Could Tighter Rental Controls Be Coming?

I don’t think so, but as many of you, not just I, have pointed out – you never know what this government is capable of.

I read a “letter to the editor” this morning that made me shake my head, but perhaps it’s the voice of a larger percentage of the general public than we think.

Even though one of the biggest pieces of rental legislation in the city’s history was implemented last year, there are still many people out who think that should only serve as a starting point…

SorryNoVacancy

Here’s a good philosophical question with which to start your Friday morning: what happens when two of your personality traits are contradictory?  Which one wins out?

For example, if I said that I were a “compassionate” individual, but I was also a “realist,” which trait would prevail?

I suppose it depends on the situation, and as you might have guessed, I’m about to introduce you to the concept.

I read a “letter to the editor” in the Toronto Star on Thursday, and while many of you will immediately roll your eyes at these letters, I often find they provide a true representation of what individuals are thinking.

In an online forum, with no name attached (like this one), anybody can be a keyboard warrior.  You can win an argument about, say, personal finance, by concluding, “….and take it from somebody that makes over $2 Million per year,” even though you’re unemployed and live in your mother’s basement.

In a letter to the editor, you sign it with your name, and often with your city.

Here’s the letter from Thursday that I want to talk about:

 


 

Your Letters: Young Familes Can’t Afford To Live In Toronto

I live in Toronto with my wife and 18-month-old son. My wife and I are both youth workers and have been at our jobs for some time. I work on the front lines with homeless and under-housed youth in employment and at a transitional shelter.

What I find unfortunate is that my wife and I have found it impossible to find affordable housing. After tax, 30 per cent of our income is roughly $1,350. As CMHC recommends no more than 30 per cent of your income be spent on housing, that is a number we aim to use to house ourselves and our young son.

A two-bedroom unit in Toronto is now going for $1,800 and more, plus utilities. That brings housing costs to more than 50 per cent for of a couple making well above minimum wage.

The lack of interest in providing citizens of this city with affordable housing is criminal. If I can’t find housing for my family, how would a young homeless person will ever get off the streets?

I’m disgusted with this city and its municipal government, along with the provincial and federal governments who leave young families like mine with no options. Families in this city are suffering, we are drowning.

As I see young people with families who are friends of mine move out of the city in droves, I am hesitant to follow. But I begin to understand their decision when I’m faced with a rental market that hates families, landlords with free rein to discriminate and governments who choose to do nothing.

We need rent control now. Toronto will soon become a city without culture, without art and without families. Governments must act now to protect their cities from the white-washing, wealth-driven machine that is the free-rental market.

Anthony Lohan, Toronto (for now)

 


 

I’m compassionate, and I’m a realist.

This is a young man with a wife and an 18-month-old child, who works a full-time job, and is having trouble keeping up.  I can be compassionate, I can be understanding, and I can be sympathetic.

But I also think that many parts of this letter, which I’ll delve into shortly, are misguided.  I am, after all, a realist.

And in my conflicting position, my realism wins out.

This man, who is complaining about rental prices in Toronto, lost this argument with the first three words of his letter:

I live in Toronto.

My solution?

Don’t.

I know, I know – hardly compassionate, and hardly sympathetic.  But the concept of the “right” to live in Toronto is not a new one on this blog, as we spent a large part of 2017 discussing entitlement, and the bizarre, yet increasingly-popular idea that people “should” be able to afford to live comfortably wherever they so choose.

From there, the letter gets a little dramatic and hyperbolic:

The lack of interest in providing citizens of this city with affordable housing is criminal.

I don’t think there’s a “lack of interest.”  Didn’t Justin Trudeau just earmark $40 Billion for affordable housing?

And while “lack of interest” could be confused with “lack of infinite resources,” I find the next part of the letter to be more telling.

I’m disgusted with this city and its municipal government, along with the provincial and federal governments who leave young families like mine with no options. Families in this city are suffering, we are drowning.

So this guy hates all three levels of government, which is incredibly ironic, since I’m hardly their biggest fan either, but our reasons are completely different.

How about this quote:

I’m faced with a rental market that hates families.

That’s not fair.  The rental market doesn’t hate families; the rental market is based on supply and demand.

Not only that, there’s some bizarre expectation on his part that, what – the “discriminating landlords,” as he puts it, will subsidize housing for those that want it?  It’s as though they should ignore property taxes, condo fees and/or maintenance, income tax on the rental income, and capital gains tax on the disposition of the asset?

And last, but not least, this gem:

We need rent control now. 

Wait, what?

We need rent control?  We do have rent control.  In fact, it’s been less than a year since the Provincial government (who he hates) brought in a rental control that affected every single property built in the past 36-years.

Last year’s new legislation, which included the words “rent control,” was a massive policy change.

So that provides only two possible explanations for this brave soul who put his name on this letter:

1) He doesn’t know what rent control is, and/or doesn’t know what changes were brought into place last year.  If that’s the case, then is it fair for me to conclude that he’s unsophisticated and/or uninformed, and thus his complaint lacks merit?

2) He does know what rent control is, he does know what changes were brought into place last year, and he wants more.  If that’s the case, then Good Lord are we all in trouble.

More rent control.

More than we already have?

What else could we do?

Would freezing rents be enough?  For two, three, or five years?

Would reducing the allowable yearly increases be enough?  From 2.5% to 1%?

Or are we going to a completely different place; one I didn’t think we’d ever explore?

As things stand right now, landlords are free to set their own rents when offering a property for lease.  But when they are extending an existing contract with an existing tenant, there are rent controls in place.  I think we all understand this, correct?  And this is how “rent controls” are thought of around the world, agreed?

But what if these rent controls extended beyond the term of the lease with the existing tenant?  What if the government got really creative, and delved into new territory?

What if once a landlord set a rent, that rental amount was regulated, forever?

