Sunday, June 19, 2022

Toronto’s housing crisis of 1922 was rooted in policies that still make homes unaffordable in 2022


A fire-insurance map from 1924 shows what the Annex, Harbord Village and Palmerston neighbourhoods looked like a decade after city bylaws banned apartment buildings in many parts of the city. Single-family homes still dominate much of these neighbourhoods today.MAP: CITY OF TORONTO ARCHIVES • ARCHIVAL RESEARCH FOR THIS STORY: PAULA WILSON/THE GLOBE AND MAIL

One hundred years ago, Toronto was in the midst of an acute housing shortage.

Although 6,000 new homes were expected to be added that year, the “immense contribution to the city’s bulk of homes” was simply not going to be enough, decried an article published in The Globe on June 16, 1922. All through the spring, the article stated, “the supply of moderate-sized homes available for rent filled only a small percentage of the demand.”

The lack of housing wasn’t a new phenomenon. By the turn of the century, Toronto had become Canada’s second-largest urban centre, after Montreal, putting a strain on its existing stock of homes. Military manufacturing boomed during the First World War, and when it was done the city bulged with returning soldiers, immigrants and rural folks, drawn by the promise of work in the city’s new harbour and financial districts.

The problem then, as now: For Torontonians without significant wealth, finding housing was a challenge. But at a time when affordable rental properties were needed most, of the 3,000 new dwellings that had been built since the beginning of the year, just five – less than 0.17 per cent – were apartment buildings.

That’s because, for the most part, they were banned outright.

Apartment blocks in various stages of construction on Kendal Avenue in 1922, when new apartment projects were heavily restricted in Toronto.CONTRACT RECORD, 1922

On May 14, 1912, motivated by moral concerns, the City of Toronto passed By-Law No. 6061, which meant no apartment buildings could be built on the majority of the city’s residential streets.

While it’s certainly not the only factor that has led to Toronto’s dearth of low-rise, affordable rental properties – indeed, many buildings were erected despite the law – experts say the city is still grappling with the bylaw’s effects on its urban fabric and zoning, not to mention the NIMBYism toward multiunit housing generally.

“Early land-use regulations have had a major impact, still very perceptible today,” said Raphael Fischler, dean of the faculty of environmental design at the Université de Montréal, in an interview about Toronto’s history. “Large parts of the city that exist today were built a century ago, under the influence of the regulations on the books at the time.”

Unlike many European cities and even Montreal, Toronto lacks elegant low-rise density, which provides a spectrum of sizes and affordability in smaller-scale neighbourhoods. These housing options, particularly beneficial for people who are often left out of the market – renters, people living alone, young families, the elderly – offer a sense of community and contribute to the character that makes cities pleasant to live in.

While Toronto became largely a city of single-family homes, Dr. Fischler said, Montreal developed as a city of duplexes and triplexes. As a result, he said, the latter now offers a wider range of housing options. “It’s fair to say that Montreal displayed a greater tolerance for density and for the mixing of uses than many North American cities,” he said.

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The Roslyn Apartments at Glen Road, north from Howard Street, in 1913 and 2022. The first tenants of the three-storey red brick buildings included realtors, merchants and manufacturers.
Osgoode Mansions at Palmerston Avenue and Harbord Street, as seen during construction in 1914 and in 2022. Today, neighbourhoods like Palmerston lack many ‘missing middle’ properties, denser than single-family homes but not as dense as low-rise apartments.
La Verne Apartments, built beside Allan Gardens in 1927, was allowed under the bylaw bans because Carlton Street, deemed a commercial road, was exempt. The tower behind La Verne was built after the city passed the Condominium Act in 1967 in an attempt to regulate affordable housing.CITY OF TORONTO ARCHIVES; FRED LUM/THE GLOBE AND MAIL

Turn-of-the-century Torontonians had a complicated relationship with apartment buildings.

On the one hand, early developments typically upheld the gentility demanded by the city’s elite. Unlike today’s towering condo buildings, the “apartment-houses” of the early 19th century were often no more than four floors high and blended in nicely with the surrounding neighbourhood.

Residents of the city’s first apartment buildings – the St. George Mansions, completed in 1904 near the current site of Robarts Library – included professors, barristers and two bank managers, according to Richard Dennis, a University College London geographer considered the authority on Toronto’s early apartment history.

