Toronto City Council Approves Affordable ‘Housing Now’ Plan
This week, Toronto City Council voted to approve the ‘Housing Now’ plan, part of John Tory’s campaign promise to build 40,000 affordable rental units over the next 12 years. This first phase of the plan calls for the construction of 10,000 residential homes — 3,700 of which will be affordable — on 11 City-owned sites. The plan offers $280 million in financial incentives for private developers and non-profits to construct buildings with affordable housing components on these specific sites.
The City is offering the land in the form of 99-year leases, waiving development charges, building permit fees, planning application fees, and parkland dedication fees in order to incentivize developers to build the mixed-income buildings. During the 99 year period, the owners will also be waived the property taxes payable for the affordable portion of the building. The City has been working in collaboration with CreateTO to determine the highest and best use for the municipally-owned sites in question.
The affordable units will seek to offer rents as much as 80% below Toronto’s average market rent to appeal to households earning between $21,000 and $52,000 annually. This is based on the benchmark that no more than 30% of one’s income should go towards housing. For someone with a $21,000/year salary, this would mean a monthly rent payment of $525.
In addition to approving the program, Council announced the first four sites that will be made available for redevelopment. At 777 Victoria Park Avenue, development will be located on what is currently the surface parking lot at Victoria Park subway station. Similarly, development at 50 Wilson Heights will replace a surface parking lot at Wilson Station.
Roughly a 6 minute walk from Davisville Station, 140 Merton Street is currently occupied by Sprint Senior Care. As the building is located adjacent to a 17-storey apartment building to the north, CreateTO is envisioning a mid- to high-rise tower for the site.
The fourth initial site is a 14 acre vacant area where the Six Points interchange is currently being replaced by a new road network in central Etobicoke. (The new Etobicoke Civic Centre is also planned for part of the site, and the red outline shown below does not reflect the final extent of the blocks that will be available to build on.) Previously home to the Westwood Theatre until its demolition in 2013, 3741 Bloor West is in close proximity to the Kipling Transit Hub and Islington City Centre. Although not explicitly stated by CreateTO, the site will likely house a number of high rise towers, of which at least a third of the units will be affordable.
The remaining seven sites are at 3326 Bloor Street West, 770 and 805 Don Mills Road, 705 Warden Avenue, 1250 Eglinton Avenue East, 251 Esther Shiner Boulevard, and 3933 Keele Street, which will be made available in 2020-21. Construction on some of these sites is expected to commence in late 2020 with the units being delivered to market in 2022-24.
The Toronto Real Estate Board (TREB) praised the move, calling this vote “an important step in addressing one of the biggest challenges facing the City of Toronto”. Not all City Councillors are happy with the outcome of the vote, some wanting a larger percentage of units to be designated affordable and that City-imposed rent controls be required on ‘Housing Now’ units. Deputy Mayor Ana Bailao responded, warning that more stringent regulations could scare off potential private sector partners.
At the same time, the Toronto Region Board of Trade wants the public to consider another more ‘hands off’ approach to solving the problem of increasing supply. The Board is calling attention to a supply scarcity that is driving prices higher and higher in Toronto’s real estate market, in part due to the process in which newly built homes are brought to market. After being submitted to the City’s planning department for approval, development proposals will often be deflected to the Ontario Municipal Board (pre-April 2018) or the Local Planning Appeal Tribunal (post-April 2018). These administrative tribunals process the appeals of development applications which City planning has refused or failed to provide a timely decision on. The Toronto Region Board of Trade estimates that there are currently 28,000 potential housing units caught in the backlog at the OMB/LPAT, with appeal hearings scheduled into mid-2020. For applications that will be approved at that time, the proposed housing stock may not reach occupancy until 2024. This backlog fundamentally prevents new housing supply from reaching the market in a timely fashion – an unintentional consequence of the valuable planning restrictions that the OMB/LPAT enforces.
The Board of Trade is, consequently, calling for the appointment of a team of temporary OMB/LPAT commissioners to tackle the backlog and get the cases decided sooner. Jan De Silva, President and CEO of the Toronto Reigon Board of Trade referenced studies on the OMB, stating that over 50% of developments brought to the OMB gain approval, “If 50 per cent of the backlogged units were approved on appeal, 14,000 homes would be released for immediate construction” she said.