You put a tenant into a property at $1,600 per month, and if a different tenant moves in next year, government regulations prohibit you from advertising the property for more than, say, $1,624 (a 1.5% increase)?  And that increase, which can fluctuate like the rent controls currently in place, are tied to that property for as long as the individual owns it?

But why not take it a step further?

Even if that individual sells the property, the rent control remains; like a right-of-way on a property, that transfers with title!

Are these the type of rent controls that Torontonians, who are demanding “rent controls” when there already are rent controls, are looking for the government to implement?

On Thursday an article appeared on CBC.ca entitled, “New Year, Same Old Expensive Rent In Toronto.  Weren’t We Fixing This?”

Define “fix.”

While we’re at it, we should finally define “expensive.”

The article starts with this:

Toronto tenants may now be legally protected from drastic rent increases, but the measure seems more like a consolation prize when rent was so high before the new rules were set.

Okay.

So then…………..should we decrease rents in Toronto?

Should Kathleen Wynne create another 3,000 full-time government positions for “Rental Fairness Officers” to go into rental properties, assess what fair market value might have been in 2016, and then maybe draw up some paperwork for the landlord to sign within 30 days to confirm new, lower rents?

The article continues:

With last year’s legislation, landlords can’t raise rent more than 2.5 per cent annually — even in units built after 1991.  But they can still set the price of a new lease at whatever the market demands.

Egad!

“They can still set the price of a new lease.”

So maybe expanding rent controls in the way that I facetiously, sarcastically, argumentatively suggested above does have some merit?

And note how that sentence continues: “….at whatever the market demands.”

Oh Dear Lord!

An efficient market?  Say it ain’t so!

Imagine the audacity of buyers and sellers interacting in a free market to set a value, like in every free market, everywhere.

Folks, come on.

Help me out here.

Am I way off base, or is every single person in society today holding his or her hand out?

The government does not have infinite resources, and never will.

On every corner, of every street, everywhere in the city, somebody is standing up on a soap box complaining about something.

If 2017 was just a warm-up to 2018, I have no idea where we’re headed.

The Canadian government can’t be Oprah.  Justin Trudeau can’t stand up and say, “You get a house!  And you get a house!  And you get a house,” to everybody who wants one, although I honestly don’t think we’re that far away.

But as far as the Toronto rental market goes, perhaps if we can’t even agree on the problem, and certainly can’t agree on the fix, then we can’t agree on a solution…

73 Comments

Post A Comment

Your email address will not be published. Required fields are marked *

  1. Steve Mitchell says:

    Love him or hate him, if Mike Harris didn’t get rid of rent control, half of those condo towers downtown which are chock full of happy renters would never have been built. And that encouraged older buildings to keep rents low to compete with the shiny new units. The rental situation would by now be exponentially worse. It’s Econ 101. If you disincentivize expanding supply, you will get higher prices if demand stays the same or increases. And it is only increasing. With 100,000 people a year coming to TO, we should not be discouraging construction with rent controls in any way. It will only hurt the very people they are designed to benefit. Just look at New York, a rental disaster partyly fueled by rent controls.

  2. Madcat says:

    So tired of the government doing absolutely nothing to curb speculation in the housing market! How is it that inflation is so low yet the cost of shelter has skyrocketed!

    Cat Funny GIF from Cat GIFs

    1. Kramer says:

      This is where the inflation has happened – in assets… equities, real estate, alternative assets, etc.

      But the market as a whole cannot afford increases in the price of toilet paper, diapers and other consumer staples.

      It shows how the economy as a whole is still fragile, and why it has taken so long to finally start increasing interest rates, and why they cannot raise them too far, too fast.

      And the divide between haves and have-nots grows wider.

    2. lui says:

      Nothing wrong with speculation then renting out but speculation and leaving the units empty as what foreign investors do not only ruins the local economy but also makes it harder for renters to find a decent place at a affordable level.

  3. Condodweller says:

    @Matt
    “Same goes for capital cost allowance; it’s a nice little tax benefit, but it’s not so clear that it has a sound economic justification.”

    CCA for a typically nondepreciating asset like a house/condo has virtually no economic impact given that most individual landlords never even heard of it never mind used it and even if they did, it only delays the tax due to the eventual recapture. In any case, it would only have a trailing effect on the economy, therefore, to suggest it affects the housing market is quite a stretch.

    Regarding PRE as I have said before don’t even mention it because we don’t need to give our government any ideas that we may be ok with eliminating it. Capital gains on RE investments is another story but if they were to play with it it would affect all capital gains which would probably be unpopular. The best way to affect housing with tax measures would be to raise the capital gains inclusion rate, which apparently is in the works already.

    WRT your final point, are you suggesting the government should start expropriating SFHs to build high-density housing? Are you volunteering to start with your house?

    1. Matt says:

      The final point was that by doubling the by right permitted density in all areas currently zoned single family residential, you’d solve the housing problem pretty quickly. No doubt there would be some infrastructure issues – perhaps start one block on either side of major transit arteries, then extend from there over time? I think the resulting built form and the flavour of many neighbourhoods would improve. For a supposedly world class city, wide swathes of Toronto are laughably light on the kind of community amenities that can only be supported by higher density.

    2. Steve Mitchell says:

      If any government (city, prov, or feds) touches the PRE or starts expropriating single family homes or allowing massive density in single family neighbourhoods, there will be pitchforks and torches at City Hall, Queens Park, and Parliament Hill. We will have truly entered the Marxist era in Canada. The people will rebel.

  4. LessThanSerious says:

    “Is every single person in society today holding his or her hand out?”

    Of course not, David, and you know it. Hyperbole is fine (it’s like mother’s milk to this, and most other, blogs) but don’t insult your readers. I think it’s basically a matter of “the squeaky wheel gets the grease,” particularly in the “dead-but-don’t-yet-realize-it” print media.

