Toronto’s affordable housing waiting list hit an all-time record of 78,604 households in May, but that hasn’t stopped Toronto Community Housing Corporation’s one-man board Case Ootes from recommending the sell-off of up to 900 affordable TCHC homes. Ootes says there is no option but to cannibalize current TCHC stock to raise repair dollars, but this backgrounder from the Wellesley Institute sets out the details.Ootes says the sell-off is needed to cover a part of TCHC’s estimated $650 million repair backlog. The new board of TCHC, which will be established by Toronto City Council next week, will consider the sell-off plan. Here are some facts and options:
- Canada Mortgage and Housing Corporation reports that there are just 5,532 vacant rental apartments in all of Toronto, and that the city’s rental vacancy rate has slipped to a painfully low 2.2% – well below the 3% that many experts believe is the minimum for a healthy rental market. Selling off 900 TCHC homes will put even more pressure on a very tight rental market in Toronto.
- Ootes estimates the sell-off could generate up to $400 million* – or an average of $445,000 per unit. This appears to be a high estimate, since some of the units are currently uninhabitable. The per-unit estimate is only slightly lower than the average re-sale price of $485,000 reported by the Toronto Real Estate Board.
- The loss of 900 units will cost TCHC millions of dollars in lost rental revenue annually – a significant loss to the bottom line.
- Toronto’s affordable housing waiting list hit an all-time record of 78,604 households in May 2011 – up 7% in one year. Only 429 households were housed from the list in May, which leaves a 15-year wait for new households joining the queue. The sell-off of 900 homes will make the wait even longer.
- The capital repair shortfall is a serious concern, and was created when federal and provincial governments downloaded aging housing stock to the City of Toronto without adequate capital reserves. Both the federal and provincial governments gave new capital dollars to Toronto in 2008 and 2009, but the new money has only reduced, and not eliminated, the repair deficit. Ootes has said “senior levels of government are not riding to the rescue,” which is not correct. The two levels of government have provided $1.2 billion in total for affordable housing repairs since 2008 for housing across the country and the province in response to municipal and public pressure. Selling off 900 TCHC units will ease the pressure on senior levels of government to pay their fair share.
- There are also innovative financing options that TCHC can explore, including Infrastructure Ontario’s affordable housing loan fund – which has more than $300 million in unallocated resources. Housing and community bonds are another social finance option to help raise funds for the repairs. TCHC has financing options other than selling off 900 homes.
- TCHC will need to get provincial permission to dispose of the 900 homes, and that will require TCHC to have a plan to re-house the existing residents. Re-housing the tenants in existing TCHC homes will make the wait lists even longer.
*This number has been corrected from $450 million to $400 million. Our apologies.