Toronto eyes cheaper, long-term shelter model as hundreds turned away nightly

Over half of Toronto's shelter spaces for the unhoused aren't financially sustainable, according to city civil servants proposing a new 10-year plan to replace them with city-owned facilities.

Staff are making the pitch in a capital plan aimed at fundamentally changing the way the city operates its shelters for people experiencing homelessness.

The city added thousands of shelter beds during the pandemic to create necessary space between people using the service, signing leases with hotels to provide the accommodations. But staff have long-warned that those leases are set to expire in late 2024 and are not financially viable in the long-term. 

"Building out city-owned spaces instead of relying on short-term leases and rentals is an important goal," Coun. Alejandra Bravo said. "We can provide better shelter services and it's better value for money."

The $674.5-million capital plan, which will come to the city's economic development committee next week for debate, proposes a shift from shelters being hosted in leased-spaces to building new city-owned facilities with a maximum of 80 beds.

If approved by the committee and then city council, the plan would see 1,600 permanent shelter spaces added to the system over the next decade. The majority of those spaces would replace the temporary spots the city will lose as it moves away from shelter hotels.

The report says that the cost of the short-term leases like shelter hotels are "no longer viable or fiscally responsible". City staff say a shelter hotel costs $253 per person each night and estimate that it costs half that amount per night in some city-owned shelters.

"Over a 10-year period, the cost difference of renting a temporary hotel ($37 million) can exceed the cost of developing a permanent new shelter," the report notes, estimating those costs at $22 million excluding purchase of the land.

The general manager of the city's Shelter, Support and Housing Administration, Gord Tanner, the city needs new investments and approaches to Toronto's shelter infrastructure.

"There are growing concerns for the long term sustainability of our existing shelter infrastructure," Tanner said. "The city's current long-term capital plan is insufficient to meet the needs of the system and the people that rely on it." 

In March 2020, Toronto's shelter system had a capacity of 5,670. That grew by more than 3,000 spaces during the pandemic. 

City shelters now serve over 10,700 people each night and are still turning away hundreds. 

The city says that nearly 60 per cent, or approximately 5,000 spaces, in its shelter system are held in short-term leases, with the remaining 40 per cent in permanent sites. Under the proposed plan, the city would move that 40 per cent to 60 per cent purpose-build spaces over 10 years.

"The report seeks approval for a plan to exit from some of the very high-cost short-term temporary shelter programs and instead build out the number of purpose built permanent shelters," Tanner said.