5 ways to make rent affordable in toronto
There are Five Ways to Make Rent More Affordable in Toronto using municipal instruments.
Convert
Buy
Build
Partner
Finance
CONVERT
Toronto needs to convert under utilized real estate assets into residential properties. Low rise buildings are cheaper to build, faster to scale, less demanding on city infrastructure (ex., sewage system), more insulated from market cycles (ex., pre-recession anxiety themed economic behaviour, technical recessions and consumer felt recessions). However, where Low Rise Buildings truly shine is that they speak to a solution that addresses the rental affordability crisis through the lens of the working class; we need affordable housing ASAP, and not at some distant point in the future. Low rise buildings allow us to do that more effectively than a 40 storey skyscraper that takes 3-5 years to build.
A city that becomes the landlord can set rent to the median household income of an area, and add rental caps that are fixed each year within a 4-5 year window.
BUY
Toronto needs to buy two and three story houses, and convert them into micro bachelor units or self contained rooms with a shower and bathroom. These would be ideal for students, young professionals and or those transitioning from being unhoused to housed.
BUILD
Toronto needs to build low rise apartments. They are cheaper to build, faster to build, less demanding on city infrastructure (ex., sewage), more insulated from market cycles (ex., the opportunity costs that come from real estate development during forecasted recessions, technical recessions or consumer felt recessions). Low rise buildings are a better immediate solution than high rise developments, because the problem many Toronto residents face is not rental affordability “at some undefined point in the distant future”, but rental affordability as soon as possible (ex., rental affordability yesterday).
The next two ways I would make rent more affordable if I were elected Mayor of Toronto would be contingent on partnered or partially financed local developers agreeing to rent as median household income for an area, and rent capping for each individual year within a 4-5 year window:
PARTNER
Toronto needs to partner with local Toronto based developers as an Equity Partner/Investor. We offer 5-20% of their capital needs, and help them diversify away from banks as the singular funding source (ex., reducing the overhead they’ll pay in the 4-6% interest from bank loans; reducing this impact of bank interest increases the developer’s profit margins and overhaul ROI). We could also expedite their paper work, allowing them to continue deferring development charges and platform them as a City Partner. The latter is especially useful for banding, because they would be certified as a City Partner Building The Toronto of Tomorrow; and as equity partners, Toronto would make a percentage of revenue on the first $1 Million, and then a percentage of profits after that point (ex., the latter would need to be negotiated and clearly defined in project scope prior to signoff). This is a compelling offer for a Real Estate Developer, because a partnership with Toronto reduces profits lost in bank interest payments, increases percentage of profits as a result of diversifying away from banks, offers a built in marketing vehicle, and creates a partnership opportunity with the city to develop Canada’s economic and socio-political heart.
FINANCE
Toronto needs to build with Toronto based Real Estate Developers as a Debt Financer. The deal framework would be similar to Equity Partnership previously mentioned, but the major differences would be:
We would not receive equity for co-financing the Real Estate Developer
We would charge them $0.20 on every dollar made until we recoup our investment, and then $0.05 on every dollar (ex., revenue, not profit) made for the next 5 years.
These are The 5 Ways we Make Rental Affordability in Toronto a reality for the working class.
My name is Cory Deville. Join me as I Become The Next Mayor of Toronto on a People Focused Platform in Partnership with Local Business.