Toronto City Council Fails to Address the Housing Crisis. Again.

Council managed to approve a plan to impose a 1 per cent tax on vacant homes starting in 2022, but housing advocates have questioned the potential effectiveness of the tax. Considering that economists have pointed to the limited impact that Vancouver’s vacancy tax has had, which stands at three per cent, there is little reason to believe that Toronto’s new tax will make housing affordable for all.

According to a news release from the city, the policy is intended to help with the availability and affordability of housing supply by creating a disincentive for homeowners to keep their properties vacant.

However, in the same meeting, Council did not take the opportunity to create more affordable housing supply as they failed to pass a proposal that would effectively legalize the construction and operation of rooming houses Toronto-wide.

Rooming houses — also called multi-tenant or dwelling houses — can only legally operate in Toronto and Etobicoke, where licences are required, as well as in York, but are banned in Scarborough, East York and North York.

For generations, rooming houses have operated as affordable rental housing for people with lower-incomes, marginalized groups, and newly arrived immigrants. Today, according to City Staff, the average rooming house rent ranges between $400 and $700 per month, compared to average studio apartment rents of about $1,100.

In the areas where rooming houses are banned, people operate them anyway.

In an illegal market, tenants may be subject to unsafe living conditions as landlords may not keep up with inspections or regulations like the fire code.

Also, the illegal market limits the ability of tenants to seek recourse as they are often put in a position where they have to protect the very landlords who may be putting them at risk. If a tenant raises a complaint, they may risk losing the only affordable housing option altogether.

But rather than legalize rooming houses and regulate the way they are operated, the Toronto City Council chose to continue driving people to an illegal and unsafe market.

It is important to note that legalizing rooming houses does not just offer affordable housing for tenants, it also contributes towards making all of Toronto more affordable.

Many economists have argued that the insufficiency of housing supply is a driving factor of the increasing cost of housing in Toronto and across the country.

By legalizing rooming houses developers would be allowed to build more rooming houses and homeowners could convert single-family homes into rental properties, thus increasing the stock of rental housing supply.

The councillors who did not support the proposal did so on the basis of maintaining the integrity of single-family homes and protecting the rights of homeowners.

Even though homeowners have had the value of their homes go up by record margins and the fact that most of Toronto is zoned to preserve neighbourhoods full of single-family homes, councillors have chosen to prioritize the whims of homeowners over the need for affordable, regulated and safe housing.

While the proposal did receive support from John Tory and other councillors, a motion was passed to defer the final vote on the matter to the fall.

Toronto has had a housing affordability crisis well before the pandemic pushed housing prices to record highs, and it has pushed people out of the city due to the high cost.

With Toronto City Council pushing the issue of rooming houses to the fall, we need to ask how high do prices need to go and how long will it take for Council to finally address the root causes of the crisis.