Item - 2021.PH26.4

The Planning and Housing Committee recommends that:  

Rapid Housing Initiative (RHI) Phase Two

1. City Council authorize the Deputy City Manager, Community and Social Services, to enter into a Contribution Agreement under the Rapid Housing Initiative (the "Contribution Agreement") and/or related agreement(s) and amendments with the Canada Mortgage and Housing Corporation, the Government of Canada or any other federal entity necessary for the receipt and expenditure of funding under Phase Two of the Rapid Housing Initiative ("RHI Phase Two") on such terms and conditions as are satisfactory to the Executive Director, Housing Secretariat, in consultation with the Executive Director, Corporate Real Estate Management, and in a form approved by the City Solicitor.

2. City Council approve the receipt of the Rapid Housing Initiative Phase Two program funds, in accordance with the terms and conditions of the Contribution Agreement and any related agreements, directives or program guidelines.

3. City Council approve an allocation of $132,151,611 (net $0) fully funded from the RHI Phase Two to the Capital Revolving Reserve Fund for Affordable Housing (XR1058) to be overseen by the Executive Director, Housing Secretariat and used to support the acquisition by the City of real estate interests suitable for the RHI Phase Two, the purchase of modular housing, related pre-development and pre-construction costs (e.g. community engagement, planning, communications, environmental site assessments, cost consultant reports, permits, architectural or engineering reports, appraisals, legal/closing costs related to acquisition of land and buildings) and all other costs permitted under the RHI Phase Two to secure and develop affordable housing, in each instance on terms satisfactory to the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management.

4. City Council increase the Approved 2021 Capital Budget for Housing Secretariat by $132,151,611 (net $0) fully funded from the RHI Phase Two to enable staff to begin project commitments, with the final cash flow adjustments between 2021 and 2022 to be requested through the third quarter variance report following completion of the Investment strategy. 

5. City Council authorize staff to allocate at least 20% of the $132,151,611 referenced in Recommendation 4 above to support the creation of affordable rental housing for Indigenous people, by Indigenous organizations.

6. City Council authorize the Executive Director, Housing Secretariat, to provide capital funding from the Development Charges Reserve Fund for Subsidized Housing (XR2116) in the amount not to exceed $100,000, inclusive of the Harmonized Sales Tax and disbursements, to pay for due diligence work incurred to identify and prepare properties for consideration by CMHC under Phases One and Two of RHI.

7. City Council authorize the Executive Director, Housing Secretariat, as appropriate, to enter into agreements or other suitable arrangements with City agencies and/or corporations, the Government of Ontario and/or its agencies, community agencies, private entities and/or individuals to allocate and deliver the RHI Phase Two funded projects in accordance with the program guidelines.

8. City Council exempt up to 1,000 affordable rental homes to be developed through the RHI Phase Two from development charges, planning and building permit fees and parkland dedication fees.

9. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat, to approve the acquisition by the City of real estate interests suitable for the RHI Phase Two, and to approve related pre-development, pre-construction, construction, renovation and conversion costs (including environmental site assessments, cost consultant reports, permits, architectural or engineering reports, appraisals, legal costs, closing costs related to acquisition of land and buildings), in each instance on terms satisfactory to the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat and in a form satisfactory to the City Solicitor, and provided that all related expenditures are to be funded through the capital funding that is advanced to the City under the RHI Phase Two Agreement.

10. City Council authorize the Executive Director, Corporate Real Estate Management and/or the Deputy City Manager, Corporate Services, to execute the agreements relating to the acquisitions referenced in Part 9 above, and any ancillary agreements and documents on behalf of the City of Toronto.

11. City Council request the Executive Director, Housing Secretariat, in consultation with the Executive Director, Corporate Real Estate Management, the Chief Planner and Executive Director, City Planning and the General Manager, Shelter, Support and Housing Administration to inform local Councillors in advance of any intention to purchase or develop properties using the RHI Phase Two funding in advance of any address being publicly released and to work with local Councillors on communication and community engagement.

12. City Council authorize the Executive Director, Corporate Real Estate Management, to administer and manage all transactions in consultation with the Executive Director, Housing Secretariat, including the provision of any consents, approvals, waivers, and notices, provided that they may, at any time, refer consideration of any such matters (including their content) to City Council for consideration and direction.

