Number of houses converted to income apartments in Toronto?

[tendim]

My wife and I have recently started looking for a house, and are now realizing that there are a large number of houses which have been converted to apartments/multiplexes. Moreover, the work seems to be shoddy and/or poor quality.. I'd say that at this point about 60% of the "single family" homes we have looked at have been "apartmentized"; our focus has been mainly in the west end (the area bounded by Bathurst in the East, Jane in the West, Lakeshore in the South, and Eglinton in the North).

I'm wondering what peoples thoughts are on this.. some random questions/comments:

• Are these legit businesses? Or is the tax man being screwed?
• For every house which is converted into an n-plex (e.g. duplex/triplex/quadplex), you effectively remove one single family home off of the market. There are a number of condo developments in the city - why do we even need these house-turned-apartment setups?
• Are there any rules and/or laws around these conversions? I understand the argument that, "the couple's kids moved out so they wanted to earn some income because the basement wasn't being used anymore." But where is the line actually drawn from a single-family home with a rental apartment, to a de-facto investment property?
• How much has this contributed to increasing housing prices? An "investment property" has a much different profile than a home for a family: the calculus for the mortgage, etc., is completely different.

Is there any data on this type of stuff? Would regulations be city or province level? (I am assuming city) Any tips on where I could find more information?

Cheers.
-10d

 

[W. K. Lis]

See this link for a start.

Used to be, before WWII, all that was needed was a second floor kitchen, it was assumed that two families lived in that house. The bathroom was shared. I used to live in such a house as a kid. My parent's rented out the second floor. We lived on the first floor. What was today would be a dining room, would have been the bedroom for all of us. The rent helped pay for the mortgage.

Today, for a "legal" apartment, there must be a separate entrance and a separate electricity meter.

 

[TOphotog]

Many things affect whether a second (or third) unit is legal. City zoning, Ontario Building Code, fire regulations, and local by-laws. A separate hydro meter is not a requirement. These houses were divided into apartments usually without any permits. The City will only send out an inspector if there's a problem (usually found by the fire department in the process of putting out a fire) or if a neighbour complains ("he's got 15 people living a two storey four bedroom house"). It's a great way for buyers to help pay for a mortgage, and these are great investment vehicles - anything with land attached to it in Toronto!

 

[tendim]

Hm.

I've been doing some additional reading and quickly learning about pure-apartments vs. "rooming houses", the lines of which are usually defined by separate entrances, shared facilities (e.g. shared kitchen = rooming house, not an apartment), etc. Much of this was driven by my research on how to get rid of a bad tenant.

I'm still curious as to the socioeconomic impacts of this though . Does nobody see this as an issue for (affordable) housing in Toronto? With the number of investment properties going up, prices go up due to demand, squeezing out legitimate families.

Used to be, before WWII, all that was needed was a second floor kitchen, it was assumed that two families lived in that house. The bathroom was shared. I used to live in such a house as a kid. My parent's rented out the second floor. We lived on the first floor. What was today would be a dining room, would have been the bedroom for all of us. The rent helped pay for the mortgage.

Seems like a bit of an endless cycle. Housing costs are going up because investors are snapping up properties to carve them into apartments, so people who can manage to buy a house end up renting out part of it to pay for the mortgage, so now they are part of the problem.

If people were not allowed to do this, would the market prices drop, thereby making houses more affordable? If prices were more realistic, there would be no need to "need help" to pay for the mortgage.

If Toronto imposed a tenant-tax on single family homes that offered an apartment, maybe we could do away with the land transfer tax? I'm willing to bet that the number of tenants in the city in houses which have (potentially illegal?) apartments is higher than the aggregate number of properties sold in the city in a given year. So you could do away with the Toronto LTT, and recoup (and possibly increase) the lost tax revenue from the rental income tax. Moreover, CRA is happy because people are legitimately paying income tax on the rental income.

 

[nrb]

Is this a joke? "Legitimate families" ? As opposed to illegitimate ones??

Subdivided houses increase supply and density. Why do you think this is a problem, other than you are angry you can't afford to buy one of these, evict the tenants who are "illegitimate" (less wealthy renters), and convert it to a single family home?

You don't know anything about lost tax revenue. You don't lose tax revenue from a subdivided house. They pay more in taxes. Much more.

 

[TOphotog]

Tendim, if people buy up these multi-unit properties and turn them back into single family homes, the value will go UP, not DOWN. The neighbourhood will slowly turn more desirable and less affordable. Cabbagetown used to be full of rooming houses and 3-4 unit homes. Now, they're few and far between. Only one or two rooming houses left, most below Dundas, and a lot of multi-unit properties have been turned into single family homes. You'd have to pay over $1M to get a house that needs gutting....

