Chow’s City Homes Plan will allow the City to act as a developer to build 25,000 rent-controlled homes over 8 years – with at minimum 7,500 affordable units, including at least 2,500 rent-geared-to-income units – on land the City already owns.
“You should be able to afford a place to live in our city, but that’s harder than ever. Families are forced to spend a huge chunk of their income on rent, and young people are moving out of Toronto entirely because it’s too hard to find an apartment they can afford. We can’t let our city become impossible to live in. Toronto needs to step up and build affordable housing itself and I have a plan to do that,” said Chow.
The City of Toronto owns over 8,400 properties across 28,000 acres of land, including parking lots and surplus land. Under Olivia’s City Homes Plan, CreateTO will be a developer and partner with the construction sector to build rental buildings that the City will own and non-profit organizations can operate – creating a mix of affordable and market rate homes that will be accessible to families of all income levels.
“Our housing crisis is urgent and we can’t count on private developers alone to offer people an affordable place to live. We have to take control and use the tools and land we have available to us today to build the affordable and rental homes people need now,” said Chow.
Chow’s plan leverages the federal government’s significant investments in the National Housing Strategy, using CMHC programs in addition to a small increase of 0.33% to the existing City Building Fund. The split of market-rate and affordable units make operations and debt repayment financially self-sustaining. The City will also expedite approvals, waive development charges, building permit fees, residential property taxes, parkland dedication fees, and additional municipal fees.
Chow’s City Homes Plan is one part of her progressive and ambitious plan to make housing more affordable. See her plan to support renters and secure affordable homes here.
Background
- Surging home prices and rents have created an affordability crisis in our city. It’s time for Toronto to do its part to provide the homes people need. This includes both allowing the market to deliver homes and expanding the City’s role in building homes.
- The City of Toronto’s real estate portfolio includes 8,446 properties on 28,823 acres of land. These properties include vacant lots, parking lots, buildings requiring redevelopment, and more. Olivia will put these plans to use with CreateTO.
- The City Homes Plan initial goal will be to build 25,000 new units of rental housing over eight years, and to grow their capacity over time.
- The plan includes at most 70% market-rate rental units, at least 20% affordable units (80% of average market rent), and at least 10% rent geared to income units (30% of household income).
- Buildings would earmark up to 20% of gross floor in new builds for commercial retail as an additional revenue source, where appropriate.
60% of the units will be 1 bedroom; 30% will be 2 bedroom; and 10% will be 3 bedroom
The City Homes Plan will use the following:
- 95% loan-to-cost financing from CMHC’s Rental Construction Financing Initiative (RCFI)
- CMHC’s Housing Accelerator Fund, which provides a per unit grant to local governments
- Revenue from increasing the existing City Building Fund by 0.33%
- This will generate approximately $404 million over 8 years, which will be put towards a down payment, and other soft costs, to build 25,000 rental homes
- Construction will be financed through self-supported debt and therefore not contribute to the City’s debt ceiling (tax-supported debt). This is because the debt servicing costs (principal, repayment and interest) are fully supported by the net operating income of the rents generated by the new rental housing.
The City Homes Plan leverages Canada’s National Housing Strategy, which invests more than $80 billion over 10 years and includes programs for municipalities. In the event CMHC’s RCFI’s 95% loan-to-cost financing is not made available to the City at the scale proposed, Olivia will not simply stand by. Chow will both advocate for more and be able to get started with building a minimum of 10,000 new units of city-owned rental housing over eight years with the same mix of housing and affordability for all income levels.
