Monthly Archives: March 2019

Home(less) is Toronto

According to a recent news release from the Toronto Real Estate Board (TREB), sales are down. They suggest the decline is likely due to the federal mortgage stress test. The stress test means that a home costing between $500,000 and $999,999 requires a minimum 5% down payment on that first $500,000, plus a 10% down payment on the value between $500,000 and $999,999. In other words, home buyers are required to put down a larger down payment than previously.

Toronto Real Estate Trends’ March Housing Market Report quotes Toronto MLS statistics that the average price for a Toronto house is $838,046, with detached homes still averaging over a million dollars.  This means that buying an average home in Toronto requires a hefty down payment, as it falls into this $500,000 to $999,999 range. It also means that new home owners are struggling to make the down payment, and taking on hundreds of thousands of dollars in debt, with low interest rates predicted to rise soon.

For now, both mortgage and Ontario’s unemployment rates are relatively low, but minimum wage is currently stagnating at $14 an hour. So someone working a 40-hour week at minimum wage is grossing less than $30,000 a year. By some estimates, the cost of living in Toronto rose from $28,200 a year in 2017, to $32,885 in 2018, and is predicted to go up to $38,572.68 a year for 2019 with no decline on the horizon. So the cost of living in Toronto is already beyond what many people make, and rising far faster than most people’s incomes. Most of this increase is due to housing costs. People don’t just want to survive—they want to thrive! They want to save money towards that hefty down payment. Clearly that can’t happen.

Like it or not, nearly 50% of people in Toronto live in rental housing. But even that’s not simple. According to the Canada Housing and Mortgage Corporation (CMHC), Toronto’s rental market only has a 1.1% vacancy rate, one of the lowest in the country.  Toronto has very limited rental accommodation, and renters are hanging onto their units as they watch the cost of rental housing rapidly skyrocketing. TREB estimates the average one-bedroom apartment is now $2,145, with a two-bedroom at $2,810. Even if you can find an apartment in this competitive market, you still have to come up with first and last, and reliably pay over two-thousand dollars rent a month.

It’s difficult to accurately estimate the homeless population of Toronto, but it’s grown noticeably in the last year. In 2018, a Toronto City needs assessment report estimated 8,715 homeless, with 533 people living outdoors. Although the 2019 figures have yet to be released (we’re still in winter), Toronto’s homeless population averages about 100 deaths per year. If a society is judged by how it treats its weakest members, we’re doing a lousy job.

How do we fix this? It’s a complicated problem, and I haven’t even scratched the surface. But what I do see is that the cost of housing in Toronto is spinning out of control. Few are able to live comfortably in this market, many are taking on debt that they’ll never be able to pay off, many are scraping by month-to-month renting sometimes sub-standard housing, and an increasing number are falling between the cracks and living on the street. Some cities have had good success with housing-first initiatives, wherein homeless people are provided with housing first and then supported in getting back on their feet. It’s also worth investing in more rental units, rather than condos, and keeping rents in a more affordable price range, while also ensuring that they’re maintained.

An awful lot of money is flowing through the hands of realtors and banks. While I have no issue with people making a decent income, I take exception at a very few making a great deal of money from the labour or others who are struggling.  

© Catherine Jenkins 2019 all rights reserved