- Early days
John Sewell has had a strong interest
in redeveloping public housing since he chaired the Metro Toronto
Housing Authority in 1986-88. At that time he initiated three
studies of redevelopment opportunities which are fully described
in Chapter 8 of his book The Shape of the City: Toronto
Struggles with Modern Planning.
In the 1990s he served
on a committee that looked at redeveloping the north west corner
of Regent Park although, unfortunately, the proposal was never
implemented. In 1995, with planner Alan Littlewood, he initiated
a plan to redevelop the north east corner of Regent Park and
replace 163 units with about 400 units of housing. This was
presented to a meeting of Regent residents in the fall of 1995.
There were very supportive and a steering committee was formed
to refine and amend the ideas into a firm plan for redevelopment
that was presented to municipal and provincial governments in
1996. Although the province expressed great interest in proceeding
with the redevelopment and held two requests for proposals to
seek out developer interest, it eventually abandoned the developers
and residents, and did nothing.
As a result of this experience John published
a booklet with the Caledon Institute in 1999 titled Redeveloping
Public Housing Projects.
- Don Mount
In 2001 the Toronto Community Housing
Company, an organization established by the City of Toronto,
assumed responsibility for public housing in Toronto. It very
quickly learned that the Don Mount project, between Dundas and
Queen Streets just east of the Don River, was structurally unsound
and required either demolition or replacement. In February 2002
John began knocking on doors in Don Mount to help tenants organize
into a group to protect their interests. With tenants (and again
with the help of Alan Littlewood) he created a plan which called
for the demolition of all 232 public housing units, the re-establishment
of city streets, the replacement of all rent-geared-to-income
units, and the addition of about 250 units of market housing,
all in a form that complimented the existing neighbourhood.
Tenants successfully convinced the board of the Toronto Community
Housing Company in May 2002 to proceed with redevelopment as
they had proposed.
John continued to
work with residents helping them to redevelop a relocation plan,
adopted by TCHC, and to proceed with redevelopment in phases
so that 75 units in the south part of the project would remain
until new replacement housing had been built in the north section
of the project. John worked with the residents throughout 2002
and 2003 to ensure that they had some kind of voice in the plan
of redevelopment, although TCHC has done much to exclude them.
TCHC created a redevelopment
company for Don Mount which in early 2003 received four bids
for redevelopment. It has refused to reveal any of these four
bids. Tenants have seen sketches for the bid that the redevelopment
company prefers: it consists of about 530 units, of which 232
replace the rent-geared-to-income units. These RGI units would
be located in four-storey structures on the new streets, and
the majority of the market units would be in a 25-storey condominium
tower. TCHC has refused to reveal the terms of this bid or its
financial implications. Tenants have asked for two modifications
- an elevatored building serving one and two bedroom units,
and basement storage space for tenants living in three, four
or five bedroom units, but these request have not been met.
Redevelopment is taking
an extraordinary long time. When tenants made their proposal
for redevelopment in May 2002 they secured the decision of the
TCHC board that construction be under way by the end of 2002.
But TCHC has proceeded very slowly. It was clear throughout
2003 that planning permission for the 25-storey tower was going
to be difficult to obtain. Nearby residents felt the tower was
inappropriate and even the City's planners said they would have
difficulty recommending it. Paula Fletcher had been elected
councillor for the area in November 2003 (replacing Jack Layton
who had gone on to become the leader of the New Democratic Party
of Canada) and she set her mind to getting the redevelopment
moving. The first step was to have TCHC officials reconsider
the tower.
In late spring 2004 the
TCHC appointed redevelopment board came forward with a new proposal
which deleted the 25-storey tower in favour a four-storey structure.
The new development would contain not 530 units but 487 units
– 232 rent-geared-to-income housing units to replace those demolished,
and 255 new market units. The new proposal also included a rent-geared-to-income
apartment building with an elevator to accommodate seniors and
people with disabilities - this had been a strong demand of
Don Mount residents and one of their criticisms with the earlier
plan. Also included in the redevelopment was a very underused
park at the south west corner of Broadview and Thompson Streets,
where 14 market town houses would be built.
This new plan was recommended
to City Council in the fall of 2004. I provided a letter of
support since, in spite of the long delay, city staff had finally
got this one almost right. The plan was approved by Council,
although the Ontario Municipal Board has yet to schedule a hearing
of objections to the plan by neighbours, and until that is successfully
completed new construction cannot begin.
Demolition of the north
portion of Don Mount was begun in early December, and by Christmas
about two-thirds of the north section was demolished. It is
reasonable to assume that the OMB hearing will be completed
within the first few months of 2005 so that construction can
proceed sometime during 2005.
One concern is that the
developer TCHC has signed a contract with has yet to establish
a sales office to market his 255 units. As of January 2005 the
market for condominiums appears to be on the decline and it
is unclear what impact this will have on the redevelopment since
the contract between TCHC and the developer has never been made
public.
