Staff call on Toronto council to pump millions into affordable rentals to support low-income tenants

City of Toronto staff are urging council to pump $351 million into affordable housing projects to unlock construction on 6,000 new homes for low-income tenants and young, middle-class families.

 

“We’ve had so many affordable housing projects stuck with high interest rates and rising construction costs,” Abi Bond, executive director, Housing Secretariat, told the Star after city staff presented its ambitious new rental housing plan to media on Thursday. “This is real money supporting real homes to be in construction and completed.”

 

In the report, which will go to the planning and housing committee next week, staff have outlined a detailed strategy that works toward seeing purpose-built rentals — sidelined for decades — becoming the most common form of rental housing in Toronto.

 

“Too much of our housing system has been about investment units and has been about realizing profit on land speculation,” Coun. Gord Perks (Parkdale-High Park) told reporters. These new units, he said, “will be for people who are struggling to stay in a home, for people in low-income jobs … and for young, middle-class families who are just getting started.”

An infusion of cash plus a host of incentives highlighted in the report, including pre-development loans, waivers of building permit and planning application fees and property tax exemptions, will create “tangible progress” toward council’s goal of adding 65,000 rent-controlled units to Toronto, Bond said.

 

Mayor Olivia Chow urged builders big and small to apply for funding.

 

“We’re asking people, faith groups, community groups, people that want to come together and build affordable housing: This is your time,” she said. “We will provide pre-development funding. We will help you plan. We’ll help you figure out whether you have the funds or not. And we will help you in trying to access financing.”

 

If passed by council, eligible projects can receive up to $260,000 in funding per affordable rental home.

 

Over the past decade, most new rental supply has come in the form of condominiums, which are generally more expensive and lack security of tenure for tenants, according to a Canada Mortgage and Housing Corp. (CMHC) rental market report.

 

Such units are out of reach for low-income, marginalized and vulnerable residents, a 2023 city report on rental housing said.

 

Nearly half of Toronto households (557,970 households) are renters, and 40 per cent of renter households are living in unaffordable housing, compared to 26 per cent of owners, according to 2021 Census data.

 

The report proposes a definition for rent-controlled homes in which monthly rents are at or below 150 per cent of average market rent — the rents paid by all market tenants in Toronto — based on unit type, as reported annually by CMHC.

 

That will work out to much less than the average price for a newly listed unit, which for a two-bedroom condominium apartment in Toronto stands at $3,139, the Toronto Regional Real Estate Board (TRREB) reported in its Q1-2024 Rental Market Report.

 

Affordable rents under the program Toronto staff have proposed range from: $1,088 for a studio, $1,378 for a one-bedroom unit, $1,992 for a two-bedroom unit and $2,190 for a three-bedroom unit.

Rents will be controlled under this program, with rental increases maintained at no more than the provincial rent increase guideline (under the Residential Tenancies Act) plus two per cent annually for a minimum of 40 years. The extra amount will cover operation and maintenance costs, the report said.

 

“This is a big deal,” Matti Siemiatycki, director of the Infrastructure Institute at the University of Toronto, told the Star. “Affordability and even availability have run away from this region. The report sketches out a policy program that responds to that need. This is the city staking out how they’re going to go from ambitious targets to action.”

 

The report, if greenlit by the planning and housing committee, will move to council on June 26.

 

Perks, the planning and housing committee chair, is optimistic.

 

“Once we have taken this first step,” he said, “we will see a renaissance in terms of the affordability and the livability of the city of Toronto.”

 

 

 

This article was first reported by Star