Watershed Partners

A Crowd-Sourced Game Plan to Restore Toronto Housing Affordability

by Charlie Ursell

Written in partnership with by Eric Swanson of Generation Squeeze

Toronto is the fifth least affordable city in the world. Over the past 14 years, house prices in the GTA doubled in relation to incomes, and it’s not just low-income households being affected. Many young professionals with good incomes are now also struggling to find affordable housing, whether to rent or own.

Compared to the mid 70’s — when today’s Baby Boomers were coming of age — statistics show that after adjusting for inflation, today’s Canadians aged 25–34 are more than twice as likely to attend post-secondary, paying approximately twice as much for the privilege, only to graduate into a market that rewards them with lower earnings and housing costs up hundreds of thousands of dollars.

For many, this squeeze has reached crisis levels. With municipal elections around the corner, voters are looking for answers and bold action.

However, the complexity of the housing system makes it difficult to chart a clear path forward. Some experts blame a lack of supply and antiquated zoning, others blame foreign and domestic speculation, still others focus on low interest rates or other factors. In reality, it’s likely “all of the above.”

Successfully navigating this complexity requires a “yes…and” approach that incorporates diverse perspectives, surfaces key trade-offs, and is open to iteration and change.


That’s the approach we took in 2016 when we brought together over 50 national housing sector leaders for a Collaborative-Design event in Vancouver. Our goal was to unpack tensions and identify a set of housing policy principles behind which people might align. Despite the diversity of perspectives and experiences, we found that it’s surprisingly easy to find common ground.The simple act of acknowledging the complexity of the situation changed the way people thought about housing and in turn changed what they saw.

At the heart of the housing system, we found a set of key trade-offs that candidates should bring to the forefront and openly address. Consider young professionals. They want affordable homes and may hope for prices to crash, yet they often have parents or grandparents who’re interested in seeing the value of their homes continue to rise. It’s hard to find an optimal solution for everyone, but by layering different perspectives on top of each other it’s possible to find an acceptable solution for most.

For starters, politicians in the GTA need to be clear about their goals. For example, a common goal is to ensure everyone can afford a home — whether renting or owning — at the widely-accepted threshold of 30% of their income (or 45% when transportation costs are included).

To get there, we need strong guiding principles. For example, following our Vancouver event, we’ve increasingly coalesced around the principle of Homes First: treating housing first and foremost as a place to live, and only secondarily as a means to earn an investment return. As soon as homeowners start expecting their home equity to increase by more than their principal payments, plus home improvement value, plus local wage growth/inflation, we start getting into a speculative, unsustainable system.

Having established some guiding principles, politicians, community leaders, and developers can then take a comprehensive approach that combines the best of the private and non-profit markets. In the private market, political leaders can seek to dial up the right kind of supply — including missing middle housing and purpose-built rentals — while dialling down sources of harmful demand from global and domestic speculators, commercial short-term rental operators and others.

At the same time, our political leaders can seek to scale up the permanently affordable, non-profit market, for example, by building price-capped housing on public land (instead of selling off that land to pay off debts).

Through it all, there’s a strong case for rebalancing our tax system to address inequalities created by runaway markets — for example by lowering taxes on income, and raising taxes on unhealthy housing values.

No one person’s perspective can either describe the multi-faceted complexity of the housing crisis, or the ideal solutions that benefit everyone equally. However, by recognizing the complexity, taking a “yes…and” approach and surfacing key trade-offs candidates can sketch a clear game plan towards meaningful, lasting change.