Affordable Housing in Ontario Mobilizing Private Capital in an Era of Public Constraint

1. 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

2. 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.

3. IMFG’s Affordable Housing Project • 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?

4. The Shifting Landscape • 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

5. House prices (and rents) race ahead…

6. But most people’s incomes have not been rising…

7. Household debt levels have spiked…

8. Nearly 20% of Toronto households in need…

9. A condo boom but little new rental supply

10. The Problem • 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.”

11. 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

12. What can we learn from Other Countries? • 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

13. Conclusions • 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)