If you include debt repayment (aka a mortgage, whether it's a city/province or end-user, this is typically a factor) and operating costs (e.g. condo fees ... really maintenance, both short and longer term) I suspect many people are just "breaking-even" who rent properties - what I mean is I challenge the notion that "no-profit" rents would be substantially cheaper if cheaper at all given building costs
The City's current {and not successful) program model is Housing Now; in this model, the City already owns the land, and there is no cost for that, and only for construction; depending on how you choose to finance construction this isn't as difficult as it looks; and it really can't be compared to a retail investor in condos who is first paying a developer's mark up; who typically lacks significant scale; and then on top of that has private financing costs. Very different base model.
When I think of pressuring landlords I'm thinking of large REITS who hold tens of thousands of apartments. Now most of those don't show a nominally huge ROI either; but that's because they keep remortgaging fully paid for properties in order to buy more. If they had kept properties mortgage-free that were paid off by the year 2000, you looked at their rental revenue to cost, most are actually in a very good ROI position.
... so really this would need to be subsided and we already have a scheme for that being the TCHC, so you seem to be arguing to expand this significantly.
My preferred model is the Vienna model.
So its not like TCHC in that the government buys the land; it then eats a portion of the construction cost from cashflow on other projects; the balance is financed in some fashion, but the developments are mixed income
including market rents, non-profit rents and deeply subsidized rents, with the former generally mostly offsetting the cost of the latter.
Vienna historically used revenue from a Housing Tax as the seed capital to build public housing; which now represents more than 1/4 of all housing in Vienna. There is also tough rental regulation on a lot of the remaining housing.
I actually have no problem with that at all, but it should not be something the city of Toronto needs to bear alone, it should be funded from the rest of the GTA, the province, and federally ... but I see no appetite for this at those levels ...
While I strongly support senior levels of gov't helping out, lets have a look at some math on what's possible.
Lets assume you try for something that looks a bit like the Vienna model.
So Toronto will either use existing land it already owns, or it will go out and purchase land, probably (if they have an iota of sense) that's zoned neighbourhoods, and buy several blocks and upzone it; and then write off the land cost in any development.
So you then have the cost of construction.
For argument's sake, lets set that at 350k per unit excluding land costs and any profit.
That would mean an investment of 1B per year would produce just over 2,800 units per year. Certainly not enough, but not nothing, That's 28,000 units over 10 years; which if serving households in line with Toronto's average household size would serve ~70,000 people.
Toronto's annual budget is ~16B.
Only a portion of that is funded by property tax; but if you think of adding 1B in net new revenue; you're talking about 6.2% more than what the City takes in now.
For comparison's sake, there are roughly 140,000 cars that use the Gardiner Expressway each day, and about 135,000 use the DVP; there is some overlap, but not that much.
So lets say there are 220,000 distinct cars (guess); If you charged each a $5 toll each way or $10 daily; you would raise 2.2M every weekday, ignoring weekend revenue just for the moment; that would bring in close to 600M per year.
An all-classes property tax hike of 4% would make up the balance and you don't even need debt.
That's not to suggest this is how you would do it or should do it; I would prefer a mix of direct subsidies from the province/feds; as well as CMHC financing; but the point is that just sitting on one's proverbial hands waiting for senior gov'ts to move is not strictly necessary.
I would add, my 350k in pure construction cost is pretty high; if you're excluding financing; but I did that purposefully to low-ball what could be achieved.
Honestly, when I look at the opportunities though......I think the gov't (feds/province) should maybe look at buying a couple of the REITs outright, and then convert them to non-profit land trusts, that would shake the market quite nicely.
CAPREIT owns something like 67,000 units nation wide; at a current market cap of 8.4B; buying it out works out to $125,000 a unit; that's a pretty sweet-heart price.
Other REITs are even cheaper per unit.
