Hello, honourable members. Thank you for having me here today. My name is Joshua Barndt, and I'm honoured to present on behalf of the Neighbourhood Land Trust.
I am coming to you here today from the neighbourhood of Parkdale in Toronto. The Land Trust owns 85 buildings, with 205 units of affordable rental housing. Our primary strategy for producing affordable housing has been to acquire existing rental housing and convert that housing to permanently affordable rental housing.
Over the past years, our organization and others have struggled to access funding through the national housing strategy to support this work.
I would like to speak to you today about the crisis of increasing unaffordability of rental housing stocks, and how we believe the accelerator fund could respond to this. In order to contextualize our recommendations, I'd like to share the housing affordability challenges that residents in our community are experiencing.
First, in south Parkdale 11,000 households are tenants. This represents 87% of residents. As Toronto experiences a housing affordability crisis, a large majority of local residents experienced a crush of market-driven rent increases, evictions and displacements. In 2021, our organization undertook a neighbourhood-wide research study, looking at the changes in affordability of the rental apartment building sub market, consisting of 68 private rental towers with a total of 6,060 units. Our research documented a troubling trend of consolidation of ownership of this housing stock by financialized landlords, with 71% of units currently owned by large corporate landlords and REITS.
Among many extractive business strategies, the acquisition of low-end market rental housing and the subsequent rent increases of asking rents in these buildings is integral to the financialized landlords' business strategies. This is translated into the prevalence of aggressive above-guideline rent increases and eviction applications. The advertised rents in south Parkdale increased dramatically from 2015 to 2018 by 36%.
In 2018, none of the large landlords offered units for less than $1,400, a rent level 40% higher than the CMHC average rents for the area. These dramatic rent increases and eviction threats have destabilized the everyday life of tenants, 50% of whom live below the poverty line, the majority of whom are BIPOC residents and immigrants. Above 50% of our survey respondents, tenants living in these buildings, now live in severely unaffordable housing by spending more than 50% of their income on rent. In addition, tenants have faced increased financial burden with 40% disclosing an inability to pay for medicines and food that they require.
What is a tangible solution to secure and maintain the affordability of rental housing stocks? Through jurisdictional research and consultation with tenants, community organizations, housing experts and municipal government officials, we've identified that the most effective means of preserving and producing as well as maintaining the affordability of rental housing stocks is the acquisition of private rental housing by the public or non-profit organizations, and the conversion of these properties to permanently affordable rental housing.
It is important to note that the acquisition of rental housing was a key strategy utilized to produce co-op housing from the 1970s to 1990s. Unfortunately, the national housing strategy has failed to support the acquisition of rental housing, the most rapid and cost-effective means of securing permanently affordable housing.
A national acquisition finance stream is direly needed as part of the housing accelerator fund. Countless advocates have already proposed such a program. FCM's 2020 white paper coined “COVID-19 and housing: Critical need, urgent opportunity” proposed, as one of two goals, to acquire and protect modest-rent market housing. FCM specifically identified that the federal government has an opportunity to empower community housing providers and their municipal partners to purchase existing, relatively affordable private rental housing at a much lower cost than building new affordable housing. While this goal has not yet been realized, it's not too late to act.
Why is an acquisition program a really good idea? Given today's high land cost and construction costs, preserving the existing supply of affordable rental units is faster and more economical than building new affordable units. Acquisition projects are an economically efficient way to secure the supply of rental housing, costing 30% to 60% less than new construction projects. Lower cost, of course, means more units are produced through public investment. Because the buildings in question are already integrated into the neighbourhood fabric, preserving rental housing supports government policy objectives of maintaining the stable and well-served mixed income neighbourhoods while reducing neighbourhood disruption caused by new construction. Acquisitions also curb the flow of vulnerable tenants into homelessness. For existing tenants, their housing becomes secure and remains affordable. In addition, as units are made available and turn over, acquisitions accelerate access to affordable housing for those on affordable housing waiting lists and in shelters.
I am almost done, so thank you for your time.
What is needed for an acquisition program to work through the accelerator fund? Canada needs a funding program that is a hybrid of the CMHC co-investment fund and the rapid housing initiative. This program must include, one, low-interest financing similar to the NHS co-investment program and, two, capital grant or forgivable loan funding similar to RHI. However, where RHI projects in Toronto required $350,000 to $600,000 per unit to produce, an acquisition project would require one-third of that, at $100,000 to $250,000 per unit.
Number three is that funds need to flow rapidly as acquisition projects move at the pace of the market. The City of Toronto has exemplified a means for governments to disburse funds rapidly for acquisition through a new multi-unit acquisition program that they called MURA. The NHS should consider a similar program design or simply provide the funds to municipalities to disburse locally and rapidly. I think this committee could consider providing those funds directly to municipalities and encouraging municipalities to produce programs similar to that of the City of Toronto.
In conclusion, the Neighbourhood Land Trust seeks to advise the committee that the most effective means for the federal government to accelerate the availability of affordably housing is to support public and/or non-profit acquisition of rental housing properties through a federal acquisition program funded through the accelerator fund.
Thank you so much for your time, and good luck on this very important task.