Homelessness and Housing in Toronto — What's Really Going On

Status: v1.2, 2026-07-14 · RENDER — derived from cluster v1.1 docs (backgrounders/cards updated through 2026-07-14), DRAFT.

This is written for anyone living in Toronto, including people who are new to the city and may not know all the terms used in the news. It explains what's happening with homelessness and housing, why, what could change it, and where even the experts disagree. It is based only on research already done for this project — no new facts are added here. Every acronym (a short-form made of first letters) is explained the first time it's used.

What's happening

Toronto is short on housing, and short on shelter space, at the same time.

The housing waitlist keeps growing. Toronto keeps one central list for subsidized housing — housing where you pay based on your income instead of the full market rent. This is called RGI, short for Rent-Geared-to-Income. At the end of 2025, there were 105,115 households on that list, up 29% from five years earlier. That number counts households (a person or family who applied together), not individual people — so the real number of people waiting is higher.

The shelter system is almost always full. On an average night, Toronto's shelters run at 95–99% full — almost every bed is taken almost every night. Even so, the City's 2026 budget plans to serve fewer people per night than in 2025, a planned cut of about 20%, which the City says reflects fewer people needing shelter, not less spending on help.

Housing people costs less than sheltering them. The City's own audit found it costs about $49,640 a year to keep one person in shelter. A well-known Canadian study found that giving someone their own home and support services — an approach called "Housing First," described more below — costs about $6,311 a year net, once savings elsewhere are counted (fewer emergency-room visits, fewer ambulance calls). That's over $43,000 saved per person, per year, when someone is housed instead of sheltered. A separate study, from a different country and using a different way of measuring value for money, found the same basic pattern holds even outside Canada — one more reason researchers see this as a settled point, not just a Toronto-specific finding.

Senior governments help pay for running shelters, but not for building them. Toronto's 10-year, $1.1-billion plan to build new, permanent shelters is paid for entirely by the City — through borrowing, a City building fund, and fees on new construction. Neither the province nor the federal government puts money toward building them, though both help pay some day-to-day operating costs. A recent province-wide report adds a wrinkle worth knowing: across Ontario, total homelessness funding grew about 32% between 2021 and 2025, but the number of people experiencing homelessness grew faster — about 49% — over the same years. And within that funding growth, money going to emergency shelters grew much faster than money going to actual housing programs, which barely grew at all.

Tent numbers are falling in the city, but homelessness is not falling province-wide. People living in tents in Toronto parks fell from 539 to 196 between late 2024 and the end of 2025 (the City's own count of how many parks had tents in them shows a small mismatch — 48 in one table, 49 in another — a gap the City hasn't explained, though it doesn't change the overall downward trend). A province-wide report from the same period counted about 85,000 people experiencing homelessness across Ontario, including about 20,000 children and youth, and found the problem growing fastest outside big cities, in northern and rural areas.

Why this is happening

Not enough homes are being built, anywhere in Canada. A national housing agency (CMHC) says Canada needs to nearly double how many homes it builds each year — from about 250,000 a year now to 430,000–480,000 — just to keep up with demand through 2035. Toronto's own population has grown faster than new homes have been built since 2016.

Who pays and who saves aren't the same government. This is the "wrong pocket" problem. The City pays the shelter bill directly. The province pays health-care costs linked to homelessness. The federal government pays costs tied to refugee claimants and health-care transfers. Because savings from housing someone don't all land back with whoever spent the money, no single government has the full financial reason to act — even though, added together, the case for investing is strong.

Toronto's own decision-making sometimes slows things down. In 2023, Council allowed small multi-unit homes called "fourplexes" (up to four units) almost anywhere in the city without extra approval. In 2025, asked to do the same for "sixplexes" (six units) everywhere, Council instead allowed it in only two areas, leaving the rest of the city to decide neighbourhood by neighbourhood. As of this writing, no other part of the city has opted in.

