Affordable rental housing on national agenda

Experts weigh in on the continuing crisis
Monday, January 7, 2019
by Erin Ruddy

As 2019 begins, Canadians face a well-chronicled slate of challenges to owning or renting a home. Supply is tight, demand is robust and more stringent controls on obtaining credit have kept many would-be homeowners in rental dwellings. Despite this certain knowledge and some meaningful action steps taken by policy-makers to mitigate hurdles and spur new development, housing experts foresee a persistent lack of affordable housing into the future.

A recent report from concludes the ongoing housing shortage will drive monthly rents even higher in 2019. Annual rental rates could increase by as much as 11 per cent in Toronto, 9 per cent in Ottawa and 7 per cent in Vancouver, the report predicts.

“Vacancy rates are getting even lower in several major Canadian cities, including Vancouver and Toronto,” observed Ben Myers, president of Bullpen Research & Consulting Inc. “Immigration is at a record high nationally and expected to increase. The change in the mortgage stress test has reduced credit availability and pushed more people to rent that were looking to buy in 2018. The increase in rental demand has not been offset by new supply.”

According to Bullpen’s data, the combined number of new rental housing units built across all of the Census Metropolitan Areas in Canada was just under 32,000 units from January to October 2018. Though this accounts for an increase of nearly 6,000 units over the same period last year, Meyers contends it won’t be enough to satisfy the additional demand.

Dr. J.David Hulchanski, professor of Housing and Community Development at the University of Toronto’s Factor-Inwentash Faculty of Social Work, concurs. “Rents will continue to increase especially in Toronto, Vancouver and Ottawa. There’s no reason why they would not,” he said.

Boosting supply: funding, incentives and the need for a streamlined process  

The city of Toronto defines “affordable housing” as anywhere between 80 to 100 per cent of market value. “Deeply affordable housing” is defined at 40 per cent of the market rate. As points out, this means that an affordable space in Toronto or Vancouver equates to around $2,000 per month for a one-bedroom apartment.

“The big issue to me in the Toronto rental market is not just price or affordability but inventory and supply,” said Dr. Richard Florida, professor and Director of Cities at the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. “We need to build a lot more rental housing at each and every price point.”

Ted Tsiakopoulos, Regional Economist (Ontario) at CMHC is optimistic that Canada’s 10-year National Housing Strategy, launched by the federal government in April of 2017, will help encourage new development and address the shortage of rental housing. That said, the goal of CMHC is a bold one with an ambitious 2030 deliverable. By that year, “CMHC is aiming to put every Canadian in not only an affordable home but also one that meets their housing needs,” he said.

To make it so, municipalities all across Canada have begun to unveil their latest initiatives aimed at boosting local affordable housing supplies. In Toronto, Mayor John Tory’s “Housing Now” plan is already underway with support from the federal and provincial governments. Eleven surplus city-owned land sites near transit stations are about to be transformed into much-needed affordable housing developments. The overarching goal, however, is to add 40,000 affordable units in the next 12 years and realize 3,300 or more affordable units per year, beginning in 2020.

Looking on the “Brightside”: More affordable housing coming for those in need in B.C.

A province deeply impacted by affordable housing shortages, British Columbia recently announced a $492 million commitment for the construction of 4,900 new mixed-income rental units across 42 communities. The non-profit organization, Brightside Community Homes Foundation, has been assigned $18.1 million to be used toward the creation of 181 rental units primarily for seniors and families. It’s perhaps a drop in the bucket in the grand scheme, but for the vulnerable residents of Brightside’s 26 buildings, grants like these are what make the difference between having a safe, secure place to call home, and not having a home at all.

“We are thrilled with this grant and what it means for our residents,” said Jan Robinson, executive director of Brightside. “We are hoping to maximize it and gain as much density on the property as possible. This will only help make things more affordable at the end of the day.”