This was a 15-unit rooming house returned to its former glory. http://themashcanada.blogspot.ca/2015/07/sold-387-berkeley-street-garden-district.html

 

[Admiral Beez]

Tendim, if people buy up these multi-unit properties and turn them back into single family homes, the value will go UP, not DOWN. The neighbourhood will slowly turn more desirable and less affordable.

OCAP is none too pleased by this phenomenon. http://www.ocap.ca/node/1100

 

[robm]

Hm.

I've been doing some additional reading and quickly learning about pure-apartments vs. "rooming houses", the lines of which are usually defined by separate entrances, shared facilities (e.g. shared kitchen = rooming house, not an apartment), etc. Much of this was driven by my research on how to get rid of a bad tenant.

I'm still curious as to the socioeconomic impacts of this though . Does nobody see this as an issue for (affordable) housing in Toronto? With the number of investment properties going up, prices go up due to demand, squeezing out legitimate families.



Seems like a bit of an endless cycle. Housing costs are going up because investors are snapping up properties to carve them into apartments, so people who can manage to buy a house end up renting out part of it to pay for the mortgage, so now they are part of the problem.

If people were not allowed to do this, would the market prices drop, thereby making houses more affordable? If prices were more realistic, there would be no need to "need help" to pay for the mortgage.

If Toronto imposed a tenant-tax on single family homes that offered an apartment, maybe we could do away with the land transfer tax? I'm willing to bet that the number of tenants in the city in houses which have (potentially illegal?) apartments is higher than the aggregate number of properties sold in the city in a given year. So you could do away with the Toronto LTT, and recoup (and possibly increase) the lost tax revenue from the rental income tax. Moreover, CRA is happy because people are legitimately paying income tax on the rental income.

"Millenial" here who makes a decent living with wife and kids, but can;t afford to live in my own GD city because of this ridiculous market. Thank the boomers for "investing" (cause they didn't plan for retirement), realtors, so called investors, foreign millionaires for making it so hard to live in our own home town where we grew up and would like to be close to family. I've been trying to figure a way how to live affordably in Toronto without having to live in a an apartment or condo and pay their stupid gouging monthly maintenance fees. I've concluded that what you're arguing against, is the best solution. Not ideal, but you can own a home, live in part of it even though smaller space, but you have a yard and own a house, and someone is helping pay your mortgage. Unless you're willing to wait and see if the market crashes, which it probably won't, this is you're best option if you want a house. eventually you can kick your tenants out.

 

[UserNameToronto]

I actually think the future for Toronto is taking single family homes, perhaps 2000sqft, and chopping them up into say 2 1000-sqft 2-bedroom duplexes. The tenants could be long-term folks who can no longre afford to buy (but can afford rent of say $3000/month).

As the city matures, there will be more demand for nice rental property like this. In London UK many single family homes have been divided in this way.

Not a bad thing, but a reflection of the way we're headed!

 

[Avenue]

I think as the city matures we will see adjacent condos being combined into one unit. Kind of NYC style.

 

[Reno eagle]

I actually think the future for Toronto is taking single family homes, perhaps 2000sqft, and chopping them up into say 2 1000-sqft 2-bedroom duplexes. The tenants could be long-term folks who can no longre afford to buy (but can afford rent of say $3000/month).

As the city matures, there will be more demand for nice rental property like this. In London UK many single family homes have been divided in this way.

Not a bad thing, but a reflection of the way we're headed!

I think its a trend we are seeing slowly. The bottleneck is zoning. Right now it takes too long to get permits at the city offices let alone get a variance to the tune of single dwelling to multiple dwellings...

In my opinion, if the zoning allows for more flexibility you will start to see more and more of the transformation you list. However, as it stands I think taking outdated properties and turning them into "updated ones" is the bulk of what were seeing in the marketplace.

Full disclosure here - I am realtor, and I also am personally working on a project that takes an older bungalow to transform it to modern 2 story home. But that is taking over 3 months and still no permits- such is life in the city.

Ed

 

[DKB]

A couple days ago I viewed a house which is a duplex (per seller descripton)but the owner turned into a single family home. Where can I find out that the house is actaully a duplex? And if so can I reinstate the basement back into an apartment?

 

[Admiral Beez]

A couple days ago I viewed a house which was a duplex (per seller descripton)but the owner turned into a single family home. Where can I find out that the house is actaully a duplex? And if so can I reinstate the basement back into an apartment?

There’s a difference between a SF house that’s been converted and a proper duplex.

I’ve no problem with SF homes being converted from multi-unit back to their original purposes, that being the SF they were meant to be. That’s been one of the driving trends in my neighbourhood since the 1980s.