This past November, Ontario’s provincial government announced the creation of a Housing Affordability Task Force. The task force had a mandate to explore measures to address housing affordability across the province. Many housing advocates expressed concern that the task force appointees overwhelmingly came from the private sector. The majority of those appointed did not have expertise in core housing need, non-market housing solutions, and/or lived experience of homelessness.
The final report of recommendations was published on February 8th. The majority of the task force recommendations focus on increasing the supply of housing and making it easier and faster for developers to get municipal approvals for development.
We welcome the province’s renewed focus on housing affordability, and agree with some of their recommendations, such as eliminating “exclusionary zoning” and legalizing multi-tenant homes. However, it is important to be clear: supply-side, market based solutions alone will not solve Ontario’s housing crisis. If we do not also make serious efforts to keep the remaining supply of affordable housing stock, things will only become worse. It is, therefore, disappointing that the task force made almost no mention of any government investment in retaining the existing supply of affordable rental housing.
For 15 years, we have lost affordable housing units without building enough units to replace them. As a result, average rents have skyrocketed. There are several factors responsible for the continuous loss of affordable rental housing across Ontario. Two of these were policy decisions made in the 1990s. The first is the removal of rent controls for new units, which first applied for buildings constructed after 1991. According to the neo-liberal wisdom of the day, the idea was removing rent controls would incentivize developers to increase their development of purpose-built rental housing. This supposed influx of rental housing would be all that was needed to keep prices affordable for renters.
The 1991 policy failed. In 2017, there was a brief period where the 1991 loophole for new builds was closed by the Wynne government. In 2018, the Ford government decided to reverse the decision and deemed that any unit first occupied as a residence after November 15, 2018 would be exempt from rent control rules. This means landlords do not have to abide by the set yearly increases in rent for tenants of newer builds. Ontarians are already beginning to see the devastating impact of this change. The lack of rent control on new units will be felt even more deeply by rapidly developing communities with a high percentage of newer builds, such as municipalities in the GTA.
There is another policy that came into effect in the 1990s, called vacancy decontrol, which removed rent controls for vacant units. The absence of rent control for vacant units allows landlords to charge incoming tenants whatever they want, making it financially rewarding for them to routinely kick long-standing tenants out. Tenants will often pay hundreds of dollars more per month for their new rental housing if they are evicted. In Toronto, it has been estimated that “asking rents in the City for existing purpose-built rental housing are up to 40% higher than average market rents.”
There can be no proven causal effect between these rent control exemptions policies and an increase in new purpose-built, affordable rentals. Rental demand continues to be met through condos and secondary suites. From 1995 to 2020, Ontario has only averaged building 5,500 new housing units each year. That is less than half of what is needed to fulfill demand.
Neither of these 1990’s era policies have delivered what was promised. Instead, we witnessed an explosive increase in rental rates and a rise of no-fault evictions in the 30 years that have followed. Without bringing real rent control back, we will continue to see affordable rental housing disappear.
Another factor in the current housing crisis includes a disparity across municipalities regarding their demolition and conversion control bylaws. Some municipalities – such as Mississauga and Toronto – have established rental property protection bylaws to preserve their affordable rental housing stock, but they are in the minority. These bylaws are flexible and responsive because they often only prevent demolition and conversion of rental units when vacancy rates are below a certain percentage, typically 3%. Having consistency across in the province would be another way to preserve the current supply of affordable rental housing.
For all of these reasons, the decision made by the province to have the Housing Affordability Task Force focus mostly on supply-side market based solutions is misguided. Treating housing primarily as an investment opportunity for developers and landlords has gotten Ontario into this mess; more of the same will not get us out of it.