13. City Council authorize the Executive Director, Corporate Real Estate Management and/or the Executive Director, Housing Secretariat to negotiate and enter into any necessary agreements, including non-competitive agreements, with a value exceeding $500,000 for which Committee or Council approval would normally be required under Chapter 195, Purchasing, for the provision of construction and professional services needed to complete the acquisition of suitable real estate interests and to carry out any necessary pre-development, pre-construction, construction, renovation or conversion of properties for the development of affordable housing for the development of affordable housing under the Rapid Housing Initiative, provided that:

a. the procurement is necessary to meet the timelines of the Rapid Housing Initiative;

b. the costs are eligible for and will be funded through the Rapid Housing Initiative; and

c. the terms and conditions of any such agreements are acceptable to the Executive Director, Corporate Real Estate Management and in a form satisfactory to the City Solicitor.

14. City Council authorize the City Solicitor to negotiate and enter into any necessary retainers, including on a non-competitive basis, with a value exceeding $500,000 for which Committee or Council approval would normally be required under Chapter 195, Purchasing, for the provision of legal services needed to complete the acquisition of suitable real estate interests and to carry out any necessary pre-development, pre-construction, construction, renovation or conversion of properties for the development of affordable housing under the Rapid Housing Initiative, provided that:

a. the procurement is necessary to meet the timelines of the Rapid Housing Initiative;

b. the costs are eligible for and will be funded through the Rapid Housing Initiative; and

c. the terms and conditions of any such retainers are acceptable to the City Solicitor.

15. City Council request the Chief Planner and Executive Director, City Planning, in consultation with the Executive Director, Housing Secretariat, the Executive Director, Corporate Real Estate Management and the Chief Building Official and Executive Director, Toronto Building to prioritize the review of sites identified as part of the RHI Phase Two, including sites suitable for the construction of new housing, land acquisitions, and the conversion of existing buildings to affordable housing or rehabilitation of existing buildings in disrepair, and identify ways to expedite the necessary building and planning approvals.

16. City Council authorize the Executive Director, Housing Secretariat, in consultation with the General Manager, Shelter, Support and Housing Administration, to issue Requests for Proposals and to select non-profit and Indigenous housing operators, to operate the affordable and supportive housing units to be developed under RHI Phase Two.

17. City Council authorize the Executive Director, Housing Secretariat to negotiate and execute on behalf of the City, municipal housing project facility agreements  for up to 99 years with the Indigenous and non-profit housing providers selected through the competitive process referred to in Part 16 above, or a related corporation, and any non-profit housing providers approved as intermediaries by CMHC to secure the financial assistance being provided and to set out the terms of the operation of the new affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

18. City Council authorize the Executive Director, Housing Secretariat to engage non-profit sector and Indigenous housing providers, to help ensure that suitable organizations respond to the Requests for Proposals referenced in Recommendation 16 above.

19. City Council authorize severally the Executive Director, Housing Secretariat and General Manager, Shelter, Support and Housing Administration, to negotiate and enter into any agreements with the non-profit and Indigenous housing providers selected, for any operating funding that may be available, including, but not limited to rent supplement or grant funding agreements, on terms and conditions agreed to by the Executive Director, Housing Secretariat and/or the General Manager, Shelter, Support and Housing Administration and in a form approved by the City Solicitor.

20. City Council authorize severally each of the Executive Director, Housing Secretariat and the General Manager, Shelter, Support and Housing Administration to execute, on behalf of the City, any security or financing documents required by the non-profit and Indigenous housing providers, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the municipal housing project facility agreement, as required by normal business practices, and provided that such documents do not give rise to financial obligations on the part of the City that have not been previously approved by City Council.

21.  City Council re-iterate its request that the federal and provincial governments provide new, accelerated, and enhanced investments to deliver the City's 24-month plan (in Attachment 3 to Item PH16.8), including:

• RHI Phase 2 approvals and additional funding for remaining units to meet the target of 2,000 new permanent affordable and supportive homes created through modular housing, acquisitions and construction/conversion of properties;
• $48 million in annual ongoing operating funding beginning 2022 (comprised of funding for housing benefits and wrap-around support services), to ensure the homes created result in new supportive housing opportunities for vulnerable and marginalized individuals, including people experiencing homelessness; and
• 1,000 additional portable Canada-Ontario Housing Benefits to help households secure housing available for rent in Toronto and across the region.

Rapid Housing Initiative (RHI) Phase One

22. City Council declare the properties municipally known as 222 Spadina Avenue, 292 Parliament Street, and 4626 Kingston Road surplus, with the intended manner of disposal to be by way of a long-term lease to successful non-profit housing providers, and direct staff to take all steps necessary to comply with the City's real estate disposal process set out in Municipal Code Chapter 213, Real Property.

