A new definition on affordable housing is needed

TheStar.com – Opinion/Editorials
July 19, 2018.   By

What people can afford to pay for a home has nothing to do with the price of housing and everything to do with their income.

When it comes to buying a house that’s something mortgage lenders know well. But when it comes to the rental housing market that’s a concept that’s harder to find.

And that’s how Toronto wound up with an affordable housing program that doesn’t actually produce much affordable rental housing. Instead, it results in housing that’s pegged to the city’s average market rents.

Certainly, that’s not bad housing and it fills a need. But it does not fill the needs of Toronto’s low-income tenants as the city is so keen to suggest it does.

And that’s a real problem — especially given the public lands, tax breaks and incentives, and government funding that is being given to developers to build this “affordable” housing.

It’s welcome, then, that Mayor John Tory has finally acknowledged that there’s a problem here.

Urged on by ACORN Canada, an advocacy group representing low-income residents, Tory said this week that he’s open to redefining what Toronto considers affordable.

Under Toronto’s existing definition, a one-bedroom unit for $1,202 a month or a two-bedroom unit for $1,426 is classed as affordable.

Those rents, though, are completely unaffordable to low-wage earners. Indeed, with average market rents over all unit sizes, a Toronto household needs to earn over $52,000 to keep housing costs to 30 per cent of income.

In a city like Toronto the cost of housing has risen far faster than incomes, making the average market rent calculation meaningless when it comes to defining affordability.

That’s why the city has an affordable housing crisis that sees low-income residents living in homeless shelters; waiting for years to get into social housing where rents are affordable; and struggling to make monthly paycheques stretch to cover the rent and still put food on the table.

Tory, who is seeking re-election this fall, has promised to create 40,000 new affordable units over 12 years to tackle the problem.

But unless the city — and the provincial and federal governments too — dramatically changes how they do business those units won’t do anything to help those most in need of them.

According to the city’s own report, city, provincial and federal investment in the 1,224 rental units it approved last year under mayor’s signature Open Door affordable housing program totalled over $128 million.

The city should use the tools it has including tax breaks, waiving development charges and providing direct funding to help drive a public benefit. But in this case, because the definition of what’s affordable is so wrong, it’s not driving the good the city really needs.

It would seem the city already knows that. And that’s why it plans to top up 10 per cent of the new units it approved this week under the Open Door initiative with additional housing allowances of $250 a month on average.

That’s great news for the few residents who will receive those much-needed allowances. But it also means that of those 606 “affordable rental housing” units only about 60 will actually start to approach affordability for those with low incomes.

At that rate the city is never going to make a dent in the affordable housing crisis. So it’s right that advocates and some city councillors are sounding the alarm.

“(The Open Door program) allows the mayor and city hall to boast that we’re doing something about affordable housing, but it doesn’t mean that it actually achieves that in reality,” Toronto councillor Josh Matlow said.

Tory has taken the first step to changing that by acknowledging the problem. Now he needs to follow through by developing a more realistic definition of affordability for projects receiving government support.

Vancouver — another Canadian city where the rising price of housing has far outstripped incomes — has taken steps to more directly tie its affordable housing objectives to people’s incomes, rather than market rents.

Toronto should look to build on that, and help lead the way for senior governments.

Because low-income tenants know all too well that just calling something affordable does not make it so.

https://www.thestar.com/opinion/editorials/2018/07/19/a-new-definition-on-affordable-housing-is-needed.html

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