The Don Mount redevelopment
is the first large redevelopment of a public housing project
in Canada . It is not an auspicious start, but it does show
that the reestablishment of a public street system and the mixing
of market and social housing units is entirely feasible. What's
needed is some device to ensure that redevelopment happens more
expeditiously and in a more transparent manner. This may involve
significant reorganization of TCHC and the city's own interest
in housing redevelopment, neither of which is a small task.
-
Regent
Park
John began organizing
tenants to consider redevelopment in Regent Park in 1995. At
that time, a steering committee of tenants was formed. In 2002
the Toronto Community Housing Company indicated its interest
in redeveloping Regent Park. The Steering Committee had continued
to be active, and it became the Redevelopment Committee which
TCHC used as the sounding board for its redevelopment plans.
A consultant’s study was undertaken in 2002. The lead
consultant was John Gladki of GHK International.
The Regent Park Revitalization Study was completed in December
2002 and calls for re-introducing streets into Regent Park,
replacing the 2100 units with 4500 units, of which 2100 will
be rent-geared-to-income and the remainder will be market units.
Some non-residential uses will be included in the redevelopment.
The study was approved
the TCHC Board without the Redevelopment Committee having had
a chance to review its recommendations, and attempts to change
the proposed redevelopment have not been agreed to by the TCHC
Board. The Redevelopment Committee had asked for three specific
changes: that in a redevelopment of this size (69 acres) every
attempt should be made to increase the number of affordable
units rather than simply replacing what is there; that the total
number of units being proposed should be increased beyond 4500
to accomplish this change; and some replacement units for Regent
Park residents should be available for sale rather than on a
rent-geared-to-income basis.
The redevelopment plans
for Regent went through some fine tuning and further consideration
during 2003 and 2004. Some members off the surrounding community
argued that it would be wrong to replace all of the rent-geared-to-income
units in Regent Park since even if mixed with a larger number
of market units, this constituted too large a concentration
of low income households. John believes that this argument is
wrong-headed and that the underlying objection is really to
the current development form and the way Regent Park has been
managed. He has suggested an increase – not a decrease - of
affordable housing in Regent and that a large portion of the
rent-geared-to-income units be replaced with ownership units
affordable by current Regent residents. This change would be
of a significant benefit to low income residents and to the
new communities being developed, as outlined in John's proposal,
which follows.
The planning amendments
required to begin implementing the Regent Park redevelopment
plan will be before City Council committees in January 2005.
There is some possibility that the plan might be amended at
that point. But the key problem is that there are no strong
leaders capable of driving redevelopment at either the TCHC
level or City Council. If there is any lesson the city learned
during its housing initiatives in the 1970s, it is that very
strong internal leadership is necessary for redevelopment to
occur - otherwise there will always be a reason for delay. Certainly
the long gestation of the Regent Park plan (in its third year
so far) shows that this is the case. By comparison, less than
18 months elapsed between the first thought of possible redevelopment
in March 1973 and the construction of the first building in
the proposed St. Lawrence community in September 1974.
**
A
proposal for redeveloping Regent Park.
1.
The Current situation
Currently,
there are about 2100 units in Regent North and South, at a density
of about 30 units per acre. All units are Rent-Geared-to-Income
(RGI) which means that a household pays about 30 per cent of
income for rent. Changes of income and family members must be
reported as they occur. As income climbs, so does rent, and
households that do well financially find that it makes sense
for them to move out into less expensive accommodation.
The
built form of both Regent North and South leaves much to be
desired. Almost all units in Regent North are in three
to six storey apartment structures sitting among large stretches
of open space including parking lots. There's no `ownership'
of this open space by the individuals who live close to it (unlike
in most communities where front and back yards are controlled
by the people who live there) and often these spaces attract
garbage, litter and abandoned cars which give the area a feeling
that it is uncared for. Inside the buildings are long
corridors which are almost `unowned', and since it has proven
impossible to control access to these corridors (since no own
`owns' the doors, locks often are ineffective and undesirables
can easily gain entry), social problems and violence are often
evident in these buildings, which many feel are unsafe.
These
same problems are evident in the five apartment towers in Regent
South, and to a lesser extent in some of the rows of townhouses
in Regent South. The fact that there are no through streets
in Regent means that normal flows of traffic are not there to
add surveillance and safety to pedestrians on streets.
2.
Objectives for redevelopment
The
primary objective in redeveloping Regent Park should be to achieve
a housing form which incorporates as many ideas of public safety
as other neighbourhoods in Toronto . This means that units
at grade should have front and back yards controlled by the
residents of the unit; the neighbourhood should be laced with
public streets; buildings should face onto public streets and
be directly linked to streets with sidewalks; as in other neighbourhoods
in Toronto the services to these buildings like should be public
in nature; there should be a mix of incomes; there should be
a mix of tenures; and there should be a mix of uses. As
we know from looking at other successful neighbourhoods in Toronto
these are the characteristics that seem to create really good
communities.
