Toronto’s housing plan would require $1-billion in government grants annually, report says

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Toronto Mayor Olivia Chow’s push to build homes for tens of thousands of people will require at least $1-billion in annual grants from higher levels of government and billions more in low-cost loans, according to a city report released Tuesday.

The city is one of the most expensive in the country and is facing an escalating housing crisis as rents and ownership costs spiral up. Ms. Chow won office this summer and has pledged to create 65,000 affordable homes – increasing by 25,000 the city’s previous goal. However, Toronto has limited resources to make this happen.

Tuesday’s staff report, which will be debated next week at Ms. Chow’s cabinet-like executive committee, noted that funding had been secured for just a few thousand of the promised homes.

The lack of committed funding for the remaining homes makes the target of having 65,000 built within seven years largely theoretical. But Ms. Chow told reporters that she was feeling optimistic at a time when so much of the political discourse is dedicated to housing.

“We have enough money to build 4,500 units now, and with a bit of help, we can build 17,000 homes for people in just a few years,” she said when asked what success would look like in three years, at the end of her term. “So I’m looking at 21,000.”

The federal government did not respond Tuesday to a request for comment. In brief remarks at Queen’s Park, provincial Municipal Affairs and Housing Minister Paul Calandra said he had not yet seen the city’s plan but would review it.

The report from city staff also calls for more study into working with homeless-advocacy and Indigenous groups, charities and the private sector to build homes, with that analysis to come to council next year.

Mary Rowe, president of the non-profit Canadian Urban Institute, said she was impressed with the ambitious scope of Toronto’s plan.

“The city is saying, okay, we’re going to absolutely pull up every rock here and figure out what we can do,” she said. “And in addition to that, here’s what we need the province and the federal government to consider doing with us. So I think in the spirit of all-hands-on-deck collaboration now, this is a very strong report.”

Toronto’s housing plan entails a mix of funding from other sources, dedication of municipal land for development and a focus making rent affordable by gearing it to income. It makes a number of assumptions, including that land would be acquired “at nominal cost” and that the city would pay an interest rate of about half the prime rate.

The city would lead the delivery of some sites under what it calls “a public builder model.”

“Generations ago Toronto did that kind of work,” said planning and housing committee chair Gord Perks, a city councillor and ally of Ms. Chow. “Other cities around the world have done it. It’s just that we lost our way, and now we’re back on track.”

Both higher levels of governments are also keen to be seen to be making progress on housing.

Ottawa has offered billions of dollars through its Housing Accelerator Fund, which funnels money to cities to speed development, and has been willing to use its financial clout to convince municipal governments to loosen zoning rules that prevented additional homes in many neighbourhoods. The federal government has also promised to increase a GST rebate on purpose-built rentals so that those developments don’t pay any of the tax.

At Queen’s Park, the provincial government has clamped down on development fees charged by cities, which can push up the price of homes by tens of thousands of dollars, and mandated greater density near transit stations.

Ottawa has faced criticism that it waited too long to take seriously Canadians’ housing woes. And the provincial government recently walked back unpopular decisions to allow building on the protected lands of the Greenbelt and to force a long list of municipalities to expand their boundaries into what is now farmland.

Beyond money, Toronto is seeking a list of promises from higher levels of government. Among them, the city wants Ottawa to guarantee that nearly one-third of development on future federal land sales be allocated for affordable housing for at least 99 years. And from Queen’s Park, the city wants to limit opponents’ ability to appeal municipally initiated zoning and official plan changes for purpose-built rentals.

With a report from Jeff Gray