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Public Works: Turning TCHC Tenants Into Homeowners

Chicago has been successful at moving people from public housing into their own homes. Should Toronto follow suit?

Public Works looks at public space, urban design, governance, and city-building innovations from around the world, and considers what Toronto might learn from them.

Photo by {a href=""}Mr Kevino{/a} from the {a href=""}Torontoist Flickr Pool{/a}.

This week Mayor Rob Ford and his trade-mission entourage descended on Chicago, infesting the corridors of power and of deep-dish pizza joints like a swarm of grinning, business-card-slinging locusts. Whether any new trade deals will emerge from the trip remains to be seen, but there may be ideas that Toronto can profitably lift from America’s second city.

Back in 2002, the Chicago Housing Authority started a program to help people living in public housing become homeowners. Called “Choose to Own” (presumably to differentiate participants from those who own inadvertently), it has proven successful. With its help, over 350 low-income families have moved into homes, even after the 2008 housing market crash.

No wide-ranging plan of this type has been attempted in Toronto. However, this week the City’s Special Housing Working Group included a recommendation for a similar program in a report [PDF] addressing the “repair and funding challenges” facing the Toronto Community Housing Corporation.

The working group was created by city council back in March principally to consider a recommendation from City staff that TCHC sell off 619 of its single family homes. This was supposed to be a means of funding a corporation-wide repair backlog estimated at $751 million. The working group doesn’t support selling the majority of those properties, but it does recommend that as many as 100 of them be sold to the people currently living in them.

Community housing is a topic beloved of rage-spitting comment trolls convinced that their tax dollars are maintaining champagne-swilling crack moms in sybaritic splendour. Misguided as that notion is, more controversial still is the idea that government should help low-income earners become homeowners. Any proposal to that effect will need to be a strong one.

As laid out in the working group report, city council would ask TCHC to “facilitate the conversion of up to 100 homes to affordable home ownership,” and to work with the federal and provincial governments to secure home loans for tenants who are interested and eligible.

The financial infrastructure already exists through the Canada-Ontario Affordable Housing Program, which provides up to $78,500 in interest-free home loans to qualifying households. The Working Group has recommended that $3.3 million of available funds from this program be directed to support 10 per cent down payments on the purchased homes.

So far so good. But there are key differences between the Toronto plan and the Chicago one. The Chicago Housing Authority scheme leverages an existing rental voucher program, allowing participants to purchase any home they can afford, while the Toronto proposal would limit buyers to those houses the TCH wants to sell them.

In other words, while Chicago looks to convert tenants to owners, here we’re hoping to kill two birds with one stone: not just putting people into their own homes, but shoring up TCHC finances through the sale of those homes.

It’s not a trivial distinction. A voucher system means would-be buyers can purchase any kind of home, including a more-affordable condo or townhouse. (Though it has to be said that Toronto has experimented with helping low-income families buy condos, as part of the Regent Park revitalization.)

Given that the average employed family in a TCHC house earns just over $32,000 a year, price matters. Relevant too is that the average home price in Chicago is now $373,000, versus $536,000 in Toronto (with detached homes heading into Scrooge McDuck territory at over $800,000).

Carrying an $800,000 home on a $32,000 income, even with government assistance, isn’t just a challenge. It’s a recipe for a disaster that could leave families homeless and taxpayers on the hook for the mortgage.

Studies show that home ownership benefits both the homeowners and society as a whole, and putting lower-income Torontonians into their own houses is a worthwhile goal. Even so, city council will want to bake this plan a little more before it comes out of the oven.


  • Paul

    Did you actually read the working group’s report? The homes that they are proposing to sell to existing tenants have an average value of $346,000, not $800K. They are recommending the sale of existing TCHC properties valued over $600K on the open market.

    • Anonymous

      HI Paul – I read the report. I knew the 800k to be hyperbolic when I wrote it, but the point remains valid in terms of the ability of people with relatively low incomes to cover a substantial mortgage (a 25 year, 300k mortgage at 2.99% comes out to around $1400 a month, which is a lot when you’re grossing under $3000). I also question how the TCHC has 100 single family homes averaging 346k each, when the average price in Toronto is over half a mil.

    • Anonymous

      “Carrying an $599,999 home on a $32,000 income, even with government assistance, isn’t just a challenge.”
      Still works, I think.

      (Oh, and I haven’t read the report because when I tried to download it the day it came out it was corrupted. Hopefully it’s fixed and it was just an overstressed webserver, maybe I’ll have another try this weekend.)

  • Nick

    Various parts of England also sold off community housing (council flats) in the ’80s under Thatcher, with tenants being offered first dibs at buying. It would be good for TCHC to investigate how this worked out.

  • Anonymous

    From 900 scattered homes in 2011, TO could soon be at around 470. Like previous quick sell-offs, the next 50 are selected by marketability (condition & neighbourhood). Up to 100 more slated for affordable ownership providers. Habit (mentioned) is a well known US christian org which believes the American Dream of home ownership will cure the ills of renters. public housing tenants are eligible for selection, they are understandably evaluated to prove socially and financially fit for ownership. After a certain time (varies) owners are allowed to sell the home on the market, at which point the public investment in affordability and mixed use quietly lapses. Like many US cities, Baltimore tore down all of its public housing towers, promising to soon desegregate tenants through purchases of homes in wealthier areas. Hundreds of nimbys showed up and plans were
    While TO targets houses and the US targets towers, the common denominator is less affordable housing.

  • mizmite

    anyone care to own the dump i live in at 25 elm street, only 1100.00 a month, cockroaches are free

  • Paul Kishimoto

    The modest success of “Choose To Own” has to be weighed against the overall condition of subsidized housing in Chicago, which by some accounts (eg. ) is not something we should be seeking to emulate.