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The common sense case for rental rooms

April 30, 2021

This April the City of Toronto launched its consultations on the future of Multi-Tenant (Rooming) Houses. It’s the third time in the past decade the City has attempted to create a regulatory framework that acknowledges the thousands of newcomers, students, seniors and other low-income people who rent rooms in Scarborough, North York, East York, Etobicoke and York. 

Why has it been such a struggle? 

The truth is Toronto needs affordable rooms. A vacant Scarborough bachelor apartment rents for $1,415 per month. In North York, it’s $1,345. In Etobicoke, it’s $1,557. These rents shut out minimum wage earners, or the 1/3 of Toronto renters who depend on a disability pensions or social assistance. 

In contrast, rooms in these areas typically rent from $450 – $700, making them the only affordable housing provided by the private sector. They are often also the most convenient. They allow students to live within walking distance of classrooms, libraries, sports facilities and friends. They enable Scarborough’s essential workers to live near their work rather than criss-crossing the city every day, and they can enable newcomers to rent from people who speak their own language. 

I sometimes hear complaints that Multi-Tenant Houses are unkempt or noisy. I also hear of tenants who live in crowded, unsafe or squalid houses, managed by landlords who do not treat them fairly. But I see these as arguments in favour of taking Multi-Tenant Houses out of the closet, not stuffing them back in. Our aim should not be to do away with the last affordable housing in Toronto, but to make it better. 

What does “better” look like?  I was very moved recently by a short video posted by a London landlord whose six lodging houses are home to 85 men, many of them coming straight from a homeless shelter or the street. I urge you to watch it too. This landlord discovered that many of the men he housed had never been respected by their landlord. When he offered that respect in word and action, men who had once struggled to maintain their homes became stable, successful tenants. The houses are well-maintained, tenants get along with each other, and rents are paid in full. Now he is ready to retire but fears his houses will be redeveloped if he lists them on the private market. So he is looking for a buyer to take over his successful business and preserve these homes. 

How can WE preserve the last intrinsically affordable housing in Toronto?

We can start by recognizing Multi-Tenant Houses are residential uses and belong in every district zoned for residential use. That is the recommendation of Toronto’s City Planning Division, and it makes perfect sense. A house is a house, whether the people who live in it are owners or tenants, or are related or not. 

Legalization is the gateway to ensuring these houses are good homes and good neighbours. Until Mult-Tenant Houses are made legal, owners cannot obtain Building Permits to upgrade their houses. Tenants cannot open their front door to an inspector, or make a complaint, for fear they and other tenants in the house will lose their home. And the inner suburbs will continue to be short-changed because census counts – the basis for public investments such as hospitals – will continue to skip the thousands of tenants living in Multi-Tenant Houses. 

We can treat operators the way we treat other landlords. That means they must abide by the City’s property standards and other regulations, be subject to City inspections, and respect tenants’ rights under the Residential Tenancies Act.  As with other rental properties, the focus should be on improving the homes, not shutting them down. 

We can invest in these homes. Most Multi-Tenant Houses were built as family homes. The Ontario’s Building Code, on the other hand, envisions Multi-Tenant Houses as quasi-apartment buildings, where every bedroom, every hallway and every stairway requires a fire-separation. 

To learn more about the costs of converting a family home to a Code-compliant Multi-Tenant House, I talked to three non-profit rooming house operators who had brought their downtown houses to Code. I also received estimates for the cost of converting a four-bedroom Scarborough bungalow with a full basement, and a three-storey house near UTSC. Here are the costs:

 ProjectTotal CostNo. of TenantsAverage Cost/Tenant
Downtown five-bedroom187,591537,518
Scarborough four-bedroom bungalow74,46789,308
Scarborough nine-bedroom127,577914,175
Downtown 21-bedroom 249,6652111,889
Downtown 11-bedroom 259,9001123,627

Will owners pay these costs? Most good landlords are making only modest profits and won’t have the savings needed to make these upgrades. So newcomers who rent out their basement to pay their mortgage might decide to evict their four single tenants and rent to a family instead. Others, especially those owning three-storey houses, might be more likely to take advantage of Toronto’s hot market and sell altogether. 

