Tag Archives: housing affordability

Mississauga Neighbourhood Ranked One of the Last Affordable Areas in the GTA

 

If you want to buy a home but you’re not a millionaire, there are only so many affordable neighbourhoods left in the Greater Toronto Area (GTA), and even then, becoming a homeowner is difficult if not near impossible—especially with higher interest rates and more vigorous mortgage stress tests.

However, one neighbourhood in Mississauga was deemed one of the last affordable in the GTA in a recent Toronto Life article.

As everyone know, Mississauga is not the most affordable city to buy a home in general. According to a recent Royal LePage report, the aggregate price of a home (combining all home types, including two-story homes, bungalows and condos) sits at $758,750. A two-story home typically costs buyers $873,194 (which is down from the $1 million+ highs we were seeing this past winter).

But at a time when the housing market is still hot and it’s hard to find a reasonably priced home anywhere, one pocket of land in Mississauga still hits the mark as a hot GTA neighbourhood.

There’s hope for non-millionaires who just want a half-decent house in a nice area with good schools,” says Steve Kupferman of Toronto Life.

Can you guess where?

According to Toronto Life, the Hurontario neighbourhood (namely Heritage Hills) is one of the last affordable neighbourhoods – of 20 – to buy a home, coming in at number 17.

Boasting an average sale price of $651,671, Toronto Life says “it’s easy for middle-class families to score an affordable home just steps away from the urban core.”

The magazine calls out the surrealness of seeing a massive cluster of distinctly urban high-rises from the window of your suburban low-rise. That said, they were right to single out the neighbourhood built around a large ­public park, as it’s pretty ideal for families—especially since it boasts paths to the two schools in the area: St. Matthew Elementary and Huntington Ridge Public School.

The house Toronto Life zeroed in on? A detached three-bedroom house on Bourget Drive that was listed for $789,888 and sold for $775,000.

Can you believe that, back in February, a cozy home sold for more than $200,000 over asking? How times have changed!

But what counts as a hot neighbourhood in the GTA, you ask?

According to Toronto Life’s list of the last affordable neighbourhoods in the GTA, it’s “a good-sized house in a safe neighbourhood, with decent schools and leafy green space and a commute that isn’t soul-­crushing.”

Without breaking the bank on a million-dollar home, of course, because not all of us are millionaires (yet?!).

This list was curated based on real estate data across the GTA, as well as information from brokers and residents. Researchers also examined access to parks, schools, shopping areas, and transportation into downtown Toronto to determine the best places to live for under a million bucks.

“They’re the last best hope for the desperate house hunter—and the neighbourhoods everyone will be jockeying to buy into 10 years from now,” says Kupferman.

A home is, of course, a huge investment, and you don’t want to be overwhelmed with debt just for a place to call your own. Though that might still be the case if you’re trying to buy a home in the GTA anytime soon, regardless of the neighbourhood.

But, some neighbourhoods are more affordable than others, so you might want to snatch up a home in the Hurontario area while you still have a chance.

“Only virtual millionaires, or ­non-millionaires with millionaire parents, or non-millionaires willing to commit to a lifetime of crippling debt, could afford to break into the housing market,” Kupferman says in the article. “Everyone else had to settle for cramped condos and crumbling fixer-uppers.”

As for other hot GTA neighbourhoods, The Junction Triangle in Toronto topped Toronto Life’s list, with Mimico and West Rouge close behind. Northwest Brampton, Central West Ajax, and Eglinton East sit at the tail end.

You can check out the other neighbourhoods on the list here.

Map courtesy of Toronto Life

Cover photo courtesy of Google Maps

Source: insauga.com – by Ashley Newport on July 14, 2018

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Brand New Affordable Housing Development Coming to Mississauga

I

t’s no secret that housing has become increasingly more expensive in Toronto and the GTA, with detached houses typically costing buyers in Mississauga and surrounding cities between $800,000 and $1 million (often more) and condos—even modestly-sized two-bedroom units—running buyers over $500,000.