A falling headline number can hide an unsolved problem. Toronto's official homeless count dropped 21% between 2024 and 2025. But the cluster of research behind this document found that drop is mostly explained by fewer refugee claimants needing shelter — not by fewer long-term homeless Torontonians being housed. The research states plainly that long-term, chronic homelessness "has not improved," even as the total count fell, and some areas of the city (Etobicoke-York and North York, specifically) reportedly saw the share of people sleeping outside roughly double between 2024 and 2025.

Some of the money in the system goes to private contractors, not directly to housing or shelter beds. Toronto has paid at least $11.9 million for a private security contract tied to encampment sites — one of eight such contracts, together worth over $100 million in possible spending. The City says this is a normal, budgeted part of running the system. At least one city councillor running for mayor has publicly questioned whether that spending makes sense given that security staff can't actually connect people with housing. Separately, a 2022 City audit found that some hotels used for emergency shelter during the pandemic overcharged the City for empty rooms — money the City's own lawyers were reviewing for possible recovery.

What could change it

Some things the City can do on its own, without asking anyone's permission:

• Use existing empty units in City-owned housing (Toronto Community Housing) faster — a 2020 audit found doing this better could house about 2,200 more people at no new cost.
• Finish the sixplex rule city-wide, instead of leaving it up to each neighbourhood.
• Spend shelter-system money on permanent supportive housing instead of temporary shelter beds, where that's possible.

Other things need help from the province or the federal government:

• Money to help build the shelters and supportive housing the City has already planned.
• A targeted top-up to income support (about $500 a month) for people who already have a lease and just need help affording it — cheaper for the province than raising the base rate for everyone.
• More judges (called adjudicators) at the tribunal that handles landlord-tenant disputes, so cases move faster for both renters and landlords. The number of adjudicators has grown a lot in recent years, but each one is resolving fewer cases than before — so simply hiring more people hasn't by itself fixed the slowdown.

Honest about the disagreements

Not everyone reads this data the same way, and this document does not pick a side:

• Is Toronto's declining tent count good news? The City's own finance chief says yes, pointing to the numbers. A community worker who has criticized past counts now says there's real improvement, but still isn't sure the full picture is visible without more information being shared.
• Should encampments be cleared, and how? In nearby Waterloo Region, a court ruled a clearance bylaw unconstitutional in 2026 on two separate grounds: the region wasn't offering people anywhere else to go, and, separately, the court found the bylaw had a discriminatory effect on Indigenous residents, people with disabilities, and women and gender-diverse residents. The Region and the province are appealing that ruling. Toronto's rules are different — it requires three shelter offers before enforcement — but no independent reviewer has checked whether that rule is fair since 2021, when the City's own Ombudsman found real problems with how earlier clearances were handled.
• Is recent improvement lasting, or temporary? Toronto used a one-time reserve fund to help pay for 2025's gains in getting people matched to shelter beds faster. The City itself says relying on that fund creates pressure for future budgets. Whether this year's progress holds up once that one-time money runs out is not yet known.

Nothing in this document tells you what should happen next — that is a judgment call for residents, Council, and the province to make together. What it tries to do is lay out, plainly, what is actually known, what is still being modelled or estimated, and what remains a genuine, open disagreement.

What you can do

If you want to follow this issue as it develops, or make your voice heard, a few concrete options:

• Toronto's Budget Committee holds public deputations before the shelter/housing budget is finalized each year — this is the specific venue where a resident can speak directly about whether the shelter system, the sixplex rollout, or the capital plan are getting the funding you think they need. Check toronto.ca for the current year's budget consultation schedule.
• Your local Councillor's office can tell you whether your ward has opted into six-plex zoning, and can raise a motion if it hasn't — this is a real, specific ask you can bring to a ward meeting, not a general "get involved."
• The City's Rent Bank and Eviction Prevention in the Community (EPIC) program exist right now for anyone facing eviction because of a temporary money shortfall — worth knowing about before a crisis, not just after one, since both programs are already described in City reporting as over-subscribed.