23. City Council delegate authority to the Executive Director, Corporate Real Estate Management, to approve and execute, on behalf of the City, long-term, nominal rent or below market rent leases and related agreements with the non-profit housing operators to be selected through a request for proposals process for 222 Spadina Avenue, 292 Parliament Street, and 4626 Kingston Road, substantially on the major terms and conditions set out in Attachment 1 to the report dated September 7, 2021, from the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management, and on such other or amended terms and conditions acceptable to the Executive Director, Corporate Real Estate Management, in consultation with Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

24. City Council authorize the Executive Director, Corporate Real Estate Management, or designate, in consultation with the Executive Director, Housing Secretariat to administer and manage the leases including the provision of any amendments, consents, approvals, waivers, notices, and notices of termination, provided that the Executive Director, Corporate Real Estate Management may, at any time, refer consideration of such matters, including their content, to City Council for its determination and direction.

25. City Council direct the City Manager to work with the General Manager of Economic Development and Culture and the Housing Secretariat to consult with Toronto York Region Labour Council, unions representing hotel and tourism workers, and other tourism and hospitality stakeholders about the potential conversion of hotels to residential use.

The Planning and Housing Committee:

1. Requested the City Manager to report directly to City Council at its meeting on October 1 and 4, 2021 and provide information on the properties submitted for funding consideration under the Federal Rapid Housing Initiative such as the community council location, the land use designation and the current use.

The Executive Director, Housing Secretariat gave a presentation on Implementing the Rapid Housing Initiative - Phase Two.

The Rapid Housing Initiative (RHI) is a federal capital funding program which aims to create new affordable rental housing within a 12-month timeframe for vulnerable and marginalized people experiencing or at risk of homelessness. The second phase of RHI was announced by the Government of Canada on June 30, 2021 and will deliver $1.5 billion in grant funding nationally to support the construction of more than 4,700 units across Canada. This funding will be delivered through the Canada Mortgage and Housing Corporation (CMHC), and will support the creation of new permanent affordable housing units through funding the construction of new rental housing, as well as the acquisition of land, and the conversion/rehabilitation of existing buildings to affordable housing. This builds on the $1 billion invested nationally in late 2020 for the first phase of the RHI which allocated $203 million under the Major Cities stream to Toronto and will create an estimated 540 new affordable rental homes.

On July 29, 2021, the Government of Canada announced Toronto's allocation for Phase Two of approximately $132 million under the 'Cities' stream with a requirement to create a minimum of 233 new units of affordable rental housing. In addition to this guaranteed allocation, working with Indigenous and non-profit housing providers, the City has updated and resubmitted Phase One unfunded projects for consideration under the Phase Two 'Projects' steam, representing a total of almost 1,000 potential new units of affordable housing. Submissions under the 'Projects' stream compete nationally and final decisions on successful bids are expected in late October, 2021.

This report provides an update on progress in implementing Phase One of the RHI including lessons learned, it outlines key program changes for Phase Two, and recommends improvements to the City's internal processes to support successful implementation within a very tight timeframe as required by CMHC. This report also recommends that Council approve approximately $40,161,171 in pre-approved Open Door incentives to support the creation of up to 1,000 affordable rental units under Phase Two of the program to support both City and non-profit led projects.

In addition to the above, a key staff recommendation for Phase Two is for the City to allocate at least 20% of its guaranteed funding to support Indigenous-owned and led projects. This recommendation supports the City's commitment under the HousingTO 2020-2030 Action Plan to increase the supply of new affordable and supportive housing opportunities 'For Indigenous, By Indigenous'. It also supports the City's commitment to truth, reconciliation and justice with Indigenous Peoples.

Furthermore, the report seeks Council approval: to declare the Phase One properties at 222 Spadina Avenue, 292 Parliament Street, and 4626 Kingston Road surplus; to issue a Request for Proposals to select future non-profit operators; and for the City to enter into long-term leases with the successful proponents based on the terms and conditions outlined in Attachment 1.

The federal RHI program has been welcomed as it is a one hundred per cent grant program which supports the delivery of deeply affordable housing for vulnerable and marginalized people in the city. RHI is helping the City to realize its 24-month COVID-19 housing recovery plan aimed at delivering 3,000 permanent affordable and supportive homes for people experiencing homelessness. However, additional capital funding will be required to help the City meet its targets by the end of 2022.

In addition to capital to create new homes, City Council has requested that the federal and provincial governments invest in operating funding (for housing benefits and support services) to help create supportive housing opportunities. Deeply affordable housing with a range of individualized, wrap-around social and health supports is key to ending chronic homelessness. Besides providing people with improved health and social outcomes, investments in permanent supportive housing will help reduce systemic and structural inequities; strengthen our housing, homeless and public health systems; and result in cost-savings for all orders of government.