With wages failing to keep up with soaring real estate values (and with renting becoming increasingly more costly as homes become more valuable), a lot of lower and middle-income earners have been locked out of the real estate market entirely. Those who have managed to rent or purchase homes in the city are often paying well over 30 per cent of their household income on shelter costs.

For that reason, residents might be pleased to hear that a brand new affordable housing development recently broke ground in the Malton area of Mississauga.

Late last month, Habitat for Humanity Halton—Mississauga, City of Mississauga and Region of Peel staff and officials hosted a groundbreaking ceremony to celebrate the launch of the Bristow-Law Build Project.

The property, located at 3073 Merritt Ave., was purchased for a toonie. Once home to a fire station, the land has since undergone a rigorous clean-up process and will soon to be transformed into four new homes for local families in need of an affordable place to live.

“The process from paying the city a toonie to now took about three years,” says John Gerrard, CEO of Habitat for Humanity Halton—Mississauga.

“[Councillor Carolyn Parrish] came to us and said ‘I think I can get you some land. There are some issues, you’ve gotta work through those issues,’ and we did.”

Gerrard says the main issue was the environment.

“With a fire station on site, there’s bound to be some form of environmental element that needs to be cleaned, so we did the first round and cleaned 97 per cent of it and had to go back and do one more round just to be sure. That takes almost 16 months, but now we’re here. We’ve submitted all our paperwork, it’s in the city planning department. We hope to start in September.”

Groundbreaking ceremony

Gerrard says the project, which he expects will take about 12 months to complete, will boast four two-storey units with basement suites that can be used for other family members.

“These are big homes, they’re four and five bedroom units, which are very rare. We’re very excited we can do that here in Malton, there are lots of large families here and lots of new Canadians and they tend to have larger families.”

Gerrard says the building, once complete, will house up to 20 individuals.

While the project won’t result in a massive affordable housing structure, it’s one of several projects geared towards providing more housing for the city’s lower and middle-class residents. Earlier this year, a new Daniels development with affordable units broke ground at 360 City Centre Drive.

The city has been working to increase affordable housing stock with its Making Room for the Middle strategy, a plan that involves petitioning senior levels of government for taxation policies and credits that incent affordable housing; piloting tools such as pre-zoning and a Development Permit System to develop affordable housing in appropriate locations (close to transit systems, for example); encouraging the Region of Peel to develop an inclusionary zoning incentive program for private and nonprofit developers; encouraging the region to investigate the cost of deferring development charges on the portion of affordable units provided in newly constructed multiple dwellings and more.

“Affordable housing is at the heart of our plans to build complete city,” says Mayor Bonnie Crombie.

“A Mississauga where people have access to modern public transit, and can find good paying jobs, earn an education and enjoy an unrivalled quality of life. The City of Mississauga was pleased to sell this land, a former city fire station, for a toonie. Now that’s a deal.”

As for how the Habitat project will work, Gerrard says the initiative is unique in the sense that it will allow families to become homeowners.

“This project is very unique. What happens is the family are given the home on title. They’re sold the house at fair market value, which, in this case, could be $700,000. However, they only pay 30 per cent maximum of their net home income. So if only two family members are working, they only pay 30 per cent of what they can.”

Gerrard says the residents can spend 70 per cent on all the other things they need, such as education, food, clothing and other necessities.

“That’s why our food bank use is so high, because when you have to choose between shelter and food, you sometimes choose shelter and don’t eat.”

Families who wish to move on can sell the unit back to Habitat—and take some equity with them.

“The next best thing is that they will be able to sell it back to us and we’ll keep it affordable, but give the family every penny back plus the equity, so they don’t have to go through a long process, they can give it back and we give them the value back,” says Gerrard.

“We retain the unit for another family in perpetuity. It will always be affordable housing and we’ll manage it with the family. It’s an extension of giving a hand up, and it gives a further hand up because they can buy a new home with their deposit. They take equity with them as well. It’s a homeownership program, but they’re guaranteed to get out what they put in, so if the market drops, they’re protected.”

As for who will get to move into the project once it’s complete, Gerrard says the families have not yet been chosen.

“Traditionally the building process is a long process, it can take from one to three years, we used to pick our families early on and they would have to wait and it would be frustrating, especially in some cases where people are desperate for housing,” he says.

