Mayoral candidate Jennifer Keesmaat has unveiled plans to create a new rent-to-own program as part of a previously-announced commitment to build 100,000 affordable units over the next decade.
Keesmaat made the announcement at the corner of East Liberty and Lynn Williams streets in the city’s Liberty Village neighbourhood on Thursday morning.
She said that the rent-to-own program would allow qualifying residents to effectively rent their home from the city for a period of one to five years.
Once that period of time has passed, she said that the city would sell the property to the tenant at a pre-arranged price. At that point, a portion of the money that the tenant paid the city in rent would be made available to them for use as a down payment on a conventional mortgage.
In some cases the city or a non-profit partner could also share the ownership of the property with the resident in order to lower the price of the mortgage and improve affordability, Keesmaat said.
“There is an entire generation that is being priced out of access to housing in our city. They are struggling with debt, they have little saved for retirement and have seen the home ownership ladder kicked out from underneath them, so today I am proposing a new City of Toronto home ownership program in order to help,” Keesmaat said. “People taking advantage of this program will be able to apply a portion of their monthly rent against the down payment so renting becomes a pathway to home ownership.”
Program would be funded by property tax levy
Keesmaat said that she would pay for the administration of the program with a 0.4 per cent property tax levy on homes with assessed values of $4 million or more.
According to the Keesmaat campaign, the tax would bring in an estimated $80 million annually.
Keesmaat said that would be enough to help about 10,000 families purchase homes through the rent-to-own program over the next decade.
“People in Toronto are facing a real affordability crunch and the most fortunate among us, the people who have done the best, can afford to contribute a little more to help people get their start in this city,” she said. “To put it another way, I believe we should make Toronto property taxes more progressive and we should use the funds to help ordinary people afford the cost of housing in this city.”
Keesmaat said that in order to raise the property tax rate on luxury homes, Premier Doug Ford’s government would have to sign off on a change to the City of Toronto Act, something that she said she is optimistic about.
In addition to changes to provincial legislation, Keesmaat said she would also be asking Ford’s government and Ottawa to each match Toronto’s investment in the rent-to-own program.
“The premier says he is for the people and this is about ordinary people having access to home ownership,” she said.
John Tory has previously committed to building 40,000 affordable housing units over the next 12 years if re-elected and has criticized Keesmaat’s 100,000-unit pledge as unrealistic.
Speaking with reporters after an appearance at the Toronto Region Board of Trade over the lunch hour, Tory said that the concept of a rent-to-own program is “worthy of consideration” but he questioned whether Queen’s Park would sign off on the legislative changes necessary to impose a property tax increase exclusively on luxury homes.
“Lets assess it honestly. What are the chances of any mayor of Toronto going to the present government at Queen’s Park and getting them to change legislation that allows us to raise taxes,” he said.
Tory added that he finds “considerable irony” in the fact that “the person who says we should be in a state of war with Queen’s Park would be the same person who would want to go up there the next day and ask for a change in legislation.