And then what?  

In 2014 researcher Lisa Freeman estimated that 5,000 – 10,000 tenants lived in inner-suburban Multi-Tenant Houses, and I suspect the numbers have grown. Where would 5,000 – 10,000 low-income tenants go? Even in the midst of pandemic-high vacancy rates, Canada Mortgage and Housing Corporation’s 2020 Market Rental Survey reported only 49 vacant bachelor apartments in all of Scarborough, 55 in North York and 38 in Etobicoke. 

And what will be the costs to the public when universities lose tuition fees, businesses can no longer fill low-wage jobs, homeless shelters bulge and encampments grow, simply because there is nowhere to live? 

The best and cheapest way to forestall a crisis it to equip landlords to complete the upgrades. In the past the City has offered loans of up to $24,000 per room, with repayment forgiven if landlords kept rents affordable. This solution will come at a public cost. But it is much less costly than the up to $300,000 required to create new micro-units or the ongoing cost of shelter allowances of up to $600/month to help low-income tenants afford private sector rents.

Time for common sense solutions

In their report to Council, City staff list ten occasions since 2008 – 20 years after Toronto’s 1988 almagamation – when City Council or its committees discussed legalizing or regulating Multi-Tenant (Rooming) Houses. Yet we are no closer to the unified regulatory framework Toronto  needs. 

It’s time to recognize reality. Toronto needs affordable rooms, and many of these rooms are in the inner suburbs.  The debate is not about whether, but how, to make these rooms legal, affordable and safe. 

To participate in the City’s consultation you can:

Beat the REITs? Or join them?

June 24, 2020

In April, I posed the question, “Can we beat the REITs at their own game?” Today we know the answer could be YES – but only if CMHC and municipalities are ready to step up. 

Here’s the background: according to the brilliant housing researcher Steve Pomeroy, Canada lost 322,600 affordable homes between 2011 and 2016. During the same period, only 20,000 affordable homes were built. That means for every affordable home built, Canada lost 15. Some were demolished to make way for higher-priced condominiums. But most disappeared simply because landlords raised the rents above the $750/month maximum that renter households with incomes below $30,000 – including 27.5% of Toronto renters – can afford.

We can’t build our way out of this crisis. CMHC’s National Housing Strategy promises a maximum 150,000 new affordable homes over ten years – fewer than half those lost in five years. But we can act now to preserve the affordable housing we still have, by taking at-risk properties out of the market and into community ownership through non-profit organizations, co-ops and land trusts. 

Learning from past successes

A non-profit Acquisitions Strategy is not a new idea. In Toronto alone, tenants and co-op activists converted 4,500 privately owned rental units into co-op homes. I worked for one of those co-ops. Starting in 1976, Innstead Co-op bought up over 50 houses, duplexes and triplexes in east Toronto, using a process that illustrates in microcosm what we need now.  

CMHC “pre-qualified” Innstead to purchase up to 20 new units each year. Innstead had a real estate agent constantly scouting for properties on its behalf. As soon as a suitable house came on the market, the co-op’s Co-ordinator and Renovations Manager inspected the house, assessed the building condition, developed a scope of work and determined what we could offer. If the project “pencilled,” we made an offer the next day with a 3-week condition on obtaining financing. 

The day after our offer was accepted, we sent our 4-page application form – simply our corporate information, a capital and operating budget, our proposed rents and our list of proposed renovations – to CMHC’s Toronto office. Within two days, CMHC would send a building inspector and appraiser to inspect the property. Within three weeks we would receive CMHC approval for both funding and loan guarantees. Innstead would waive the conditions, and the house was theirs. Renovations began as soon as Innstead had the keys, and the future of the home’s affordability was secured forever. Today, Innstead’s bachelor apartments rent for $647/month and three bedroom houses rent for $1,541/month.

