| 135032 | REPORT | N | Y | MAIN | ACTION | AMENDED | — | N | — | Launching the Rental Housing Supply Program | 2024.PH13.8 | — | Y | Y | Y | Y | <p>Toronto is facing two housing crises – one where there is a lack of deeply affordable and supportive housing for low-income marginalized and vulnerable residents; and a more recent one in which rising rents have made it increasingly unaffordable for middle income earners, key workers and professionals to live in the city. This was noted by the <a href="https://www.toronto.ca/legdocs/mmis/2023/ph/bgrd/backgroundfile-235840.pdf">City’s Perspective on the Rental Housing Roundtable report</a> in 2023. Urgent action across the entire housing continuum is required to prevent more residents, specifically renters, from experiencing housing instability and potentially homelessness; to avoid Toronto’s social service sector facing a deepening key worker staffing crisis; and to allow Toronto’s businesses to attract the workforce and labour supply they need to grow.</p>
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<p>City Council has recognized the need to expand the City's <a href="https://www.toronto.ca/community-people/community-partners/housing-partners/housingto-2020-2030-action-plan/">HousingTO 2020-2030 Action Plan</a> (HousingTO Plan) targets beyond affordable rental homes, to include rent-geared-to-income (RGI) and rent-controlled homes, thereby advancing a generational transformation of Toronto’s housing system by 2030. In support of the delivery of a full range of homes, City Council has further directed staff to recommend revisions to the Open Door Affordable Rental Housing program (Open Door program). This report responds to City Council’s request to review the Open Door program in light of the revised HousingTO Plan targets that include rent-geared-to-income, affordable rental, and rent-controlled homes (<a href="https://secure.toronto.ca/council/agenda-item.do?item=2023.EX9.3">2023,EX9.3</a>).</p>
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<p>The Open Door program has been the City’s signature affordable rental housing initiative since <a href="https://secure.toronto.ca/council/agenda-item.do?item=2016.EX16.26">its launch in 2016</a>, and has provided City funding and incentives (including waivers of fees and charges, and property tax exemptions) to support the development of over 21,000 affordable rental homes on public, non-profit, co-op and private land.</p>
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<p>The Open Door program has been able to support a healthy <a href="https://www.toronto.ca/city-government/data-research-maps/toronto-housing-data-hub/housing-data/">pipeline</a> of affordable rental homes across Toronto, with 1,911 of these homes constructed and an additional 3,011 currently under construction. There are an additional 16,530 homes that are currently stuck in pre-development phases due to requiring additional support, including funding and financing, and acceleration of approvals, to move them into construction. </p>
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<p>This report provides recommendations to transform the Open Door program into the Rental Housing Supply Program in light of the updated HousingTO Plan targets, recent legislative changes to the <em>Development Charges Act (DCA)</em> through the <em>More Homes Built Faster Act, 2022</em> (Bill 23); the <em>More Homes, More Choice Act, 2019 (Bill 108), and the Affordable Homes and Good Jobs Act, 2023 </em>(Bill 134); federal and provincial housing policy and funding changes; and the current macroeconomic context which is making it increasingly difficult to adequately scale-up the purpose-built rental housing supply in Toronto.</p>
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<p>To respond to the housing and homelessness crises and support City Council’s new target for 65,000 rent-controlled homes, this report proposes:</p>
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<p>1) Allocating <strong>capital funding to 18 affordable rental and rent-geared-to-income housing projects,</strong> outlined in Confidential Attachment 1, aimed at accelerating delivery of over 2,600 new affordable rental homes. Through this funding, non-viable projects will be able to move to construction start and secure financing. Staff estimate that in addition to unlocking over 2,600 affordable rental homes, a further 3,380 market and rent-controlled rental homes will enter construction for a total of almost 6,000 new rental homes.</p>
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<p>2) Launching the new <strong>Rental Housing Supply Program</strong> which:</p>
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<li>Aligns the program definition of affordable rental housing with the <a href="https://www.toronto.ca/city-government/planning-development/planning-studies-initiatives/definitions-of-affordable-housing/">City’s Official Plan income-based affordable housing definition</a> and the provincial <a href="https://www.ontario.ca/page/municipal-development-and-community-benefits-charges-and-parklands#section-4">Affordable Residential Units Bulletin</a> definition.</li>
<li>Establishes a framework for prioritizing and recommending capital funding for affordable and rent-geared-to-income rental homes, up to a maximum of $260,000 per unit.</li>
<li>Introduces a proposed program definition of rent-controlled homes where rent levels are higher than income-based affordable rents and at or below 150% of the average City of Toronto rent, by unit type, as reported annually by Canada Mortgage and Housing Corporation. This new program definition is consistent with the Official Plan definition of mid-range moderate rents and will include limiting rent increases to the provincial rent increase guideline under the <em>Residential Tenancies Act</em>, 2006 plus 2%.</li>
