Item - 2024.PH13.9

The Planning and Housing Committee recommends that:

New Regulatory and Funding Framework

1. City Council authorize the Executive Director, Housing Secretariat to:

a. enter into new Service Agreements related to the administration and funding of Part VII.1 housing projects that comply with the requirements of Ontario Regulation 367/11 under the Housing Services Act (“HSA") and which address the matters set forth in Attachment 1 to the report (May 30, 2024) from the Executive Director, Housing Secretariat, regarding Part VII housing projects with mortgages that have reached the end of their term, upon terms and conditions satisfactory to the Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor;  and

b. to provide notice as required by the Housing Services Act of each such agreement to the Minister of Municipal Affairs and Housing.

2. City Council request the Executive Director, Housing Secretariat to engage with all orders of government, financial institutions, Community Housing Providers, membership organizations and other organizations providing programs that support access to safe and affordable housing on opportunities for mortgage refinancing for Community Housing Providers in Toronto with expiring mortgages to assist these housing providers in leveraging their assets to access additional funding to repair and revitalize their housing stock.

Considerations for a New Lease Policy Framework with Community Housing Providers

3. City Council adopt the Lease Policy Framework (Attachment 2 to the report (May 30, 2024) from the Executive Director, Housing Secretariat) for extending, renewing or entering into new leases with non-profit housing corporations, non-profit housing co-operatives, and Indigenous housing providers (collectively referred to as "Community Housing Providers") providing social and affordable housing on City-owned land.

4. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat to extend, renew or enter into, and thereafter administer and manage, leases that are in accordance with the terms set out in Attachment 2 to the report (May 30, 2024) from the Executive Director, Housing Secretariat, and on other amended terms and conditions satisfactory to the Executive Director, Corporate Real Estate Management, with Community Housing Providers providing subsidized and affordable housing on City-owned land who meet the eligibility criteria set out in Attachment 2 to the report (May 30, 2024) from the Executive Director, Housing Secretariat.

5. City Council authorize severally each of the Executive Director, Corporate Real Estate Management and the Director, Real Estate Services to execute leases pursuant to the Lease Policy Framework and any related documents on behalf of the City.

6. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Executive Director, Corporate Real Estate Management, to negotiate and execute on behalf of the City, operating agreements with Community Housing Providers providing subsidized and affordable housing on City-owned land in accordance with the Lease Policy Framework in Attachment 2 to the report (May 30, 2024) from the Executive Director, Housing Secretariat, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form satisfactory to the City Solicitor.

7. City Council authorize the Executive Director, Housing Secretariat to negotiate and execute on behalf of the City, an extension of the operating agreement and the date by which Woodgreen Community Housing Incorporated, or its successor, is obligated to re-convey the property at 444 Logan Avenue to the City, to August 1, 2026, to allow time for the City to negotiate the terms of the continued operation of this social housing project, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

8. City Council direct the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management to prioritize the negotiation and completion of new long-term ground leases with Beech Hall Housing Co-operative and Alexandra Park Housing Co-operative pursuant to the Lease Policy Framework and:

a. take any additional steps to successfully develop and negotiate a ground lease and operating agreement with Beech Hall Housing Co-operative and Alexandra Park Co-operative, including where necessary, commission building condition assessments;

b. that in such negotiations and finalizing of proposed community housing Service Agreements, the City recognize any existing mandates; and

c. report back by October 30, 2024 to Planning and Housing Committee on the status of lease negotiations with the Beech Hall Housing Co-operative and Alexandra Housing Co-operative and, should it be necessary, make recommendations to extend the current leases arrangements until such time as new leases are finalized.

9. City Council request the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management to develop and formalize internal city processes to expedite, well in advance of the expiry of Community Housing Provider ground leases, the negotiation and extension of such leases and the development of new operating agreements in accordance with the Lease Policy Framework in Attachment 2 to the report (May 30, 2024) from the Executive Director, Housing Secretariat.

Enhancements to the Multi-Unit Residential Acquisitions Program (MURA)

10. City Council authorize a waiver of building permit fees and an exemption from taxation for municipal and school purposes for up to 500 new affordable rental or co-operative units annually to a maximum of 1,500 units to be secured by 2027 through the Multi-Unit Residential Acquisitions Program for 99-year terms by the municipal housing facility agreements (the City’s “Contribution Agreements”).

11. City Council authorize the Controller to refund any taxes paid after the effective date of the exemption from taxation for municipal and school purposes as set out in the Contribution Agreement.

12. City Council authorize the City Solicitor to introduce the necessary bills to give effect to City Council’s decision.

