Toronto was a great place, but neglect and arrogance has it facing a brutal future. It tops the global real estate bubble index, and a sharp recession is ahead. There’s construction everywhere, and residents have no idea who this city is being built for. Young people are fleeing rapidly, and taking the city’s energy with them.
Two months ago, I began a leave of absence from Better Dwelling, the company I co-founded. I put together a team, and we began to dissect as many of Toronto’s municipal issues as possible. We looked at the problems, then spoke to experts around the world to better understand how they solved them. I spotted a once-in-a-generation opportunity to not just fix things. But one to transform the City into a place that will set the standard for municipal governance.
I won’t bore you with the whole platform, but here are four data points that show how bad the city has become. More importantly, how we’re going to address those issues so we never face them again.
Toronto Real Estate Is Nearly Impossible To Buy
Toronto real estate is nearly impossible to buy if you (or your parents) don’t have deep pockets. The median household needed 45 months (3.75 years) to save a down payment on average from 2000 to 2018. Today? A median household needs 354 months (30 years). A 22 year old will be 52 when they’re ready for a starter home, and it’ll be paid off when they’re 77 years old.
That’s just the down payment. If you want a mortgage, you’d have to spend 91% of your income on the payments. To qualify for a mortgage, your household would need to make at least $246,400/year.
It’s primarily an issue of monetary policy. The Bank of Canada (BoC) explained this. They even shared data showing low rates helped investors outcompete first time buyers. The Bank of International Settlements (BIS) agrees. BMO is also warning you.
I can’t change monetary policy, I can only advocate for those changes. However, we can make life more comfortable by building a City-owned rental company. Instead of selling off public lands for cheap, we can turn them into mixed use buildings with rent stabilized apartments. When developers stop building to preserve prices, we’ll start building.
This is a revenue neutral plan, with the commercial rents used for low income subsidies. We need more housing. It needs to be affordable and it needs to be sustainably financed. We can’t just ask taxpayers for more, doubling the spend like we did this year.
Toronto Has One Of The Worst Commutes In The World
People from Vancouver think they commute. Toronto was born in a commute. Raised in a commute. No one in this city was ever on time for anything until they visited Asia, and by then… okay, I’ll stop joking, but we have one of the worst commutes in the world.
A study ranked Toronto the sixth worst in the world for quality, and worst in North America. We spend a whopping 96 minutes on average commuting per day. That means you spend 18 days per year commuting, which is far more than most people get in vacation time. It’s tied with Bogota, Colombia for the second most time wasted on average.
Proposals like SmartTrack (or making it more like Bogota lol!) are nice thoughts, but not practical. The reason SmartTrack doesn’t work is because Toronto has no money. That’s why we plan to merge the TTC with Green P, and develop the land into transit-owned commercial facilities. Profits will provide a dividend to help offset operating costs and expansion.
It’s how Tokyo does transit, and it provides up to a third of their revenue at just one operator. This will also help to spread out commercial activity, distributing opportunity. Everyone won’t have to concentrate downtown, reducing traffic.
Toronto Is Losing Its Young Adults
Alberta is calling. Ontario saw 40,200 more people under the age of 40 leave for other provinces than arrived, the most in decades. In Toronto, the 20 to 24 year old population fell 4.7% (-9,100 people) between 2016 and 2021.
Toronto shelters are reporting up to a third of residents are students, can anyone blame young people for leaving? The world’s top universities don’t seem to have this kind of issue elsewhere.
Beyond housing, they need to know there’s a future. We’re going to build a community driven economy that takes a stake in promising startups. Rather than selling transnational companies on how cheap our labor is, we’re going to build our own industry. We’ll do it with various industries, from tech to the arts. There’s a unique opportunity to shift from a real estate dependent economy to something more productive. We need to take it.
Toronto Real Estate Speculators Are Out of Control
Speaking of over dependence on real estate, Toronto’s investors are out of control. Nearly 3 in 5 (58.7%) newly built condos are owned by investors. Short-term rentals are ridiculous, with 3,555 whole home rentals on AirBNB.
Then there’s the 92,400 vacant and underused homes, about 7.4% of housing in the city. The industry attempted to dismiss this at Census by pointing out a small share are homes empty during a move. The OECD challenges that, since it’s the same standard used elsewhere. It’s a problem in other countries with less housing demand, but not in Canada — funny how that works.
Housing isn’t a luxury for the people that work and live in a city, it’s infrastructure for its operation. AirBNB needs stronger controls, and restriction of full unit rentals. We also need serious enforcement, and to close the current loopholes. This would be like increasing the number of units completed this year by 15%, almost instantly. Your tax dollars are being wasted mitigating a housing crisis to help investors. That’s not okay.
Toronto’s vacant home situation is partially due to the property tax rates. It’s low due to Federal and provincial subsidies, which people can appreciate right now. However, it’s also catnip for speculators, who also get these subsidies. Your tax dollars shouldn’t subsidize inefficient use. We need a vacant property tax of at least 3% to deter the use of land as a bond.
Vacant property will never get to zero, but even reducing it by half would be like putting two years of supply on the market.
Bonus Politics Data!
Okay, fine — let’s do one more. Ever wonder why policies are always slanted towards seniors, like no one under 55 lives here? It’s not because they vote more, it’s because seniors determine the polls.
I asked the Toronto Star about their recent poll numbers, and the journalists didn’t have the data. Great, you regurgitated a poll without knowing how it was made? That’s not concerning at all.
The pollsters provided it, and over half of respondents were senior citizens. There are more voters between the age of 20 and 40 than Boomers, but the media polled Boomers. Consequently, the support forecast and issues are steered by this demographic. It doesn’t matter that my social following is second only to the incumbent, my face is blasted on transit and hundreds of lawns, retirees doing polls by land line weren’t super familiar with me. Funny how that works.