“We work with our families and select them 120 days before the project is completed. That way, they see the reality, they see its coming and they can plan appropriately. We want them to come and learn all the extra things, like financial management, how to take care of a home, etc.”

As for the project taking shape in Malton, Councillor Parrish says it’s an ideal neighbourhood for the development.

“It’s particularly nice to welcome Habitat for Humanity to the Malton community. Malton has for some years lived down a reputation as a rough town, it’s not,” says Parrish. They are the sweetest, kindest, nicest people, and you’ll see that as you’re building here. They’ll bring you coffee and tea and they’ll be coming with their hammers and saying ‘what can I do?'” It’s a wonderful village.”

Parrish said Habitat and the city faced some challenges in terms of moving the development forward.

“It’s wonderful to have you here. Habitat is probably the most innovative group I’ve ever met, you’re always one step ahead of where the government is and you do a great job. We had a lot of problems with resistance from the airport. Thanks to the mayor and council, we’ve actually negotiated with the GTAA to change the rules around here. This is a great location, we hope to get more semis and more housing out here. The Region has been incredible.”

In terms of who will eventually live in the structure, Gerrard says Habitat works with a number of organizations to decide which families are ideal candidates.

“They could be on the Peel housing list or referred to us. We work with community groups, women’s shelters, any organization with families. We try to help anyone in need.”

And while this project is more modest in scope, Gerrard sees more substantial developments in Habitat for Humanity’s (and Mississauga’s) future.

“We’ve been working on some big projects for a couple years now. We’re hoping our next development will be somewhere in the neighbourhood of 120 units, so we’re in discussion with some developers in the community on some land, and ultimately our objective would be to work within the City of Mississauga’s new affordable housing strategy,” he says.

“We’d like to have a mixed environment that gives young people the opportunity to buy a home, at the same time being able to retain inventory to help the next family and the next family and the next family.”

The development should be complete by the fall.

 

Source: insauga.com – by Ashley Newport on July 8, 2018

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Even New Yorkers Can’t Afford a Home in Toronto

 

There’s only a handful of cities in the world that make living in New York seem cheap for middle-income people, places like London, Sydney and Hong Kong. And then there’s Toronto, as 26-year-old JunJun Wu will tell you with a sigh.

After almost three years in New York she opted to move to Toronto for what she figured would be less-expensive housing.

“The apartments that I saw were so tiny, which was shocking,” she said. “Compared to my studio in New York, these were half the size.”

Prices have soared almost 60 percent in the last five years in Canada’s biggest city, and are up another 3 percent already this year. They’re not as high as Vancouver — one of the hottest real-estate markets anywhere — but among the world’s major cities, Toronto housing ranks as the fifth most unaffordable relative to income, according to consultant Demographia.

Severely Unaffordable

The world’s seven priciest housing markets relative to salary

Source: Demographia

Rankings are only for major markets with over 5 million residents. Price and pre-tax income are medians.

All that means is that a Canadian millennial, aged 25 to 31 with a median income of C$38,148 ($29,360), can’t buy very much housing in Toronto. Her maximum budget at that salary would be about C$193,661, according to Royal LePage. That calculation includes tougher lending rules, institutedthis year, that has reduced buyers’ purchasing power by almost 20 percent and cooled the market.

That’s probably not even enough money to purchase the garage of a detached home in the Toronto region, where the average price was C$1.05 million in May, according to the Toronto Real Estate Board.

Rents are no better, having soared about 11 percent to an average monthly C$2,206 ($1,697) in the first quarter from a year earlier, according to researcher Urbanation. That’s if you can find a unit: the number of newly completed condos available dropped to 1,945 over that time frame, the lowest in more than eight years.

Angie Mosquera, a 23-year-old software developer, saw up to 30 different units in recent months but kept getting outbid.

“I was so frustrated by the whole process,” Mosquera said. “I was like screw this, I’m going to be 40 and living at home, and I don’t even want to live in Toronto anymore.”

