The reality of the transformation of Honest Ed’s into affordable rentals

With Toronto being the most expensive city to rent in, according to a Rentals.ca Rent Report, the federal government and the city have attempted to remedy the situation with an investment to turn the famous Honest Ed’s department store into affordable rentals.

On Jan. 16, the Canada Mortgage and Housing Corporation (CMHC) announced a $200-million investment by the Canadian government and the City of Toronto to create affordable rental units where Honest Ed’s once stood in a media release.

However, with more than 100,000 households in need of social housing in the city, according to the Toronto Housing Market Analysis, one affordable housing expert does not believe the investment will be enough to properly address the city’s housing crisis.

“You would need to more than double the amount of skyscrapers we have in Toronto to address the housing crisis,” said Ash Navabi, senior economist for Housing Matters, a non-profit advocating for housing affordability in the GTA.

The development that is now being called Mirvish Village as an homage to Ed Mirvish, the former owner of the iconic discount store that closed its doors in 2017,

Mirvish Village is set to entirely a rental residence, made up of six buildings standing on the corner of Bathurst Street and Bloor Street West, according to the CMHC media release.

The six buildings will apparently contain 916 rental units but only 366 of them will be officially designated as affordable, being offered at or below 30 per cent of the median household income. In addition, 100 of those will be offered lower at 80 per cent of the average market rent for the City of Toronto.

The median household income for the GTA is estimated to be $78,378 before income taxes in 2016 by the CMHC. This would theoretically place the rent of more than two-thirds of the designated affordable units at $2,612 a month, if offered at 30 per cent of the median income.

Although it has not been released how many bedrooms the rental units will have. But, that monthly rate is higher than the Average Market Rent of a five-bedroom townhouse which sits at $2,548 a month according to a City of Toronto report.

As for the remaining 100 units, 80 per cent of the average market rent in 2019 puts a one-bedroom apartment at $1,016 a month, a two-bedroom unit at $1,194, and a three-bedroom suite at $1,331, according to the same report.

Of the Honest Ed’s transformation, Navabi said, “I can’t say that it is a move in the right direction because it’s the same thing they’ve been doing for the last 40 years. They’re just subsidizing the problem instead of actually addressing it.”

Mayor John Tory who has been an advocate for increasing affordable housing in Toronto acknowledged in a tweet on Jan. 16 that the Mirvish Village development just the most recent affordable housing project. “This project will build on the investments we have already made in affordable housing,” the mayor said in the tweet.

This project will build on the investments we have already made in affordable housing. In 2019 alone, we approved 4,798 new affordable rental homes, while launching our #HousingTO 2020-2030 Action Plan to help more than 341,000 Toronto households across the housing spectrum.

— John Tory (@JohnTory) January 16, 2020

Tory also referred to the Housing Now initiative that city council approved last year. The initiative proposes to create 3,700 affordable rental units along with 10,000 affordable homes in mixed-income communities across the city.

However, Navabi and Housing Matters suggests that to properly address the housing crisis in the city, zoning regulations need to be re-evaluated.

Navabi compared Toronto’s zoning regulations to Canada hypothetically telling Toyota that they could only import one car a year into the country.

“Do you think it would be an affordable Camry or a brand new Lexus?” Navabi said.

Strict zoning laws in Toronto are almost forcing developers to build luxury condos that eventually get resold as rentals at inflated monthly prices because “they only have one shot” to make their investment worth it, Navabi said .

A report by Housing Matters noted the total number of rental units only increased by 15 per cent from 2007 to 2016 in Toronto. It was almost entirely condos repurposed for renting.