Could multimillion-dollar homes be one solution to chronic homelessness?
|Toronto Star 22 Mar 2019 at 13:25|
As Toronto continues to grapple with a dearth of affordable housing, a surge in the sale of multimillion-dollar houses could, if tapped correctly, be used to lift hundreds of people from chronic homelessness and out of the city’s bursting emergency shelter system.
That is the bones of a proposal being presented to city council next week, as part of a joint motion outlining how the creation of a new top-tier Municipal Land Transfer Tax rate could be used to extend a soon-to-be exhausted funding stream that is part of the city’s housing allowance program.
The pitch is that homes sold for $3 million and up be subject to land transfer taxes of 3 or 3.5 per cent and homes sold with a value of $4 million be taxed at 4 per cent, with the extra funds used to support housing allowances and other programs designed to reduce chronic homelessness, as required.
“We have seen an explosion in the number of houses that have sold for more than $3 million, meanwhile we have not been progressively capturing that increased revenue,” said Councillor Joe Cressy, speaking with the Star on Friday following a press conference at city hall. The idea is that those who “have benefited the most from a strong housing market” will help ensure the most marginalized also have a roof over their heads, he said.
Cressy plans to move the motion asking council to instruct the general manager of shelter, support and housing administration to research the expansion of the housing allowance program, including the tax option, and report back to the planning and housing committee in May. Councillor Brad Bradford and Deputy Mayor Ana Bailão intend to second the motion and the report should come back before council in June.
“The housing system is interconnected and we need to utilize a wide range of tools to ensure that all Torontonians have access to a safe, clean and affordable place to call home,” said Bailão, chair of the planning and housing committee, in a press release.
In Toronto, homes sold for $2 million and up are subject to a land transfer tax rate of 2.5 per cent.
In 2018, the number of single-family residences that sold for $3 million or more was 774 — a 353 per cent jump from the 171 homes sold within that price range in 2010, according to information provided by the city. If the homes sold in 2018 had been subject to 3 per cent land transfer tax, instead of the going rate of 2.5 per cent, it would have meant $5.1 million in incremental revenue that could have provided new rent support for 1,000 households, based on one scenario to be considered by council.
The housing allowance program provides eligible households with between $250 and $600 each month and 5,119 households were being supported as of Dec. 31, 2018. Cressy said the money is available for up to five years, though people typically need it for less, and without new funding will be closed to new people in about two months.
Mayor John Tory’s spokesperson said the mayor intends to support the motion. Tory “hopes the report will look at a wide range of options as to how to pay for these housing allowances,” Don Peat said in an email.
Earlier this month, council rejected several motions to boost the rates of property taxes for homeowners beyond the rate of inflation, leaving the city with an operating budget that had a $79-million hole in it and several initiatives unfunded.
The federal government has pledged to provide a $2,500 housing benefit to at least 300,000 Canadian households as part of the National Housing Strategy, but that money won’t begin to flow until 2020.
Toronto’s emergency shelter system has space for 7,425 people, according to online city statistics, but at last count was just a few spots away from being completely full. Outside of the emergency system, 1,010 people sought shelter in nine 24-7 cold weather respite sites, two 24-7 women’s-only drop-ins, and three locations of the volunteer-led Out of the Cold program, city data showed.
Cressy said cash to offset rental costs will never reduce the need for more transitional and supportive housing but it is one of the city’s most effective tools to help people who simply need a hand up, in terms of dollars. He said the money can also be used to help people who abruptly lose low-cost housing, such as in the shutdown of the storied 63-room Waverly Hotel on Spadina Ave. in 2017, to make sure they don’t end up in the shelter system.
Diane Walter, executive director for Margaret’s Housing and Community Support Services, said “anything that moves the needle” for people experiencing chronic homelessness should be applauded. However, she stressed the real issue is how a lack of co-operation between all levels of government has resulted in a severe shortage of affordable and safe homes.