Students at the Institute Without Boundaries discuss the unaffordable situation we live in today
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In this episode, students from George Brown College’s Institute without Boundaries program discuss about the meaning of living an affordable live. Also, Wellesley Institute senior researcher Greg Suttor talks about how Toronto’s housing market was in the past and what the possibilities for the future are.
Luiz Felipe Lamussi: Hello and welcome to The Dialog’s podcast! My name is Luiz Felipe Lamussi, looking for someone to share an apartment with and your host for this season! And today our main topic is affordability. Greg Suttor, senior researcher at the Wellesley Institute shares his thoughts and gives us a lecture on the past and the present of the Toronto housing market.
Also, students from the Institute without Boundaries here at George Brown College have been studying this affordability issue. In mid-January, they were part of DesignTO festival with an exhibition that wanted to make people rethink what affordability is. The students created a fake political party called Afford Nation, a great wordplay, by the way, to introduce to the public their new perceptions of affordability.
But before we start I just want to say a special thanks to Sheena Glen, Madison Snell, Shruti Bhaskar and Marcela Cordero for the interview, and also Casey Hinton and Robert Giusti for connecting me with the students.
Lamussi: So hi everybody! Thanks for coming today. Hi Sheena, Madison, Shruti, and Marcela. I want to start the interview asking more about your theme. I know this year the IWB is focusing on affordability, so my first question is why this theme?
Madison Snell: So the IWB picks a topic every year that kind of fits into their five-year plan, and this theme was brought to us on the very first day of orientation. It was like: “Here is your topic, go!”
Marcela Cordero: Yeah, we are willing to tackle very weak problems and affordability is one of them. It is something connected with everything and we had to go really deep in to start to understand the problem and come out with some solutions.
Lamussi: And did you find solutions or ways to attack it?
Snell: There are solutions that exist, we know that there’s ways to lift people out of hard times. But the problem is, there are people at the top have the control of these solutions who don’t want to implement them.
We are not looking for new solutions, although the crop up throughout our research, it’s more about how we can change people’s ideas that affordability and unaffordability is not just about them, it’s about us. How can we lift all of us up?
Cordero: It is about everyone because there is this misconception that affordability can be just about poverty but it is not just about that. It’s a very complex issue that is going to affect us all.
Snell: So we’re focused more on shifting the perceptions of affordability to kind of lead us to that affordable world and implement these solutions that already exist.
Shruti Bhaskar: This has been interesting for us because we are a diverse group, and it’s kind of changing our perceptions on what we had thought and now we have changed our perceptions towards affordability.
Lamussi: So it changed your personal perception around this theme?
Snell: One thing we are also interested in is the false choices that people make. So, you think you are choosing from a suite of options, but really, you having to move two hours out of downtown Toronto to find an affordable place to live but then having to drive two hours in. You were forced to make that choice of making that choice of “I need to find somewhere to live, I need a roof over my head” I’ll sacrifice my commute time in order to find a safe place to live. It is not that you love to have two hour commute. You are forced into that choice and we are also looking at deeper choices of “do I eat or buy a new winter jacket?”
Lamussi: And here the weather is something that is hard. I’m from Brazil, which has not bigger issues related to weather and temperature changing, I don’t need to buy stuff to live there. When I got here and I had to decide if I’m going to buy a coat or food.
Lamussi: These are decisions we are making every day.
Snell: And we call them decisions but you are forced into them because there are no other options. One other thing we are also interested in is healthy food versus fast food. The perception of people who are poor eating fast food because is that’s their choice but really it’s about quick calories, quick nutrition and feeling full for less.
That perception again of the poor eating poorly and not making good food decisions is wrong because they don’t have the means to make good food decisions because we’ve skewed what good food means.
Lamussi: And usually those people are the ones who live far from their work, so they are spending less time taking care of themselves and more time commuting.
Sheena Glen: The functional value of food is so much more important than the monetary value. It is kind of taking that spin on affordability in multiple ways of yes can I afford something to do this or not? But more about if something is good or not for your body. And it was in that inner process that we started to think about the political party.
Lamussi: And since you brought that about the political party, let’s talk a little bit about the exhibition. Why did you make a fake political party?
Snell: So part of the program is having an exhibition inside the DesignTO festival. So we were challenged to come up with the framework for the exhibition. How do you want to communicate to the public? What’s you’ve researched from the end of August to the beginning of December.
So for us it has been about value, choice, opportunity and then one thing we also discovered is changing policies and politics is a slow process and it is not catching up with the demands of people.
Zoning has a huge role in this. Toronto is getting more and more people every day and we are running out of places to put them. So they are going outside of Toronto, which creates sprawling cities where nobody talks to each other. So we need to not be afraid of developing the cities that can bring us closer together. There is a lot of talking about the missing middle when we talk about housing and affordability. Where is the duplexes or the triplexes? Where are the houses where you don’t jump from the single detached homes to the fifty-floor apartment? There are levels in between that we are not building because people are wary of what densification means for our city.
Cordero: It’s just that also has brought a fake scarcity of buildings and housing because there is no more housing here in Toronto.
Glen: This is where the yellow belt comes in.
Snell: Sixty per cent of residential homes in Toronto are single detached homes and they are specifically zoned only for that kind of home. So even if you demolish it, the zoning restricts building any kind of higher buildings.
Glen: And the solution to that was: “Oh, let’s just start building into the green belt.” And I’m like don’t do that! That’s our air!