On that note, even if you’re not voting for me, you should still vote for whoever you’d like. Don’t let sloppy journalism steer your opinion towards the policy that resonates with landline owners.
The way we do municipal government is broken. Let’s fix it.
Editor’s note: Stephen Punwasi is the co-founder of Better Dwelling, and on leave from his role as Chief Data Scientist while he runs for office. Information on his campaign can be found on his website and social media.
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Toronto is a special kind of hell hole and it’s ridiculous at best. Good luck, my family and I are voting for you.
The other option is Gen Z lives in vacant homes, or they go with the NDP’s choice of building new parks to build encampments in. Everyone is absolutely insane.
This Vancouverite would vote for you if ahe could!
Politicians should have to be able to answer basic budgeting questions on the qualification. They shouldn’t have access to our money and have no clue how it works.
Good Luck ,hope you win !
Welcome and Good Luck.
“Housing isn’t a luxury for the people that work and live in a city, it’s infrastructure for its operation”. This is true no matter what City you live in.
I’ve been preaching this message for years. Warehousing people isn’t an industry. But don’t explain this to Developers as they think the economy runs on warehousing people in high-rises or anything that workers can’t afford.
Instead of running for Mayor, you should be running for a position at the Bank of Canada and explain to them that Real Estate is a shell game. Innovation, new technologies, and IP is the only thing that will allow us to compete on the global stage and fix our economy.
Several of my friends committed suicide in the past decade. There is no future for young people in this city.
Sorry to hear that.
Read up on the disabled man who wants to choose medically assisted death because he might become homeless this winter.
I guess suffering from frostbite and becoming a living popsicle for a few hours before dying is more painful than an injection or pill that helps a suffering Canadian escape this capitalist hellhole.
You are not addressing the main culprit. Multiple dwellings hoarded by companies or even single individuals. Why do you think BlackRock is building a new office in your city?
Tax them according to the number of properties they own. I recently went to an open house in Vancouver to find out it was owned by a lawyer who has over 20 properties. When houses become investment tools that is when you lose families who can’t compete with this nonsense
Agreed. To have one or two investment properties makes good investment sense but there should be a limit. 20 properties and controlling market rents is just a monopoly. Homes are shelters and should never be owned by companies and institutions.
Properties shouldn’t be allow to remain vacant for extended periods of time without paying higher taxes. Until everyone that wants a home to live in has a home, this support of investors needs to stop. Further, the Bank of Canada during the pandemic should have been supporting businesses only. The lowering of the interests alone would have helped individual families. Buying back mortgage securities coupled with QE to credit credit was and is criminal. So many individuals were lead to believe they needed to jump in or lose their chance at homeownership. Many will now be underwater. All because Tiff needed to maintain this illusion of growth.
It’s time also to review and revamp the real estate commissions structure and culture. It’s a monopoly. If someone wants to move it shouldn’t cost 5% plus HST of their equity. On a $1M sale that’s $56.5K of your money. Why so much? You pay your lawyer, who went to school for 5 yrs $2K. Most other industries are regulated. Why not the RE industry? And don’t get me started if you want to sell your own home. You’ll get blacklisted unless you offer agents their 2.5% plus HST. Sinful.
Wow, pragmatic solutions! You’re a revolutionary Stephen. I’ve been telling all the kids at work that you are the only candidate who will deliver real change for the better.
What about an undisclosed ownership tax? At least the money launderers etc. would have to subsidize those of us who live legally…
Good luck and if I still lived in Toronto I would vote for you. Real estate investors, first time home buyers, and parents who loaned their kids money to buy their first home, are going to get decimated. This next cycle downturn will wipe out generational wealth and will not discriminate between the wealthy, the less wealthy, the smart, the less smart. Renters and those holding NO debt, will be the only ones who escape the carnage. If my math is correct, prices should revert back to 2005 levels in the next few years.
I hope what you say will become true.
There is a homeless crisis in Toronto that the Toronto Police are trying to sweep under the earth by literally kicking the unhoused people like ants.
Suicide is through the roof because Canadians see no future in Toronto and they cannot escape.
Suicidal victims will leave society by death, if the equation no longer makes sense.
What is the point in working and paying taxes if home ownership, good living, a chance at creating a family, and retirement are no longer possible?
Canadian society exists solely to nurture it’s citizens- when it no longer serves that purpose, the narrative no longer can be followed. Therefore, in the face of a police state and Toronto Police victimizing the homeless, death seems like the only option for those Canadians.
Would loved to have voted for you but already moved out of the city…. For basically all of of the reasons you are running for!
I do not really think it is possible now to solve this problem. The root of the problem is that dwelling considered investment. Whatever is investment is supposed to grew in value and attract investors and speculators interested in value growth. It is the whole mafia over there now. To resolve this problem permanently the whole system must be broken . Laws instituted and investors along with speculators must be crashed into the pulp. Understandably many will suffer due to losing value in their homes, but it should have never been seen as investment in the first place. For simple people exceptions can be made and construction must be partially done by state connected contractors and investors with guaranteed profit albeit limited by state and within final price constrains of 4-5 average annual salaries top. The system must be broken. One cannot make omelette without breaking an egg.
BTW, the good example how housing problem is solved would be post War USSR. 50% of all housing was destroyed in war and 30 years later all of us was getting free housing without putting no down payment and paying no mortgage. Good luck
Toronto the good is now the hell hole. It’s also sucking the life out of the surrounding communities. BoC is mainly to blame, but I blame the likes of very poor but aggressive real estate agents fueling the fire. The commercial banks also got greedy supplying the easy money caused by almost zero interest rates. Greed feeds greed. Many to blame who should have known better and just carried on like it was normal.
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