Item - 2023.PH8.11

The Planning and Housing Committee recommend that:  

Program and Implementation Considerations

1. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (November 16, 2023) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, remain confidential in its entirety, as it contains information explicitly supplied in confidence to the City of Toronto and Toronto Community Housing Corporation by the Canada Mortgage and Housing Corporation (CMHC).

2. City Council authorize the public release of Confidential Attachment 1 to the report (November 16, 2023) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, once the City is permitted to do so pursuant to the funding agreement with CMHC following the public disclosure of the same information by CMHC.

3. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat, to approve and execute, on behalf of the City, a long-term, nominal rent lease and related agreements with the non-profit housing operator to be selected through a request for proposals process for 65 Dundas Street East, substantially on the major terms and conditions set out in Attachment 2 to the report (November 16, 2023) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

4. City Council consider the lease referenced in Recommendation 3 above to be in the interests of the City.

5. 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 lease 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.

6. City Council authorize the General Manager, Shelter, Support and Housing Administration to enter into a data sharing agreement with University Health Network, to receive patient data for consenting patients who are experiencing homelessness and who are high-frequency users of the hospital emergency departments, and to share information with respect to the By-Name List, for the purposes of assessing eligibility and prioritizing for supportive housing opportunities at 150 Dunn Ave., on terms and conditions satisfactory to the General Manager, Shelter, Support and Housing Administration in consultation with the Executive Director, Housing Secretariat, and in a form satisfactory with the City Solicitor.

Financial Considerations

7. City Council increase the 2024 Operating Budget for Housing Secretariat by $93,863,862.16, fully funded from the RHI Phase Three, to enable staff to begin flowing capital funding to non-profit and Indigenous housing projects approved under RHI Phase 3, and in accordance with applicable program guidelines and Contribution Agreements to be executed between the City and the non-profit and Indigenous housing providers.

8. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Chief Financial Officer and Treasurer, to allocate any available provincial or federal funding for capital projects to any Rapid Housing Initiative projects led by Indigenous and non-profit housing providers approved as intermediaries by CMHC in any past, current, or future phases of the Rapid Housing Initiative ("Housing Providers"), provided that:

a. the Executive Director, Housing Secretariat, is satisfied that the funding is required to close any funding gaps to complete the Rapid Housing Initiative project;

b. in the case of provincial or federal grant funding, the province or the federal government, as applicable, have approved the use of the funding for the purpose of the Rapid Housing Initiative project, where necessary.

9. City Council authorize the Executive Director, Housing Secretariat to negotiate and execute, on behalf of the City of Toronto, any agreements, including amendments to any existing agreements, with the Housing Providers to secure the financial assistance provided pursuant to Recommendation 8 above 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.

10. City Council authorize an exemption from taxation for municipal and school purposes for the affordable rental homes developed as part of RHI Phase Two and for the periods of time described in Table 2 below in the Financial Impact section of the report (November 16, 2023) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management.

11. 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).

Intergovernmental Considerations

12. City Council request the Government of Canada extend the Rapid Housing Initiative to include additional phases, and increase the funding allocated to Toronto based on demonstrated need and demand.

13. City Council request the Government of Canada to amend the Rapid Housing Initiative program guidelines to cover cost overruns resulting from unavoidable market or other conditions, or allow projects to be eligible for low-cost financing through other National Housing Strategy programs, including the National Co-Investment Fund, to ensure successful completion of the projects.

14. City Council re-iterate its requests to the Government of Canada and the Government of Ontario to urgently scale up investments in the Canada-Ontario Housing Benefit program and commit to providing at least 3,100 net new allocations per year in Toronto.

15. City Council request the Government of Ontario to expand on its recent commitment to partner with the City of Toronto to create new supportive homes for people experiencing or at risk of homelessness, by providing an incremental $60 million in operating funding annually, beginning in 2025, for wraparound health and social supports to enable the creation of 2,500 net new supportive housing opportunities.

On November 29, 2023 the Executive Director, Housing Secretariat issued a supplementary report advising that the project at 4201-4203 Kingston Road, to be led by Gabriel Dumont Non-profit Homes, and previously listed in Confidential Attachment 1 to the report (November 16, 2023) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management has been publicly disclosed by Canada Mortgage and Housing Corporation, and as such can be named publicly.

