Housing Finance in Early 20th Century Suburban Toronto

Article excerpt

Abstract

This study examines the financing of housing production and consumption in five early twentieth-century Toronto suburbs. The study areas range in status from upper-middle class to working class.

Research findings include the persistence of a traditional pattern of finance characterized by high levels of cash transactions and private financing. Institutional lenders, while influential in financing high-status housing, played a relatively minor role in the overall provision of mortgage funding.

The study adds to our understanding of the role of housing finance during this formative period when the major element of modern suburbanization, including the emergence of a corporate land development industry, were being established.

Resume

Cette etude se penche sur le financement de la production et de la consommation des logements dans cinq subdivisions de Toronto au debut du 20e siecle. Elle examine principalement les diverses sources de financement du logement a l'interieur des ville. Cette etude revele la persistance d'une formule traditionnelle de financement du logement, caracterisee par une abondance d'argent comptant et de financement prive. Les etablisse ments de prets jouerent un role relativement mineur dans le finance ment des hypotheques, quoique leur importance ait ete significative dans le financement des logements de luxe. La preponderance d'argent comptant, de financement prive et de prets hypothecaies consentis par les vendeurs montre que Toronto a une aptitude remarquable a financer le developpement de ses logements.

Introduction

The development of Canada's early 20th century suburbs has received much attention in the recent literature. A major focus of this research has been the emergence of a corporate land development industry and its role in creating new suburban landscapes. (1) However, an important aspect of the suburb-building process--housing finance--has been relatively neglected. In North America, access to owner-occupied housing has come to hold significant implications for the life chances and social status of households. (2) This situation has had important repercussions for the shaping of attitudes and perceptions about the appropriateness of owner-occupancy and suburban lifestyles. For most households access to mortgage financing remains a critical determinant in achieving the socially prescribed status of owner-occupier.

The purpose of this study is to examine the financing of housing production and consumption in early 20th century suburban Toronto. The analysis is based on a study of land registry records, specifically a sample of properties located in five subdivisions which were largely built between 1911 and 1941. The central focus of the study is intra-urban variations in the sources of housing finance. The paper will examine the residential mortgage environment during the early 20th century and its impact on the city-building process in suburban Toronto.

Housing Finance in Early 20th Century Canada

Only fragmentary evidence exists on patterns of housing finance in early 20th century Canada. The available information suggests that the home mortgage market was dominated by private lenders with only minor participation by financial institutions. The major role of private lenders would appear to represent a continuation of an earlier pattern. Research on the 19th century city has indicated that the overall involvement by institutional lenders was quite low and that the majority of mortgages were held by private lenders. Most mortgages, at that time, represented a relatively small proportion of the purchase price. Indeed, taking all transactions into account, cash appears to have been the most important form of financing in the 19th century. (3)

Relatively little has been written on the historical evolution of the Canadian mortgage market. Naylor and Drummond are among the few who have explored this topic. …