The race is on to create desperately needed housing units to shelter the homeless and those struggling to keep a roof over their heads.
The COVID-19 pandemic has created an impetus for permanent solutions, and fast. In Peel, for example, staff mobilized to help 600 homeless people access long-term housing in March, as shelter space grew even more limited due to physical distancing measures.
Peel’s affordable housing crisis looms at a critical time in the pandemic, as flu season, dropping temperatures and the curtailing of certain social services add more pressure on some of the region’s most vulnerable residents. Last month, regional staff were asked by council to find “immediate solutions” to assist homeless populations in downtown Brampton and other areas.
Now, Peel is expecting another accelerated push for affordable housing supply. Fifteen cities and municipal regions across Canada will share a $500-million boost from the federal government through its Rapid Housing Initiative announced last week.
Peel has been allocated $30.4 million based on the federal government’s assessment of severe housing needs among renters and the homeless.
“All options are on the table right now, including potentially purchasing distressed hotels as well as other distressed and abandoned buildings across the Region that could be turned into multi-residential homes,” Mississauga Mayor Bonnie Crombie said in a statement to The Pointer. The city will also look at the option of creating new modular, multi-unit rentals and work with Peel to apply for additional funding through another available stream.
Toronto will receive the greatest share of the city-stream funding ($203.3 million), followed by Montreal ($56.8 million), Vancouver ($51.5 million) and Ottawa ($31.9 million).
Local and provincial governments, Indigenous and other eligible organizations can also apply for additional funding through another $500 million reserved for project applications made to the Canada Mortgage and Housing Corporation (CMHC), the crown corporation administering the program.
The $1-billion total funding in the Rapid Housing Initiative will support efforts to “quickly develop” up to 3,000 affordable housing units across the country, according to a press release issued by the federal government.
The initiative is part of the government’s National Housing Strategy, first launched in late 2017 as a $40 billion plan, and upped to $55 billion in the March 2019 budget. The 10-year plan was conceived to create 125,000 new housing units, and repair more than 300,000 others.
“On paper, it sounds great…but when you actually start doing the math, $1-billion is not a lot of money when it comes to tackling the problem of unaffordability,” said Vik Singh, an assistant professor at Ryerson University’s Ted Rogers Schools of Management, currently researching the impact of COVID-19 on the GTA. “That program is well intended, but I think [the government] has to probably put up more budget to make it more effective going forward.”
Locally, Peel Region is also trying to hit a $1-billion budget target on its own Housing Master Plan to create 5,300 affordable units by 2034. In an October report to the Strategic Housing and Homelessness Committee, staff criticized the “significantly and disproportionately high” contribution paid by the Region towards the current housing plan.
In a statement to The Pointer, regional spokesperson Lesley Hudson said Peel’s Housing Services will be applying for additional funding through the Rapid Housing Initative’s project stream later this year.
According to a 2016 census bulletin, nearly one-third of households in Peel spent 30 percent or more on housing costs, and 14 percent of the region’s residents lived in subsidized housing. Mississauga had the highest number of Peel’s renters, at 65 percent. Based on 2008 regional data, rental units were considered affordable at a cost of $1,018 or less a month, and homes at price tags of less than $306,800. Adjusted for today’s inflation, those prices translate to about $1,200 a month in rent, and $363,000 in house cost.
According to a Rentals.ca report, Mississauga had the third highest average rent prices in Canada in October, at $1,932 a month for a one-bedroom apartment, just below Vancouver’s $1,941 unit cost, and Toronto, the most expensive city, at $1,967. Brampton, where rent was at an average $1,614 a month, sat at number 13 on the list of Canadian cities.
According to Zolo, the current median selling price of a residential units in Mississauga is $878,000; one-bedroom condos are selling for an average of $497,000 and the average price for a one-bedroom townhouse is $456,000.
In Brampton, the average selling price for all residential units is currently $867,000; one-bedroom condos are $428,000; and two-bedroom townhouses are selling for $643,000 (the most recent prices for one-bedroom townhouses are from three months ago, when Brampton buyers paid an average of $552,000).
According to the 2016 Census, Brampton’s median total individual income was $29,092, and Mississauga’s was $31,311. Today’s real estate picture points to how out-of-reach home ownership or affordable housing is for many Peel families, and those living on their own.
In the country’s sixth largest city, that median individual income, after taxes, would be about $25,886, so to cover the cost of an average one-bedroom apartment in Mississauga, it would leave $225 a month to pay for food, utility bills, other bills, clothing, transportation and all other expenses.
Housing is not cheaper today in real inflation adjustment terms, said David Hulchanski, a professor of housing and community development at the University of Toronto. “There's a growing mismatch between the incomes of many people…but house prices and rents are dramatically increasing in real terms,” he said. “Sadly, I think things are only going to get much worse because not too much is being done in Peel or in other jurisdictions in the country.”
Offering modest subsidies to developers to reduce rent or other short-term incentives for purpose-built housing are not sufficient, he added.
“We simply need more real affordable housing, which is social housing. We used to build 20,000 units a year and we stopped doing that in the 1990s,” Hulchanski said, criticizing the progress of the federal government’s National Housing Strategy.
The housing affordability crisis may be artificially alleviated by a pandemic economy, as rental stock has increased in many parts of the GTA.
Though CMHC rental market data is still being collected for its annual survey, real estate listing trends are pointing to a greater supply of rental units, said Dana Senagama, a CMHC principal market analyst for the GTA.
Other factors that could temporarily drive up supply are renters in lower-income sectors who have been shut out of the rental market due the economic impacts of COVID-19, including those who move back in with their families, she said. New immigrants also tend to rent for at least two years upon arriving in Canada, and with the COVID-19 restrictions, disruptions to these trends are also leading to more temporary unit vacancies.
“It's kind of like a triple whammy,” Senagama said, noting that even with the creation of more purpose-built rental units, vacancy rates have hovered at around two percent for the last five years. “We've seen very tight rental market conditions [pre-COVID] simply because there’s just not enough supply...so with all of these more temporary impacts, what you're likely to see is more units laying vacant.”
Homeownership is seeing the opposite effect, thanks in part to record-low interest rates, Senagama said. She points to increased sales prices, up by about 25 percent across the GTA, with price growth up by 12 percent compared to last year.
But some landlords with multiple investment properties may have shed them earlier this year when Mississauga placed restrictions on short-term rentals. On Wednesday, the city announced a new short-term rental by-law that, if approved, would go into effect January 19, 2021 and require landlords to obtain an annual $250 license while only renting from their principal residence.
COVID-19 is impacting all Canadians. At a time when vital public information is needed by everyone, The Pointer has taken down our paywall on all stories relating to the pandemic and those of public interest to ensure every resident of Brampton and Mississauga has access to the facts. For those who are able, we encourage you to consider a subscription. This will help us report on important public interest issues the community needs to know about now more than ever. You can register for a 30-day free trial HERE. Thereafter, The Pointer will charge $10 a month and you can cancel any time right on the website. Thank you.
Isaac Callan, Local Journalism Initiative Reporter, The Pointer