But despite that pedigree, the predominantly Protestant city found the negative moral associations hard to shake. Apartment-dwelling families were expected to have fewer children, and this was considered an unethical constraint on the natural order. Meanwhile, dwellings that offered in-house kitchen and cleaning services were seen as degrading the traditional role of a wife.

“Unsurprisingly, there was negative reaction from both wealthy neighbours and city administrators who were reviewing building permits and were not familiar with this new building type,” said Emma Abramowicz, a planner at ERA Architects who has researched Toronto’s early planning history.

Yet by the end the century’s first decade, Dr. Dennis wrote in his landmark 1989 research paper, Toronto’s First Housing Boom, the city’s directory listed almost 50 such buildings creeping into single-family home neighbourhoods. This raised concerns about property values and privacy, as well as the loss of home ownership as a priority (apartments were typically rented)

St. George Mansions on Harbord Street, photographed in 1944 and shown in its architectural drawings, was Toronto’s first apartment building. After it was finished in 1904, the six-storey complex had 34 apartments and about 99 occupants.CITY OF TORONTO ARCHIVES; TRINITY COLLEGE ARCHIVES
The Spruce Court Apartments in Cabbagetown were built from 1913 to 1925 for working-class residents. But with rents of $25 a month – half of an ordinary worker's monthly wages – it wasn't quite as affordable as advertised.CITY OF TORONTO ARCHIVES

Experts have often noted that the turning point was set in 1911 by physician Charles Hastings with the publication of his report exposing the unsanitary conditions of those living in the Ward, the inner-city slum located next to City Hall.

Fearing that Toronto might fall victim to the scourge of these “human packing cases,” so rife in New York, Dr. Dennis wrote, the report reinforced the belief that shared dwellings were immoral and not fit for Toronto.

“If Toronto becomes a city of closely-packed tenements,” one Globe journalist wrote on April 27, 1912, “it will become a city of stunted children and of unhappy adults. Its morals will suffer as well as its health.”

In response to these mounting concerns, and after a slate of lesser measures were deemed inadequate, in 1912 city council passed the apartment ban by 18 votes to nil.

By-Law No. 6061 limited the construction of apartment buildings to a few arterial roads.

Developers found breaking the law could be fined $50 – about a month’s salary at the time – or jailed for as much as six months.

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Apartment houses listed in Toronto directories
Number, 1903-1918
010020030019031904190519061907190819091910191119121913191419151916191719182
THE GLOBE AND MAIL, SOURCE: DATA COLLECTED BY UNIVERSITY COLLEGE LONDON GEOGRAPHER RICHARD ​DENNIS, PUBLISHED IN TORONTO'S FIRST APARTMENT-HOUSE BOOM: AN HISTORICAL GEOGRAPHY(1989)​
DATA
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earNumber of apartments
1903-01-012
1904-01-013
1905-01-014
1906-01-015
1907-01-018
1908-01-0114
1909-01-0123
1910-01-0137
1911-01-0167
1912-01-0192
1913-01-01129
1914-01-01207
1915-01-01250
1916-01-01272
1917-01-01287
1918-01-01290

APARTMENT HOUSES LISTED IN TORONTO DIRECTORIES

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According to Richard White, an author and Toronto historian, public response was favourable. Nonetheless, there were dissenters.

Builders who had purchased land for the purpose of apartment development were angry. Two weeks after the bylaw had been passed, architect John Alexander Mackenzie wrote in The Globe: “It surely is not British fair play that the objections of a few property-owners should be allowed to bar hundreds of our best families from a share in the fresh air and pleasant outlooks of our hill and Rosedale districts.”

Others rejected equating Toronto’s mostly upper-class apartments with New York’s tenements. Builder Alfred Coleman argued that planned multifamily dwellings were actually better than the crammed single-family houses that would result from the ban.

Almost immediately, developers found workarounds. They could usually get special approval from city council or run a long apartment block behind a narrow commercial street frontage.

As a result, several hundred apartment buildings were constructed in areas where they had initially been banned. Dr. White said that of the 12 applications for exemptions in the Beaches neighbourhood, all were approved.

According to data from the City of Toronto Archive, between 1921 and 1931, the number of units in apartment houses increased tenfold, from 2,000 to 20,000. Yet for a city with a population of 630,000, that number was tiny compared with cities such as New York and Chicago.

“It’s the core reason why Toronto doesn’t have a historic character of medium density throughout its historic core, like the four-storey buildings seen in American cities,” Ms. Abramowicz said.

