Councillors on Toronto’s housing committee are being asked to endorse a plan to build 6,000 new rental units across the city, spending over $350 million to help get shovels in the ground.
The Rental Supply Housing Program will come before the committee at its meeting Thursday. It would see the city provide funding to builders of up to $260,000 per unit to help accelerate construction of 18 projects, according to a staff report. City staff say that would see thousands of units of affordable housing currently in the development pipeline “unstuck,” enabling them to be built this year or next.
“Housing is fundamental because it gives people hope,” Mayor Olivia Chow said at the program launch Monday, stressing these units will not be typical market housing, which many in need cannot afford.
“People deserve to feel secure when they move into a home. They need to feel secure that the rents would not go up so much that they have to move.”
Staff said housing projects can get stuck in development for a variety of reasons, but often it’s because project finances run into trouble as builders grapple with the impact of inflation and high interest rates. The financial incentives provided under the deal are open to public and private sector builders, but the city is hoping to grow capacity within non-profits, co-ops and Indigenous led-developers with this program.
“We will be rebuilding a community and social housing sector that has been, frankly, atrophied for the last 20 or 30 years,” Coun. Gord Perks said.
Perks, who chairs the housing committee, said for too long the city’s development priorities have got it all wrong. The city has focused on the “speculative boom” around the profit-driven housing market, and not met the needs of people who couldn’t take part in the escalating market, according to Perks.
This program will provide homes for people working in low-income jobs and middle class families, he said.
“We’ve been building the wrong housing for the wrong people,” Perks said.
“Too much of our housing system has been about investment units and has been about realizing profit on land speculation.”
The program would also create a three-year pilot that provides $10 million annually for city housing providers, including the Toronto Community Housing Corporation. The funding would allow the agencies to increase their own development capacity in order to build a “pipeline of future affordable housing projects.”
Affordable housing to be fast-tracked through approvals
All of the projects would be fast-tracked through the city’s own development approvals process. Abi Bond, the executive director of the city’s Housing Secretariat, said at a press conference the program will fill the gaps in the affordable housing market.
“We really are at a critical moment for housing in Toronto,” Bond said.
“There are so many headwinds that have created problems for real and meaningful progress when it comes to moving forward on affordable housing and for creating essential housing for Torontonians.”
The program is part of a broader plan approved by city council last fall to build 65,000 new rent-controlled homes by 2030. The total includes 6,500 rent-geared-to income, 41,000 affordable rental and 17,500 rent-controlled market homes.
In order for units to be eligible for the financial incentives under this program, they must be rent-controlled for a minimum of 40 years.
The proposed policy also would set specific definitions for affordable rents, which will range from a studio apartment at $1,088; a one-bedroom unit at $1,378; a two-bedroom at $1,992; to a three-bedroom at $2,190.
Matti Siemiatycki, director of the University of Toronto’s Infrastructure Institute, said what’s different about this policy is there’s cash to back it up. If approved, the city will pay for the program out of its capital budget, hoping to transition the funding to provincial and federal sources in the future.
“This is a big deal,” he said.
“What’s really been missing is the money, with the incentives, with the collaboration, with engaging the private sector, as well as non-profits and faith-based organizations, to really get projects shovels in the ground and projects built.”
If approved by the housing committee, the program would still need to be endorsed by city council later this month. Beyond those political hurdles, Siemiatycki said the challenge will be executing the plan, and making sure it doesn’t remain a program only on paper.
“The implementation has to be smooth and flawless to make sure we can really get to this ambitious plan of 65,000 units,” he said.