Opinion: Toronto’s Status as a ‘Global City’
Benefits Residents Disproportionally
Janurary 2022

Global cities are the archetypal products of globalization under the new international division of labour from the mid-late 20th century. I argue Toronto’s status as a global city benefits residents disproportionately that only favours a limited segment of the population. This trend furthers economic segregation and perpetuates social inequality. I consider Toronto’s housing market and the long-term economic impact from a state-centric approach to support the said argument.

 

Indeed, the city’s global status attracts foreign investors, which positively contributes to the aggregate economy in the short term. However, this positive contribution alone is insufficient to address adequate social welfare levels for local residents. Rising costs of living are a major factor. For example, foreign investors contribute to the financialization of housing in Toronto. This financialization of real estate is problematic because it contributes to the rising price-to-rent ratio and rent costs that add burden to prospective homeowners and existing tenants who do not own residence, which accounts for nearly half of Toronto residents. A greater vacancy rate for higher-end housing because of this financialization starkly juxtaposes with the large number of residents who cannot find affordable housing, some eventually become homeless.

 

Over time, from a state-centric approach, it becomes more likely for government to prioritize foreign, instead of local interests, to keep pace with other global cities’ competitiveness. This prioritization compromises the interests of local residents because of Torontonians’ limited economic mobility and leverage, which cannot compete with the absolute advantage of other global cities combined due to their sheer size of capital.

 

In the constant pursuit of rising competitiveness to keep pace with other global cities, we embrace neoliberalism entrenched in Toronto’s status as a global metropolis. Given the uneven spatial distribution of power presented by the advent of global cities, Toronto’s housing example and the race for global competitiveness epitomize many other regards that benefit but also risk further polarizing Toronto residents.