Affordable Housing Incentives Encourage Development, But Still Fall Short

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Affordable Housing Incentives Encourage Development, But Still Fall Short

The City hopes to support more affordable housing with its Open Door program.

from https://www.flickr.com/photos/cityoftoronto/

Regent Park. Photo courtesy of The City of Toronto/Flickr

With a dearth of affordable housing options in the city, municipal administrators have long known they need to do more to ensure that Toronto residents can actually afford to be Toronto residents. In 2009, City Council adopted Housing Opportunities Toronto—An Affordable Housing Action Plan 2010-2020 [PDF]. The ambitious plan called for the creation of 10,000 new affordable rental homes and 2,800 affordable ownership homes. The City has since fallen short of yearly targets several times and looks like to fall far short of its final targets as well.

When the City falls behind on its affordable housing policies, there are serious consequences for thousands of Torontonians. Around 88,000 households are on the waitlist for affordable housing right now, and with rents and property values only going up each year, that number is likely to continue growing.

The City felt it needed to encourage developers to create more affordable housing, and so the Open Door Program was launched in April 2015 to help address the policy challenge. The three “prongs” of the program, according to Erik Hunter, manager of policy and partnerships with Toronto’s Affordable Housing Office, are:

    • Making city lands available for development;
    • Fast-tracking the planning and approval process for developers creating affordable housing;
    • “increasing the city’s supports and streamlining access to them for affordable housing developers.”

The program includes municipal tax breaks and breaks on fees to developers, which developers can take advantage of for as long as they agree to keep some units affordable (the minimum is 20 years).

It’s a pretty sweet deal for developers, who are already enjoying the benefits of a real-estate market that’s so red-hot it’s been the subject of repeated warnings, but that hasn’t yet driven people into cheaper nearby cities en masse. Of course, the City can’t force developers to build anything they don’t want to build. An inclusionary zoning bill is before the Ontario legislature; if passed, it could allow cities to require that affordable housing units be included in new developments, but for now cities are restricted in what they can tell developers. Toronto Community Housing is dealing with a $3.6 billion repair backlog that has people already in social housing living in sometimes unsafe conditions; thousands of units could be condemned within the next few years if additional funding isn’t secured.

When asked why the City chose to open up a Railway Lands property owned by TCH to private and non-profit developers rather than creating new public housing it would own and control, Hunter said, “It’s not the best way to put it, but we’re in a hurry to get some affordable housing built in the city.”

“The stars are aligning” for affordable housing, according to Hunter, from the three levels of government agreeing on the urgency of the situation to a “market appetite” encouraged by the city’s incentives.

While the Open Door Program is still being rolled out (an online application form is expected to be available early in the new year), it has been in place for over a year. So what progress has been made?

A total of 511 new homes have been approved under the program: 262 rental units and 249 ownership homes. They’re in seven spots throughout the city; the Railway Lands property will host 80 rental units. That’s barely more than a third of the year’s goal for rental and ownership units under the HOT action plan, though it’s an improvement on last year’s figures. Just 48 rental units were approved in 2015, and 66 ownership units.

If developments are approved at this speed over the coming years, the Open Door Program could bring the City much closer to meeting its HOT goal of creating 12,800 affordable housing spaces between 2010 and 2020. Of course, that would still leave almost 80,000 households on the waiting list for a home they can afford.

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