What would we need to make this happen today? 

The Canadian Network of Community Land Trust’s webinar, Beat the REITs, has the answer. 

First, we need a CMHC acquisitions fund. Steve Pomeroy is already on the case. He is proposing CMHC supplement the National Housing Strategy’s Co-Investment Fund – which funds only new construction and non-profit renovations – with an Acquisitions Fund that would enable non-profit, co-op and land trust organizations to purchase at-risk rental buildings when they come on the market. 

Second, we need expedited approvals. CMHC no longer has a Toronto office. But might it be possible for the City of Toronto could step into that role? The City pioneered a Small Sites Acquisition Pilot Program that had many of the same features Innstead enjoyed. Non-profit organizations were pre-qualified, in this case through an RFP process. And in 2019, Parkdale’s Neighbourhood Land Trust was able to tap $1.5 Million in City funds, combined with the land trust’s own equity, Federal/Provincial funding and a conventional mortgage, to purchase and renovate a large at-risk rooming house. 

Alternatively, the Ottawa Community Foundation has contemplated a revolving fund to enable non-profit organization to tie down properties quickly, and then repay the Foundation once they had CMHC approval.

There may also be the potential to identify acquisition sites before they come to market. In the heyday of co-op acquisitions, for example, it was often tenants who first signaled that their building might be on the verge of sale and who organized to take control of their own buildings. 

Third, the non-profit and co-op sector needs the capacity to participate in the market. Like Innstead, we need specialists who can scan the market for opportunities, evaluate building condition and financial viability, submit a credible submission and take on the responsibilities of owning and operating the building. 

Unlike Innstead, however, we will be pursuing far more complicated buildings and competing with buyers in a red-hot market. Some Toronto non-profit housing providers are already collaborating to strengthen their collective development capacity. We may also need to cultivate a development consultant who becomes the acquisitions specialist, or deliberately assemble the combination of resources we need from many parties. 

Ready for something truly audacious?

CMHC has set itself a “big hairy audacious goal: by 2030, everyone in Canada will have a home they can afford and that meets their needs.” By that measure, building-by building purchases will be, in the words of a participant in the Beat the REITs webinar “fighting a nuclear war with a slingshot.” Their proposal: take up CMHC’s call for audacity by buying a REIT! – and then put the REIT’s expertise and assets to work for the community-based sector. 

Keeping at-risk properties affordable forever

An acquisition strategy would bring so many benefits to Toronto. It would:

  • enable low-income tenants to stay where they are, stabilizing neighbourhoods, and preserving a diversity of incomes and tenures in gentrifying districts 
  • preserve and extend the legacy of public investment. Many of the buildings at risk of financialization were created through federal grants and tax incentives totalling $4 Billion Canada-wide. Bringing these units into the community domain extends the value of these considerable public investments
  • be faster and surer than new builds. A recent study of nine Toronto supportive housing proposals found seven required Official Plan and Zoning By-law amendments, and two required minor variances. Only two of the nine went forward. One non-profit owner purchased a property using their own reserves in 2015, yet five years later their new building is only now under construction.

Seizing the moment 

Based on the best information we have, during the Covid crisis 10 to 15% of Ontario renters have not been able to pay their rent. Some will be able to bounce back once they return to work. But many others may find that their old job, and perhaps their entire line of work, has evaporated. 

That’s bad news for tenants who risk losing their homes once the Ontario Government lifts its eviction ban. It’s also bad news for small landlords who needed those rents to stay afloat. And it will be very bad news for Toronto if these at-risk buildings are bought up by REITs and other financialized players whose business model entails squeezing low-income tenants with extra charges, or hustling them out the door and raising the rents to whatever the market will bear.

