Toronto changes definition of affordable housing

city hall toronto

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Ontario Construction News staff writer

The City of Toronto is implementing an income-based approach to define affordable housing.

New definitions of affordable rental housing, mid-range rents and affordable ownership housing better respond to the needs of low-and moderate-income households were approved at a council meeting last week, following public and stakeholder consultation throughout 2020 and 2021.

An income-based approach “will help to ensure that rents and prices for affordable housing reflect the incomes of low-and moderate-income households in Toronto,” staff wrote in a report.

Councillors said existing definitions are tied to market rents, which have been rising faster than incomes, eroding who can afford housing and tying definitions of affordable housing to incomes rather than market rents “will be better able to ensure homes are affordable for residents over the long term.”

The new affordable rental housing definition is expected to lead to a reduction in affordable rents for studios, one-bedroom and three-bedroom units.

Also, the proposed revised definitions better align with the Canada Mortgage and Housing Corporation (CMHC) affordability threshold, which sets affordability at no more than 30 per cent of a household’s before-tax income.

The recommended updated affordable rent limits and incomes are:

  • Studio: $812, $32,486
  • One-bedroom: $1,090, $43,600
  • Two-bedroom: $1,661, $66,440
  • Three-bedroom: $1,858, $74,301

Updating the housing definitions in the official plan is the first. Combined with the Inclusionary zoning policy and the Open Door and Housing Now programs, the changes will help align municipal, provincial and federal housing policies and support the shared objectives of all governments to increase the supply of affordable housing, promote housing stability for residents and end chronic homelessness.

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