She eventually found a tiny studio downtown for about C$1,620 per month, meeting her budget. Still, the rent eats up a huge chunk of her salary, which is especially frustrating because she moved to Toronto from Montreal for a 40 percent bump up in pay.

Penthouse Condo

Stephanie and Justin Wood

Source: Justin Wood

Even those with more resources find it tough. Three years ago, Justin Wood and his wife Stephanie bought a three-bedroom penthouse condo for about C$430,000. Its price surged by about C$181,000 and this year they decided to upgrade to a house, with a toddler in tow.

“We thought we were going to be rich and it was going to be amazing,” said Wood, 33, who is now chief executive officer of his own Toronto-based tech startup. “But then we were like ‘Oh wait, we have to buy something.’”

As living in Toronto proved to be too expensive, the Woods headed for the suburbs and ended up purchasing a three-bedroom detached house in neighboring Oakville with a pool for about C$800,000. Monthly mortgage payments are about C$3,400. The commute is around two hours.

After spending almost a month in Toronto looking at about 40 listings, JunJun Wu, a college-prep counselor originally from Montreal, finally found a studio to rent in downtown Toronto through an online listing. She’s relieved that she secured a lease but the experience has left her unnerved.

“Maybe I should’ve gone back to Montreal instead,” she said. “I’m thinking I’ll give myself maybe one or two years in this city to see.”

Source: 

 

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Little-known ownership model touted as unaffordability cure

The land lease model, wherein a resident owns the home but not the land upon which it’s built, is about 30% cheaper than freehold and is being touted as a panacea to the unaffordability crisis that’s gripping major cities.

Lachlan MacLean, vice president of property operations for Parkbridge, says that land leased homes are excellent options for first-time buyers, retirees, and even real estate investors.

“The fundamentals are the same,” he said, “because they own an asset that typically grows in value over time, with the difference being that it’s at a lower entry point. It’s different than someone looking to buy a home, so the entry point is lower and that might create opportunities for people who wouldn’t otherwise have considered buying a home as a user or investor. It’s a rental product that may be more affordable and, therefore, appeal to a broad audience because the buy-in for the investor was low in the first place.”

A land leased home still builds substantial equity, which could then be used to ascend the property ladder. Parkbridge has land leased communities throughout the country, including in Surrey, B.C., where a three-bedroom, two-bathroom single-family detached house is being sold for $199,000.

“The average benchmark price in the Lower Mainland is well over $1.5mln, so immediately there’s a place where people can go where they own their home, have a yard instead of condo living, and they can start building some equity that would allow them to stay in that community or take other steps on the property ladder.”

Although it’s a model of homeownership that isn’t well publicized, CMHC does offer mortgages for land leased homes.

However, for residents hell-bent on living in an urban centre like Toronto, MacLean says land leased homes wouldn’t be feasible.

“We’re typically in smaller urban centres,” he said. “In places like the GTA, the land value doesn’t support any kind of single-family development, let alone land lease, so we’re in smaller centres like Goderich, Wasaga Beach, the Barrie market and the Kawarthas, around Peterborough.”

Source: Canadian Real Estate Magazine – Neil Sharma30 Apr 2018

 

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Affordability: What first-time homeowners need to know

Affordability. It’s a word that gets tossed around a lot when people talk about homeownership, but what does it really mean? Affordability is a term that’s both quantifiable (lending institutions use a formula) and a little bit subjective (lifestyle considerations factor in, too). Here’s what you need to know about affordability, and what it means for you.

AFFORDABILITY, AS DETERMINED BY LENDERS

For lending institutions and mortgage insurers, affordability can be summed up by the debt service ratios, as indicated by your gross debt service ratio and total debt service ratio.

Gross debt service (GDS) ratio
  • Homeownership costs (mortgage payments, property taxes, heating and, if applicable, 50% of condo fees), relative to household income
Total debt service (TDS) ratio
  • Homeownership costs (as outlined above) plus debt payments (credit cards, lines of credit, student loans, car loans, etc.), relative to household income

To qualify for mortgage insurance (mandatory for any home purchase with a down payment of less than 20% of the cost of the home), the highest allowable GDS ratio is 39% and the highest allowable TDS ratio is 44%.

