Affordable Housing in Ontario Mobilizing Private Capital in an Era of Public Constraint André Côté, Manager of Programs and Research Institute on Municipal Finance and Governance University of Toronto

About the IMFG The IMFG is a non-partisan research hub based in the Munk School of Global Affairs at the University of Toronto. What types of work do we do?  Research (e.g. academic & shorter papers)  Events (e.g. conferences, speakers, etc)  Presentations in Canada & abroad (Tokyo, Helsinki, …)  Roundtable convening & government advising What issues do we focus on?  Local finance and governance issues in cities in Canada and internationally  The fiscal health of big Canadian cities  Recent work touched on borrowing and P3s, housing and Section 37 agreements, transportation, etc.

 IMFG’s focus on broader fiscal challenge housing poses for cities  Asked to convene public, private & non-profit sector representatives, in a neutral space  The paper: a ‘primer’ to frame the discussion How do you create the conditions for greater private participation in affordable housing? IMFG’s Affordable Housing Project

 House prices and rents have raced ahead  Incomes have not been rising for most  Households have taken on much more debt  Nearly 20% of Toronto CMA households in ‘core housing need’ (CMHC)  A condo boom but little new affordable housing or purpose-built rental development The Shifting Landscape

House prices (and rents) race ahead…

But most people’s incomes have not been rising…

Household debt levels have spiked…

Nearly 20% of Toronto households in need…

A condo boom but little new rental supply

1.Housing affordability is getting worse for many households  Housing costs have been increasing faster than incomes  Few new affordable units built in recent years 2.Social housing providers struggling to maintain units  Huge repair liabilities: ~$850M and rising in Toronto  Significant demand: 150,000 households on wait-lists across Ontario 3.Limited scope for big new fed-prov investments  Long-term trend: withdrawal from social housing field  Drummond: for Ontario to address their budget crisis, a “sharp degree of fiscal restraint [is needed] over the next few years.” The Problem

The Moral of the Story  The old model of paying for social housing – through large-scale, direct federal/provincial subsidies – is likely a thing of the past  New funding models and sources of investment are needed – with an expanded private sector role  Onus on local governments to innovate and develop these new funding & partnership models

 Looked at the US, Australia and the UK  All face similar housing affordability issues and budget constraints  Using different tools to mobilize private players  US Low-Income Housing Tax Credit Model  Australian National Affordable Rental Scheme  UK austerity and the growing role for private investment What can we learn from Other Countries?

 Toronto can’t wait on other orders of government  Leverage the IAH funding, and use the assets and tools Toronto has  Many viable options in Private Roundtable & “Putting People First” reports  Ensure housing discussion links with OP review & transportation planning  Need to present housing as a ‘win’ to the Province  An opening to re-engage on the housing file  Focus on enabling conditions for local strategies, not new funding ask  Deepen relationships with private and non-profit players  Public and private interests are starting to align  Create spaces for discussion, analysis and experimentation (e.g. piloting initiatives) Conclusions