    “On every corner, of every street, everywhere…”

    Puh-leeze!

  5. Matt says:

    Hey David,

    I think you’re being too hard on the author of this letter to the editor. You’re right in the sense that he hasn’t made the best case for how to solve issues in Toronto real estate. But the idea that somehow there is are simple issues of supply and demand that are at the root of the housing affordability problems in Toronto is a bit to blase of a dismissal.
    First of all, for most purchasers, credit availability is a big driver of housing purchase decisions. The availability of credit is linked in many ways with government decision making- CDIC insurance, CMHC mortgage insurance, and the broader regulatory regime that gives depositors confidence, play a significant role in supporting the housing market. Strip them all away, and then you’d have more of a free market. But I’m fairly confident it would be a very different market then we have today.
    Second, tax distortions support housing purchase decisions. Take away the tax free status of capital gains on principal residences, and we’d have a freer market. But not one were housing prices are so well supported. Same goes for capital cost allowance; it’s a nice little tax benefit, but it’s not so clear that it has a sound economic justification. Strip it away, or true it up to the real economic depreciation of the housing stock, and no doubt the bid for condos from investors would diminish.
    Finally, and I think most importantly from the perspective of the kind of renter who’s being priced out of the city, why on earth is there so much low density housing south of the 401, between Dufferin and Vic Park. It’s not because of the “free market”. It’s because of the entrenched interests of those who already own houses- many of whom are bankers who are sucking at the teat of government and pretend that somehow they’re heroic capitalists.

    1. A says:

      Matt,

      Capital cost allowance is permitted for depreciable properties and in the case of a real property, only the depreciable components qualify. CCA is aimed to give recognition that the cost of a depreciable property is written off over time. How can you even question the economics of this?

      You can call it a distortion but PR exemption has existed forever even in periods when prices were down. It has been a longstanding government policy to encourage home ownership and Canada is not the only country that allows this. Take a place like Newfoundland or Fort Mac. You can get all the good stuff you mentioned too – PR exemption, CMHC, etc. Why are those markets in the doldrums?

      If you strip away the PR exemption, homes cannot be passed down to the next generation without paying income tax. Query whether that is an appropriate response.

      There are lots of condos in the downtown area which I think would qualify as between Dufferin and Jarvis.

  6. Tommy says:

    Any further rules introduced to “control rent” and I’m selling all properties and investing elsewhere.

    1. Alexander says:

      I am done with purchasing of rental properties in Ontario and Canada as well. Even 5 years ago it was hard to break even and now it does not make any sense. I wonder how tenants are expecting to pay less that 2000 a months for a new condo rent if you calculate management fees – 400-600, taxes – 250 and up and mortgage payments unless buyer pays all in cash. Now if there will be no price rise both in rental and selling price why would you start buying condos and houses ( even worse numbers ) and taking all those investment risks with new government intervention or bank tightening.

      1. lui says:

        You two people must be doing something wrong .My last two condos I kept them for 3 years each.Day one I had a renter and all the units they resigned when the year lease was over.The rent I got covered everything and even had a few hundred at the end of the year left over to cover unexpected events.I do agree with sq footage downtown hitting the $850 range it’s more difficult to buy/rent/sell and expect to made a decent profit.I’m also getting out in 2018.

  7. Jim says:

    Have anyone noticed how the top builders are billionaires. I find speculating on necessity of life distasteful. Most people seem interested in making as much money as they can without thought about what type of world is being created.

    One way to increase affordibilty is limit the after sale price to a reasonable amount and change the way buildings are financed with rules about the total number of units given the total livable space the building provides. Also, increase the interest rate paid on returned deposits for cancelled projects to credit card levels.

    1. Craijiji says:

      If you do that, no one is going to build anything and the situation would be worse.

    2. David(Not the David who run this website) says:

      Jim, the only way out of this is to get rid of all rent controls and make it easier for landlords to get rid of bad tenants. We should also make it easier for good tenants to leave bad buildings and landlords. Level the playing field and free up the markets, then things will improve.

      As for billionaire builders, you have to wonder if the Wynne gov. increased rent controls so as to stack the deck in favor of new condos. Building condos must be very profitable, since there are so many being built in this city. Also condos probably net the city more in property taxes and land transfer taxes than would a rental building. No doubt these builders are some of the people who help put Wynne in office.

    3. Not Harold says:

      People who own large family controlled companies are billionaires? Shocking!

      How large is a condo project exactly?

      A small condo of 100 units (10 floors of 10 units) at an average price of $300k (either incredibly tiny units or far below current average prices) would be a $30 million dollar project.

      Something like Sugar Wharf (LCBO HQ) with 5 buildings between 64 and 90 stories is looking at 360 floors of units (after discounting for amenity floors, lobbies, and some wastage). Maybe 300 floors if each tower is significantly reduced. Again using a 10 unit per floor estimate, that’s 3600 units! Projections are for 8000 people to live so that’s a reasonable figure for the total units.

      3600 units at an irrationally low price of $300k is… $1B. That’s a big project even at very affordable prices.

      But you obviously don’t want anyone to build a company or make money. You just want the government to do it.

      We know how that works, ranging from the impeccable quality of the TTC and Canada Post to the idiocies of the Canadian Wheat Board (no new products like heritage breed spelt, just barest commodity wheat), LCBO circa 1950, or the Canadian Dairy Board (incredibly hard and expensive to start a cheese producer for organic artisanal cheese or more unique butter).

  8. Buckley B. Buckington says:

    Drive around residential streets in my area of Etobicoke and you’ll see loads of 3-6 unit apartment buildings that take up no more space than many of the monster houses that people are building these days. I don’t think a single one of those buildings has been constructed since the 1970s. What changed since then? If rentals are in such demand, why isn’t anyone building these things anymore?

    1. Kramer says:

      I’m gonna go out on a limb and say “Inadequate Return on Investment”.