TIP: Get a quick snapshot of your current debt service ratios via Genworth Canada’s What Can I Afford? calculator.

AFFORDABILITY, AS DETERMINED BY LIFESTYLE

Although debt service ratios are an indicator of bottom-line affordability, other real-world factors should be considered up front by potential homeowners.

Expenses like groceries, child care, transportation, and mobile phone and Internet services, for instance, are not covered by TDS, but they’re more or less fixed costs for many households. While they don’t affect debt service ratios, they should be included in your own budget calculations, as they eat up a large chunk of income.

Discretionary expenses like clothing, entertainment, memberships and kids’ extracurricular activities should also be factored into affordability considerations. Are there any areas where you could cut back? Or will some expenses disappear, such as when a car is paid off or when a child leaves daycare for full-time school?

SET A BUDGET YOU CAN AFFORD

Between the numbers-driven debt service ratios used by banks, trust companies and mortgage insurers and the discretionary lifestyle expenses that also affect your bottom line, you will find what affordability means for you.

It’s never too early in your homeownership journey to speak with a mortgage professional or financial planner to determine how much mortgage you can comfortably carry. This will help you assess your financial fitness and also help you set realistic goals on an achievable timeline.

Source: HomeOwnerShip.ca

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Shadow Lending Growing as Canadians Chase Housing Dream

Mortgage broker Samantha Brookes is trying to figure out how to get one of her clients out of a housing-fueled debt hole.

The couple, a 59-year-old Toronto city worker and her husband, 58, have so much debt that they stopped making payments on the C$410,000 ($318,000) mortgage for their suburban home. They wanted to refinance but regulations imposed last year will disqualify them. In a few weeks, they won’t even qualify for an uninsured loan at an alternative lender as more rules come into effect.

They opted for a third route: adding a second mortgage with an interest rate of 10.5 percent to pay off their debt. Their salvation came from a private unregulated lender, a move many other Canadians are making as the government tries to rein in a home-price surge that’s driven household debt to a record. But like a giant game of Whac-A-Mole, the risk to the financial system from tapped out borrowers is merely shifting — this time to a market where there’s no oversight from the country’s national bank regulator and new stress-test rules don’t apply.

“We’re transferring risk from the regulated segment to the unregulated segment of the market,” Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce, said by phone from Toronto. “If we have a significant correction, clearly the unregulated markets will suffer even more because that’s where the first casualties would be. And then you will see it elsewhere.”

Erik Hertzberg / Bloomberg

Brookes says more than 90 percent of her business in the last two months has been lining up funding from non-bank and private sources, or shadow banks — versus a 50-50 mix previously. “People aren’t going to stop buying, they’ll just find different ways of doing it.”

For the government, it may be a case of careful what you wish for. Anxious to prevent a repeat of the kind of taxpayer-funded bank bailouts that occurred in the U.S. after its housing crash a decade ago, the federal government has been moving to reduce its exposure to the mortgage-insurance market.

Read More: Canada’s Bank Regulator Toughens Mortgage Qualifying Rules

Rules last year added a stress test for insured loans backed by the government. That sent more buyers to the uninsured space, where a 20 percent down payment is required. As of Jan. 1, these borrowers will also need to qualify at a rate two percentage points higher than their offered rate, a move which could lower mortgage creation by as much as 15 percent, Canada’s bank regulator has said.

Earlier changes have already had a dramatic effect. Uninsured mortgages made up about three-quarters of new loans at federally regulated banks this year, up from two-thirds in 2014, according to the Bank of Canada. Roughly 90 percent of new mortgages in Toronto and Vancouver this year are now uninsured, in part because government insurance is forbidden on homes priced over C$1 million ($780,000) and prices have risen, the bank said.

Initial Bite

On the one hand, taxpayer risk has dropped as insured mortgage origination fell 17 percent in the second quarter compared with a year earlier, the bank said in its semi-annual financial system review. About 49 percent of all outstanding mortgages are now uninsured, up from 36 percent five years ago. The credit quality of some of the loans at the big banks have also improved as borrowers buy less expensive homes, the Bank of Canada said.

