Ontario Construction News staff writer
To tackle the ongoing housing crisis, City of Toronto staff has released a report recommending the creation of 20,000 new rental homes. The plan, outlined in the report titled Build More Homes: Expanding Incentives for Purpose-Built Rental Housing, aims to build up to 16,000 purpose-built rental units and at least 4,000 affordable homes.
If approved by council, the city will commit to using its resources to construct 7,000 rental homes, including 5,600 purpose-built rentals and at least 1,400 affordable units.
The goal is to kick-start the first phase of the program and immediately release a call for applications to identify and approve 7,000 new rental homes, including 5,600 purpose-built rental homes and at least 1,400 affordable rental homes, through its own resources.
“Toronto is taking bold action to address the housing crisis. We’re offering up incentives to build thousands more purpose-built rentals and affordable homes,” said Mayor Olivia Chow. “With partnership from the provincial and federal governments, we can build thousands more homes and reshape the housing landscape for a more inclusive and affordable Toronto for everyone.”
The report will be reviewed by the Executive Committee on Nov. 5 and subsequently by City Council later in November.
With high interest rates, inflation and soaring construction costs stalling new developments, the demand for rental housing is expected to increase, driven by population growth and a home ownership market that remains largely unattainable for many residents.
A new purpose-built rental homes incentive would be designed to facilitate the development of 20,000 rental units, including 4,000 affordable homes. This program aligns with targets set by federal and provincial housing initiatives and aims to reach the goal of 41,000 affordable rental units and 285,000 housing starts by 2031.
Staff are seeking approval to launch a call for applications for the first phase of the initiative. Eligible projects will benefit from significant financial incentives, including:
- An indefinite deferral of development charges, estimated at $37,636 per unit, for purpose-built rental homes.
- A proposed 15 per cent property tax reduction for 35 years, totaling around $20,396 per unit.
- Full financial incentives for affordable rental units, potentially reaching $97,264 per unit.
To qualify, projects must dedicate at least 20 per cent of their units as affordable, adhering to the City’s new income-based criteria, and must commence construction by the end of 2026.
Also, the report recommends that City Council establish a new Multi-Residential Property (Municipal Reduction) Tax Subclass, which would provide a 15 per cent municipal tax rate reduction for eligible developments starting in the 2025 budget.
City officials are also looking for provincial and federal funding, including $7.3 billion in low-cost financing to support the creation of the proposed rental units, alongside a request for joint funding from the provincial and federal governments to establish a Canada-Ontario-Toronto Build program.
Councillor Gord Perks, Chair of the Planning and Housing Committee, emphasized the urgency of the situation, stating, “Our city has reached a critical point in the need for stable, rental housing. This is a crisis that has been decades in the making, and now we are asking other levels of government to join us at the table.”
For more details, the full staff report is available on the City’s website.