City’s ‘not real’ plan for more rental housing is too dependent on funding from other levels of government, says Beaches-East York Councillor Bradford

By AMARACHI AMADIKE

A city staff report has outlined steps to address Toronto’s purpose-built rental housing shortage with the introduction of the Purpose-built Rental Homes Incentive which aims to create 20,000 new rental homes.

The staff report highlights insufficient investments from all orders of government over the past three decades as the catalyst for the current housing crisis while initiating  plans to create 16,000 purpose-built rental homes and 4,000 affordable rental homes which will begin construction in 2026.

“As governments stepped back from investment in new purpose-built rental homes, new private investment in condominiums increased leading to a situation where 85 per cent of all new rental homes created in Toronto in the past 10 years are from the secondary market (wherein condominium investors rent out their units),” stated the Build More Homes: Expanding Incentives for Purpose-Built Rental Housing Report.

The report reiterated the idea that these investor-owned homes have nurtured an environment where renters experience a lack of security as well as higher prices that “on average” are more than 40 per cent higher than existing purpose-built rental homes.

“Toronto is taking bold action to address the housing crisis,” said Mayor Olivia Chow in a news release about the report. “We’re offering up incentives to build thousands more purpose-built rentals and affordable homes.”

Incentives include an indefinite deferral of development charges on purpose-built rental homes. That will save developers an estimated $37,636 per unit, however, the units’ tenure must remain as rentals.

Staff also recommend a 15 per cent property tax reduction for 35 years estimated at a total of $20,396 per purpose-built rental unit as well as “foregone taxes and fees for affordable rental units”, estimated at $97,264 per unit.

To qualify for these incentives, however, at least 20 per cent of units will need to meet the city’s income-based definition of affordable housing and remain affordable for at least 40 years with a maximum of 99 years.

Projects must start construction by the end of 2026.

The city staff report has attracted praise from many councillors, but not all. Some, such as Beaches-East York Councillor Brad Bradford, believe that the incentive plan falls short of Toronto’s current needs.

“This may help one or two projects that have already secured other government funding and are probably on public land, but it does nothing for the more than 20,000 privately-led purpose built rental homes and 11,500 condos that are stuck right now,” stated a Twitter post from Bradford following the announcement on Wednesday, Oct. 30.

In contrast, WoodGreen Community Services Vice President of Housing Growth, Development & Asset Sustainability, Mwarigha, stated in a Thursday, Oct 31, press release that they believe the staff proposal works in favour of some of their current partnerships with the private sector.

“Many of our projects in our development pipeline are partnerships with private developers,” said Mwarigha. “This new rental housing support stream provides a pathway for WoodGreen to grow our existing partnerships with private developers to scale the delivery of affordable housing in healthy, inclusive and mixed communities.”

The City of Toronto is committing to kick-starting the program’s first phase by “immediately” releasing a call for applications to identify and approve 7,000 new rental homes which include 5,600 purpose-built rental homes and at least 1,400 affordable rental homes “through its own resources”.

Bradford said he is uncomfortable with the fact that the program’s success relies so heavily on other levels of government.

“Instead of addressing these urgent issues, the Mayor just added another $8.3 billion to the wish-list of funding from the province and federal government,” said Bradford. “It’s unfortunate because a lot of people are hoping that housing is going to get more affordable and more available in the city.”

In a media scrum that same day, Bradford described the rental housing plan as “not real” and urged the mayor to be “honest with people about those numbers.”

The city staff report recommends that Toronto calls on the provincial government to provide a Build More Homes Rebate “estimated at $1 billion equivalent to the value of development charges and 85 per cent of the value of property taxes for 35 years” for new purpose-built rental homes.

The report also demands that the federal government immediately allocate a $7.3 billion portfolio of low-cost financing to support the program as well as the establishment of a Canada-Ontario-Toronto Build program that enables provincial and federal grant funding of $225.3 million each that will go towards construction of 2,600 affordable rental homes.

Funding from other levels of government, city staff said, will allow Toronto to extend its call for applications to approve an additional 13,000 new rental homes in the program’s second phase.

The Build More Homes: Expanding Incentives for Purpose-Built Rental Housing staff report will be considered by Toronto’s Executive Committee on Tuesday, Nov. 5.