Olivia Chow wants to offer private landlords a break on development fees and a fast-track through the city’s approval process in return for including affordable units in new apartment towers.
The financial incentives – a carrot she predicts would add as many as 15,000 new affordable units over four years – are part of a three-part housing strategy Ms. Chow released Friday outside Toronto City Hall, joined by supporters from the industry.
“People cannot find good rental housing because there is not enough rental housing being built,” she told reporters. “We want to encourage developers to build units and make some affordable.”
Under her proposal, developers who earmark as much as 20 per cent of units in new developments for affordable rents would have development fees deferred for a decade. Rental rates would be based on affordability standards from Canada Mortage and Housing Corp., she said.
Ms. Chow could not say how much the incentive would divert from the city’s coffers. Toronto recently increased development charges, which remain low compared with other municipalities, in order to raise badly needed funds for infrastructure.
Ms. Chow’s 15,000 target is optimistic. It’s based on an estimate of 20 per cent of all multifamily development – both rental and condominiums – expected in Toronto over the next four years, a spokesman for her campaign said.
Numbers provided by the city, based on CMHC data, show that in the past six years the number of rental units completed in the city range from a low of 804 in 2011 to a high of 1, 985 in 2012. An average of 1,265 units have been completed in each of the past six years.
“There is no doubt that it is an aggressive target,” said spokesman Jamey Heath. Experience in other cities such as New York has shown that with the right incentive, developers will switch to building rental units, he said.
In Toronto, multifamily housing starts continue to be dominated by condominium units and rental vacancy rates remain under 2 per cent, according to numbers from CMHC.
Howie Paskowitz of Medallion Corp. said his firm is building 186 affordable units in a northwest Toronto development, but would add more with the right incentives.
“If you don’t find ways to encourage it with time and money, I don’t think it is going to happen,” he said.
Ms. Chow offered no immediate fix for the problems facing Toronto’s social housing agency, which is struggling to cope with a massive maintenance backlog and is trying to rebound from a scathing investigation into its promotion and hiring practices that saw the departure of several senior executives, including the CEO.
Asked about the poor state of repair in many buildings, Ms. Chow pointed to Regent Park as a model for redevelopment and said the federal and provincial governments need to come to the table.
Her policy announcement also included plans to ease zoning requirements around existing towers to encourage more intensification and commercial development.
She also proposed hiving off TCHC’s seniors’ buildings into a separate corporation. A smaller organization would be more responsive to residents’ needs, she said. If this seniors’ pilot project is successful, she left the door open to further dividing TCHC into smaller units, as some have suggested.