The policy was generally quite effective, she said; for decades, much of the city saw very little apartment development.

A 1920 report from the Toronto Housing Commission includes these specifications for a semi-detached home of Type C, one of the permitted types of housing at the time.TORONTO HOUSING COMMISSION

Type A and C houses on Gilmour Avenue, as seen in the 1920 report, and a block plan of other properties in the neighbourhood.TORONTO HOUSING COMMISSION
One of the apartment complexes built in the post-ban era was Claridge Apartments at Avenue Road and Clarendon Avenue, built in 1927-28. Architectural firm Lawrence Baldwin & Gerald Greene designed it in a Venetian palazzo style.CITY OF TORONTO ARCHIVES

While many areas did get more low-scale apartments and condo towers later in the century, few of those developments broached tree-lined, residential streets.

“We haven’t really shifted from the planning approach the City of Toronto took in 1912,” Ms. Abramowicz said. “I think it’s to our detriment.”

While experts agree that By-Law No. 6061 has left a mark on the city’s building story, many argue its more significant legacy is the attitude it initiated. According to Richard Harris, an urban historical geographer at McMaster University, Toronto’s early 20th-century policies led to its ingrained resistance to development in residential neighbourhoods.

“That’s where the ‘not-in-my-backyard’ consideration comes in,” Dr. Harris said. “Once the built environment has been built in a particular way, property owners resist any kind of density.”

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Apartment buildings under construction at Moss Park in 1963.BORIS SPREMO/THE GLOBE AND MAIL

Mr. White said this mentality was truly entrenched in the 1960s, amid numerous attempts to rezone the apartment-free areas to add density. This was met with strong opposition from homeowners, and in 1966 the planning department marked most of those neighbourhoods “inviolate” – protected from widespread development.

“The urban reform movement stopped neighbourhood destruction, but it then entrenched an anti-development mindset,” he said. “To me, that is the root of present-day opposition to the missing middle.”

A hundred and 10 years on from the passage of By-Law No. 6061, it is impossible to know how the city would have evolved without it. Indeed, Toronto never got the “wealth of attractive, medium-density character apartments” it could have had, Ms. Abramowicz writes in the housing anthology House Divided.

Such apartments offer a spectrum of quality, architectural style and affordability, she argues. Amid a housing crisis comparable with that of a previous century, she asks: “Why shouldn’t there be room down the street?”


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Toronto could face wave of condo project cancellations as costs rise


Toronto housing developers could cancel the construction of up to 5,000 condo units as the costs of borrowing and building soar, according to an analysis by leading condo research group Urbanation Inc.

Construction costs have climbed across the country. Putting up a high-rise in Toronto is now 21 per cent more expensive than it was during the same quarter of last year, according to Statistics Canada’s building construction price index. And with the Bank of Canada’s benchmark interest rate having risen 125 basis points in the past four months, construction loans are also becoming more expensive.

Such an increase in costs can put a developer in a bind, because projects typically can’t receive construction loans until most of their units have already sold to preconstruction buyers. The time between preconstruction and occupancy is usually about five years. If costs rise during that interval, a developer can’t easily raise prices to compensate, because many of its condos are presold. Instead, the increased expenses eat away at profit margins. When projects become unprofitable, they are often cancelled.

According to Urbanation’s research, about 5,000 preconstruction units were sold last year for less than $1,000 per square foot, which would make them economically unfeasible to build under current financial conditions. “Many of those could cancel,” said Urbanation’s president, Shaun Hildebrand.

If Toronto developers start cancelling projects, buyers who made deposits on preconstruction condos will have their money refunded, as required by Ontario law. But those who signed sale agreements years ago could find that they now have to pay higher prices for similar units.

Tarion, the province’s new-home consumer protection organization, says on its website that developers are required to specify conditions under which their projects could be terminated. Those conditions could include a developer failing to secure necessary financing, or not meeting the minimum number of preconstruction sales needed for a building to proceed.

The rise in the cost of building condos in the Toronto region had already begun before the pandemic disrupted supply chains and drove up prices of building materials such as wood. From early 2017 to today, construction costs are up 50 per cent, according to commercial real estate data firm Altus Group.

The last time Toronto experienced a wave of condo cancellations was in 2018, when developers called off 4,687 units because of rising construction expenses, according to Urbanation.