      1. David(Not the David who run this website) says:

        That and it’s just not worth being a small landlord in Toronto.

        1. Buckley B. Buckington says:

          Are you so sure? Those old multiplexes still change hands regularly so there must be some people that think it’s worth it.

          1. Kramer says:

            True, and they will sell at a price where the new owner makes the return on investment they are looking for… but building new ones is a whole different can of corn, and there are typically other uses for the land that have a better return on investment.

    2. Zar says:

      Taxes & levies to put up a multiplex are too high to justify the construction cost, land cost with what you get back in potential rent.

  9. Professional Shanker says:

    It comes down to what someone believes a gov’t owes them via the taxes it pays to them. In our country we believe a gov’t must provide health care & education regardless of income status but as “free market capitalists (kind of ironic given health care & education)” we believe a line must be drawn with regards to affordable housing. Further, the perspectives from most on this blog seem to indicate that they are not in the income bracket where affordability is truly a concern, so their view is biased as you would expect. The people David speak about may not possess the skills to be truly mobile, otherwise they would just leave the city and pick up work somewhere cheaper, why would anyone turn down an opportunity to increase their net standard of living? The problem being is that the same gov’t is encouraging urbanization – Toronto is the city creating jobs, so as easy as it is to say pick up and move, practically it is not that simple.

    1. A says:

      I am not sure if that is true. I would argue that ironically, those who cannot afford to live here tend to make lower wages at jobs which are available elsewhere. Youth workers are needed whether it is Toronto or Wawa.

  10. Parkhurst.Bessborough says:

    Very few people would be willing to write this commentary, David. That’s unfortunate because, as we can see from the consensus in the comments, people agree with you. This is not Oprah — “you get a house! you get a house!” It’s the Rolling Stones (“you can’t always get what you want”).

  11. David(Not the David who run this website) says:

    Rent controls aren’t the answer to affordable housing and it’s true that no one has the right to live anywhere, but if you need to have a higher than average income level to live here, then just where are all the people who have lower to mid income level jobs going to live? Are they expected to move out of the city and then have to do a long commute back into the city every day? Most of them could get those kinds of jobs outside the city and save themselves the time and expense that would come with working here.

    Kyle is spot on, we have more than enough government intervention in the economy. If markets were freer, then the laws of supply and demand would even things out. There would be more rental housing and there might be more demand for workers. As things are now, that will never happen.

    1. Kramer says:

      Agreed.

      I think we’re seeing a harsh reality for some that the market can take a long time to evolve as a whole, while prices specifically can move very fast. It can leave groups of people behind, and with the way they had planned out their lives significantly deviating off plan. Some people may not be the “entitled” type, but have still seen things change so quickly around them that all of the sudden their admirable life plan is now derailed.

      So to those who have worked hard, had a plan, and now have to change course significantly because housing costs have increased rapidly… I am sympathetic.

      That being said, if such people are disgruntled, the only productive thing to do is rethink the future, hopefully fully understanding that this problem is not going to change quickly. Ten years is a ridiculously short timeline for evolution of a city/GTA in terms of housing supply yielding better affordability, but for an individual with their 30’s in front of them, it’s everything in terms of time… you can’t delay major life planning by 10-15-20 years waiting for the market to evolve, hoping for some kind of real estate crash, or hoping for an immediately effective bailout of your situation… you gotta change the plan.

      For those who are just getting started, this is the reality, everyone in your position faces the same market, and build your plan around it. If I were in university right now I would be expecting a coin flip down the road on whether I was going to be building my life in Toronto or somewhere quite far away, depending on how my personal life turns out.

  12. O says:

    What a lot of the “I grew up here deserve a home here” people don’t seem to understand is that Toronto is filled with people who had to leave their own home cities to make a better life for themselves. My parents on both sides come from true “international world class cities” that they loved. But these cities were too expensive and hard to make a living in. So they came to Montreal which they loved. But the political climate in the 70s made earning a living there difficult so my family ended up here…not their first, second or third choice….but this is where they made their life.

    If you cant afford to live in Toronto, the sad reality is you have to move on. The sadder reality is you won’t be missed. The saddest reality is that you will be easily replaced by someone who can earn more than you.

  13. a Smith says:

    Sing it, sister! I check in to this website about once a week for a little dose of good old fashioned reason.
    Very refreshing, and surprisingly difficult to find these days…

  14. Jackie says:

    Anthony has the affordability index wrong. The guideline is 30% of pre-tax income not after tax. Using the #’s he provided, he should be budgeting $1875 a month for housing. It would require some searching in the outer areas of Toronto, with less reliable transit service but definitely achievable. Also, using the #’s he provided his total household pre-tax income is approximately $75,000 a year. The median wage in the City of Toronto from the last Toronto Economic Bulletin is $22.75 which equals $44,362 for a full time annual salary. Two person full-time working house-hold would be $88,725. Anthony and his wife (assuming both are full time workers) are making below average income for a 2 person working household in Toronto. It stands that they would have to look for housing in less desirable neighbourhoods.

    1. Izzy Bedibida says:

      Good point and correct, but rent is paid with after tax dollars. That’s what I base my finances on.

      1. A says:

        Sure but the guideline of 30 pct already assumed it is with pre tax dollars. It could have said for example 20 pct of after tax dollars.

    2. Sevyn says:

      Jackie… is it me or is 1875 not good enough to find a place to rent in Toronto? There are 3 bedroom apartments in that price range as well as basement apartments as well as 1 and 2 bedroom condos. We aren’t talking about prestigious downtown condos or housing. I see rent typically ranging from $1100 to $1900. And owning is always much much more than that. On an income of 80K $1800 isn’t hard to pay?! Am I missing something here? Someone help me out. And people need to leave Toronto. There are surrounding cities that require some commuting but it won’t kill you. I am also a landlord. I rent a BRAND SPANKING NEW 1 bedroom basement apartment out and it’s stunning. I charge $1100.00 all inclusive plus cable and internet and laundry are also included in that price…. in Pickering. That’s decent. I wish I was a renter!! Life would be easier for me. That’s a third of my mortgage!! I’m not kidding.

