Skip to main content

Currently being occupied by a senior care company, there’s a proposal to develop an 18 floor rental building on the property at 140 Merton St., in Toronto.Fred Lum/The Globe and Mail

To even the most jaded observers, it seemed like an auspicious development in the long and mostly unproductive fight to create more affordable housing in Toronto.

After an intense showdown on this issue during the 2018 mayoral election – which previewed the housing debate in the current federal campaign – Mayor John Tory wasted little time unveiling an ambitious plan, dubbed Housing Now, with two novel and critical ingredients.

The city would develop 40,000 new housing units on municipally owned land, including thousands of deeply affordable rental units, over 12 years, with the first 10,000 targeted for 11 sites unveiled in December, 2018. The scale of the initiative is considered unprecedented.

To prime the pump, Toronto council quickly voted to waive $280-million in fees and development charges. But the real incentive was the real estate: the city anted up numerous parcels of publicly owned real estate, several of them large and located near transit – something it hadn’t really done systematically since the 1970s.

Housing Now appears to be stalled, mired in complex contract negotiations over access to a debt financing initiative that’s included in a $40 billion/10 year federal support program geared at supporting rental and subsidized housing, and announced with much fanfare by the Liberal government in 2017.Fred Lum/The Globe and Mail

As has been done in cities with more successful long-term affordable housing programs, like Vienna, these lands would be leased rather than sold to builders over 99 years. In a frothy market in which downtown real estate can top $30-million an acre, the leveraging of public land seemed like a magic bullet.

What’s more, the timing was right, not just because of pent-up demand for affordable housing, but also due to surging investor interest in the stability of cash flow from multi-unit rental apartment buildings. The city, moreover, had moved to streamline approvals by handing off these projects to a single agency, CreateTO, tasked with strategically developing city real estate holdings, not just selling them off as was previous practice.

Government should reconsider this bid to create a topsy-turvy arts complex on Toronto’s Queen West

Another win for Toronto’s Distillery District

Almost three years later, however, Housing Now appears to be stalled, mired in complex contract negotiations over access to a debt financing initiative that’s included in a $40 billion/10 year federal support program geared at supporting rental and subsidized housing, and announced with much fanfare by the Liberal government in 2017.

Abi Bond, the executive director of the City’s Housing Secretariat, disputes such concerns, and predicts that the development teams for the first few sites will be announced “imminently.” “There’s a huge amount of work that is happening behind the scenes.”


Progress Report, first 11 Housing Now sites, July 2021

LocationNumber of rental units approvedPer cent affordable rentalConstruction start forecastMonths behind schedule
777 Victoria Park* 575 50%Q4 202112
50 Wilson Heights* 1,484 35Q1 202215
705 Warden* 600 42Q1 202218
140 Merton 180 50Q1 202215
Bloor/Kipling (Block 1) 2,300 34Q4 202212
Bloor/Islington 1,250 34Q4 202212
805 Don Mills 988 34Q2 202318
770 Don Mills 1,389 33Q3 202321
1250 Eglinton West 70 50Q1 202315
251 Esther Shiner 1,800 34Q3 20239
3933 Keele 190 50Q4 202424
Total 10,826 36 (3,867 units)

*Winning bids selected by CreateTO, but not yet disclosed.


According to city reports and interviews with several sources familiar with the process, the re-zonings on the first four sites, collectively representing almost 3,000 housing units, were approved even before the pandemic began. On the first three, the requests for proposals process wrapped up over a year ago, with a robust response, sources say. On the fourth, an 18-storey half market/half affordable rental building on Merton Street, the RFP closed last week. The city wants some of the proposed rental units to remain deeply affordable in perpetuity.

Non-profits such as Woodgreen, which participated in the bidding on one site, were notified well over a year ago that they weren’t successful. According to CreateTO’s timelines, the winning consortia – which include non-profit housing agencies that will manage the affordable units – were supposed to be marketing their projects by now.

Yet none of the winners has been revealed publicly, and sources say the development consortia on the first set of sites haven’t yet signed deals with Canada Mortgage and Housing Corporation (CMHC), the federal agency that allocates billions in subsidies to affordable housing. As of early September, says Mark Richardson, a spokesperson for HousingNowTO, an advocacy group that has tracks the process, “it will be 1,000 days since the mayor announced the Housing Now sites. As of now, we’ve not got shovels in the ground on any of them.”

Indeed, a city progress report published in July noted that the delays on the first 11 sites – encompassing 10,826 units, 36 per cent of which are considered affordable – ranged from nine to 24 months, with not a single project even remotely on schedule.

“I know they are trying to secure the financing,” confirms deputy mayor Ana Bailao, council’s housing czar. But, she adds, CMHC financing is “only one piece of the puzzle,” and points out that both the pandemic and volatile markets have slowed the process. “It needs to be easier and quicker,” she says. “That has been something that we’ve said for a long time.”

Currently a parking lot for transit commuters, this property at 50 Wilson Heights Blvd., in Toronto, is slated to become a housing development.Fred Lum/The Globe and Mail

The irony of the logjam is that the four sets of players in this process – developers, non-profit housing providers, the City and the federal government – are in full agreement about the problem, and all sides seem willing to commit substantial resources to solving it. Says Ms. Bond, “I’ve never seen this degree of collaboration.”

Despite that confluence of political intentions and financing, the approvals process is still littered with “landmines,” says Mr. Richardson. He points out that city council, after years of tolerating NIMBYism from residents’ associations, found itself targeted by those same groups when trying to re-zone parking lot sites next to subway stops. But after a surge of public and media attention over such disputes, council managed to approve re-zonings on many of the first 11 Housing Now sites, and has, in fact, increased the number of proposed units.

The more problematic obstacle seems to involve negotiations with CMHC over access to construction financing and long-term mortgages through the Rental Construction Financing Initiative, a $25.75-billion program launch in 2017 and intended to create over 71,000 new affordable rental units across Canada. “We were assured federal funds would flow quickly to these projects,” Mr. Richardson says.

RCFI money, in the form of extremely low-interest loans, has been flowing elsewhere, including two projects in Toronto – $357-million in 2019 to a three-tower project by partners Dream Unlimited, Kilmer Group and Tricon Residential in the West Donlands and also Westbank rental housing complex on the former Honest Ed’s site, which received $200-million through the program in January, 2020. Both have a mix of market and affordable rental units, say Dream Unlimited, Kilmer Group, and Tricon Residential.

As of March, 2021, according to the agency, CMHC has committed close to $9.7-billion to more than 29,700 units, of which over 18,000 will be affordable. Almost half are under construction or built. But none of those are part of the Housing Now program, at least not yet. (CMHC officials declined to be interviewed, citing election period blackout protocols.)

Some insiders say the stumbling block with the Housing Now sites is that the proponents – the consortia of for-profit apartment builders and non-profit housing providers – haven’t provided enough equity to satisfy CMHC that the agency won’t face financial exposure if the projects go sideways. The City, moreover, isn’t backstopping the loans, says Ms. Bond, who describes CMHC’s RCFI program as “absolutely critical” to the Housing Now program.

The other question is whether the RCFI funding will run out before the city achieves Mr. Tory’s goal of 40,000 units in 12 years. Ms. Bond and others acknowledge that the program is “over-subscribed” and CMHC’s own data suggests that almost half of the available financing has already been allocated in less than four years. To complete the Housing Now build out, Ms. Bond adds, “we will likely need more than is currently included in the RCFI.”

As Ms. Bailao admits, “We need to accelerate.”

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.