Lamussi: Before connecting the IWB to schedule the interview, I thought their program was more focused on housing rather than the concept of affordability itself. So it was interesting to chat with them and change my perspective on this issue. However, as I was talking to them I realized that I know how Toronto is now, but I have no idea how we ended up in this situation. That’s why I also talked with Greg Suttor, a senior researcher at the Wellesley Institute and specialist in affordable housing.
So today we are with Greg Suttor, thanks so much for receiving me today. Toronto is new to me. I’ve been here for not a long time. So, do you think Toronto is an affordable city right now?
Greg Suttor: No, it is not easily affordable to most people. Most people would say that and by an objective detachment comparative standard, it is very expensive.
Lamussi: And it was always like that?
Suttor: No, this has changed a lot in recent years due to the big escalation of home ownership and rental. So the big escalation of home ownership prices has started in the early 2000s but mostly it is was over the past five to seven years. If you went back 10 years ago, Toronto was less expensive than San Francisco or New York.
Lamussi: And now it’s similar.
Suttor: Yes. So we should talk about ownership and rental. Let’s step back for a second. The Greater Toronto Area grows about 40.000 households every year. So you need to do enough building of the right kind of thing to keep up with that growth. So, overall about 30 per cent of households rent their home. So all that growth, long-term, means that about 30 per cent of the homes you need to add to be available to rent.
So we had a big shift back around the turn of the millennium. All of our growth was in home ownership because interest rates were low, prices were moderate and economy and incomes were growing very robustly. And so, there was no increase in rental demand. In other words, even though the city region was growing rapidly, the number of renters was not growing. So that means that the rental market was soft.
Lamussi: It was not something you would have to worry about.
Suttor: Yes, there was no pressure to push up prices. So after 2008 and the recession, we had this huge increase in ownership prices. Low-interest rates, more foreign investment or whatever are the factors. So this means is fewer people can afford to buy, more people stay renting for a longer part of their lives. Some people who may have made it into home ownership before don’t.
But then we need to talk about supply. Do we have a system that produces more houses or apartments that can be rented? And if we look at demand and supply, what sort of system do we have for providing rented homes?
Different countries have quite different systems. So in Toronto today and in a great part of Canada as well, the main increase in rented houses is coming from condominiums. About half of new condominiums units are rented.
But that’s kind of investors/speculators, affluent households, who want to buy a unit and realize a capital gain in five years or something like that. If we look at that, what sort of rental housing is our system building?
We used to have a different systems in Canada. For example from the 1950s to the 1970s, we had a whole sector of private firms that built and operated apartment buildings entirely for rental. And that how those post-war towers scattered across our urban landscape were built. And many of them are still owned by the same firms.
But developers and those firms don’t like to build all-rental buildings today because is much more profitable to build a condominium. You realize your investment return as a developer in a three-year period of building the building and then you’ve made your money, and you don’t have to worry about long-term risk and property management.
So that old model of the structure of the industry and the way investment happened, that was out the window 40 years ago. And that private rental development in that period was about a third of total housing production for about 30 years.
And for another 30 years, just starting a bit later, from the mid-60s to the 90s we had fairly strong social housing production. Then we got back to the last cycle between 1996 to 2008 when there was no increase in rental and governments, taxpayers and the media didn’t care, we were not worried about it.
So then rental demand surges back in this past decade. Sometimes the long-run needs don’t fit the way the market actors are organized and structured. It’s not that I think that government can just march and solve the problem but I think public policy needs to grapple with this set of complex factors.
Lamussi: In this episode, I’m trying to figure it out how people like me. New immigrants, students, and young people, are going to think when they get here in 10 from now? And how the city is going to be affordable for those people.
Suttor: So I think we’ve been seeing a lot more young adults sharing places to afford the rent. We’ve been seeing a lot more young adults staying in the home of their parents if they are from a family that has that kind of comfort. Of course, by no means do all families or all young people have that option.
We have seen a lot more renting basement apartments, especially near colleges. In many ways, I would say we have to look at how the huge existing housing stock gets adapted to the young adults’ needs. We build 40,000 to 50,000 of housing units a year in greater Toronto but we have over 2 million. So how does that housing stock get adapted, that’s the yellow belt analysis that you talked about. For example, big houses that are 1,500 or 2,000 square feet, can those be subdivided into apartments? Can neighbourhoods and neighbours understand that is something that needs to happen?
Lamussi: And accept this new reality.
Suttor: Yes! We need to see some of that same adaptation of essentially (converting) moderately large older houses into smaller units.
Lamussi: But do we have any concrete things happening to this yellow belt to change right now?
Suttor: I wouldn’t say too actively. There is zoning permission for basement apartments in many areas but of course, many of them are not built to building code or in good quality.
Lamussi: Okay, thank you so much Suttor, it was a really good talk. It was good to try to understand what is happening right now to Toronto. I came here to try to understand what is happening today but actually, I had a great lecture about the past 70 years.
Suttor: It is easier to know the past than the future.
Lamussi: Oh yeah!
Lamussi: And that’s all for today, folks! It was a great episode trying to understand how the Toronto housing market works, what GBC students are trying to change and how did we end up here, sharing tiny apartments, commuting for one hour to school and living off Subway, McDonald’s and cups, and cups of coffee.
Like Mr. Suttor and I talked before, let’s try to imagine which kind of city we would like to live in 10 years from now. If you have any ideas please e-mail me at email@example.com. And please don’t forget to subscribe on the iTunes app or any other podcast app that you use! That’s all for today, see you next time! Bye!