The rules, along with other measures such as a foreign-purchase tax, have had an initial bite — with Toronto house prices falling 8.8 percent from May to November and the average price of a home posting the first annual drop since 2009. Vancouver prices have reclaimed new heights after cooling earlier this year.

But the risks to the financial system haven’t gone away. In the uninsured space, mortgages are increasingly going to highly indebted households and for amortizations for longer than 25 years, the central bank said. And like Brookes’s clients drowning in house debt, more borrowers are turning to lenders whose activities fall outside federal regulatory scope.

These include credit unions and mortgage-investment corporations, pools of money from individual shareholders, which aren’t subject to the new rules, Tal said. Credit unions hold about 17 percent of uninsured mortgages, according to the Bank of Canada.

‘Sub-Optimal’

Canada’s patchwork regulatory system also doesn’t encourage comfort, Tal said. Banks are regulated by the Office of the Superintendent of Financial Institutions, but credit unions and brokerages are overseen provincially. Mortgage-finance companies are semi-regulated, and MICs and other private lenders are unregulated.

MICs currently make up about 10 percent of mortgage transaction volume, or 6 percent of dollar volume, according to research from Tal at CIBC said. Transaction volume will likely grow to about 14 percent under the new rules, and in the event of defaults in a housing correction, those MIC investors would be open to losses, he said.

“Anything over 10 percent is sub-optimal,” he said. “You don’t want this market to be too big because you don’t want to increase the blind spots.”

Sound underwriting is an important element in maintaining a strong and stable Canadian financial system and OSFI will continue to monitor the country’s housing and mortgage markets under the new rules, Annik Faucher, spokeswoman for Ottawa-based organization said in an email.

Need Solutions

Like her clients, Brookes said borrowers will get creative to get around the new rules. Options include companies like Alta West Capital, Fisgard Asset Management Corp. and Brookstreet Mortgage Investment Corp. or just a wealthy individual willing to lend at interest rates starting around 12 percent.

Fisgard didn’t respond to request for comment, Brookstreet declined to comment while Chuck McKitrick, chief executive officer at Calgary-based Alta West said MICs are regulated by the country’s securities commissions and various real estate bodies.

“We’re scrutinized a hundred different ways,” said McKitrick. “There’s very little difference between us and other regulated entities.”

Despite the expectation that MICs will see more business, McKitrick said the big financial institutions will adapt to new regulations to keep lending. Shawn Stillman, a mortgage broker at Mortgage Outlet Inc., said banks could lower their mortgage rates so homebuyers would still qualify under the new stress-test rules.

“The bank doesn’t care because they’re still going to make their fees and get their money,” Stillman said by phone from Toronto.

Alta West predominantly lends to entrepreneurs and new Canadians, groups that typically have a harder time getting a mortgage at one of the big banks. Its rate of mortgages in arrears is about 2 percent, he said. That compares with about 0.2 percent at the big banks and about 0.4 percent for the credit unions, according to data compiled by the Canadian Credit Union Association.

“People need solutions — it could be temporary, but at least they have a home over their head,” Brookes said.

Source: Bloomberg.com – By Allison McNeely and Katia Dmitrieva 

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Mississauga Ranked 14th Most Unaffordable Area to Live in in North America

You knew it was expensive to live in Mississauga. With detached houses costing buyers anywhere from $800,000 to $1 million and compact condos selling for over $400,000, residents are turning to the rental market and being equally as disappointed to see that prices are no more kind there (in some cases, two-bedroom suites can cost close to $2,000 a month).

But while most people understand the GTA is a costly place to call home, some might be surprised to find out that Mississauga is one of the most expensive cities in all of North America.

According to data by real estate company Point2Homes, it’s the fourteenth most unaffordable real estate market on on the continent.

Having recently hit its lowest level in the past decades, housing affordability is definitely a highly discussed topic for Canadians today,” writes Point2Homes in a recent report. “With this in mind, our team of researchers looked at the 50 most populous cities in North America to determine the affordability ratio for each. Based on the numbers, Mississauga is the 14th most unaffordable real estate market on the continent.”