“When cost escalation is 10 per cent to 14 per cent, you can lose your profit in less than a year,” said David Schoonjans, senior director of cost and project management for Altus. Developers that launched projects in 2019 and have not yet broken ground are facing a 30-per-cent jump relative to construction costs at that time, according to Altus data.

Even if global supply chain problems dissipate and goods start to move more quickly, Mr. Schoonjans said, the Toronto region will continue to deal with rising costs because of the sheer volume of new home construction in the area.

Housing starts reached a record high across the country last year, and the Toronto region saw record-high condo starts. That has increased demand for experienced carpenters and other construction workers.

“The market is so overloaded and schedules are being extended and missed,” Mr. Schoonjans said. “There’s just more work than there is capacity to perform it, and that would be the case even without the pandemic.”

Real estate developers could raise the prices of units in future projects in anticipation of higher costs, but buyers may not be willing to spend much more than they already are. The average cost of a preconstruction condo in Toronto is already near $1,400 per square foot, according to Urbanation.

The bulk of preconstruction condo buyers are investors, each of whom would need a tenant to pay at least $3,000 a month to cover the mortgage payment on a 500-square-foot unit purchased with a 20-per-cent down payment at today’s typical five-year fixed rate, which is around 5 per cent. That does not include condo fees or other home ownership expenses, such as taxes and upkeep.

Urbanation says developers had planned to launch projects totalling 12,900 condo units in the Toronto region during the second quarter of this year. As of mid-June, 8,606 units had been brought to market in the quarter, according to Urbanation’s numbers.

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Tuesday, June 14, 2022

How to search the history of your Toronto home?


Toronto has a fascinating history but just how difficult is it to do a little digging into the history of where you live?

The City of Toronto provides a guide to finding the history of your house. There may be maps, building permits, photographs and other information you can find if you're willing to spend the time searching their treasure trove of data.

You can start with online research but you'll eventually need to head over to the City of Toronto Archives at 255 Spadina Road. It's only open weekdays by appointment only.

Once you get there, staff can help you get started and retrieve specific records including copies of building permits or photos.

The site archivehistory.ca recommends some of the following strategies.

  • Determine whether or not your street name or address changed at any point in the past
  • Consult fire insurance plans
  • Check the City's aerial photograph collection, which covers most of the city from 1947 to 1972
  • To determine former occupants, consult assessment rolls and city directories

If all of this sounds like too much work, third party companies like Toronto-based Caerwent Housestories will do all the work for you and offers a series of packages, depending on how nicely you want the research presented.

The basic package will set you back $550. It comes in chart-form and includes "detailed information about previous owners and occupants."

Pricier packages include things like photographs, newspaper citations, building permits and a narrative history of your house and neighbourhood.

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Sunday, April 10, 2022

More than 200 homeless people died in Toronto last year 2021


A total of 216 people experiencing homelessness died in Toronto last year, according to new data from the city.

The data released by Toronto Public Health (TPH) on Friday shows there were 4.2 average deaths of unhoused people per week last year. 

According to the city, the number of deaths in 2021 rose significantly from 2020. Seventy-two more people died last year than in the previous year, when 144 unhoused people died. The number of deaths has more than doubled since 2017 — the first year that the city collected such statistics — when 101 people died. 

A full 55 per cent of the deaths in 2021 were due to drug toxicity, the data shows. Other causes of death include heart disease, accidents, complications from diabetes, hypothermia, liver and lung disease, organ failure, suicide and cancer.

The city says 132 out of the 216 people who died were residents of homeless shelters. It has yet to release the number of people living outside who died. 

For Gru, a shelter hotel resident in Toronto, the numbers are "awful" to hear.

"There are no words," he said. "There is just a deep, deep sense of loss that these are people like you or I who ended up in a position where they couldn't afford rent or they couldn't afford their mortgage. Homelessness in Canada is a death sentence, really."

Homeless advocates say the numbers are staggering, but not surprising. They say the city has enforced policies that created unsafe conditions for unhoused people. And they say the solution is permanent housing and harm reduction supports, not policing and clearing encampments.

'It's a crushing number,' homeless advocate says

Doug Johnson Hatlem, a street pastor at Sanctuary Ministries of Toronto, said on Saturday that Mayor John Tory, the city's Shelter Support and Housing Administration (SSHA), and city councillors should all be held to account for their policies on homelessness, given the "unacceptable" number of deaths of unhoused people last year.

"It's a crushing number," Johnson Hatlem said. 

