Item - 2025.EX21.13

The Executive Committee recommends that:

1. City Council direct the Executive Director, Development Review and the Executive Director, Housing Secretariat to:

a. undertake a review process of residential development applications in the City’s Development Review pipeline that:

i. are intended to be developed as Condominiums;

ii. include at least 5 percent - 10 percent of total residential units as affordable units; and

iii. have submitted a complete Site Plan Application by March 1, 2025; and

b. prioritize projects that include a higher percentage of affordable housing. 

2. City Council authorize the Deputy City Manager, Development and Growth Services, in consultation with the Chief Financial Officer and Treasurer, to approve up to 3,000 condominium units in the class of projects described in Part 1 above to benefit from:

a. deferral of development charge payments until the earlier of four years from the approval of the deferral, or Condominium approval, with the final payment date subject to the approval of the Deputy City Manager, Development and Growth Services, provided it is no later than Condominium approval;

b. waiving of interest on deferred development charge amounts; and

c. applying the development charge rates in effect as of June 6, 2024 for applications not subject to a lower frozen rate.

3. In the event that the above criterion generate a unit count above the 3,000 unit limit referenced in Part 2 above, City Council direct the Deputy City Manager, Development and Growth Services to prioritize projects first based on percentage of affordable housing and second on the development review application status reflecting projects that can be built faster.

4. City Council authorize the Executive Director, Housing Secretariat and any other member of staff of whom it is requested, to enter into a non-disclosure or similar agreements, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor, with the appropriate legal entities for the development projects identified in Part 1 above to allow relevant information to be provided to City staff.

5. City Council authorize the Deputy City Manager, Development and Growth Services, in consultation with the Chief Financial Officer and Treasurer, to enter into agreements, pursuant to Section 27 of the Development Charges Act, to defer the payment of development charges payable in relation to condominium units approved per Part 2 above provided building permits are issued for the project within two-years of approval for development charges deferral, and on such other terms and conditions as may be satisfactory to the Deputy City Manager, Development and Growth Services and in a form satisfactory to the City Solicitor.

6. City Council direct the Deputy City Manager, Development and Growth Services, and the Chief Financial Officer and Treasurer to report to City Council in second quarter of 2025 with the results.

Toronto is experiencing a continued housing supply slowdown as a result of high construction and financing costs, higher interest rates, and declining pre-construction sales and rents. Foreign trade risks and immigration changes add significant uncertainty to the growth outlook of housing supply. The slowdown in development activity could have a generational negative impact on Toronto's ability to accommodate the housing needs of current and future residents, and a potential permanent loss of development capacity if capital and labour are reallocated.

This slowdown is being experienced across the housing spectrum. Following the introduction of a new Purpose-Built Rental Supply Program in late 2024, this report is proposing measures to unlock and advance stalled multi-unit ownership housing projects that include at least 5%-10% affordable housing and are expected to start construction within the next two years. Subject to approval of this report, the City will provide deferral of the payment of development charges (DCs) for eligible multi-unit ownership units. The deferred DCs would then be payable, interest free and at June 2024 DC rates, four years following approval of the deferral or at the time of condominium approval, whichever occurs earlier.

Subject to adoption of this report, staff will undertake a review of projects already in the City’s development review pipeline to identify interested proponents with projects on private land that have submitted a Complete Site Plan Application as of March 1, 2025 and include at least 5%-10% of their units as affordable housing.

Based on a high-level preliminary review, staff estimate that there are at least approximately 14,000 units in the development review pipeline that will be developed as condominium buildings and that include an affordable housing component at various stages of development review status. Based on the City’s current financial capacity, up to 3,000 condominium units can be unlocked through these measures. Staff will report in Q2-2025 with the results of the implementation process.

In previous discussions with industry leaders, through Building Industry and Land Development (BILD), the City was asked to provide a full exemption of DCs for condominium units to unlock stalled developments. While this report does not recommend an exemption, the proposed measures aim to improve the financial viability of condominium housing projects by reducing upfront development and financing costs for developers, while considering the financial constraints of the City of Toronto and that these projects will contribute to the affordable housing supply and creation mixed-income communities in Toronto.

The City of Toronto hopes that municipal actions undertaken will be complemented by efforts by the provincial and federal governments to advance housing supply. For example, City Council has formally requested the Province amend the Development Charges Act to authorize municipalities to adjust or remove annual development charge indexing provisions without an amendment to the development charge by-law, with the objective of incentivizing housing development (Item CC27.2). This would allow the City of Toronto to have greater flexibility in responding to market conditions.

Recent trade developments between the United States (US) and Canada, notably US-initiated tariff disputes, have introduced new uncertainties which will have direct and indirect impacts on construction projects, and the overall economy. There is an opportunity to spur construction of ownership projects with an affordable housing component faster, so people can move into these new homes sooner. These actions will support Toronto and Canada’s efforts to ensure a more resilient economy, during the response to tariffs and beyond, while supporting local jobs and economic growth.