<li>Provides proposed incentives to not-for-profit corporations, non-profit housing co-operatives (co-ops), Indigenous housing providers, (collectively referred to as “Community Housing Providers” throughout this report), as well as the Toronto Community Housing Corporation (TCHC) and the Toronto Seniors Housing Corporation (TSHC) to support the development of new rent-controlled homes.</li>
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<p>3) Launching a <strong>Pilot Community Housing Pre-development Fund</strong> to support the intensification and re-development of Community Housing sites.</p>
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<p>4) Working towards launching a sustainable and <strong>revolving Affordable Housing Fund</strong> to attract funding from government and non-government sources including financial institutions, philanthropic organizations, and private sector organizations (including large employers) to support a range of City-supported and City-led affordable rental housing projects.</p>
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<p>These measures also complement the “Community Housing Modernization and Growth Strategy” (the Community Housing Strategy) report that is also to be considered by the Planning and Housing Committee at the same meeting on June 13, 2024. The Community Housing Strategy includes concrete measures to support long-term sustainability and affordability of the city's existing community housing stock over the next decade as they navigate expiry of mortgages, ending of land leases with the City, and escalating maintenance costs. The Community Housing Strategy also proposes a number of policy and planning measures aimed at increasing the community housing stock including enhancements to the Multi-Unit Residential Acquisition Program (MURA) to enable Community Housing Providers to better compete in the city’s speculative market and to acquire properties that can be operated as affordable rental housing in perpetuity.</p>
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<p>The proposed new Rental Housing Supply Program aims to support a shift in Toronto's housing market, where purpose-built rentals are the most common form of rental housing but have contributed the least amount of new supply over the past 10 years. During this time, most new rental supply has derived from condominiums, which according to the <a href="https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres">Canada Mortgage and Housing Corporation Rental Market Report</a> are generally more expensive and do not offer the same level of security of tenure for tenants. The proposed new Rental Housing Supply Program also aims to support a generational transformation of Toronto’s housing system to shift Toronto’s housing system and increase the supply of non-market, community housing.</p>
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<p>Despite an increase in purpose-built rental housing starts in 2023, the rental housing supply is not forecast to keep up with demand. Canada Mortgage and Housing Corporation (CMHC) anticipates a decline in housing starts that will persist through 2024 and 2025, reflecting the lagged effect of higher interest rates, labour shortages, and supply chain issues. Toronto is continuing to face high rental demand driven by strong population growth and an increasing number of renter households squeezed out of homeownership market. The rental market in Toronto is expected to remain tight without significant action by all orders of government to facilitate the development of purpose-built rental housing. This proposal responds to stakeholder feedback in the City’s <a href="https://www.toronto.ca/legdocs/mmis/2023/ph/bgrd/backgroundfile-235840.pdf">Perspective on the Rental Housing Roundtable report</a>, which recommended that the City study additional means of incentivizing purpose-built rental housing supply beyond what is already available in the Open Door program, and recognize the vital role of the non-profit sector in providing affordable housing.</p>
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<p>While the City is committed to taking every possible action within its jurisdictional and financial capacity to tackle the housing crisis, strengthened partnerships with the federal and provincial governments are needed to complement Toronto’s efforts. Recent federal and provincial measures introduced to support purpose-built rental construction, such as providing a 100% rebate on the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) on new purpose-built rental housing is an example of government policies aligning to advance collective housing objectives.</p>
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<p>However, new and enhanced policy, program and financial tools are urgently needed to meet Toronto, Ontario and Canada’s respective housing supply targets. This includes a new fiscal deal to support the structural changes that will put Toronto on a path to long-term financial sustainability, as well as a commitment from the federal and provincial governments to invest in the HousingTO Plan.</p> | 13 | 8 | CMMTTEE | PH | All | N | … | Report | ACTION | Amended | Main | — | — | Committee | … | … | … | … | … | … | … | … | … | … | … | … | … | ACTION | true | Amended | — | … | … | … | … | — | 1719374400000 | NEGOT | A position, plan, procedure, criteria or instruction to be applied to any negotiations carried on or to be carried on by or on behalf of the City. Attachment 1 contains financial information, supplied in confidence to the City of Toronto and CreateTO, which, if disclosed, could reasonably be expected to significantly prejudice the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization. | Measures to be applied to negotiations by or on behalf of the municipality or local board |