Toronto has 2.9 million people and some of the continent's highest housing prices. Despite being a great place to live, Toronto real estate is facing homelessness and unrealistic rent prices. Cities are working with the federal government to find a long-term solution.
Canada's Affordability Crisis
Canada's lack of affordable housing was a major election issue in October and within reason. Statistics Canada shows that there has been a steady increase in rent for quite some time. With low vacancies and households barely making it by with their rent, provinces are doing what they can to help low-income renters.
It's Not Adding Up
According to Rentals.ca, rental apartment growth has a steady increase of 9 percent each year, while single-family homes experience an 11 percent increase. A one-bedroom apartment in Toronto, on average, goes for $2,304, but the average wage barely scrapes the top of it. This crisis is leading to a 50 percent increase in no-fault eviction applications in Toronto alone.
What Caused It?
A study titled "The Impact of Higher Energy Efficiency Standards on Housing Affordability" showed that the rising cost of labor and materials are attributable to the total selling price of the house. Yet, it can't keep up with the significant rise of land appreciation. Urbanized areas are the top targets for this phenomenon.
Many factors play a role in Canada's housing affordability crisis. Along with the lack of affordability and well-paying jobs, social benefit cuts attribute to it as well.
Economic Inequality
Low-income households in Canada are the first to suffer the consequences of rising rent prices. According to the study by U of T researchers and the United Way, Toronto is the lead in the economic gap compared to other Canadian areas.
Growing Population
Over 115,000 people move into both of Canada's two largest cities each year - about the size of a small town. It consists of Canadian-born citizens, immigrants, and many international students and workers.
Toronto's Tech Boom
Part of the population influx is due to tech workers settling in Toronto, which is soon becoming the Silicon Valley of the Great North. As of August, the average price of a detached home is 17% higher than the previous year. Many tech companies of different sizes are migrating to the new location, but what happens when a tech giant like Amazon makes its move?
Large companies often invest in accommodation for their workforce. Unfortunately, it still profoundly impacts the surrounding area. After a while, these changes cause lower-income households to move because they have no choice.
Toronto Approves Affordable Housing Plan
There are many programs dedicated to housing affordability by province. However, the federal and provincial governments made a significant announcement last Thursday that may finally turn things around.
Toronto Mayor John Tory is approving a city housing proposal. It would help prevent evictions and build new rental accommodation. The housing plan is expected to last a decade and aims to help more than 300 thousand households. This includes those in homelessness, social housing, rental housing, long-term care, and homeownership.
Who May Be Eligible
Toronto's low-income renters may soon get some relief from the city's overheated market. According to a news release, money will be provided directly to families in need through the Canada Housing Benefit. Ontario would be the first province to start the rollout of the national program. The families are already predetermined by the provincial government, and the investment will assist groups such as:
Seniors
Individuals with disabilities
Indigenous communities
Survivors of domestic violence and human trafficking
Individuals experiencing or at risk of homelessness
During the program, each household is set to receive financial assistance from 2020 to 2028, but the amount is subject to change according to every separate case basis and location.
A New Toronto Community
A new housing plan may be what Toronto needs to bring true social and economic change. Deputy Mayor Ana Bailão said residents deserve to live in "safe, well-maintained and affordable" housing. She is confident that the plan will lead to positive change. We see it as a step in the right direction and hope it puts a stop to the ongoing crisis.
