Taking a Closer Look at Toronto’s “Least Expensive” Neighbourhoods

Last week, I took the click-bait on a blogTO article on “the most and least expensive neighbourhoods in Toronto”. Written by Lauren O’Neil and drawing extensively on analysis by Scott Ingram, the article was a sobering read.

When it comes to the most expensive neighbourhoods, the names are familiar and easy to guess: the Bridle Path, Lawrence Park, Rosedale, Forest Hill…the usual suspects. Less familiar to many are the “least expensive neighbourhoods”. I recognized many of the neighbourhoods as areas from which we at Habitat for Humanity GTA receive homeownership applications. Mount Denis. Black Creek. Malvern. Dorset Park. Weston. Woburn. Many of these are neighbourhoods in which Habitat GTA has built new communities.

These “least expensive neighbourhoods” can now also be defined as pretty much unaffordable for most first-time home buyers who are pursuing a dream of homeownership without help from “the bank of mom and dad”.

In 2020, the average price of a detached home in the Toronto’s fifteen “least expensive” neighbourhoods was $854,000[1]. That was last year. Average prices in these same 15 neighbourhoods as of the first quarter of 2021 had jumped another 17%. Result: the average price of a detached home in Toronto’s “least expensive neighbourhoods” now sits at $1,003,000 — and the rate of increase shows no sign of slowing down.

Which leads to the question: who are the people buying these $1 million “least expensive” homes? Based on the neighbourhood profiles produced by the City of Toronto, it is highly unlikely that the buyers are current residents of these neighbourhoods.

Barely one generation ago, in 2001, an average detached home in these same neighbourhoods sold for $186,900. In 2001, median family incomes in these neighbourhoods stood at $46,200[2] — a 4x multiplier between income and home prices. Owning a home was possible if you lived in this neighbourhood and worked hard.

Today, these 15 neighbourhoods reflect some of Toronto’s most diverse communities, with a combined population that is 70% visible minorities, 56% immigrants and 8% newcomers to Canada within the last five years. The jump to $1 million homes represents more than a five-fold increase in the price of a home in these “least expensive” neighbourhoods in just twenty years. Family incomes in these neighbourhoods have plodded along barely keeping up to inflation. Moreover, the gap between median family incomes in these neighbourhoods and the median family incomes for Toronto overall has widened from being 18% below the City median in 2001 to 25% below in 2021.

Today’s families in these neighbourhoods are looking at an income to home price multiplier that average 14 and are as high as 22 in the Oakridge neighbourhood, south of Warden and St. Clair. Median family income levels across the 15 neighbourhoods would only be able to qualify for a $250,000 mortgage.

Thus, chances are good that new homeowners in these neighbourhoods will not be current residents. It’s more likely they will be young, upwardly mobile families relocating from downtown condos or elsewhere. And, given the skyrocketing price of homeownership, no doubt a large number of these new homeowners will have had help from parents who have been able to leverage wealth built in their own homes over the extraordinary twenty-plus years of escalating real estate values.

What does all this mean for the future shape of these “least expensive” neighbourhoods and of our city and region more broadly? What does it mean that current residents in our “least expensive” neighbourhoods can’t aspire to ever owning their own home in their own neighbourhood — or anywhere in the city they work in? What path are we on as a city when the residents of our most diverse and racialized communities are relegated to a future of rental with limited avenues to build multi-generational wealth?

As challenging and complicated as housing affordability in the GTA is, it is more important than ever that we press harder for solutions. At Habitat for Humanity GTA, we are proud of our track record of helping families defy the odds and realize their dream of building a stronger future for their children through homeownership. We are committed to collaborating with the many other smart minds that are leaning into these critical questions facing our city and region. And, we’ll keep sharing our ideas for how to build a better GTA for everyone, and make our “least expensive neighbourhoods” inclusive and attainable for more of our city’s residents.

[1] The data used in the Scott Ingram analysis was based on detached homes. Increasingly, there are other family-sized units available in denser build forms like townhomes, stacked towns, midrise and highrise — all at price points somewhat below detached homes — but nonetheless well out of reach of households in the 15 “least expensive” neighbourhoods.

[2] For this analysis, we used Median Family Incomes rather than Median Household Incomes. Rationale was that our interest is on how attainable it is for families to be able to buy homes. In addition, the data referenced in the blogTO article on which this article is based related to detached homes which, in general, are purchased by families.

Ene is the CEO of Habitat for Humanity GTA, which helps working families build strength, stability and self-reliance through affordable homeownership.