he current state of Toronto’s rental market for minimum wage workers is grim.
Toronto, one of the largest cities in North America, is also one of the most expensive. The average cost of a one bedroom rental unit in the city in 2022 is $2,474 — a 27.5 per cent increase since last year.
Wages are not keeping up with increased cost of living. As of October 1, the Ontario minimum wage is $15.50. This wage increase, up 50 cents from the previous $15 minimum wage, raises the monthly income for a full-time worker by approximately $100.
Affordable housing is widely discussed, but the term does not have a universally agreed upon definition.
According to Ricardo Tranjan, a political economist for the Canadian Centre for Policy Alternatives, developers often use it to describe housing that is below the market rate. Conversely, the Canadian Mortgage and Housing Corporation (CMHC) defines affordable housing as 30 per cent of a household’s monthly income before taxes. “This is the definition researchers and policy people use,” said Tranjan. He added that it is not a hard and fast rule, but if someone is spending more than a third of their income per month on housing, they are living in unaffordable housing.
To put this in context, for an individual to rent an average Toronto one-bedroom unit at $2,474 a month without it being classified as unaffordable, they’d need to be making over $8,000 a month or $98,000 a year (before tax).
Affordable to whom?
The key difference to the 30 per cent definition of affordable housing is that – unlike below market rate housing (an approach taken by many developers and developer-friendly politicians)– it takes the income of the tenant into account when determining whether or not a unit is affordable. The 30 per cent definition is used by housing charities and nonprofits, as it is a proportion that allows people the freedom to not make financial compromises on other living staples, like food or transportation.
Thanks to the dismal state of the rental housing market in the city, many Torontonians are being forced to spend 50 per cent or more of their monthly income on housing. According to a study in the Lancet, an unsustainable cost of living will push more people into poverty and have a serious and lasting detrimental effect on individual health outcomes.
With people being squeezed out of the city, it seems important to investigate the severe lack of housing available for people making a certain income. Using the CMHC’s definition of affordable housing as a benchmark, how many available rental units listed on rental sites fit the CMHC’s definition of affordable housing for people making minimum wage?
The real cost of living
For someone working 37.5 hours a week at the minimum wage in Ontario, their average monthly pay before tax would be $2,518.75. According to the CMHC’s thirty per cent guideline, this worker should pay no more than $755.63 per month on housing, leaving $1763.12 for other living expenses including food, transportation, medical expenses, and emergencies.
In order to maximize the number of units available within the affordability parameters set above, a two bedroom apartment will be assumed to be shared between two people, a three bedroom between three and a four bedroom between four people.
On October 31, 2022, in a data-based web scrape of the popular classified listings website Kijiji for longterm rental units available in Toronto, 603 unique rental listings were collected. Some of these listings were duplicates and others are already no longer available on the website for various reasons (already rented, user deleted post, the post broke terms of service for Kijiji).
Of the 603 units scraped from Kijiji, only six of the units fit the CMHC definition of affordable for someone making minimum wage and were located inside the metropolitan area of Toronto. Kijiji does not represent the entire rental market, but for a dataset that included 603 unique links to rental units, less than one per cent of listings can be considered affordable for minimum wage workers.
Of the few affordable units found on Kijiji, most are nearly an hour away from the city centre on public transport, and some of them require unconventional living arrangements.
Location of Affordable Units
“We need an alternative, and for an alternative to emerge we need to name the problem,” said Tranjan.
To Tranjan, politicians have been calling the housing crisis by a misleading name.
“We’ve convinced ourselves that the problem is supply when the problem is profit. Yes, more housing helps, build more housing,” he said. “But there’s profiteering in housing and that is the central problem and to address that, you need regulation.”
Tranjan added that there needs to be community driven political solutions before there are policy solutions, and pointed to the emerging tenant rights movements as something to be optimistic about.
Tenant Organizing as a tool to fight housing crisis
David Bell, a tenant organizer for Parkdale Organize, is skeptical of the idea that simply building more housing will end this crisis.
“You’re never going to be able to build enough affordable units to keep up with the rate in which people are being pushed out of affordable housing,” he said.
Bell stressed that landlords and real estate investors are financially compelled to evict their current tenants in order to dramatically increase rental prices.
He added that preserving tenancies in units that are affordably priced is integral to keeping a healthy, affordable housing supply in the city. In order for the housing situation to turn around in this city, Bell said it would have to become more difficult for a landlord to buy a building and evict its current tenants to raise the rent.
“If there’s doubt in the mind of buyers that they can do that, it will put downward pressure on prices, reduce the size of mortgages and reduce the expectations on profits,” he said.
Bell added that there are more incentives for politicians to build new units than there are to preserve tenancies in existing affordable ones, even if the number of units added cannot keep pace with the number of those that are lost.
“There’s no political value in announcing x number of tenancies being preserved, you can’t cut a ribbon in front of that,” he said. “You can cut a ribbon in front of 20 affordable units in a 500 unit building, meanwhile 100 people have been evicted from their affordable homes and the rents there have now tripled.”
Many developer-friendly politicians have supported the idea that we need to build more housing as the simplest solution to the housing crisis. However, for this to have an effect on the current housing situation developers would need to build the affordable housing that is sorely needed in Toronto, instead of more lucrative investment properties.
As Tranjan said, “One side has to give, and the working class has been giving and giving.”
Like Tranjan, Bell says he imagines the solution to the housing crisis coming from working class people, through tenant organizing.
“Whatever it is that you’re looking to do, if it’s in the interest of the working class, you need working class power or it’s never going to happen,” he said. “We have everything to gain from each other.”
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