The federal government will provide Toronto with $2.55 billion in low-cost financing to help deliver thousands of new rental homes as part of a “landmark” and “historic” housing agreement,” Mayor Olivia Chow says.
Officials say that the financing will help the city advance the delivery of seven new rental housing projects.
Those projects will ultimately bring 4,831 new rental units to the market, including a minimum of 1,075 affordable units.
The City of Toronto, for its part, will contribute $234.83 million to incentivize the construction of the new rental housing through relief from development charges and fees and property tax deferrals.
“This is a landmark housing agreement that we are announcing together. Why is it historic? Because it is the first time the federal government has been willing to batch all the projects together and say to Toronto we trust you to deliver them,” Chow said during a news conference on Wednesday morning. “It batches together seven very big projects that will have close to 5,000 units of rental housing. But it also sets the tone for other projects.”
The financing will be administered by the Canada Mortgage and Housing Corporation under its existing Apartment Construction Loan Program.
Speaking with reporters, Chow said that higher interest rates in effect in recent years had essentially “frozen the housing pipeline” in Toronto and made it impossible for the city to reach its ambitious targets for new rental units, even as developers expressed interest in partnering with the city.
“In November, the City of Toronto said we would waive development charges and reduce the property taxes and within a month we got 76 applications, 30,000 units of housing, developers saying that they were ready to build. We could only afford 8,000 but even though we said yes to 8,000 they still needed low-cost financing which is why this agreement is so critical,” Chow said. ““These projects have zooming approval, they have land and the homebuilders are saying we are ready. Now it can happen because of this federal agreement.”
Federal government officials say that they have set aside up to $7.3 billion in low-cost financing over three years to help the city incentivize the construction of more rental housing.
However, the money is contingent on financial support from the Government of Ontario which has not yet materialized.
“We can only afford (to incentivize) 8,000 units but there are thousands waiting (to be built). If the provincial government can step up and say ‘here is the rebate, you can make it cheaper to build’ then absolutely we can then unlock a lot more units and make sure the pipeline is not frozen,” Chow said.