  15. Marina says:

    So I think there is something to be said about cities needing social workers, nurses, home aids, childcare, and other lower-paid but essential roles. I’m not including police, firefighters and teachers, because they DO make enough (seriously).
    Maybe the answer is the government creates a special subsidized class and helps pay market rent for those in essential services jobs.
    Or better yet, improve transport so that living further away is not so hard.
    But the answer is NOT to regulate the free market to the point that nobody wants to build rentals anymore.

  16. Rodge says:

    I’ll help you out here David, since you asked for it.

    The problem is: you’re living in the wrong time. You would have been a great fit for the 80’s, but the world has changed. No longer is an entire generation happy to have “freedom” or civil rights. Now people want more, more, more, and television and the Internet constantly show people what they don’t have.

    And governments like ours, headed by a person with no experience, no background in economics, and a personal goal to be well liked by everyone, are going to try to provide, provide, provide.

    1. Sevyn says:

      Completely agree with Rodge. Tv and social media contribute to this nightmare

  17. Kyle says:

    The author of the letter is absolutely correct, that Toronto is no longer affordable to many families, and that the Government can do much more to help the situation…By getting the hell out of the way of the free market. When rents increase, so too *should* supply. The problem is that isn’t happening anymore. If anything thanks to the recent rent controls, the long overdue pipeline of purpose built rentals that was picking up steam, has now stopped in its tracks.

    Anyone who has ever considered converting their basement into an apartment will know, that the City makes it so onerous, so difficult and costly to actually create a secondary suite that no one in their right mind would ever do it, or at least not do it “legally”. This is why there are literally 10’s of thousand basement apartments and just over 1,750 of them are actually legal.

    And the landlord and tenant rules are so one-sided in the tenants favour, that much of the rental supply is now dominated by large REITs, pension plans and asset managers who can lawyer up and not got burned by the rules. The remainder are condos which cost much much more to rent. No wonder airbnb, spread so fast, being a host doesn’t expose you to getting bent over the way being a landlord does.

  18. Craijiji says:

    It’s simple. If you can’t afford to live in Toronto then go live somewhere else.

    I don’t want to sound like an a$$, but maybe these people should have evaluated their finances before having a child and trying to stay in the city. It’s their choice to stay and try to keep their heads above the water. If my wife and I were only bringing in $100k combined (which is roughly what these people are making), you best believe we’d be living somewhere cheaper.

    1. Mr. Eff says:

      Waited and planned for that eventuality. Then doctor told us that we were “too old” and that the odds of having a difficult and dangerous pregnancy were way to high along with having a “special needs”child if she did manage to conceive. Relationship soured and ended after that. I hope you never have to deal with something similar.

      1. David(Not the David who run this website) says:

        Mr. Eff, you have my sympathies, I was in that very same situation many years ago. I’m far too old to think about kids now and even if I wasn’t, I would never have kids today for a variety of reasons which are far beyond the scope of this website.

      2. Craijiji says:

        That’s unfortunate, and I’m sorry that happened to you.

        However, that doesn’t take away from the point that there are people out there that feel entitled to live where ever they want regardless of the fact that they can’t afford it, and make decisions in their life that will perpetuate their inability to afford it. That dude needs a reality check.

    2. Sevyn says:

      Couldn’t have said it better myself. People have multiple children… 2-4… and complain about all the expenses such as daycare and social activities and housing. You can’t have it all. You just can’t.

  19. A Grant says:

    “I live in Toronto.”

    My solution?

    Don’t.

    That simple solution ignores the following: “My wife and I are both youth workers and have been at our jobs for some time. I work on the front lines with homeless and under-housed youth in employment and at a transitional shelter.”

    Cities need folks like the letter writer and his wife. Along with the thousands of skilled middle income earners (teachers, nurses, firefighters, early childhood educators, etc., etc.) that keep a city running.

    I find labeling people who simply want to live within a reasonable distance from their work “entitled” highly problematic. Because if the solution to the affordability crisis is “don’t live here”, then they won’t.

    And those working in professions that are so critical to a functional and safe society will leave. Or the city will end up looking like Silicon Valley, which is facing a “working homelessness” crisis due to the lack of affordable housing.

    1. Chris says:

      “Cities need folks like the letter writer and his wife. Along with the thousands of skilled middle income earners (teachers, nurses, firefighters, early childhood educators, etc., etc.) that keep a city running…Because if the solution to the affordability crisis is “don’t live here”, then they won’t.”

      Isn’t that a solution though? Take firefighters as an example. If a city is prohibitively expensive for a firefighter, there are really only two choices: either increase firefighter salaries or watch as firefighters move to lower COL areas. Given that cities don’t want to see buildings burn unattended to, I suspect they’ll stump for the former.

      1. Not Harold says:

        There’s this thing called the GO Train. Tons of people take it from Oakville, Ajax, Barrie, Hamilton.

        Some are making very large salaries, choosing areas for larger houses, different community, better lifestyle (getting kids to hockey practice and swim classes is easier in Oakville than Leslieville).

        Some are on smaller salaries, choosing these places for affordability.

        No one “deserves” to live in the city. Make your choices by changing neighbourhoods, cities, jobs.

        You can’t always get the job you love, in the area you love, with the lifestyle you love. Everyone makes tradeoffs.

        Higher salary – more time at work, more time traveling, and maybe a job that isn’t as fulfilling. Lower salary but more fulfillment or a less dangerous environment.

        Get out of kindergarten and join the real world.

