
Earlier this week, Sidewalk Labs released its long awaited proposal to develop a site on Toronto’s Waterfront. It’s called Toronto Tomorrow. There are proposals in for affordable housing, so of course we couldn’t pass up the opportunity to review it from our particular perspective — affordable housing.
Several commentators have noted that Sidewalk Labs has delivered a proposal for a 77 hectare parcel, which is a good bit larger than the Quayside parcel of 5 hectares.1 In this post, we are talking about at the affordable housing proposed for the larger parcel.
Sidewalk’s proposal for Affordable Housing
Sidewalk says that up to 6,800 units of ‘affordable’ housing could be achieved. It also plans to offer some two bedroom and three bedroom units.
Some of the ‘affordable housing’ will be renting for as 60% of the average market rent. Right now, 60% of the average market rent for a one bedroom apartment is affordable for someone earning $14/hour (the minimum wage). This is based on a scenario of 35 hour work week, 52 weeks of the year. For a household with two people earning minimum wage and renting a two bedroom unit, the situation is similar. And, for both of these scenarios, the rents have to be at 60% of the average market rent: units renting at 65% of the average market rent are not affordable.
Two other things to point out about the Sidewalk Labs proposal for affordable housing. First, the scenarios presented above are based on today’s costs. 60% of Average Market Rent is based on transactions in the rental housing market. Just as average market rent for 1 and 2 bedroom units increases (or decreases), the 60% level will rise (or drop) too. Second, it isn’t entirely clear how many of the units (if any) will be offered at the rent level of 60% of the average market rent. Third, it is worth remembering that minimum wage is driven by public policy, not the market. Increases to minimum wage have historically lagged well behind rent increases.
So, from the perspective of someone on minimum wage, the Sidewalk Labs’ proposal for affordable housing is some? sort of? good news. Let’s look at it from another angle.
Toronto’s Affordable Housing Challenge
Sidewalk mentions that the 6,800 units amount to 30% of the City’s affordable housing targets.
How much affordable housing does Toronto actually need? Here are a couple of ways to get an idea.
People with high housing costs
The number of households paying more than 30% of their gross income on housing costs. There were 406,000 households in this group in Toronto at the most recent census (2016).
People receiving public assistance
The households receiving emergency benefits (aka welfare) and public long term disability support are far below minimum wage. There were approximately 475,000 of these households in Toronto in April this year.
It seems evident that the City’s targets are not related to its needs. Indeed, as the Mayor noted when the targets were set, they are based on ‘what is achievable’.
Thinking bigger
Toronto just completed its first Resilience Plan. Like the Sidewalk proposal, the resilience plan is concerned about being prepared for the future. Both reports note that climate change will hit low income households much harder than their more affluent neighbours. They also zero in on the need for affordable housing.
The City’s resilience plan includes a strategy to refurbish some 2,000 aging high-rise apartment buildings, that leak heat in winter and get very very warm in the summer. The primary beneficiaries will be the 500,000 people who live in the buildings who are mainly renters, and just happen to include some of the city’s lowest income residents.
Sidewalk’s focus is different, of course. But they’ve invested $50 million (at their own estimate) to prepare the proposal. And clearly one cannot expect that developing a single site (regardless of size) is going to solve all of the City’s housing challenges. But Toronto has demonstrated that there are ways to go further.
If Sidewalk is going to hang its proposal on targets, Toronto needs to give serious consideration to changing them. Then perhaps future discussions with Sidewalk will absolutely have to be about doing more.