13. City Council authorize the Executive Director, Housing Secretariat, to amend the Multi-Unit Residential Acquisition program as follows:

a. Expand the eligibility criteria to enable the program to support not-for-profit housing providers (including community land trusts and co-operatives) and Indigenous housing providers with an exemption from taxation for municipal and school purposes and waivers of building permit fees where such not-for-profit and Indigenous housing providers are able to purchase properties using non-City acquisition programs, subject to the acquisition meeting the eligibility criteria under MURA and the not-for-profit and Indigenous housing providers agree to enter into a Contribution Agreement with the City, and provided these units are within the City Council approved maximum program limit set out in Part 10 above.

b. Expand the eligibility criteria to enable Multi-Unit Residential Acquisition to support not-for-profit housing providers (including community land trusts and co-operatives) and Indigenous housing providers with the purchase of condominium units to be operated as affordable rental housing, for a period of 99 years consistent with the Multi-Unit Residential Acquisition program requirements, in developments that will be completed within one year of applying for funding, and such further criteria, requirements, terms and conditions deemed necessary by the Executive Director, Housing Secretariat.

c. Revise the residential building requirements for eligible properties by removing the 6-unit minimum and 60-unit maximum limits provided that the City Council-approved maximum funding allocation limit of $200,000.00 per unit and up to $12,000,000.00 for the building is maintained.

14. City Council authorize the Executive Director, Housing Secretariat to issue a request for proposal on an annual basis and to select not-for-profit housing providers (including community land trusts and co-operatives) and Indigenous housing providers to purchase or establish long-term conventional financing, renovate and operate affordable rental or non-profit co-operative housing under the revised Multi-Unit Residential Acquisition program;

15. City Council authorize the Executive Director, Housing Secretariat to negotiate and enter into on behalf of the City, a municipal housing facility agreement for housing purposes for 99 years with the successful not-for profit housing provider (including community land trusts and co-operatives) and Indigenous housing providers selected through the request for proposal process under Part 14 above to secure the financial assistance being provided and to set out the terms of the operation of the affordable rental or non-profit co-operative housing (the “Contribution Agreement”) or any related agreement to facilitate the funding process, all on such terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

16. City Council authorize the Executive Director, Housing Secretariat to execute on behalf of the City, any security or financing documents, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the Contribution 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.

Expediting the Development Review and Permitting Process

17. City Council direct the Executive Director, Development Review, in collaboration with the Chief Planner, and Executive Director, City Planning and the Chief Building Official and Executive Director, Toronto Building, to consider a Community Housing priority stream to expedite the review and approval of development applications and building permits for new Community Housing projects, and to report back to Council by the fourth quarter of 2024 on the creation of this priority stream.

Strengthening the Capacity of Community Housing Providers

18. City Council direct the Executive Director, Housing Secretariat to engage with Community Housing Providers and explore opportunities for mergers, acquisitions, and strategic partnerships to achieve enhanced economies of scale and/or the ability to leverage larger asset pools to improve sustainability, increase capacity to maintain and revitalize existing assets, and to support longer-term rental housing through redevelopment and/or acquisition.

19. City Council direct the Executive Director, Housing Secretariat to establish a Community of Practice for the Multi-Unit Residential Acquisition program for Community Housing Providers and other interested organizations to help share best practices and to advise smaller organizations on responding to the annual Multi-Unit Residential Acquisition request for proposals. 

Intergovernmental Considerations

20. City Council request the Government of Canada and the Canada Mortgage and Housing Corporation (CMHC) to consider enhancing its grant and financing programs, including the Affordable Housing Fund, to support the City’s achievement of housing targets and make them more accessible by Community Housing Providers through:

a. Aligning program requirements with the Ontario Building Code requirements for energy efficiency and accessibility when Canada Mortgage and Housing Corporation has contributed less than other project partners.

b. Increasing the forgivable loan amount that non-profit organizations are eligible to receive based on the cost of repairs and renovations in the Toronto market.

c. Providing a direct funding allocation to municipalities to enable targeted outreach and support for Community Housing Providers with limited capacity who need help to repair, renew, and upgrade their existing portfolios.

21. City Council request the Government of Ontario to support the implementation of the Community Housing Strategy, which is also necessary to support delivery of the provincial More Homes Built Faster plan and the Community Housing Renewal Strategy targets, by:

a. allocating between $500 million and $800 million per year in grant funding to Toronto over the next seven years to develop new housing, including new community housing;

b. providing access to $6.5 billion to $8 billion in in low-cost financing/re-payable loans to Toronto over the next seven years;

c. allowing residents of community housing projects that are exempted from taxation for municipal and school purposes to be eligible for the Ontario Energy and Property Tax Credit component of the Ontario Trillium Benefit;

d. continuing to support improvements to the community housing stock to be in a better state of repair through programs such as the Canada-Ontario Community Housing Improvement Program;

e. enhancing funding commitments to sector support agencies such as the Ontario Non-Profit Housing Association and the Co-operative Housing Federation of Toronto to provide consulting services and support to Community Housing Providers to successfully transition to a new operating framework with the City of Toronto.

In Toronto, Community Housing (or non-market housing) refers to social and affordable housing that is owned and/or operated by non-profit housing organizations (including community land trusts), non-profit housing co-operatives ("Co-ops"), and Indigenous housing providers (collectively referred to as “Community Housing Providers”), along with the Toronto Community Housing Corporation (TCHC) and the Toronto Seniors Housing Corporation (TSHC). Community Housing is typically developed and operated with publicly funded capital contributions, and ongoing rental subsidies. Furthermore, it is a critical segment of the housing continuum and provides rental housing options for low-and-moderate-income households.