At its June 15th meeting, Toronto City Council’s Planning & Housing Committee directed the Housing Secretariat and City Planning Division to convene a working group with non-profits, co-ops and land trusts to develop a strategy to acquire properties for affordable housing.

This is not a moment to miss!


Can we Beat the REITs?

April 29, 2020

The headline in the Globe and Mail’s Business Section says it all: “Analyst sees ‘once in a decade opportunity’ to buy Canadian REITs.”

Is anyone surprised?

Read more…

“When our emotional needs are met, we can face life and enjoy it.”

November 28, 2019

What a hopeful report is coming to Toronto City Council’s Economic and Community Development Committee next Wednesday!

City staff is recommending City Council pilot an “emotion-centred” approach to care at Lakeshore Lodge — one of ten long-term care facilities operated by the City of Toronto.  The plan requires increasing front-line staffing to offer 4 hours of care per resident each day, up from 3.5 hours.  But the real breakthrough is a proposed shift in the philosophy of care, from churning through tasks to enabling residents to live better lives. As the staff report says, “when our emotional needs are met, we can face life and enjoy it.” Read more…

What if we brought an “applicants first” lens to Toronto’s social housing waiting list?

July 10, 2019

Toronto’s Auditor General’s June 21st report, Opening Doors to Stable Housing, confirmed what many of us have known for years: Toronto’s social housing waiting list is not an effective vehicle for matching home-seekers to social housing vacancies. Read more…

TCHC’s $1.34 Billion: Is it the real deal?

May 14, 2019

Last month, Prime Minister Justin Trudeau announced a $1.34 Billion investment to address Toronto Community Housing’s repair backlog.

It was the biggest one-time federal housing announcement in Canadian history. It was everything that TCHC had asked for, and the culmination of advocacy efforts that began in 2005 with the tenant-led Save our Structures campaign.

And yet the response from housing advocates has been strangely muted. Read more…

So THAT’s why we can’t find affordable homes!

May 3, 2019

Did everyone get to see PUSH, the new film screened to sell-out audiences at this year’s Hot Docs Festival? Or to hear UN Special Rapporteur Leilani Farha speak at last Tuesday’s Planning and Housing Committee?

Ms. Farha offers a welcome alternative to the thesis that a housing crisis can be solved simply by building more homes, and that the government’s job is to get out of the way. Read more…

Housing Now: Big, bold . . . but can it be bolder?

January 25, 2019

Now here’s the sort of “big thinking” Toronto needs.

The City of Toronto has mobilized the resources at its disposal — its land, waived taxes and fees, a $20 Million revolving fund to staff up and hire consultants, and expedited planning and legal approvals — to create more affordable housing on 11 City-owned sites.

Toronto needs this “whole of government” approach if we hope to achieve Mayor Tory’s target of 40,000 new affordable homes in 12 years. Housing Now started the ball rolling with the sites they own, but this inter-divisional approach is needed for all affordable housing development. Read more…

Creating new homes in just five months

January 10, 2019

It’s a conundrum.

We know that homeless people need homes.  But when people are dying in the streets and our shelters are over-capacity, we can’t wait years to shepherd affordable or supportive housing through funding and planning approvals. So we create shelters and respite centres – not because we think they are a permanent solution to homelessness, but because they are the solution we need right now.

But what if we could create a self-contained apartment as quickly as a shelter bed?  It’s what Vancouver is doing. Read more…

Inclusionary Zoning is “definitely a good thing” — developer

November 2, 2018

Now this is what I like to hear. In the lead up to the municipal election, developer Alfonso Romano, President of Castlerock Numa, joined Steve Paikin and three other panelists to cheer on Inclusionary Zoning.

Mr. Romano described Inclusionary Zoning as “definitely a good thing,” that would create a level playing field for developers across the City. In Romano’s words, “You really need to legislate this and basically say [to the development industry], ‘You have to take up this social responsibility and be part of the solution.”

Exactly so.  Read more…