"All three — council, Toronto mayor's office and SSHA spent an incredible amount of their time and their political capital insisting that they were in the right to beat people into submission to get inside for what they were calling safe indoor shelter. Their priorities were completely out of whack."

In 2020, the first year of the pandemic, there was more of a spirit of "we're all in this together," but in 2021, Tory's attitude was "we're going to do what we want to do and we're not going to listen to people," Johnson Hatlem said. The city failed to engage with people who were unhoused and their advocates and instead chose to act on behalf of wealthy people and those who don't want to see homelessness in their backyards, he said.

"The problem will not just ever go away until people are housed. And so, we saw a 50 per cent increase in deaths and it's an enormous number that somebody has to take account for," he said.

"It's not an acceptable number. I think a great majority of these deaths were preventable," he added. "It's always been a crisis that we have people who died homeless on the streets of Toronto. At this point, it's a five-alarm fire, and the people who should be treating it as a five-alarm fire are not doing so."

Johnson Hatlem said the city, for example, put a lot of effort into clearing encampments, which displaces and scatters unhoused people, increasing their vulnerability. He said the city should sit down with unhoused people and advocates to figure out what needs to be done to reduce the number of deaths and violence and to reduce the number of overdose deaths.

Rafi Aaron, spokesperson for the Interfaith Coalition to Fight Homelessness, said it is important to remember that each number represents a human being.

"They were wonderful people. They loved and were loved. They had people who were close to them. They were fathers, wives, brothers, sisters, uncles, aunts, in some cases grandparents. They were our neighbours or your neighbours. They were people who were vibrant and generous and who we miss dearly and who didn't need to die," Aaron said.

A.J. Withers, a steering committee member of the Shelter and Housing Justice Network and adjunct faculty in critical disability studies at York University, said some of the deaths happened when the shelter system was more than 99 per cent full. The absence of safer indoor shelter space, the toxicity of street drugs and the dismantling of encampments was all "deeply concerning," Withers said.

"The lack of safe supply, the lack of access to overdose prevention sites and lack of access to appropriate harm reduction really means that people die," Withers said. "As the city does things like criminalize people in encampments, people get pushed further and further away from support systems and people die."

Withers said the numbers are probably far higher because hospitals and emergency rooms don't report deaths of unhoused people to TPH. Withers noted that the median age for males who died was 49, while the median age for females who died was 40, meaning "there are many years lost" when people don't have housing.

Dr. Andrew Boozary, a primary care physician and executive director of the Gattuso Centre for Social Medicine at the University Health Network, said the city cannot "go back to normal" because homelessness was already a public health crisis before the COVID-19 pandemic. The pandemic itself has affected unhoused people disproportionately, he said.

"The solution to homelessness is housing. Shelters or encampments are not solutions to homelessness, it is housing. And so, we really need to ensure that every level of government is committed to housing as the solution. And if we don't see that concerted effort, these rates will only continue to increase," he said.

"And that's on us as a society, because these rates are increasing, not because of individual failures, but because of our failure on delivering housing as a human right."

Policing poverty is also not the answer, he said.

"What is really has to be clear is that ripping down tents is not the solution to homelessness. It is delivering on housing as a human right. It is building more social housing, it is getting people more access to social housing and supportive housing." 

City 'saddened by all of the deaths'

The city, in response, said it collects the data and uses it to help it make better decisions on improving the health of people experiencing homelessness.

"The City is deeply saddened by all deaths of people experiencing homelessness both in and outside of the City's shelter system. We offer our condolences to the individuals' friends and loved ones and to our staff and clients who continue to witness these tragedies," the city said in a statement.

"While the emergency shelter system plays an important role in supporting the health and wellness of those experiencing homelessness, the real solution to improved health outcomes is permanent housing with supports." 

Toronto's 24-month housing and homelessness plan aims to create more than 3,000 new affordable housing opportunities by the end of year, including 2,000 with supports, to meet the needs of marginalized and vulnerable people experiencing homelessness, the city said.

In February 2022, the city said council approved an accelerated housing plan to provide an additional 300 "housing opportunities" through partnerships with housing providers and private market landlords.

"The death of anyone in our city is extremely sad and our condolences are with the families and friends of those who have passed away," Tory said in a statement issued Saturday evening. 

Tory defended the actions the city has taken to tackle homelessness and drug overdoses, including opening thousands of supportive homes, expanding the shelter system before and during the pandemic and introducing harm reduction initiatives in shelters.

