Toronto's Mini-Ghettos

Toronto has a housing crisis, have you heard!?

Okay, you probably know that already, but the problem is more than pricey condos and people clamouring to become homeowners in a red hot market. Illegal rooming houses are springing up all across the GTA.  This was highlighted by a recent news segment that aired on City News.  

Illegal rooming houses are large municipal houses that are occupied by several tenants.  The example used in the news segment was a house in Scarborough 13 people called home.  The problem with these homes according to Deputy Fire Chief Jim Jessop is that they are plagued with safety issues.  The violations in these homes include improper smoke and carbon monoxide alarms, fire separation between units, and even houses that hold 4 people in their one-exit basements.  Currently only the fire department has the legal authority to enter the apartments because of safety concerns, other law enforcement like bylaw officers need to obtain warrants.  

The city plans on acting by implementing a pilot project that would allow and regulate these group homes with new rules. Scarborough city councillor Jim Karygiannis criticises this plan by saying that the people who are already in this business won't bother adhering to these regulations because why would they? They're already operating and the prospect of fines already don't concern them.

Hey, I agree with that!

His solution, however, is to call on the province to allow bylaw officers to get into houses without a warrant.  Giving the police the power to enter a house without a warrant, there's no way that could be manipulated, right?

The City Council is working hard to overcome this problem.  Right now their potential solutions are regulating these group homes, or giving the police unfettered power to enter them when they see fit.  To me, both of these proposed solution place blame on the landlords, while neither are addressing the root of the problem.  

There is an urgent need for affordable housing in Toronto, and it needs to be addressed immediately.

The problem is that people are increasingly unable to find or afford new housing, and they are resorting to living in these illegal group homes, but let's start calling them what they are: capitalized squatter houses, or mini-ghettos.  If there wasn't a need and demand for more housing, these illegal landlords wouldn't be able to continue to operate. 

The sharp increase in housing prices in the GTA in recent years is no secret.  In the beginning of this year, it was revealed that the average housing prices had risen 22% from January of 2016.  The general consensus was that this number was untenable and that the market would self correct, but there's a statistic that shows the more troubling effects of the housing crisis.  According to the City of Toronto's own website, the number of people using the emergency shelter system on an average night is 17.5% higher than it was a year ago. This page also highlights that the average cost of a bachelor apartment rose 9.5% over the past two years, while currency inflation only rose 2.52%.

There is some bittersweet news as well.  People have been calling for the Toronto housing bubble to burst for years now, but after hearing the same ol' song for over 5 years, it seems as though buyers have begun throwing caution to the wind. They began buying houses in anticipation of growing profits.  This is called 'speculation' in economics, and it's a death blow to any market.  If you want a better idea of what it looks like, check out this speed dating event where people can pool resources to buy property.

After three months of plummeting prices, it appears as though Toronto housing is becoming a bear market.  This is partly being credited to the foreign buyers tax, but the real culprit here is speculation.  Foreign investment only accounts for 4.9% of real estate transactions, but people still began seeing a downturn on housing prices, so they clamoured to put their houses on the market to reap the benefits while they could.  New listings were up 49% in May 2017 compared to a year ago.

This is bittersweet because while it looks like the housing market is finally starting to stabilize, it also means we're also taking a huge blow to the industry that kept Toronto afloat during the Great Recession, and also many people are going to be out a lot of money.  

I would also venture to guess that the people staying in these mini-ghettos aren't the ones looking to buy homes.  I checked out some of the group housing websites mentioned in the City News segment, and they were offering housing for senior citizens and teenagers.  

Jobs and fortunes could be lost in Toronto, and we could only be entering the worst of the housing crisis where a huge influx of renters are looking for homes, while swathes of half finished condo buildings punctuate the landscape.  This means that the disenfranchised will continue to resort to illegal group homes, lest they want to sleep on the street.  

So what can we do about it? Subsidized housing is always a tricky subject, and to its credit the City of Toronto has adopted Housing Opportunities Toronto, but I think the first step should be to stop accepting proposals for luxury condos, and begin granting projects to proposals that want to build affordable rentals buildings in diverse neighbourhoods.  But I don't know, I'm just a writer.