MPACC 2018: Affordable Rental Housing in the City of Toronto

Ian T. D. Thomson and Lina Pulido

On January 19, graduate students from the School of Public Policy & Governance (SPPG) and the Department of Geography and Planning took part in the 2018 Municipal Policy Action Case Competition (MPACC) at the University of Toronto. MPACC is an annual student-led case competition geared towards tackling problems in municipal policy. The competition provides students with an opportunity to address local issues from the perspective of policy-makers at a municipal level.

This year, 46 students making up 11 teams took part in the competition with the aim of solving the City of Toronto’s difficulties with affordable rental housing.

The issue

In Canada, housing is considered “affordable” when less than 30% of before-tax household income is spent on shelter. 44% of Torontonians currently pay rent that is above this threshold. While nearly 7,200 government-assisted and private rental homes were built between 2006 and 2015, and 22,000 more are set to be built, the number of units remains lower than estimated demand.

In 2016, the City of Toronto approved the Open Door Affordable Housing Program to support the Housing Opportunities Toronto Action Plan 2010-2020. The program aims to increase access to affordable rental units by providing capital funds and fee or tax exemptions to developers for building them. However, despite housing plans developed at all three levels of government, providing purpose-built affordable rental housing in Toronto continues to be challenge for the city, especially as the population continues to grow and house ownership remains out of reach for many.

Knowing the context of the policy issue, MPACC participants were asked to answer the question: “Given the City’s commitment to provide affordable rental housing, how can Toronto improve the quality, quantity and support of its affordable rental housing sector?” Teams were tasked with developing practical solutions that accounted for factors like the city’s budget, timing, the roles of other governments and external stakeholders, and legislative restrictions.

Competitors presented their policy proposals to a panel of expert judges with direct experience working on the policy challenge. The judging panel consisted of Sean Gadon from the City of Toronto, Susan Ritchie from the Region of Peel, Michelle German from Evergreen, and Margie Carlson from the Ontario Non-Profit Housing Association. They evaluated each team’s policy proposal based on feasibility, risk, clarity and creativity.

The proposals

Students’ creative and critical policy skills were on full display during the presentations. One team suggested using existing space, including public buildings like libraries and recreation centres, to build mixed-income housing units. A similar strategy has been implemented in New York, Seattle and St. Paul. Another team proposed the renewal of 1,200 old housing towers that could house up to 500,000 people. Two teams proposed the use of secondary suites, focusing on city-sanctioned and supported laneway or garden suites, complete with a task force to eliminate red tape around the application process.

Another suggestion was to expand density for benefit agreements, which are development contracts that outline specific benefits for the community. In this approach, developers come to the city with the intention of increasing height and density restrictions in an area. The goal of the proposal was to formalize the process to ensure developers and city planners continue to collaborate.

The runner-up team presents their proposal

Other teams favoured the creation of entirely new housing and city programs. One group recommended using government funds to support not-for-profits that are focused on creating mixed-income co-living. Along the same lines, another team proposed using public-private partnerships to incentivize developers to build affordable housing with tax credits and subsidies. A third team suggested bringing for-profit housing developers together with non-for-profit housing charities with incentives like reduced parking requirements, fee waivers, density bonuses, property tax rebates, and access to affordable housing grants and interest-free loans. The variety of approaches indicates how complex affordable rental housing policies are.

The runner-up team, comprised of Jasper Paredes, Kaitlin de Menna, Megan Skinner, Steven Tavone, and Tony Yin, outlined a “Robin Hood” policy. First, the team recommended altering current land transfer tax rates to discourage sellers and preconstruction condo investors from using housing purchases solely for investment and selling within the first two years of purchasing. Tax rates would be highest in the first year, then progressively decrease for two years. The proposal would incentivize property owners to maintain their investment for longer, thus increasing rental housing supply, as opposed to selling the home and potentially removing it from the rental market. Second, the team proposed a micro-credit loan option for specific income groups and a tax credit for rental suppliers to provide affordable rental housing.

The winning idea

Members of the winning team for MPACC 2018 were Alexander Wreford, Rachel Vickerson, Sacha Forstner, and Sarah Caicco. The team proposed petitioning the province to create a new “rental-only” zoning category, while effecting a variety of land-use changes locally to boost infill and gentle density. The idea was to save areas from luxury residential development and to expand rental supply. The team’s approach was praised for its creativity, as well as its flexibility.

The winning team poses with the judges

In a Beyond the Headlines Interview for an upcoming episode, Sean Gadon, the Director of the Affordability Housing Office for the City of Toronto and one of the 2018 MPACC judges, praised the feasibility of the winning solution. “That idea was cool because it is also something the city could implement. In particular, it had the opportunity of creating new housing that for a 100 or 150 years would be there. So it wasn’t something some other future government could undo, because that housing would be built in those rental zones.”

However, Mr. Gadon was inspired and impressed by all 11 teams in each coming to a unique idea to solve something in the housing crisis.

“I was absolutely thrilled to participate …and I thought it [the competition] was a really fresh way to explore ideas without the usual confines that we find in government itself,” he said. “I want to congratulate the school in holding the competition… the enthusiasm by the students was absolutely inspiring.”

Ian T. D. Thomson and Lina Pulido were two of the Directors for MPACC 2018 and would like to thank the judges for their time and SPPG for their support.

Ian T. D. Thomson is a 2018 MPP Candidate at the School of Public Policy & Governance.  Originally from Winnipeg, Ian holds both a Bachelor of Science Honours degree in Psychology and a Bachelor of Arts degree in Philosophy from the University of Manitoba. His policy interests include energy policy, natural resources policy, and urban policy. 

Lina Pulido is a 2018 MPP Candidate. She holds a Bachelor of Arts in International Relations, as well as a Minor in French from the University of Calgary. She is interested in immigration policy, municipal policy, and labour policy.