Introduction

CONTEXT:
HOUSING CONDITIONS IN TORONTO

Toronto's Ownership Sector

In the greater Toronto area about 63 percent of all households were home owners in 2003. In the City of Toronto about half of all households own their housing. Although there have been substantial swings in the ability of households to access the ownership sector, the reality is that many recent immigrants cannot afford to buy a house or condominium.

This is a considerable change from the 1960s and 1970s when the relative cost of ownership for European migrants entering Toronto was much lower. Indeed, these immigrants have generally achieved a higher rate of home ownership than the population as a whole, partially because of relatively lower house prices at the time they arrived but also due to the high intrinsic value they place on home ownership.

Toronto's Rental Sector

For lower income newcomers, housing opportunities are restricted to the rental market. Toronto's rental stock varies widely in structural form, ownership and price. About half the rental stock is conventional (purpose-built) apartments in the private rental sector, while the rest consists of rented houses, apartments in houses, rented condominium units and social housing.

Much of the private rental stock is under a limited form of rent regulation. Rent increases have been gradual but continuous over the past decade. The average rent for a two bedroom apartment, for example, increased by 39% between 1992 and 2002. The average rent for a two bedroom apartment in Toronto ($1047) was higher than in any other Canadian Census Metropolitan Area.

Household Income and Wealth Trends in Toronto

Comparison of Income and Wealth of Owner and Renter Households, Toronto Metropolitan Area 1984 and 1999 (1984$ adjusted to 1999$)

As noted in the table below owners had double the income of renters in both 1984 and 1999. The ratio remained about the same between these two years. The wealth gap between owners and renters, however, is huge and increasing. Homeowners’ wealth increased from 40 times that of renters in 1984 to 75 times renters in 1999. Median net worth for owners increased 43 percent between 1984 and 1999 while net worth for renters declined 23 percent

	Median Income		Median Net Worth
	Owners	Renters	Owners	Renters
1984	$48,821	$24,212	$174,254	$4,291
1999	$53,563	$27,039	$248,400	$3,300
Change	$4,742	$2,827	$74,146	-$991
% Change	11%	12%	43%	-23%

Source: Hulchanski, David (2001). A Tale of Two Canadas: Homeowners Getting Richer, Renters Getting Poorer. Toronto: Centre for Urban and Community Studies, Research Bulletin #2. http://www.urbancenter.utoronto.ca/pdfs/researchbulletins/02.pdf

Though housing consumers are divided into these two groups (owners and renters), the land and housing markets are not. There is one market for both, and owners, with the higher incomes, set the prices. The low average incomes among renters means that it is no longer economical to build new rental housing, except at the upper end of the market - though this part of the market is now mainly served by condominium apartments that are offered for rent.

Toronto's Vacancy Rates

Low vacancy rates are supposed to be the housing market signal for investors to build more rental housing. However, vacancy rates have been very low for more than two decades in Toronto. They were less than one percent through most of the 1980s, increasing to two percent in the early 1990s and then falling back again. Beginning in 2002, vacancy rates climbed again but many of these vacancies were at the expensive end of the market

Vacancy Rates in the Toronto Census Metropolitan Area 1992-2003

1992	2.2
1993	2.0
1994	1.2
1995	0.8
1996	1.2
1997	0.8
1998	0.9
1999	0.9
2000	0.6
2001	0.9
2002	2.5
2003	3.8

Source: Canada Mortgage and Housing Corporation, Canadian Housing Observer, 2003, Table 11; Canada Mortgage and Housing Corporation Vacancy Rate Survey, 2003
http://www.cmhcschl.gc.ca/en/News/nere/2003/2003-12-02-0815.cfm


Social Housing

Social housing accounts for a relatively small proportion of the total housing stock in greater Toronto. About ten percent is in the non-profit and government-owned social housing sector, of which only about two-thirds is rent-geared-to-income.

Because of the long waiting lists for social housing many newcomers find rental accommodation in relatively poorly maintained buildings at the lower end of the private rental market. Black households, however, both from the Caribbean and various African countries, are strongly over-represented in entirely rent-geared-to-income developments. The proportion of blacks in this stock has increased dramatically since the early 1970s. Black households have been particularly affected by difficulties in Toronto's tight private rental market because of income constraints, various forms of discrimination (gender, family composition and 'race') and low vacancy rates.

Rental Housing Construction in Toronto

Most of the rental housing built over the past ten years has been social housing (municipal, private and co-operative non-profit housing subsidized by the federal and provincial governments). However, the federal government ceased funding any new social housing in 1993 and the Province of Ontario did the same in 1995. Thus, with the exception of a few “Let’s Build” and “SCPI” units added in 2002, there are no longer any new social housing starts and there are very few private sector rental starts.

Rental Housing Completions in the City of Toronto
1984 to 1998

Year	Private Rental	Assisted Rental	Total Rental
1990	1532	1182	2714
1991	743	1605	2348
1992	278	2403	2681
1993	22	5834	5856
1994	132	2443	2575
1995	164	1308	1472
1996	98	1543	1641
1997	94	861	955
1998	114	0	114
1999	254	0	254
2000	30	0	30
2001	39	0	39
2002	653	151	804

Source: City of Toronto (2003). The Toronto Report Card on Housing and Homelessness, 2003. Toronto: City of Toronto.

Many of the immigrants who settle in the Toronto area, in particular, the lower income households who are not joining families, receive an unexpected surprise when they start looking for a place to live. Our research indicates few even thought about finding housing before they arrived.

Selected References on Housing in Toronto

Canada Mortgage and Housing Corporation (2003). Canadian Housing Observer, 2003. Ottawa: Canada Mortgage and Housing Corporation.
http://www.cmhc-schl.gc.ca/en/cahoob/index.cfm

Canada Mortgage and Housing Corporation (2003). Special Studies on the 1996 Census Data: Housing Conditions of Immigrants in the Toronto Census Metropolitan Area. Ottawa: Canada Mortgage and Housing Corporation, Socio-economic Series 55-12.
http://www.cmhc-schl.gc.ca/publications/en/rh-pr/index.html

City of Toronto (2003). The Toronto Report Card on Housing and Homelessness, 2003. Toronto: City of Toronto.
http://www.city.toronto.on.ca/homelessness/index.htm

Hulchanski, J. David (2001). A Tale of Two Canadas: Homeowners Getting Richer, Renters Getting Poorer. Toronto. Toronto: Centre for Urban and Community Studies, University of Toronto, Research Bulletin #2.
http://www.urbancenter.utoronto.ca/pdfs/researchbulletins/02.pdf

Hulchanski, J. David (2002). Housing Policy for Tomorrow’s Cities. Ottawa: Canadian Policy Research Networks, Discussion Paper F/27.
http://www.urbancenter.utoronto.ca/pdfs/elibrary/CPRNHousingPolicy.pdf