        Plus we don’t need social workers or homeless advocates. These roles used to be performed by ministers, monks, nuns. All of which take a vow of poverty for a reason. Ideally the government would spend no money on these counterproductive efforts and the letter writer would starve.

        1. David(Not the David who run this website) says:

          Not Harold, most of the GO train areas aren’t that much more affordable than Toronto. Rents and home prices aren’t that much lower in those areas, I’ve checked. Also you may end up spending what you save in housing costs on GO train/bus fares, which aren’t cheap. GO transit also isn’t that reliable at times, so being late for work might just be the end of a job if the employer doesn’t care.

          You said “Some are making very large salaries”, yes good point. A decent home in Oakville, Ajax, Barrie and even Hamilton is going to require it. Those on smaller salaries will have almost as hard time finding affordable housing in those areas.

          It’s not always the case that a higher salary comes with more time at work. Many times lower paying jobs require long hours, are dangerous, and aren’t very fulfilling. It’s not a matter of joining the real world, it’s a matter of trying to solve a societal problem before it blows up. While we don’t need more useless government ideas, something does need to be done. Otherwise, we’re going to end up with a city that’s 90% slum areas and the remaining 10% will have to spend a fortune on security to survive.

          The letter writer is naive and not well informed, and there are many like him and his wife out there who can’t find a place to live. Your plan is just to let them all starve and die in the street but keep in mind that some of them aren’t just going lay down and die like you seem to want them to do. One day, they might just send your job offshore or have you replaced by automation but I guess you’ll just go quietly into the night, right?

          1. Kramer says:

            “Otherwise, we’re going to end up with a city that’s 90% slum areas and the remaining 10% will have to spend a fortune on security to survive.”

            Never going to happen. Ever. If you truly think otherwise, walk through the steps towards this.

          2. Chris says:

            I don’t disagree with you Kramer, but I think David’s point is that high and rising inequality does lead to some serious societal problems. Not Harold’s post smacks very much of “let them eat cake”.

            Not saying that the government should step in and mollycoddle people from the cradle to the grave, but we should recognize that things tend not to end well when we implement Not Harold’s attitude of “let them starve”.

          3. David(Not the David who run this website) says:

            Kramer, rent controls are going to discourage landlords from improving their buildings because they can’t increase rents. There’s less incentive to build new rental buildings, we’ve already seen some projects cancelled or changed to condos. The existing stock of rental apartments is going to deteriorate and good tenants won’t want to rent them. I’ve seen it happen to good buildings that friends of mine have lived in. Within a few years the building went from being a reasonable nice, clean place to bug infested, crime riddled dump. Many units had multiple families living in a 1 bedroom apartment and two of my friend’s neighbors were drug dealers. People started getting mugged and robbed outside my friend’s door by drug users. It was no longer a safe place to live and my friend had to leave but had a hard time finding another place to live.

            There are areas in the city with empty, decaying buildings because property owners get a tax break if the building isn’t being used. Eventually they may be replaced by expensive condos but in the mean time, the area becomes less and less attractive.

            With the minimum wage increasing so far, we’re going to see more unemployment. A lot of businesses, shops and restaurants aren’t going to make it. Where are those people going to find work or a place to live? They’re going to have to live in bad areas and be subjected to the negativity that comes with those areas. Maybe we won’t end up with 90% slums but I can tell you right now, there are areas of the city that I just won’t visit even during the day because it’s just not worth it.

            A family member who lives out of town remarked to me that there are very few areas of Toronto that he’d consider living in because most of it he said is just an over price, dirty dump.

            I’ve seen many parts of the city change and not for the better. Take Queen West for example. I used to love to spend the day there. There were lots of interesting shops, like the Pages book store, which had books that you’d never find anywhere else, which is gone because of high rents. Active Surplus, used to sell all kinds of crazy, interesting stuff, is gone because of high rents. The Silver Snail comic book shop had to relocate because of high rent. There used to be lots of great little interesting eating places there too, which are gone. They’ve all been replaced by big name stores and businesses, but those same Shoppers Drug Marts and Star Bucks are also in my area, so I don’t go to Queen West anymore, what’s the point?

            I also used to love to spend time in the World’s Biggest Bookstore, there was nothing else like it, but that too is gone and now there’s just a big, ugly mud-hole in it’s place, so there’s no reason for me to go to that area anymore.

            If you take away all the things that makes a city interesting, then to me it’s going to end up mostly as a slum. So once everything has been replaced by condos, what are people supposed to do? Go home to their expensive shoe-box in the sky, sit in front of their big screen TV and drink? It’s interesting that LCBO stores are opening up at the same time as the condos, I guess the Ont. Gov. knows that people are going to need more booze…

          4. Kramer says:

            David Not The David…

            I’m sure we would agree on most things, which is why I will probably only pick at some individual ideas. I do agree that rent controls will stop improvement of rentals. Makes perfect sense. It’s a consequence of messing with supply and demand which I am against.

            One thing I greatly disagree with…

            Silver Snail and the World’s Biggest Book Store are not vanishing because of rent. They are vanishing because they are dying businesses. You can’t fight the fact that people are reading e-books on their kindles (or paperbacks shipped from Amazon which has every book ever written in stock) and want to do so sitting in a Starbucks around other people. That’s just the way it is. Some businesses cannot survive massive changes. That is not new. There are plenty of cool book shops on Roncesvalles. So when people want that experience once every two weeks they can hop on the rocket and come to Roncey for the day and support the shops… when they need a Shoppers Drug Mart or a Starbucks 5-10 times per week, it’s walking distance. The market has spoken.

            If a condo building goes up, the businesses around it that should still exist will thrive even bigger because of the increase in traffic. The businesses/restaurants/shops that shouldn’t be there anymore anyway will continue to disappear, maybe at a slightly faster rate. If the direct population living nearby increases 20% and your customer count continues to decrease because less and less people care and online strategies can’t grow your business, I’m sorry but that’s the fault of the business/category/industry/the changing marketplace. Furthermore if you cap costs for all, it’s just going to grow Starbucks’ and Shoppers Drug Mart’s bottom lines as well. To expect traffic to increase and your costs to be capped so that your flat/declining customer base can still support your business is unrealistic in general. Adapt or die.

