Canada's Condominium Magazine

The Affordability Myth: current definition of an affordable rental “out of reach” for many

Tackling Toronto’s affordability issue begins with the definition of what’s affordable. The current definition is “any unit where the total cost of rent, utilities and taxes is at or below the city’s average.” Here’s the problem. Due to a shortage of both purpose-built rentals and condos converted to rent, the average rent in Toronto has skyrocketed.

Typical Hong Kong low-cost public housing: towering buildings, high density and — relative to the rest of Hong Kong — somewhat affordable. Although no city necessarily does low-cost housing well, some large cities, such as Hong Kong, have, at least, made monumental efforts: high density communities, squeezing 22,000 people into ten city blocks — usually in the newer areas. This also serves the purpose of spreading population density over a wider area.


Since there is a significant shortage of purpose-built “low-cost housing”, and the stated goal of Toronto is to have 40,000 affordable housing units over the next 12 years — which, by the way, is previous double targets — the question is how many of these 40,000 will be truly affordable to lower-income families? If the definition remains $1202 per month for a single bedroom — based on Toronto’s definition as “average” price in the market — can lower income families manage? 4.8 million Canadians live below the poverty line, according to the 2016 Census.

Low-income definition

The provincial and federal governments consider housing affordable if the “shelter costs do not exceed 30 per cent of gross household income.” By this standard:

  • To qualify for the single-bedroom average lower-income rental ($14,424 per year for rental of $1202 1-bedroom), would require just under $45,000 in annual income. How many low-income singles or couples make $45,000 annually?
  • To qualify for the two-bedroom average lower-income rental at $1426 ($17,112 annually), would require approximately $51,000 per year for a small family (who can manage a 2-bedroom).

Current census data (Statscan) indicates 38% of households in the GTA earn less than $50,000 annually. The reality is, that many families, spend up to 72 per cent of their income in Toronto on rent/ mortgage, maintenance and utilities. In different areas, according to a report, homeowners and tenants can spend up to 79.7% on housing in the Vancouver area. In Toronto, it’s 72%, up 8.3 per cent since 2016. This leaves little for food, emergencies and other necessities.

Just what is median income in Toronto?

$78,800 is the median income in Toronto. Even at $78,800, the average rental for a condo seems “just affordable.” For the many people below the median in Toronto, this is an issue. In the Census, 27 per cent of the population in Toronto were low-income singles, many with incomes under $20,000, according to Canada Census 2016. To qualify as “low income” in this Census:

  • $22,133 for a single (in 2015, per Census): maximum annual rental based on this would be $7303 or $608.53 — roommates a must.
  • $44,266 for a four-person household (2015): maximum annual rental based on this would be $14,755 or $1214 — maybe a one-bedroom for four?


Kin Ming Estate in Tseung Kwan O: 10 housing blocks housing 22,000 people.


Hong Kong example?

Hong Kong’s public housing and low-cost housing was, at one time, world renowned. Although policy has changed, somewhat controversially, its worth looking back to 20 or 30 years ago when Hong Kong sent high-density towers aloft faster than people could snap them up. The key was to push the bounderies of the city, opening new territories (at that time), and making sure low-cost housing had maximum density: at least 40 stories, and buildings so dense you couldn’t see the sky. But they filled up quicly. For instance, Kin Ming Estate in Tseung Kwan O, built years ago, consisted of 10 city blocks, housing 22,000 people.

Although Toronto is not Hong Kong, it is growing quickly. Thirty-eight percent of households in Toronto earn less than $50,000. The call for properly priced affordable housing may require higher density solutions, such as Kin Ming Estate.


Auberge on the Park-Tridel


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