The Middle Class Can No Longer Afford Housing in Mississauga

When people hear the term “affordable housing,” they too often think of subsidized housing (which, though important, is not quite the same thing) and assume that lower-cost housing is something other people need.

Not so.

According to Making Room for the Middle: A Housing Strategy for Mississauga–a draft strategy recently unveiled by the city of Mississauga–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.

Some key facts:

• A home is considered affordable when its inhabitants spend 30 per cent or less of their earnings on housing costs
• 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
• Middle income earners include nurses, teachers and social workers
• People who want to purchase homes can typically afford to pay between $270,000 and $400,000, meaning their only options are condos and a limited selection of townhouses
• Housing prices are adversely affected by supply and demand imbalances (there’s much more demand than there is supply)
• The average rental unit costs $1,200 a month
• Rental inventory is 1.6 per cent (which is troublingly low)

The city is focusing on middle income earners because they typically make too much to qualify for government assistance, but still cannot afford to rent or purchase homes in the city. When people are priced out of their communities, the social and economic fabric of the area is compromised. If the middle class is forced to move further away, the city will only be suitable for very high and low-income earners–something leaders are hoping to prevent.

Now, it is important to note that the city alone cannot do much to cool the red-hot housing market. Low housing inventory across the GTA and beyond has led to a stunning uptick in prices that has left many prospective first-time buyers incredibly discouraged.

In 2017, the Toronto Real Estate Board (TREB) announced that detached houses in the 905 are costing buyers an average of $1 million. Now, they cost around $900,000. Even condos, the last bastion of affordable owned housing, are running purchasers a whopping $400,000. The wild increases in house prices has, naturally, trickled down to the rental market. A quick look at MLS shows some one bedroom condos being rented out for as much as $1,500 a month. 

But while Mississauga can’t do much to bring down market-dictated prices, it can do its part to protect existing rental stock, advocate for residents at the federal and provincial levels and incentivize developers to include affordable units in their projects.

The draft strategy offers 40 actions based on existing municipal powers for achieving its goals. It also proposes establishing interim city-wide housing targets for market rental and affordable ownership of 35 per cent.

“Housing is an issue that touches every Mississauga resident and business,” said Mayor Bonnie Crombie. “Council has already endorsed in-principle, actions to protect existing rental housing and create a housing-first policy for surplus lands. Making Room for the Middle: A Housing Strategy for Mississauga is the City’s plan to provide, together with our partners, a supportive development environment for a range of affordable housing.”

So, what has the city proposed thus far?

• 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 is also 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.

Since so many people (including lower-income residents who are waiting for subsidized housing to become available) are seeking cheaper accommodations, the city is discussing the benefits of incentivizing landlords to register their units through tax breaks, while also reexamining its own enforcement policies.

It’s encouraging that Mississauga is working to draft its own plan and not simply waiting on the provincial or federal governments to provide guidance. While housing has been identified as a priority for all levels of government (the Canada Mortgage and Housing Corporation is developing its National Housing Strategy and province is working on its Promoting Affordable Housing Act), the city is optimistic that there are things it can do (such as legalizing secondary units and protecting existing rental stock) in the interim to keep middle-income earners in Mississauga.

“Mississauga can move forward on actions within its authority,” the draft reads. “It can remove barriers that prevent the development of housing that is affordable to middle income households by reviewing its own policies and procedures. It can also examine the costs of waiving/deferring the fees it charges and review the impact of changes to multi-residential tax rate to encourage purpose-built rental housing. These will have real cost implications. A program would be developed to support this initiative and tables at General Committee at a future date.”

Speaking of other levels of government, however, the draft also calls on the provincial government to expand municipal revenue tools (meaning give cities more avenues to generate revenue).

“We have repeatedly said municipalities and the province need to have an honest debate about how to fund urgent city-building priorities with revenue tools that ensure permanent, dedicated and long-term funding,” said Crombie. “Setting aside 1 per cent of the HST or the income tax for cities is worth considering.”

But while the road ahead will be long, it’s good to see the city taking so much initiative.

“People cannot pursue the opportunities that each new day brings here in Mississauga if they do not have a safe place to lay their heads at night. Complete cities move, service and house people,”

Crombie says. “This strategy puts Mississauga on the path to getting housing affordability right.”

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