In addition to over 57,500 homes provided by Toronto Community Housing Corporation and Toronto Seniors Housing Corporation, there are currently over 200 Community Housing Providers in Toronto that operate over 40,000 subsidized Rent-Geared-To-Income (RGI) and affordable homes. About 75% of this stock was built prior to 1987 utilizing federal and provincial funding programs. Action from all orders of government is urgently needed to preserve and modernize these aging homes.

Recognizing the need to accelerate efforts to maintain the city’s Community Housing stock, in March 2023, through Item - 2023.EX3.1, “Housing Action Plan 2022-2026 ("HAP") and in November 2023, through Item - 2023.EX9.3 - “Generational Transformation of Toronto’s Housing System to Urgently Build More Affordable Homes”, City Council directed staff to report back on a strategy to modernize and grow the Community Housing sector, and provide additional support for Community Housing Providers.

The report responds to Council’s requests and recommends a new Community Housing Sector Modernization and Growth Strategy ("the Strategy") aimed at:

• protecting the city's existing Community Housing stock through preserving the assets as well as maintaining affordability;
• creating net new Community Housing that will support the City in achieving its target of approving 65,000 rent-controlled homes by 2030; and
• improving access to housing opportunities for low-and-moderate income households, particularly Indigenous residents and those from equity-deserving groups.

The proposed Strategy, included as Attachment 1, encompasses six key initiatives to achieve these objectives, including:

1. A New Regulatory and Funding Framework to Maintain Homes Operated by Community Housing Providers Under Part VII.1 of the Housing Services Act – The new regulatory framework will allow the City, as Service Manager, to secure partnerships that will continue to offer affordable and deeply affordable housing with Community Housing Providers operating under Part VII of the Housing Services Act whose mortgages are expiring.

2. A New Policy Framework to Guide Ground Lease Arrangements Between the City of Toronto and Community Housing Providers – A number of Community Housing Providers operate buildings on land leased from the City and need a lease extension, renewal or a new lease in order to continue to operate, or to refinance buildings and complete required upgrades/major repairs/modernization. The City is also focused on offering more of its land, through long-term leases to the Community Housing sector to scale up the delivery of non-market homes. A new policy framework is proposed in Attachment 2 to guide lease arrangements and ensure a consistent approach for both the City and Community Housing Providers as it relates to new leases, extensions and renewals.

3. Program Enhancements and Additional Financial Support to Acquire and Create New Community Housing – This report recommends changes to the Multi-Unit Residential Acquisition (MURA) program that would enable Community Housing Providers to use Multi-Unit Residential Acquisition funding to acquire a wider range of housing types, including larger buildings (those with greater than 60 units), smaller buildings (those with less than 6 units) such as multi-tenant homes, and condominium units.

4. Encouraging Development and Intensification Opportunities – The City will work with organizations who own land to identify opportunities to create new Community Housing. In addition, staff will continue to advance a number of changes to the Official Plan, zoning by-laws, and planning guidelines through the Housing Action Plan that would result in greater as-of-right development permissions, making it more predictable, simpler and quicker to add new housing supply.

5. An Expedited Development and Permitting Review Process for Community Housing Applications – This report recommends considering the establishment of a Community Housing Priority Stream to expedite development and permitting review and approvals of eligible Community Housing projects, and the utilization of all available tools to expedite zoning approvals.

6. Partnerships to Support Community Housing Sector Action to Build New and Modernize Existing Homes – Enhancing the development, asset management and governance capacity of Community Housing Providers will entail working with sector partners to develop resources and provide advisory services, and to explore opportunities for mergers, acquisitions and strategic partnerships between organizations to achieve economies of scale and/or to be able to leverage a larger asset pool for accessing capital required for new developments and repairs that will support longer-term growth and sustainability. The City will leverage its existing relationships within the sector and explore new partnerships and collaboration opportunities with organizations that can provide advisory services and support to Community Housing Providers.

The measures in this report are complemented by the “Launching the Rental Housing Supply Program” report that is to be considered by the Planning and Housing Committee at the same meeting on June 13, 2024. This complementary report recommends additional financial support for new Community Housing through a proposed three-year, Community Housing Pre-Development Fund Pilot. Through this proposed pilot, Community Housing Providers can apply for financial assistance to cover the cost of pre-development activities that are crucial in supporting new community housing projects.

The Strategy recommended in this report takes a comprehensive approach to sustain, modernize and grow the Community Housing sector in Toronto. It was informed by engagement with Community Housing Providers, the Housing Secretariat’s Tenant Advisory Committee, and key sector organizations such as the Ontario Non-Profit Housing Association (ONPHA), the Toronto Alliance to End Homelessness (TAEH), the Co-op Housing Federation of Toronto (CHFT), and United Way Greater Toronto (UWGT).

While the Strategy is focused on City-specific initiatives, immediate and complementary action is urgently needed from the federal and provincial governments. This includes new and enhanced investments to: grow the Community Housing sector; support low- and-moderate-income households to access and maintain their homes; improve access to supports and services; and build new affordable rental, co-operative and Rent-Geared-To-Income homes within complete communities.