Mississauga real estate is facing a serious affordability problem, which has a major impact on the city’s middle class. Average earners find themselves earning too much to qualify for subsidized housing, and too little to afford the rising prices. The newest strategy revealed by the City Hall plans to address this issue with 40 targeted actions.
Low Availability, High Prices and Average Income Levels Create a Perfect Storm Impacting Affordability
Titled Making Room for the Middle: A Housing Strategy for Mississauga, the strategy to increase affordability is based on some key findings about the situation facing the middle class in Mississauga.
Some of them include statistics published by the Toronto Real Estate Board, like the 1.6% rental inventory, and the average cost of a rental unit pushing $1,200.
Middle-income earners in Mississauga make anywhere between $50,000 and $100,000 each year, and include professionals like teachers, social workers and registered nurses. Our recent study found that most Canadian professionals don’t earn enough on their own to live comfortably with a mortgage, especially in the GTA and Metro Vancouver.
Given that the average home price in the area is $1 million and the average price of a condo is $400,000, according to TREB, while most people can only afford to purchase a home in the price range of $270,000 – $400,000, it leaves two thirds of households spending more than 30% of their income on housing.
The affordability problem is not limited to Mississauga, it affects the entire area of The Golden Horseshoe, as Ontario Finance Minister Charles Sousa pointed out in a letter sent in early March, urging Ottawa for intervention on a federal level.
40 Actions in a Plan to Help Middle-Income Earners Become Homeowners
The Mississauga administration says it is limited in its power to address these issues without help, but the strategy it outlines is meant to give home buyers more options, by proposing 40 actions to increase affordability.
One of the key actions proposed is working with senior levels of government to address credit and taxation law issues which contribute to the affordability problem.
Mississauga City Hall may not be able to control skyrocketing prices, but it can fight to address the root issue – the imbalance between very low supply and very high demand – and to offer developers incentives to build more affordable units.
Adjusting zoning laws to allow development of more affordable housing in key locations is another action Mississauga intends to take. This includes creating new zones in which private and nonprofit developers can work together.
“Housing is an issue that touches every Mississauga resident and business. 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.” said Mayor Bonnie Crombie for local website Insauga.com.
The message is clear – Mississauga intends to keep a close eye on the situation and will work with private companies and stakeholders to ensure that the middle class is not driven out of the city in search for cheaper homes.
There is also a Housing Forum in the works for this quarter, bringing together residents, stakeholders, and city officials. The strategy will be presented and detailed during this event, and the City Hall is hoping to receive feedback from the gathered representatives.
Legalizing Basement Apartments Is One of the Solutions Proposed
This might include changing policies on types of dwellings which are currently illegal in Mississauga, such as basement units, a.k.a. “accessory units,” with rents generally costing 16% less than the average rental apartment in the city. Legalizing these units can bring a significant housing stock increase, but it means that the city could no longer collect fines from landlords renting out these unregistered homes.
Fortunately for middle-income earners, Mississauga is willing to forego several revenue sources to increase affordability, including offering tax breaks as incentives for landlords to register units. The strategy draft also states that the City Hall will petition the Provincial Government to make more revenue generating tools available to local government, to compensate.
Mayor Bonnie Crombie makes another important point: “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. Setting aside 1 per cent of the HST or the income tax for cities is worth considering.”
While the most recent attempt by the Ontario Finance Minister to petition the Federal Government for help addressing affordability issues in the Golden Horseshoe was not successful, local level initiatives like this are sure to be appreciated by Mississauga residents.
Original article published by Insauga.com.