A
second objective of redevelopment should be to create more housing
that is affordable by households with low incomes. There
is a considerable shortage of housing that low income households
can afford and on such a large publicly owned site (70 acres!)
the city has an obligation to create more housing for low income
households than now exists on site.
A
third objective should be to create affordable housing which
is affordable for governments. If there are good ways
to minimize the public expenditures (subsidies) in achieving
affordable housing then these methods should be explored.
A
fourth objective should be to help low income people become
more self sufficient with more opportunity to move themselves
up economically and have more resources to support themselves.
A housing scheme that helps to do this is clearly a benefit
not only to the households involved but to society at large.
To
sum up, the objectives to be achieved in redeveloping Regent
Park are:
-
To create a much better and more sustainable urban form, one
that is similar to other successful neighbourhoods in Toronto.
-
To increase the amount of housing affordable to low income families
on this site.
-
To do everything possible to minimize public expenditures in
creating good housing affordable to low income households.
-
To help low income households become better off.
3.
A Development Proposal
To
achieve these objectives the following kind of development should
be made:
Regent
Park should be developed in a medium-rise form to accommodate
between 75 and 80 units per acre for a total of about 5,500
units. This is a quite reasonable density for a downtown
neighbourhood, about double the density of Cabbagetown and Riverdale,
but one-third less than the density of the St. Lawrence community.
Three
types of tenure should be offered in this redevelopment:
*
1000 units of rent-geared-to-income in a way that is mixed into
the rest of the development;
*
2000 units of ownership housing affordable by most Regent Park
residents and other TCHC residents; and
*
2500 units of market housing.
This
mix means that about 3000 units of housing will be available
to the kinds of people who live in Regent Park and other public
housing projects. A third of that will be available on
the same terms as now exist, namely rent-geared-to-income, but
the other twp thirds will be by way of ownership. This
ownership housing should provide opportunities for some of the
lowest income households in Regent Park to own if they so wish,
as well as to others in Regent Park who have higher incomes.
The company Options for Homes has shown how ownership can be
made available to households with incomes as low as those on
welfare. But there is no thought that welfare families
would be the only people permitted to own - there are many working
families in Regent Park and other public housing projects with
higher incomes who would be delighted to own a home, and have
the where-with-all to generate incomes to pay the necessary
costs for much of the unit without subsidy.
The
merit of this arrangement is three-fold. First, ownership
means that the family will no longer have to report on a regular
basis to the housing company about family composition and income.
This reporting requirement, necessary where rents are geared
to incomes, is a very serious bureaucratic intrusion into
family life and it should be ended if at all possible.
Providing ownership means that families are entitled to make
what ever money they can and have whatever family composition
they can without being required to report to someone else.
Not
only is this change a social benefit to the families involved:
it also saves considerable administrative expenses. This
is a second benefit.
Third,
the government investment in these ownership units - the
subsidy - will be returned to the government if and when the
units are sold. This means governments will have, through the
ownership option, a revolving fund of money that
can be reinvested into new housing as those low income ownership
units are sold for whatever reason. Obviously low income
families will be reluctant to sell because of the favourable
conditions under which they occupy the unit but there are many
reasons for people to sell and there is no reason why they would
not be allowed to do so if they so desire, knowing that government
investments in the units will be returned to government for
new housing purposes.
One
final point: the low income ownership arrangement means
that over time, different families will be changing their economic
status at different rates. Very quickly, the community
will be a very viable and interesting mix of families with different
incomes. As we know from the experience of St. Lawrence
this kind of mix is very healthy and is something we should
be trying to repeat.
4.
Constraints
City
policy does not encourage low income ownership housing.
It requires rent-geared-to-income housing to be retained and
does not permit it to be replaced by ownership housing, even
if the same household could afford to own rather than rent.
These policies will have to be changed.
The
policies are set out in the new Official Plan. The plan
has not yet been approved by the Ontario Municipal Board,
but it is used to manage current issues that come up at Council.
Policy
5 in Section 3.2.1 reads as follows:
Significant
new development on sites containing seven or more rental units,
where existing units will be kept in the new development,
will secure for as long as possible:
a)
The existing rental housing units, with either affordable
or mid-range rents, as rental housing; and
b)
Any needed improvements and renovations to the existing rental
housing with no pass-through of such costs in the rents to
the tenant.
Policy
4 in the same section states that municipal assistance (providing
land at below cost, or waiving city fees, for instance) will
only be provided to low income ownership units if “provided
on a long term basis by non-profit groups.”