At its meeting of November 8 and 9, 2023, City Council adopted Item EX9.3 – “Generational Transformation of Toronto’s Housing System to Urgently Build More Affordable Homes”, which outlined the urgent need for new and enhanced government investments to strengthen and shift the housing system to increase the supply of public and non-profit owned homes. These homes are critical to adequately address the unmet housing needs of low- and moderate-income households.

A key federal program that has supported the City and the Indigenous and non-profit sectors to create new deeply affordable supportive housing is the federal Rapid Housing Initiative (RHI). The RHI program provides up to 100% capital grant funding towards the costs to build or acquire and renovate properties to create net new affordable and supportive rental homes for people experiencing or at risk of homelessness. With almost $440 million in federal investments over Phases One and Two of the RHI program, the City has been able to accelerate the delivery of almost 1,100 new homes to successfully move people out of homelessness.

As part of Budget 2022, the Government of Canada announced Phase Three of the RHI and allocated $1.5 billion to create over 4,500 affordable rental homes across Canada. In July, 2022, through Item PH35.21, City Council authorized staff to submit an application to the Canada Mortgage and Housing Corporation (CMHC) for funding under this new phase of program and to report back on the outcome of the application, once known. This report responds to Council’s request and provides an update on the City’s RHI funding application.

As part of Phase Three of the RHI program, CMHC has recently approved a total investment of $169.4 million in grant funding to support 9 projects, estimated to create 416 net new rent-geared-to-income (RGI) homes across Toronto over the next 18 months. While this allocation falls short of the City’s requested funding to deliver over 1,300 affordable and supportive homes, the City greatly appreciates this federal commitment and looks forward to additional opportunities for collaboration and enhanced partnership. Approved and announced projects are outlined in this report, and Confidential Attachment 1 to this report provides details of the approved and unannounced projects, which must remain confidential until publicly announced by CMHC, as required in the City’s funding agreement with CMHC.

To deliver deeply affordable rental and supportive housing, a tri-government partnership approach is essential. To complement federal capital investments, the City has committed its own land and financial incentives to support delivery of the new homes. This report recommends that City Council request the provincial government to also join federal and City efforts and commit to incremental and sustained operating funding (for housing benefits and support services) to help create net new supportive housing opportunities. This is on top of the $48 million annual commitment made by the provincial government for 2023-2025 to support an estimated 2,000 supportive housing opportunities created over 2021 and 2022 through new construction, acquisitions, and layering on supports to existing rental units. Deeply affordable homes with a range of individualized, wraparound social and health supports are key to ending chronic homelessness. Besides providing people with improved health and social outcomes, investments in permanent affordable and supportive housing help reduce systemic and structural inequities; strengthen our housing, homeless and public health systems; and result in avoided costs and cost-savings for all orders of government. 

This report also provides a status update on in-flight rapid and modular housing projects, in line with direction from City Council in July 2023 through Item AU2.7. Specifically, Item AU2.7 from the Auditor General recommended that staff provide Council with more regular updates on the status of modular housing projects. Further, this report seeks City Council approval for staff to allocate funding from the Housing Secretariat approved 2023 Capital and Operating Budgets, as well as federal and provincial sources, to previously approved RHI projects, including proponent-led projects, subject to funding availability and conditions specified by the Housing Secretariat. These authorities are required to ensure that in-flight City, Indigenous and non-profit projects, which are essential to relieving pressure on the emergency shelter system, can continue to advance despite the current challenging construction environment with rapidly escalating labour and material costs.

A whole-of-government and whole-of-community approach is needed to effectively address the housing and homelessness crisis which threatens the social, economic, and cultural growth and prosperity of Toronto, Ontario, and Canada. As outlined in Item EX9.3, new and enhanced policy, program, and financial tools are urgently needed to meet the shared housing supply and growth targets of all orders of government. This includes a commitment from the federal and provincial governments to invest in the HousingTO 2020-2030 Action Plan. Investments in upstream interventions, including changes to social assistance programs to reflect the current cost of living, and increased access to health and social services, are also urgently needed to prevent more households from falling into poverty, housing precarity and homelessness.

This Information Report provides an update to an item before Planning & Housing Committee, Item PH8.11 - Federal Rapid Housing Initiative - Program Update and Phase Three Implementation. This report clarifies that one project listed in Confidential Attachment 1 to PH8.11 has now been publicly disclosed by Canada Mortgage and Housing Corporation (CMHC), and as such can be named publicly by the City. This report provides Committee and Council with information about this project.