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.