Brightside, a housing provider in Vancouver since 1952, owns and manages 26 apartment buildings throughout the city, mostly three-storey wood-frame walkups for seniors, families and persons with disabilities—all individuals struggling to meet the demands of market housing. But, as with most properties built decades ago, many of the buildings are badly in need of repair—a costly endeavor when rental income is less than market and required accessibility upgrades are looming on the horizon.

“What makes us stand out from the other housing providers in the province is that we really try to focus on providing support and housing security,” Robinson said. “Many of our residents are older and losing their capacity to manage. Though we can’t provide staffing to go in and help them, we do connect them to services so that they are able to function independently for longer.”

YIMBYISM: “Yes in My Backyard”

Last fall, Brightside launched efforts to engage Vancouverites on the need for equitable housing developments for people of all income levels and to promote the idea of “YIMBYISM” as a solution to the city’s housing barriers. At an event attended by citizens, non-profit housing representative and real estate professionals, participants looked at a number of issues and responded to an in-depth housing survey.

Key takeaways from the survey:

  • 75% said expediting the permit process is the most important issue/solution policy-makers should focus on in the next 12 months
  • 64% said Vancouver’s current housing situation is a threat to diversity
  • 46% said developers and non-profits should seek to build affordable housing projects that enhance or provide access to community spaces, with recommendations to provide housing that is “community-oriented”, “flexible”, “livable” and “bright” with direct access to outdoors
  • Most people (75%) had a positive perception of affordable housing
  • Concerns around “renovictions”; lack of affordable housing supply; high cost of rent; lack of developer interest in building affordable housing, and the need for more family-sized rentals emerged as top priorities

At the end of the day, Robinson said she is hopeful that “YIMBYISM” will prevail and believes that all levels of government are doing their part to effect change.

“Everybody is concerned about the affordable housing deficit and offering support,” she remarked. “However, I think we could use some more collaboration between the levels of government. Though there are many programs being offered, they need to be more accessible. CMHC’s Co-Investment Fund was a little too stringent and difficult for people to meet the qualifications, though I understand they are changing that and making it a little easier. Now, if the city could just step up a bit, cut the red tape and expedite that permitting process, that would be really helpful.”

“Affordable Housing Bonds”:  A viable solution to the housing crisis?

Meanwhile, Cary Green, veteran housing developer and chairman of Greenwin Inc. has been touting the merits of a solution he believes could spark widespread housing development: government-funded development bonds. In December, Green spoke with TVO’s Steve Paikin about this approach and why he believes it’s the best possible direction.

“With between 3 and 4 million Canadians currently in need of affordable rental housing, the problem is endemic,” he told Paikin. “It cuts across the country and every group, the obvious one being the homeless. You’ve got people living in overcrowded homes and in substandard housing. Students…people in their first jobs…coming out of divorce, returning war veterans and new immigrants.”

In short, Canada needs more affordable housing, and these bonds, says Green, would provide a viable, fiscally responsible means to kick-start new development. Watch the complete interview here:

Erin Ruddy is the editor of Canadian Apartment Magazine


1 thought on “Affordable rental housing on national agenda

  1. First step is to stop using the term “affordable housing”. There are only 2 types of housing, market housing and subsidized housing. Whether it’s “affordable ” or not varies with each individual’s income and other situational criteria.

    Next step is to admit that throwing huge numbers of immigrants, foreign students, asylum seekers and others into the demand column, with apparently no planning for them, is going to create competition for housing and price increases. Economics 101.

    Next, there are a lot of options, including those used back in the 70s, when there was supposedly another “crisis” in housing. These methods included generous tax incentives to developers including 2X soft cost write offs, and serious money for developers to build social housing units and sell the project to housing societies.

    I looked back in my file and found 2 other times over the last 50 years when there was a “crisis” which was sorted out, usually by having the economy collapse, taking demand with it. Would you rather have that? I hear there are plenty of inexpensive housing options in Detroit, or perhaps, Oshawa very soon.

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