For the first time in decades, a significant number of purpose-built rental apartments are under construction in Toronto – about 12,500 as of 2020 – a change that housing activists welcome.
Less welcome is the fact that most of those new apartments will not be affordable for lower-income residents of the city. A new project in Regent Park aims to provide a different template for affordable housing by implanting non-profit housing within a market-rate building, the kind of innovation its principals say is badly needed.
“The private sector is building market rental, how do we harness the fact that’s happening,” said Mitchell Cohen, president and chief executive officer of the Daniels Corp.
Daniels is nearing completion on a 29-storey purpose-built-rental building called Evolv to be opened this spring. In partnership with Sun Life (which provided key financing) and WoodGreen Community Services, the developer recently announced it would dedicate a 40-year lease for 10 per cent of the building – 34 units out of 346 apartments – to WoodGreen for an affordable housing program for single mothers. “We’re not required by the zoning bylaw or a community benefits agreement, but we want to demonstrate we can create affordable housing,” Mr. Cohen said.
The rents for the single mothers, graduates of a program called Homeward Bound that WoodGreen has been running since 2004, will be 80 per cent of the Canada Mortgage and Housing Corp. average for Toronto. In practice, that’s a steeply discounted price from other rents in the new downtown building: A three-bedroom market rate would hit $3,300, but WoodGreen will only charge $1,410 a month, or 43 per cent of market. A two-bedroom unit will rent for $2,500, but WoodGreen will collect $1,270.
To make it work the City of Toronto is giving $5.1-million in federal/provincial funding under the Ontario Priorities Housing Initiative (OPHI) to WoodGreen, which will in turn lease the units from Daniels. To finance the project, Daniels also took advantage of a provincially funded Toronto program to incentivize affordable housing called Open Door that provided a $720,847 property tax break for the building.
Toronto has been in desperate need of affordable housing for years; in 2018, Mayor John Tory campaigned on a promise to jump-start new construction. The Housing Now program, which grants city-owned land to private developers in return for pledges of long-term affordable rental buildings, has faced a slew of delays – planning and COVID-19 related – and none of the approximately 4,500 approved apartments has been finished. Open Door also provides breaks on property taxes and development fees. The City says about 10,000 affordable apartments have been given planning approval under that program since 2016.
For WoodGreen, the opportunity to access finished apartments on a quicker time scale is a major selling point. “It is not another announcement about a project we may see realized in three or five years,” said Teresa Vasilopoulos, executive director of the WoodGreen Foundation. “This partnership is an example of how forward-thinking corporate partners can come together with government and local agencies.
“The waitlist for community housing is 80,000 families – there’s almost a 10-year waiting list for a two-bedroom unit – and that list is going to continue to grow and COVID has really exacerbated this situation,” Ms. Vasilopoulos said.
Housing construction of all types has been outstripped by rapid population growth in the Toronto region in recent years.
Using the WoodGreen-Daniels template is tempting, but critics note the challenge of meeting even a modest goal like the city’s plan to create 22,000 affordable apartments by 2030.
“The city needs to generate almost 2,500 new units like last week’s announcement every year for the next nine years,” said Mark Richardson, an activist and technical lead for HousingNowTO (an activist group not connected to the city’s Housing Now program). “Our volunteers fully support these kinds of funding innovations. Speed and scale are important to meeting our affordable-housing needs in Toronto … but it is hard to get to the city’s target of 2,500 new units per year in blocks of 34 units at a time.”
Mr. Cohen said the Open Door program’s incentives are welcome, but not sufficient to fund more examples such as the one his company is setting. “To be very clear, a waiver of property taxes and waiver of development fees does not create affordability,” he said.
Mr. Cohen argues the WoodGreen template could provide a quicker way for the federal government to use some of the unspent billions in its National Housing Strategy – a 10-year $55-billion plan first announced in 2017. The National Housing Strategy has yet to allocate about half of the funds it has committed to spending and has been slow to launch any of the 100,000 new affordable units it pledged to build.
For market rental already under construction, Mr. Cohen argues a public subsidy is needed to attract more builders to follow his template and dedicate some portion of the market rental units to less lucrative affordable apartments. “We wanted to create an affordable template that was replicable. And yes, it means forgoing revenue on 10 per cent of the units,” he said.