"More than half a billion dollars was spent on shelters and housing programs last year by the City of Toronto — this was entirely because the Mayor and City Council understood we need to do everything we can as a municipal government to provide safe shelter to people, to provide supportive housing to those who need it, and to help provide vaccinations and other pandemic safety measures," the statement said.

"Notwithstanding the significantly increased level of activity especially in the area of supportive housing where the federal government has been of great help, much more remains to be done and I acknowledge that just as I continue to work hard to get the support we need to offer even more supportive housing, perhaps the single most important key to addressing homelessness."

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Here’s six ways the Federal Budget could affect residential house prices in the GTA


There is no silver bullet for Canada’s housing woes, federal Finance Minister Chrystia Freeland cautioned while delivering the federal budget this week — a road map that includes an array of pitches to build more homes, stifle flippers, and overhaul housing programs that have faced scrutiny.

The Toronto area has felt the weight of overlapping housing challenges, which ripple out countrywide.

Million-dollar home prices have forced would-be buyers to stay in the rental market, as soaring rent costs squeeze out the city’s essential workers. With thousands relying on the city’s shelter network, the number one reason for homelessness cited during last spring’s street needs assessment was that Toronto housing costs were just too high.

What will the newest slate of federal housing promises mean for residents of the GTA? While many details are yet to come, here’s a look at what this budget could mean on the ground:

Market-priced home supply

Will the budget’s $8.8 billion to build 100,000 more Canadian homes in the next five years make GTA housing more affordable?

Royal LePage CEO Phil Soper says the injection of supply will help, particularly as the budget’s intent aligns with that of the Ontario government and the City of Toronto. The problem, he said, is the tidal wave of demand — millennials are aging out of their condos to raise their families and a record 400,000 immigrants landed last year.

The budget “is not quite enough,” says Karen Chapple, director of the School of Cities at the University of Toronto.

“It’s not really addressing the structural issues in the GTA — the declining population in some of the inner ring suburbs and the unevenness of growth. We have so much low-density housing and it’s very hard to move that stock because it’s inhabited by middle-class, long-term homeowners,” she said.

Chapple says Toronto is doomed to keep building “tall and sprawl” — ultradense towers and exurbs that require people to commute long distances to work, unless it removes some of the existing barriers. Among them, she said, are zoning that makes it easier to rebuild monster homes than multiple units; urban design regulations, and appeals and delays at the Ontario Land Tribunal.

“This money doesn’t quite do the trick without dealing with these details,” said Chapple.

Foreign buyers

The federal government’s two-year ban on foreign home buying made for great budget headlines, but it won’t contribute to housing affordability in Canada and certainly not in the Toronto region, said Royal LePage’s Soper.

He says the issue of foreign buyers probably registers with people who have misconstrued immigration for investment.

In 2017, such a ban might have had more impact but now the run-up in GTA home prices is higher at the tail end of a pandemic when the borders have been effectively sealed for nearly two years.

“This time it’s a made-in-Canada problem. The 2020 to 2022 rise in home prices includes virtually no foreign investment,” said Soper.

In Vancouver, which has a more concentrated population, it could mean a decrease in competition for extravagant homes among the super rich. But it will have less impact in Ontario, he said.

Soper notes the ban includes some significant exemptions, such as recreational properties that are popular with Americans in places such as Muskoka.

“We have 850,000 foreign students (in Canada). A small portion will live in homes they own and they’re exempt,” he said.

The Toronto Regional Real Estate Board says land registry data shows an average of 200 transactions a month by foreign buyers in the Greater Golden Horseshoe. But for the last two years that number has been about half or about 1 per cent of total real estate sales. There were about 11,000 sales in the real estate board’s territory in March.

Home flipping

Experts differ on the effectiveness of a new measure announced to curb house flipping.

The step, which impacts residential properties sold on or after Jan. 1 next year, would see individuals paying “full taxation on their profits as business income,” for properties held for less than a year (excluding homes sold under extenuating circumstances such as a death or divorce.) The measure would see Ottawa reaping an additional $15 million a year.

The move is a switch from current legislation that permits a capital-gains tax exemption on all principal residences.

Frank Clayton, senior research fellow in the Centre for Urban Research and Land Development at Ryerson University, believes the policy is aimed at a problem that “will solve itself.”

