TORONTO — City of Toronto staff have issued a report recommending steps the city can take to support the development of 20,000 new rental homes including a minimum of 4,000 affordable rental homes.
Of that total, the city would commit to build 7,000 rental homes through its own resources.
The staff report is titled Build More Homes: Expanding Incentives for Purpose-Built Rental Housing.
Among the recommendations, the city is proposing a new purpose-built rental homes incentive to move rentals through the pipeline and into construction. The program, developed in partnership with all orders of government, will advance the city’s own targets of 41,000 affordable rental homes, targets under the federal Housing Accelerator Fund and the provincial Building Faster Fund and the city’s pledge of 285,000 housing starts by 2031.
Mayor Olivia Chow stated in a release, “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 city would kick-start the first phase of the program by immediately issuing 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.
Eligible projects will receive city incentives of: an indefinite deferral of development charges on purpose-built rental homes, estimated at $37,636 per unit, as long as the development remains rental tenure; a recommended 15 per cent property tax reduction for 35 years estimated at a total of $20,396 per purpose-built rental unit; and full financial incentives, including foregone taxes and fees for affordable rental units, estimated at $97,264 per unit.
To qualify for the incentives, projects will need to include at least 20 per cent of units as affordable rental homes, for a period of up to 99 years and for at least 40 years. Projects will have to start construction by the end of 2026.
Staff also recommend that Toronto city council approve a new Multi-Residential Property (Municipal Reduction) Tax subclass to provide a 15 per cent municipal tax rate reduction for eligible rental developments through the 2025 budget.
The staff report recommends that city council call on the provincial government to provide the city with a Build More Homes Rebate estimated at $1 billion, equivalent to the value of development charges and 85 per cent of the value of property taxes for 35 years for new purpose-built rental homes. The funding will allow the city to launch a second phase of the incentive stream and extend its call for applications to approve an additional 13,000 new rental homes, including 10,400 purpose-built rentals and 2,600 affordable rental homes.
The report also includes a request to the federal government to immediately allocate a $7.3 billion portfolio of low-cost financing to support the delivery of the 20,000 new affordable and purpose-built rental homes outlined in this report.
Staff also recommend city council request the establishment of a Canada-Ontario-Toronto Build program and enable provincial and federal grant funding of $225.3 million each to support the creation of at least 2,600 affordable rental homes.
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