The
key issue is that in redeveloping public housing sites, city
policy is to ensure that the same number of rent-geared-to-income
units is available at the end of the redevelopment as at the
beginning. The policy appears to prevent the replacement
of low income rental housing with low income ownership housing
even if the low income ownership housing can be available at
the same or lower cost. And the policy seems to prohibit the
city from lending assistance to a private developer who wishes
to provide low income ownership units.
The
reason for this policy apparently is the assumption that rent-geared-to-income
rental housing is a continuing asset controlled by the city
or a non-profit agency, whereas ownership housing is not.
There are two fears about an ownership unit: first, that
a low income family which buys their own unit will be able to
arrange their affairs so they no longer are a low income family
and continue to live in the house they have purchased, so the
unit is no longer occupied by a low income family. Second, that
if the low income family sells, the unit would be “lost” to
another low income family, even if the city is fully reimbursed
for subsidies provided. In short, rent-geared-to-income
units are seen as a continuing asset to the city whereas low
income ownership units are not.
Perhaps
the fears are unfounded or misplaced. One key advantage
of the ownership option is that it reduces the subsidy cost
to the city, so that for the same cost the city can provide
more housing that is affordable to low income households if
it wishes. (Admittedly, governments often try to reduce
the amounts they provide for low income purposes, but that's
a different issue.) Another advantage is that when a low
income ownership unit is sold, the subsidy originally given
is returned to the city for re-investment. This means
that the opportunity to replace the unit “lost” is available.
The
fear that a family in a low income ownership unit might increase
its income and not remain in the low income category should
be considered a positive outcome, not a negative outcome.
The
benefits of ownership are social and financial. If the
city can better use its subsidy dollars so that more of the
low income population is in units they can afford, then surely
a policy favouring this arrangement will be superior.
This is the result of low income ownership units:
the subsidy cost to the city is less because the city does not
have to pay management costs. The social value of ownership
is higher for the low income family because of the lack of oversight
in family arrangements.
One
can understand why the city might think that it is good to continue
the worn-out system of rent-geared-to-income housing with all
of the bureaucracy involved. But while one
can understand it, one should not support it. The policy
should be changed to help families climb out of a low income
status, and allow communities to evolve and change at their
own pace rather than being frozen into a rent-geared-to-income
regime administered by a bureaucracy which at the best of times
will respond in bureaucratic ways.
5.
A short note on financing low income ownership housing
The
cost of a two bedroom unit is about $ 143,000. Here's how financing
can be arranged so the unit is affordable by a very low income
household, one that can afford to pay only about $400 per month:
1)
A mortgage for $50,000, which at current interest rates would
require a payment of about $370 a month to cover principle,
interest and property taxes.
2)
A subsidy covering the cost of land, about $40,000.
3)
A write-off of city development charges and other such charges,
$13,000.
4)
A subsidy generated from market units in the project, $40,000.
Once
the owner has paid off the mortgage she can then start to pay
down some of the other subsidies. When the unit is sold
the owner recovers only the equity on the share represented
by the paid portion of the mortgage. The remainder of the sale
proceeds goes into a fund to cover the other subsidies. This
fund could be used to create another low income unit for sale.
If
the owner sells within a short period of time then the equity
will be very small. But over time as payments are made and the
mortgage is paid off the equity clearly increases. Any
household whose income moves upward will quickly find that many
of the subsidized costs can be paid off so the owner's equity
substantially increases.
The
value of the property will increase in line with the general
increase in real estate values, which means the value of the
subsidized items increases too. This means that those who have
provided subsidies will find their investments protected.
Providing
the suggested subsidies can be generated, low income ownership
units appear to be very viable. If they are built on city-owned
land then it is quite clear that the land subsidies and the
city charges are relatively easy to secure. Assuming that
there is a mix of units, it seems entirely possible that the
subsidies from the market units are also fairly easy to secure.
In any case, it is unlikely that all of the units will require
the very steep subsidies needed for families on welfare.
In most cases they will be able to pay a much higher monthly
payment than the $400 suggested.
There
are various scenarios about how one deals with the resale of
units. Obviously, the fewer controls the better.
One may want to ensure that no sale takes place during the first
five years. One will probably also want to provide assistance
to very low income owners to give them the assurances needed
to provide oversight for matters such as insurance. Revenue
from any sale should probably be divided according to capital
investment so that if the city provided 40 per cent of the capital
(through land contribution, waiving fees, etc,) then the city
should receive 40 per cent of the sale price. In any sale the
owner would receive the same share as the paid-off portion of
the mortgage represented to the capital investment. There will
also be question of where the revenues on the contributed side
of the investment go - back to those who were providing the
subsidies, or to a special fund controlled by a public body
or a non-profit body to be reinvested in low income housing.
These are issues to be decided.
John
Sewell,
January
3, 2004.