            I like a good small shop as much as you. Guitars are my thing, and vintage guitar shops are about as small, charming and cool as shops get. Toronto’s shops are doing just fine, in fact I would assume their bottom lines have been growing nicely. Their rents have gone up too, but their businesses are strong, demand is growing and prices are able to increase, and as the population grows, so will their business because (until demand for vintage guitars changes – the market will speak to that). They will also ship all over the world because technology hasn’t killed their highly tangible-touch-and-feel-based business, but rather has expanded it. Business is good, and they are adapting to grow their reach. One shop I know of moved not long ago, I assume because rents were increasing and their exact location wasn’t going to determine if they survived or not – other fundamentals would decide that. So they moved… They didn’t go out of business. It was a business decision to move, and their business (and all aspects of it) allowed for it, and they are thriving.

            Do you know how many goddamned CUPCAKE SHOPS I have walked by in the last 5 years? I can tell you how many I walked by 10 years ago… ZERO. The market has spoken. Do I like it? Does it matter if I do?

            I guess what I’m trying to say is that the business fundamentals are far more responsible for any changes we see in our neighbourhoods. Rental expense is only one line on the income statement.

          5. Kramer says:

            And to reiterate, David… I think we agree on the main point here… highly burdensome rent controls do not move things forward.

            In fact I’m no longer sure where we disagree. Maybe just miscommunication.

          6. Not Harold says:

            Prices in Ajax or Courtice aren’t “that” much more affordable than Toronto?

            Depends on what you mean by “that” and “Toronto”.

            Far cheaper than Prime King West, Leaside, Lawrence Park for similar quality and square footage.

            But there are alternatives that even people with very good jobs avail themselves of because of tradeoffs.

            There is no role for the government in any of this except to get the hell out of the way.

        2. A Grant says:

          Not Harold – I’ll ignore your put down and early 19th-century views as to how the world ought to be and focus on your first point.

          There’s this belief that “the government” ought not to be involved in affordable housing as it is a waste taxpayers’ dollars. After all, live outside the city and commute!

          At the same time, we ignore the comparatively higher costs associated with our expanding suburbs/exburbs in terms of transportation (GO Trains, road construction/maintenance), infrastructure and the expansion of city services. Costs that are borne by the taxpayer.

          If your goal is to save taxpayers money, shouldn’t we endorse policies that encourage more sustainable urban living?

          1. David(Not the David who run this website) says:

            A Grant, maybe his real name is Ebeneezer Scrooge?

          2. Not Harold says:

            There is no need for the government to pay for transportation infrastructure of any kind.

            People don’t want to pay their fare share of costs and want “some other feller behind that tree” to pay for it, as you see every time unsubsidized pricing shows up (407 tolls, UP Express, etc etc)

            Get the government out of doing things it is bad at and doesn’t have to do. Leave it to police, courts, and defence.

            Then the market can sort itself out in terms of appropriate density in terms of housing, transportation links, etc.

            Every time the government fails at planning and supply management (economic growth, education, transportation, housing) people like yourself demand MORE government control and regulation.

            I say that you and your confreres are bad at it and that your responsibilities should be taken away. Failure should lead to loss of responsibility and jobs, rather than ever larger budgets and empires for subnormal bureaucratic power mongers.

          3. A Grant says:

            A Harold – I’m not going to respond to your desire for a libertarian utopia. Clearly that’s not going to happen.

            But there is an interesting point hidden in your post. The belief that housing is best left to the free market when, in fact, housing construction has historically benefited heavily from government interventions/subsidies.

            So that leaves us with a question – can we rightfully ask the government to stay out of housing policy when housing construction has benefited so much? Is there really a “free market”?

      2. Craijiji says:

        Fire Fighters are a pretty poor example as the base salary for one in Toronto is about $100k. If you have another income you’d be doing alright.

        1. O says:

          Who can afford these prices? 2 teachers. A nurse married to a cop. A fireman married to social worker. A “works for whatever dept” of the government. Who can’t? The private sector engineer who makes less than a TTC bus driver.

          1. Sevyn says:

            AGREE

        2. Chris says:

          I used firefighters as an example listed by A Grant as important to a city. I realize that presently many of them are well compensated relative to median incomes and COL in Toronto; in my hypothetical exercise, firefighter salaries were no longer sufficient for the COL.

          1. O says:

            Sure, understandable, but we are now at a point where unionized blue collar government workers are making more than white collar private sector workers. They can’t be fired. They have pensions for life. They get raises beyond what you get and you have to keep paying them regardless off how much the taxes hurt your family. So this idea that “no one can afford homes” should be more like “no one in the Private sector” can afford homes.

    2. David(Not the David who run this website) says:

      Grant, what’s happening in Silicon Valley may end up happening here. I’m sure everyone has read about tech workers in silicon valley having to living in the van or RV in the parking lot of the company that they work for because they just can’t afford a home within a reasonable distance from work. The crazy thing is that some of these tech workers make better than average incomes and yet they’re homeless.

  20. Daniel says:

    Absolutely nailed it today, David! Well done!

  21. Boris says:

    The concept and importance of free markets and property rights are lost on politicians and the ignoramus public.

  22. Chris says:

    I sympathize with his claims about Toronto becoming a city without culture, arts, and families.

    I view it as similar to the Leafs. Tickets are expensive, so a lot of fans are priced out of attending. Anytime I go to a home game, the environment seems far less raucous than that of the Red Wings, Sabres, Blackhawks, Sens, etc.