To show the affordability levels across North America, Point2Homes says it examined the home price to income ratio (also called median multiple).

Data shows that with a median multiple of 7.4, Mississauga is a “severely unaffordable market,” coming in fourteenth in the North American ranking and third in Canada—after Vancouver and Toronto.

But while the numbers aren’t great, people can still take comfort in the fact that Mississauga is more affordable than Toronto and significantly more affordable than Vancouver (which is actually number one on the list). It’s also cheaper—which shouldn’t surprise anyone—than such famous cities as San Francisco, Manhattan, NYC, Boston, San Jose and Seattle.

Surprisingly, it’s more expensive to live in than Dallas, Portland, Oregon, Chicago, Las Vegas, Houston, Montreal, Calgary, Edmonton, Ottawa and Philadelphia.

According to Point2Homes, it would take 10 fewer years to pay off a house in Mississauga than it would in Vancouver. That said, the report notes that, when looking at the raw numbers, Mississauga’s median family income stands out – it’s bigger than the income in Los Angeles and even New York.

If a Mississauga resident were to put their entire income towards their home, it would still take close to a decade—7.4 years—to pay it off.

Of course, this report isn’t the first to notice how unaffordable Mississauga has becom.

The City of Mississauga’s Planning and Development Committee recently adopted the city’s first housing strategy: Making Room for the Middle: A Housing Strategy for Mississauga.

According to the strategy, there’s a pressing and dire need to create affordable housing for middle income earners who are in danger of being priced out of the city.

Some of the draft’s findings are alarming, even though they’re not at all surprising.

According to the draft, a home is considered affordable when its inhabitants spend 30 per cent or less of their earnings on housing costs. In Mississauga, 1 in 3 households are spending more than 30 per cent of their income on housing and research suggests this number will rise.

Middle income households typically net between $50,000 and $100,000 a year and middle income earners include nurses, teachers and social workers. When people in this income bracket decide to try to purchase a home, they can typically afford to pay between $270,000 and $400,000—meaning their only options are condos and a limited selection of townhouses.

As far as rent goes, the city says the average rental unit costs $1,200 a month and that rental inventory is 1.6 per cent (which is troublingly low).

So, what has the city proposed to do?

  • Petition senior levels of government for taxation policies and credits that incent affordable housing
  • Pilot tools such as pre-zoning and a Development Permit System to develop affordable housing in appropriate locations (close to transit systems, for example)
  • Encourage the Region of Peel to develop an inclusionary zoning incentive program for private and nonprofit developers
  • Continue to engage with housing development stakeholders
  • Encourage the Region of Peel to investigate the cost of deferring development charges on the portion of affordable units provided in newly constructed multiple dwellings
  • The city has also been working to legalize accessory units (better known as basement apartments). At this juncture, basement suites remain a very viable option for people looking for affordable units, as the suites tend to cost $1,000 or less. Right now, most units remain unregistered and the city is responsible for levying fines against landlords operating unregulated units.

The city is also going to welcome a more affordable units in Mississauga’s City Centre neighbourhood.

The Daniels Corporation, the development firm who has built multiple properties in the City Centre and Erin Mills Town Centre areas in the city, is slated to construct an affordable housing project at 360 City Centre Drive.

As for how the development will work, 40 per cent of the units (70 in total) will be Rent Geared to Income suites. These units will take residents off affordable housing waitlist. The city also says that 60 per cent (or 104 units) will be set aside for renters and owned by the Region. They will be available to middle-class residents.

A second tower on the same podium will boast market-value units, creating a mixed-income property on City Centre grounds.

With the Hurontario LRT coming, there’s a chance property values along the LRT corridor will increase, potentially pushing people out of the area. The city is also tackling other major development projects, including complete redevelopment of some waterfront areas in the Port Credit and Lakeview neighbourhoods.

While the city is certainly doing its part to address affordability, it remains to be seen how the housing market will react to a bigger and more sophisticated and urbane Mississauga.

Perhaps the worst is yet to come.

Source: Insauga.com – by Ashley Newport on November 23, 2017

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