Toronto is at a pivotal point in the year 2020. Actions and policies over the next decade will shape the city. The success or failure by 2030 will depend on how we tackle workforce housing. In this article, we’ll take a look at workforce housing, why it is such a contentious issue and what can be done to ensure Toronto will succeed in the future.
What is Workforce Housing?
Let’s talk about Workforce Housing. Workforce housing is a term that refers to households that fall within a specific income range. It typically encompasses households that earn above the threshold for social housing programs yet struggle or are unable to find suitable housing within their budget or housing that is specifically built for certain groups of workers. The Urban Land Institute defines workforce housing that is affordable for households earning between 60% - 120% of area median income (AMI) which is approximately the range between $21,960 and $54,850. With Toronto’s median household income of $65,829, we are greeted with an interesting problem especially when looking through the lens of the current global pandemic.
Toronto is at a pivotal point in time when looking ahead to 2030. 2030 is an important milestone for Toronto. GTA’s population is projected to hit 8 million by 2030 and 10 million in 2045. Toronto’s current infrastructure is not set up to handle this population density. Without sufficient investment and policy changes, Toronto will suffer under the strain of severe congestion on both the roads and public transportation systems, overwhelmed infrastructure, and housing that many residents will not be able to afford. In particular, without adequate housing for the working population and specifically lower-wage earners or essential workers, Toronto will struggle in the future. Cities require essential workers to function. We’ve seen that in action during COVID-19. If Toronto is unable to supply essential workers with adequate housing, they will go elsewhere and Toronto will become unlivable. It is important that Toronto tackles this issue now and put in place policies that will ensure Toronto’s continued success in the future.
There are many reasons that cities need to have an adequate supply of housing for workers. Talent acquisition and retention rely on adequate housing. Companies will not be able to hire a suitable pool of workers if workers cannot afford to live in the city. This can, in dire circumstances, lead to the company leaving the city entirely. Additionally, the lack of skilled workers often leads to slow economic growth. Many workers will choose to relocate elsewhere. Community development will slow and many unique shops and vibrant neighbourhoods will suffer.
Why Is This So Important?
We’ve talked at length about Toronto’s housing crisis and the phenomenon of the Missing Middle. Much of Toronto’s housing supply is geared towards high-end condos that are often bought for investment. The rent prices for these investments are often out of reach for the majority of essential workers.
Historically, people in large urban areas would move to a higher-priced rental or buy a home as their income increased. This would then allow others to move into the now vacant and more affordable unit. However, due to rising rents and housing prices, tenants have few options to move. Tenants choose to stay in their affordable unit, staggering the process. Toronto’s private apartment turnover rate fell by 3.5% in 2018. Apartments and units remaining on the rental market were increasing in price and reducing supply.
Though there have been programs to encourage private and non-profit agencies to develop and build affordable units targeted at middle-income residents, their progress and success have been minimal when compared to the increasing level of need in Toronto.
What Can Be Done to Resolve This?
More needs to be done to address the current housing issues for workers and prevent Toronto from falling apart in the future. There are many ways that Toronto can do this. In the simplest form, this means increasing the minimum wage and lowering the cost of housing. However, the reality of tackling those two things is more complex.
A few suggestions that would assist essential workers would be to change the labour act and allow workers improved union access. This will allow employees, particularly at smaller job sites, to organize and leverage for better benefits. Increasing the minimum wage would be another good option but as Ontario has shown with its recent block to raising the wage, it is easier said than done.
Investing in alternatives in housing is another option for workers including co-op housing and community land trusts. Cohousing and coliving are becoming increasingly popular options in Canada and the United States. Co-ownership and cooperative real estate are also becoming an increasingly popular option in Toronto.
Toronto could invest in building dedicated housing for workers. This can be done through non-traditional partnerships, community engagement and through prioritizing the end-user. For example, organizations with real estate holdings such as school boards and hospitals often have an asset that could be used to build housing. Though this is costly, it can provide much-needed housing. A study created by Woodgreen to assess workforce housing in Toronto addresses six key principles that should form the foundation for creating solutions to issues in workforce housing. These six principles are purposeful building, land maximization, financial scalability, long-term affordability, model replicability and strategic partnerships.
This requires steady and stable policy reforms, brave new initiatives, investment into different sectors and an overall shift towards the future and sustainability. Unfortunately, there is no one, easy solution that will address the issue of workforce housing. There needs to be pressure put on the government to push for change. It is likely that many smaller incremental steps will need to be made so that Toronto’s future is assured.