    But I don’t really think the answer is to drop ticket prices. All that would happen is scalpers would buy them up at the lower prices and resell them, pocketing the difference.

    Similar, with Toronto renting, I don’t really know what, if any, answer there is. When things are popular, they tend to cost more.

    If you can’t afford Toronto, moving may be your best bet. If you can’t afford Leafs tickets, well the Marlies play just down the road.

    1. Kramer says:

      I know we don’t like comparing Toronto to NYC… and I haven’t spent any time in NYC so I’m speaking out of my arse, but… all I do know is that it’s insanely expensive to rent/live in the ‘core’, if you will, and they have a ton of culture obviously… so I guess my post is really some questions…
      – how does Toronto compare to NYC in terms of family and community, etc…
      – is it a bad thing to move in the direction of their culture in the ‘core’…
      – what other cities is Toronto comparable to in this way…

      It feels to me like these are growing pains… like you said, if you can’t afford it you might need to move… if you can’t afford the leafs live, watch the marlies live… and is the answer community wise to purposely stunt growth… is the answer for individuals that if you don’t want to live in a growing city, then you need to move.

      1. Kyle says:

        Agree some of this is growing pains, and out-dated expectations. I’ve read lots of articles on millennials threatening to leave or claiming there’ll be an exodus, due to affordability. As far as i can tell the population in this City continues to grow, so i think those threats are empty. You bring up a good point, what do people in far more expensive places do? Live smaller, live farther, live with others, live in a less desirable hood, live with less, live in an older property, live on a lower floor, etc. There are other solution besides moving, people’s expectations just haven’t adapted.

        “– how does Toronto compare to NYC in terms of family and community, etc…”

        For me personally, there is absolutely no comparison. I would never trade Toronto for NYC to raise my family. Toronto is an amazing City for raising a family. For all its hub bub, NYC, doesn’t hold a candle to Toronto when it comes to what it can offer families. Toronto’s Library system is the best in the World, Toronto’s Parks and rec programs and facilities are unparalleled. Literally, within a 20 minute walk of my front door my family can enjoy FOR FREE OR NEXT TO NOTHING: kilometers of beach (with a fitness trail, play apparatus, wading pool, olympic pool), a massive park (with a zoo!), many smaller parks with play apparatus, tennis courts, outdoor pools, a few indoor pools, wading pools, splash pads, skating rinks, a couple of libraries, gymnasiums, baseball diamonds, soccer fields. ravines. I don’t care how rich they are, show me a Manhattanite, that can boast the same. Kids growing up in Toronto get to experience stuff that kids in other large cities can only dream of.

        I grew up poor as dirt in this City, but still feel like i had a lot of rich experiences, which i’m sure i wouldn’t have had growing up elsewhere. Kids don’t have to be rich in this City to learn how to swim, skate, ski, golf, fish, sail. play tennis, or join a sports team. These are some of the things i think a lot of people who live in this City just take for granted.

    2. Daniel says:

      Reminds me of the yogi berra quote – “no one goes there anymore, it’s too crowded”.

      I mean obviously, Toronto is teeming with arts and culture and full of families, i’ll refrain from providing stats given how incredibly self evident this is to anyone spending any time here.

      Doesn’t mean we don’t have lots of problems and that it’s not crushingly expensive, just that characterizations of the city as this barren wasteland are often trotted out by anti development folks despite a wealth of evidence to the contrary.

      1. Kyle says:

        Bingo, it’s development that leads to more culture and more vibrancy, not affordability. For decades, Liberty Village, King W, King E, Distillery, South Core were barren post-industrial waste lands until they changed the zoning and allowed them to be developed.

        The real problem, is when you don’t allow growth, don’t allow development, or only allow/encourage a certain type of growth (e.g. bachelor units for investors) that things become scarce and that’s what creates unaffordability.

        1. O says:

          Actually, I will argue that the true culture of Liberty Village started back in the day when it was a bunch of artist occupied industrial space between Atlantic and Dufferin that most normal people were too afraid to visit…..

          But having said that, Liberty Village and other gentrified areas become vibrant when people move to these areas due to the fact that they CAN NOT AFFORD Rosedale, Forest Hill or the core. So even in Toronto people are forced to leave the areas they grew up in to carve out the life they want. But by doing that, they make the less desirable place better.

          Can’t afford Toronto? Move to Ajax. When enough people with the cosmopolitan Toronto mind set move there, Ajax will become Toronto, just as Toronto is becoming New York.

      2. Chris says:

        I don’t agree with the editorial’s author that Toronto is a barren wasteland of culture. But I do sympathize that gentrification and rising COL can push out things that people came to enjoy about certain areas. As Kramer said, these are growing pains; not always fun, but probably unavoidable.

        I also suspect that by nature of his profession, he is acutely aware of the downsides of development, gentrification, etc., and may not be fully appreciative of the upsides it brings.

        1. Daniel says:

          I’ll happily give the op ed author a pass. City staff and other urbanists, on the other hand, also lament how gentrification pushes out the people who made an area attractive and thus destroy it. Case in point, TO staff are always talking about the need to make King West livable. With the obvious, ridiculous, implication being that it’s currently unlivable despite being arguably the most desirable neighbourhood in canada.

          Furthermore, many cities have been very expensive for a very long time and are still thriving meccas of arts and culture. When was New York last affordable? People have been spending absurd portions of their income on housing in London and Paris for decades.

          Lastly, the assertion that the reason people moved to the neighbourhoods is because the artists were there is also not self evident. Many of the neighbourhoods in question gentrified because of their location in the cores of cities. Not because of the sculptors who were there first.

          And lastly, many of the artists were, themselves, gentrifiers who pushed out immigrant communities first.

          Once again, to be clear, i think cities becoming unaffordable is super negative and i’d love for our society to figure out how to fix it. I just think that you can’t actually fix things without honestly acknowledging facts.

POPULAR POSTS

TWEETS