THIS IS HOW TORONTO RENTERS THINK THE MARKET CAN BE FIXED, AND WHAT EXPERTS THINK OF THOSE IDEAS
When it comes to solving a problem as complicated as Toronto’s housing crisis, there’s no such thing as a silver bullet, says one expert.
CBC Toronto spoke to Douglas Kwan, the director of advocacy and legal services at the Advocacy Centre for Tenants Ontario, and other housing experts after hearing from hundreds of our readers about how hard it is to be a tenant in the city. We asked them about some of your most popular ideas to help curb the rampant unaffordability.
“There’s multiple solutions that every level of government could enact,” Kwan said.
Here’s what you suggested some of those solutions could be and what the experts think about them:
Freeze all rent
After the onset of the COVID-19 pandemic, the provincial government froze rent on most residences in 2021, meaning it couldn’t be raised. But that freeze ended at the end of the year, while advocates pushed for it to be extended.
“I would say yes for rent controls, absolutely,” said Ricardo Tranjan, a senior researcher at the Canadian Centre for Policy Alternatives. “A blunt freeze may not be necessarily the best solution.”
Tranjan said one argument against rent control is that it slows down housing starts and makes it harder for landlords to afford repairs and maintenance. But empirically, he said, those arguments only held true in the 1950s and ’60s when rent control was more “blunt” — like a straight freeze.
These days, he said the research recommends a more targeted form of rent control that keeps up with inflation but doesn’t exceed wages.
“When you get into the weeds of designing rent controls, those new rent controls do not show the same negative impacts and they would actually be really good in terms of controlling rent and providing more housing,” he said.
Cap rent increases at inflation when a new tenant moves in
This idea is in response to something called vacancy decontrol. According to the province, vacancy decontrol allows landlords to invest more in their apartments because they have the ability to raise rents to “market levels” whenever someone moves out and a new person moves in, even if the apartment is rent controlled.
In Ontario, all rental units built before Nov. 15, 2018 are rent controlled, meaning rent cannot be raised beyond a certain percentage set by the province — in 2024 that’s 2.5 per cent.
But when a tenant moves out, the base rental price of a rent-controlled unit can be increased however much the landlord wants. Then, when someone else moves in, that base price is still subject to rent control.
Let’s break it down:
Say the previous tenant paid $1,500 a month.
Once they move out, the landlord can raise the price to whatever they want, perhaps to $2,500. The apartment is rent controlled at the higher price just like at the lower price.
That means instead of an extra $37.50 a month for a 2.5 per cent maximum increase, the new tenant is paying about $62.50 because the starting rent is higher.
Advocates, city councillors, and the official opposition have called on the Ontario government to do away with vacancy decontrol several times in recent years. However, the province has rebuffed those attempts.
Steve Pomeroy, a professor at McMaster University’s Canadian Housing Evidence Collaborative, says he used to be in favour of vacancy decontrol.
“I thought it was quite well balanced that you protected existing tenants,” he said. “Then for vacant units, you’re not hurting anybody because there’s no one there.”
But his opinion has recently changed.
“We’ve come to realize that, boy, these increases on turnover are massive,” he said.
He said it’s important to protect the affordability of existing affordable housing and there’s a case to be made for doing it through vacancy control, even if it’s done temporarily while more apartments are built.
Create more affordable housing
“Yes,” Pomeroy said when asked about the suggestion that governments creating more affordable housing could help solve the housing crisis.
However, this suggestion may be easier said than done, at least municipally. In May, CBC Toronto reported that the city’s ambitious 2019 plan to build 10,000 affordable homes on city land had yet to result in a single new apartment. The city agency overseeing the plan said at the time that pandemic delays were largely to blame.
When there’s a crisis, Pomeroy said, you want a quick emergency response.
“The trouble with supply, while we do need it, [is] it takes three, four, five years to get new units built, completed and occupied,” he said.
Kwan, from the provincial advocacy centre, said cities are “handcuffed” when it comes to helping create housing because they have limited revenue to do it. He said all three levels of government need to partner to achieve this idea.
While Tranjan argues governments need to rely less on incentivizing the private sector to build homes. He believes when profit is removed from the process of developing housing, affordability can grow.
“If and when the desired outcome is affordability, it’s much easier to do it directly,” he said.
A spokesperson for Infrastructure Canada said private developers are part of the solution.
“The scale of this challenge is so large that the private sector must be involved — governments cannot do this on their own,” Caleb Spassov said in an email.
Spassov also pointed to the National Housing Strategy announced in 2017, that provides billions in low-interest loans to developers who build units below market rents.
A spokesperson for the city said Toronto has a “limited role in the direct delivery of housing.”
But it does have a role in funding and incentivizing housing development that fits the city’s needs, they said.
Story by: CBC News