Clayton argues that when the housing market peaks, which he says it is going to or has already, due to interest rate hikes, “if we wait until 2023 (house flipping) is not going to be a problem because the market will be softer and people won’t be (doing it).”

John Pasalis, president of Realosophy Realty, a Toronto real estate brokerage that uses data analysis to provide advice to residential real estate purchasers, investors and sellers, holds similar doubts about the policy.

“The speculation tax is unlikely to have a big impact on the housing market,” Pasalis says, adding it’s “very rare” to see investors buying and selling a home within 12 months without doing any major renovations to it, simply to profit from rising house prices.

Rental housing

What’s in it for renters?

For one, a reform of the federal government’s multibillion-dollar Rental Construction Financing Initiative, which was introduced in 2016 to create more rental units, but has faced criticism over its formula — which currently lets some above-market-rent units be labelled “affordable housing.”

The rules are based on median family incomes. Using Toronto’s 2019 median, that would mean any rental could be affordable if it cost $2,228.75 or less — a rate that falls above this year’s average market rate for even a three-bedroom apartment. The new target Ottawa is pledging would ensure at least 40 per cent of the units fall at, or below, 80 per cent of local market rate.

“It was something that really needed a second look and we’re glad that they are taking a stronger approach,” said Douglas Kwan, a lawyer with the Advocacy Centre for Tenants Ontario.

He was encouraged, too, by a vow to federally review “housing as an asset class,” including the way corporate players in residential real estate are taxed. While Kwan was hoping for more immediate steps, pointing to the trend of rental buildings being bought by the likes of real estate investment trusts, the budget hints at “potential early actions” by year’s end.

Also on the horizon: a strategy that tackles the specific challenges faced by Indigenous households in cities such as Toronto. The budget grants a $300-million ask from the National Housing Council to develop an Indigenous housing strategy for urban, rural and northern settings — with the council lambasting the current approach as having “demonstrably failed.”

Deeply affordable housing

With the promise of $4 billion to accelerate housing efforts by municipalities, Kwan is looking for detail — namely, how much deeply affordable versus market housing would be boosted, and if there would be any marked increase in undersupplied rent-geared-to-income homes.

As of late 2021, more than 78,800 households in Toronto were waiting for rent-geared-to-income housing, with just 2,821 housed off that list last year. Tens of thousands are also waiting for units with support services. For those residents, Coun. Ana Bailão — Mayor John Tory’s designated housing advocate — said she was pleased to see a two-year, $1.5-billion extension of the federal Rapid Housing Initiative, which supports deeply affordable projects in the city.

By year’s end, Bailão says Toronto is expecting to have 1,000 RHI-funded units opened up — though she cautioned that with the city’s depth of need, they’d always want to see more funds.

While awaiting details, she’s hoping the accelerator effort offers supports that could be layered on top of city initiatives to further lower the cost of its resulting units.

Also well-received: a promise to keep up the higher levels of funding to combat homelessness allocated during the pandemic, and a pledge to issue a one-time $500 payment to those struggling with affordability.

“Even as fast as we’re building our modular housing, it’s still taking six months, nine months, a year,” Bailão said. Some households, she said, needed help “right now.”

Co-operative housing

More co-op housing appears to be on the horizon, with the federal government promising a new development program with a target of 6,000 units countrywide, and $1 billion in loans to support co-op projects, reallocated from the existing Rental Construction Financing Initiative coffers.

Toronto has a diverse co-op market, with some requiring buy-in, but others operating similarly to a rental — though without a traditional landlord or profit incentive, with residents becoming members of the co-op that can vote on decisions like when to raise housing bills.

But while co-ops provide affordable housing to some city-dwellers, advocates and elected officials alike have said federal funding doesn’t compare to what it’s been in the past — meaning building a co-op today is much harder, and available units have become a rarity.

Tom Clement, executive director of the Co-operative Housing Federation of Toronto, said the budget vow was “significant,” though details of the program are still being ironed out.

He’s hoping to see some grants available along with the promised loans, arguing that especially in expensive markets such as Toronto, loans may help secure the brick-and-mortar building, but that further assistance would likely be needed to offer rentals at an affordable rate.

Clement also hopes to see a program that offers some long-term certainty, in order to ensure a steady pipeline of new co-op units, as well as allowing for ongoing partnerships with the private sector to help boost supply and attracting more talent to work in the co-op sphere.

“To look at this as a long-term investment, to me, is really key,” he said.

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