As the city of Toronto moves ahead with plans to develop affordable housing on 11 city-owned land parcels, a group of local activists is warning that three of the four initial site proposals are not dense enough to make financial sense and risk never being built.
“The rule of thumb is to make the math work for affordable housing in mixed income in an urban Toronto context in 2020, you need to be at least 200 units per acre to ensure 99 years of affordability,” said Mark J. Richardson, a consultant and former member of Toronto’s Planning Review Panel who formed the Housing Now TO organization to push for as many affordable units as possible on the city sites. (Somewhat confusingly, the activists hijacked the city’s name for its affordability program – Housing Now – when they named their group Housing Now TO.)
The basic conundrum is that unlike true social-housing projects, the city is not paying the full bill for these developments, nor will it own them at the end. The initial commitment is for the city to spend $280-million (mainly on donating land, waiving development fees and property taxes for affordable units) on Housing Now, but private partners will be spending their own money constructing and then operating them. And while housing non-profits are intended to operate the affordable rental portfolio, a non-profit structure does not mean they will be able to lose millions of dollars on uneconomic buildings. Mr. Richardson warns affordable-housing projects that are not sustainable won’t get built or could be recast as typical market-rate housing.
The developer parlance that Mr. Richardson uses to express his concern is “does it pencil,” as in can you estimate construction costs, future revenues and all other assorted soft costs to draw a picture of a functioning project?
“We’ve run the numbers, crunched the data using the Ontario Affordable Housing Calculator,” said Mr. Richardson, and he warns that right now most of the proposal do not “pencil.” His group developed its own plans that in some cases ignore lower-density city zoning on the sites and propose the kind of density that would have a better chance of being financially sustainable. “The mayor set a target of 40,000 units of affordable housing in 12 years as his No. 1 priority for the city. Our project is designed to make sure the city can actually achieve that goal,” he said.
The group focused on initial city prezoning estimates for 50 Wilson Heights Blvd., 140 Merton St. and 705 Warden Ave. Currently, the city’s plans propose a total of 685 affordable rental units across those three sites, with a section of market rent and ownership units that would add up to a total of 1,750 new units. Many of these buildings fall in the mid-rise category, between eight and 12 storeys. Currently, Merton’s density comes out to about 179 units an acre, Wilson is about 144 units an acre and Warden is 63 units an acre.
The Housing Now TO plan would triple the total density at Warden from 450 total units to 1,500, almost double the plans for Merton from 150 to 293 units and stack up an extra 450 units at Wilson. All told, their proposal would create 1,175 affordable rental units, 460 more units than the city’s proposals. It would also add more than 600 market-rate homes for purchase to the sites. The activist plans often go beyond the 12-storey limit of mid-rise but do not include any “superhigh rise” projects now common in for-profit condo buildings, which are typically in the 30- to 50-storey range.
Alexei Guerra, a registered professional planner with Sweeny & Co. Architects Inc., helped design Housing Now TO’s alternative plan for three sites, and is contributing his time pro bono because he says he believes the affordability crisis requires an all-hands-on-deck approach to solve.
“I think the city and staff and CreateTO [the city’s real estate agency] and sub-consultants are putting a tremendous amount of effort and resources to make this happen as quick as they can," he said. “I feel they are being somewhat conservative. They are constraining themselves to policies that are frankly out of date and don’t reflect a citywide need.”
One example is a secondary plan from 2005 designed to guide the development around the Warden Station – a plan that comes from a time before the Scarborough subway expansion was planned, and long before today’s housing crisis.
Gregg Lintern, Toronto’s chief planner and executive director of the City Planning Division, warned community members not to assume the numbers in the initial outlines represent the final density approvals.
“It’s too early to draw that conclusion. What we’ve put out there so far is for consultation,” he said. “We’re working with CreateTO on the concept development phase, and that kind of assessment of the appropriate development parameters for each site is under way. We haven’t made any decisions on it.”
That said, Mr. Lintern stressed that whether the projects pencil out as affordable is only one of the considerations the city has, particularly since it’s driving this process on its own lands.
“It’s an opportunity to really optimize each property for not only affordable housing … but other public priorities in those areas: whether that be child care, or an issue around pedestrian safety. You’re building these things to land well in the communities for both the people that live there now but also the people that are going to live there,” he said.
Mr. Richardson and his team worry that a traditional planning approach might doom the projects to failure.
“If you want all the things you want on the grocery list of requirements the city is baking in – community space, grocery stores in food deserts, affordable housing, mixed income, 99 years affordable, accessible units for seniors – you can’t have it at six- and eight-storey buildings,” he said. "Nice elegant policy does not always equal a successful project.”
Both sides also agree that no matter the eventual density on these Housing Now sites, this program alone cannot solve the city’s affordability issues.
The city’s own data show that only 2 per cent of housing approved in the past five years has been affordable, that a quarter of the city’s residents spend more than 50 per cent of their income on housing, and half spend more than 30 per cent – the traditional metric for affordability.
Mr. Lintern says more of the work to address affordability is being done in through the Housing Opportunities Toronto Action Plan 2020-2030 process, which will report its recommendations to council in the fall. Among the ideas the city is grappling with is inclusionary zoning (that would require affordable components in any property development above a certain threshold), examining single-family zoned areas (a swathe of density resistant neighbourhoods sometimes called the “yellowbelt” that covers two-thirds of the city’s land) and other zoning issues such as parking minimums.
“We’re taking a very broad toolkit approach. Because it is a big, complex problem, it needs a whole host of both simple solutions and complex solutions,” Mr. Lintern said.
Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.