Item - 2023.PH8.10

The Planning and Housing Committee recommends that:  

1. City Council authorize the affordable rental homes located within the developments described in Table 1 in the Financial Impact section of the report (November 24, 2023) from the Executive Director, Housing Secretariat, to be eligible for waivers of fees for planning application, building permit, parkland dedication and development charges exemptions, unless already paid or exempted by provincial legislation.

2. City Council authorize an exemption from taxation for municipal and school purposes under the terms of the Open Door Affordable Rental Housing Program for the affordable rental homes located within the developments and for the periods of time described in Table 2 in the Financial Impact section of the report (November 24, 2023) from the Executive Director, Housing Secretariat.

3. City Council authorize the Controller to cancel or refund any taxes paid after the effective date of the exemption from taxation for municipal and school purposes as set out in the applicable municipal housing facility agreement (the City's Contribution Agreement).

4. City Council authorize the Executive Director, Housing Secretariat, to negotiate and execute, on behalf of the City, a municipal housing facility agreement (the City's "Contribution Agreement"), or amendments to existing Contribution Agreements, where applicable, with the appropriate legal entities for the developments listed in Table 1 and 2  in the Financial Impact section of the report (November 24, 2023) from the Executive Director, Housing Secretariat, or related entities, to secure the financial assistance and to set out the terms of the development and operation of the new affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat, in consultation with the Chief Financial Officer & Treasurer, and in a form approved by the City Solicitor.

5. City Council authorize the Executive Director, Housing Secretariat, on behalf of the City, to execute any security or financing documents, or any other documents required to facilitate the development, including any documents required by the developers of the developments described in Table 1 in the Financial Impact section of the report (November 24, 2023) from the Executive Director, Housing Secretariat, or their related corporations, to complete pre-development activities, construction and secure conventional financing, where required, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the municipal housing 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.

The Open Door Affordable Rental Housing ("Open Door") program is a key program under the HousingTO 2020-2030 Action Plan (“HousingTO”) that offers capital funding and/or financial incentives to support non-profit and private sector housing developers to create new affordable rental housing for low- and moderate-income households. These new homes are critical to help the City meet its target of approving 65,000 rent-controlled homes by 2030, including 41,000 affordable rental homes.

Since 2016, Housing Secretariat has released an annual Open Door call for applications to allocate grant funding to support eligible projects. Due to a series of legislative, policy, and budgetary changes a call for applications was not released in 2023. The adoption of Bill 23, More Homes Built Faster Act ("Bill 23") by the Government of Ontario in November 2022 has significantly changed the impact of the benefits offered though the City program, reducing the ability to negotiate and secure long-term affordability on new affordable rental projects, because equivalent benefits are now provided automatically with less requirements. Bill 23 has also eliminated the City’s ability to collect anticipated and budgeted development charges revenues for housing services, representing a $120 million per year impact to the City’s housing programs and the loss of a primary funding tool to deliver funding through the Open Door Program.

On November 8 and 9, City Council adopted EX9.3, titled “Generational Transformation of Toronto’s Housing System to urgently Build More Homes” which revised the City’s housing targets and included direction that staff report back to City Council in Q1 2024 with recommendations to revise the Open Door program to support the City’s new housing targets.

Throughout 2023, Housing Secretariat staff have continued to support Indigenous, non-profit and private sector development partners with moving affordable housing projects forward. To ensure these projects can move forward, this report recommends approval of City financial incentives for 19 affordable housing projects to support the creation of 856 new affordable rental homes. 17 of these projects are led by non-profit housing partners and 2 projects are private sector led. The estimated value of City incentives on waivers and exemptions to development charges, parkland dedication, planning fees, building fees, and property tax is $65,813,467.

 
City Council’s approval of the recommendations in this report will support continued progress on urgently needed new affordable homes while staff continue due diligence and consultation on Open Door program changes necessitated by Bill 23, which will be brought forward in Q1 2024 in response to Council’s request.