Protecting the most affordable homes in Toronto
Published on 15/04/2021
On April 12, 2021, the City of Toronto announced its plans to consult on the future of multi-tenant houses (traditionally called rooming houses) in Toronto. That’s good news!
Since Toronto’s amalgamation in 1998, multi-tenant houses have operated in a sort of regulatory limbo. They are legal and regulated in the old City of Toronto, illegal altogether in East York, Scarborough, and North York, legal but unregulated in parts of York, and regulated and permitted in small pockets of Etobicoke.
The City has come forward with a welcome proposal for a unified regulatory regime, where multi-tenant houses will be permitted in every residential zone in Toronto. The proposal recognizes that multi-tenant houses are dwindling in downtown neighbourhoods such as the Annex, Parkdale, and Riverdale, where large houses are converted to high-end single-family homes. Newcomers, students, and low-income singles are now more likely to live in the many inner-suburban houses that feature full high-and-dry basements or the spacious houses near university campuses.
However, because many of these houses are deemed illegal, the tenants living there cannot exercise their human right to a safe, well-run home. Instead, they must “keep their heads down,” afraid to make an official complaint for fear the house will be shut down and both they and their housemates will lose their homes.
The right regulatory framework could enable both tenants of multi-tenant houses and their landlords to come out of the closet. For tenants, the benefits could be safer, more secure, and more liveable homes. For landlords, the benefit could be recognition as a legitimate business, with the ability to apply for building permits or grants, just like any other property owner. For the rest of us, it could ensure landlords pay taxes, and census counts – the basis for planning hospitals and other public services – accurately represent the number of people living in each community.
These benefits depend on a regulatory framework that puts tenants first. Any regulations that threatened to make tenants less secure or their homes less affordable would simply mean that tenants would continue to stay hidden.
Take, for example, the fire safety requirements in the Ontario Building Code (OBC). Most Toronto rooming houses are conversions from family homes, but the OBC treats them as quasi-apartment buildings, where every bedroom is treated as a fire-separated suite that must open onto a fire-separated corridor, which in turn must lead to a fire-separated stairway to an exit. Building designs that are commonplace in family homes, such as a front door that opens onto a living room or a back door that opens onto a kitchen, are not permitted.
The costs of renovating a family home to meet these requirements can vary considerably. To estimate these costs, I contacted three non-profit rooming house operators who had brought their downtown houses to Code since 2015. I also identified two houses for sale in Scarborough, Toronto’s east end – a four-bedroom bungalow with a full-basement and a large two-storey house with full basement near the University of Toronto’s Scarborough campus – and asked architect Dean Goodman and Code Consultant Nicole St-Pierre to design and cost their conversion to Code compliant rooming houses. The table below lists the costs for renovations per tenant, some of which can be surprisingly high.
Table 1: Renovation cost per tenant for five example projects
|Project||Total cost||No. of tenants||Average cost/tenant|
|Downtown five-bedroom house||187,591||5||37,518|
|Scarborough four-bedroom bungalow||74,467||8||9,308|
|Scarborough nine-bedroom house||127,577||9||14,175|
|Downtown 21-bedroom house||249,665||21||11,889|
|Downtown 11-bedroom house||259,900||11||23,627|
Will multi-tenant house owners be willing to pay for these renovations? And can they?
There is a common perception that multi-tenant house operators make huge profits. Toronto’s current regulatory framework does create the opportunity for over-charging, over-crowding, and under-maintaining. However, the experience of non-profit multi-tenant houses operators, or private operators known to rent quality rooms, suggests that few can generate the surpluses needed to pay for renovations.
For example, a 2019 survey of 79 houses (549 rooms) owned by non-profit agencies found the median cost to operate a room was $427 per month excluding mortgage, property taxes, and support staffing. Operators of privately-owned multi-tenant houses funded and monitored by the non-profit agency Habitat Services receive $1,602/per tenant/per month in rents and subsidies to provide a room, meals, and 24/7 staffing. An operator of a multi-tenant house that does not provide meals or 24/7 staffing receives $1,013/per tenant/per month. In contrast, non-funded Scarborough rooms listed on Kijiji typically rent for much less, from $500 to $650 per month. So there is very little “profit” to be made, if any, with little to no surplus to pay for costly renovations.
If landlords cannot afford to renovate their homes, the risk is that they will stay under the radar until an inspector shows up, and then either close voluntarily or be shut down by the City. Either way, tenants will lose their homes. If it is the City that shuts down their home under an emergency order, tenants could be without a home without notice. The Red Cross can pay for two weeks’ hotel accommodations for anyone displaced by a fire or by a Toronto Fire Services order. After that, they are referred to Toronto’s shelter system.
And where will displaced tenants go?
The hidden nature of inner-suburban multi-tenant houses prevents a reliable count of tenants who might be at risk of displacement. In 2014, researcher Lisa Freeman estimated 5,000 to 10,000 people lived in inner-suburban multi-tenant houses, almost all of whom had low incomes. By 2021, it is likely there are many more. Most, if not all, will be living in houses that do not meet current OBC standards.
Toronto simply does not have the capacity to re-house these tenants. Wait times for subsidized housing are long. Student housing at inner-suburban campuses is significantly more costly than the rents from rooms advertised within a ten-minute walk. As for private-sector alternatives, according to Canada Mortgage and Housing Corporation’s 2020 Rental Market Survey, there were only 49 vacant bachelor apartments in Scarborough, 55 in North York, and 38 in Etobicoke. The average rent for a vacant bachelor apartment ranged from $1,345 per month in North York to $1,557 in Etobicoke – rents that would be unaffordable to single people on disability or in minimum wage jobs.
A plan to keep tenants safe and housed
City staff have come forward with a thoughtful proposal to legalize and regulate multi-tenant houses across the city. Now they are asking for our advice. Although there is much one could say, for me, there are three basics:
- Recognize multi-tenant houses as the last remaining intrinsically affordable housing in Toronto. We need more affordable rooms and micro-units, not fewer.
- Examine all proposed policies or regulations through a human rights lens, with tenants at the centre. Ask: will this policy or regulation increase or enhance habitability, safety, affordability, and security of tenure? Will it enable tenants to exercise their legal rights? Will it ensure persons with disabilities have accessible homes and the support to live independently and with dignity? And will it ensure these rights are availably equitability to all Torontonians?
- Be ready to invest in quality multi-tenant houses. Renovation costs may be too costly for landlords but are small in comparison to creating new units with a cost of up to $300,000 per unit. In the past, the City of Toronto has offered a maximum $24,000 forgivable loan to multi-tenant houses owners on the condition that rents are kept affordable.
Tell the City what you think
The consultations are now underway. Learn more about the consultation, how to be part of it, and read more about the issues, by accessing one of the resources below:
Visit the City’s website to learn more about its consultation on a proposed city-wide framework to encourage and regulate safe, liveable, well-maintained, and affordable multi-tenant (rooming) houses across Toronto.
Read the Maytree report, A human rights review of Toronto’s multi-tenant homes policies. The report highlights key human rights considerations and implications to help guide the design and implementation of multi-tenant houses policies consistent with Toronto’s existing housing objectives and human rights obligations.
Read the Maytree report, The economics of rooming houses. The report investigates the economic viability of multi-tenant houses to inform the City of Toronto’s rooming house policies.