The calculations used to measure housing affordability show that we are failing the city's low-income residents.
“Affordable housing” is both a common-sense concept and a policy term. The accepted benchmark in policy is that someone spending no more than 30 per cent of their household income on everything related to housing: rent or mortgage, insurance, utilities. Initiatives like Toronto’s Open Door program and the federal-provincial Investment in Affordable Housing (IAH) seek to encourage private developers and non-profits to rent spaces either at or slightly below the average cost of what a similar unit goes for in the commercial market (which is referred to as average market rent, or AMR), thus making it possible for people with low incomes to have a place to live while also having money for the other necessities in their lives.
What’s lost in using this phrase is that designated “affordable housing” often, in fact, is not.
Using the metric mentioned above, the Wellesley Institute calculated in 2014 that the “affordable housing wage” for a one-bedroom apartment in Toronto was $41,400. Yet, the report went on, someone earning the then-newly announced minimum wage of $11 per hour and working 40 hours each week—already an uncertain scenario—would earn just $22,800. The minimum wage has since gone up to $11.40, allowing workers to bring home a grand total of $23,712. In other words, making rent and living comfortably is unlikely for everyone earning anything near minimum wage and working full time. For the many part-time workers in the city, it’s even further out of reach.
But many apartments built under affordable housing programs are rented either at this mark or just below. The City of Toronto’s Open Door program, which offers private developers tax breaks in exchange for building residential properties “where at least 20 per cent of the residential gross floor area is affordable,” mandates that those affordable units be rented to tenants at or below market value. By the program’s own figuring, the people who can afford market-value rents are professionals like dental assistants and social service workers.
Private developers putting affordable housing on the market under the IAH have to ensure that the building as a whole rents for 80 per cent AMR or lower, says Mary Todorow, research and policy analyst for the Advocacy Centre for Tenants Ontario (ACTO). That means some units can be rented at market rate as long as others are rented further below (for example, in a building of 20 units, 10 could be rented at market rate if the other 10 were rented at just 60 per cent).
“So people who are living at or below the poverty line,” Todorow continued, “they would need a lot of supplement to live in an IAH affordable unit which is at or below 80 per cent of average market rent.”
And there are supplements to make “affordable housing” units actually affordable to those most in need, said city housing advocate and councillor Ana Bailão (Ward 18, Davenport). Those include the City’s housing allowance and rent geared to income, which subsidizes one’s rent to ensure the renter pays no more than 30 per cent of their income. But there are more than 90,000 households on the waiting list for rent-geared-to-income housing, indicating that both the stock of affordable housing and other measures are falling far short of the current need.
Todorow suggested further measures that could make housing affordable: “You can either look at it on the housing side or the income side,” she said. “And on the income side, you know, housing is caught up with poverty reduction, because housing costs are the greatest expenditure for people who are living in poverty. So what you can do is you can also do income supports, like a living wage.”
Practically speaking, even a housing supplement is an income support, since it decreases the portion of your income you have to spend on housing, thus freeing more up for other necessities. Taking a more holistic approach to housing affordability could mean increasing the living wage, as Todorow suggested, or instituting a universal basic income, as the provincial government is testing out. Other options could include stricter rent regulations.
Todorow suggested the need for a large-scale housing strategy based on human rights. The federal government, in preparation for its national housing strategy, is set to release the results of its consultations later this month. It’s yet to be seen if they will heed what must surely have been a common refrain among housing and tenant advocates they spoke to.