The federal government is open to giving Toronto money to help fund Mayor Olivia Chow’s plan to build 20,000 new rental units.
Last week, Chow unveiled a plan to provide tax cuts and fee waivers to developers that build purpose-built rental units.
The plan heavily relies on funding from other levels of government to compensate for municipal revenue that Toronto will forgo in order to get the housing construction off the ground.
The first phase, which is entirely funded by the city, could help build 7,000 units by deferring development charges and waiving property taxes.
The second phase, which aims to build the remaining 13,000 units, is contingent on getting as much as $8.3 billion from Queen’s Park and Ottawa.
Together, the two measures would take nearly $60,000 off the cost of building a new unit. They would also cost Toronto hundreds of millions in lost revenue, according to a city staff report.
The federal government is “willing to work with the city,” said Sofia Ouslis, spokesperson for federal Housing Minister Sean Fraser, in a statement to TorontoToday.
“We agree with the City of Toronto, that all levels of government must work together to solve the housing crisis, and we remain ready to partner with the Government of Ontario and municipalities to make much-needed investments in housing and critical infrastructure,” Ouslis said.
The money could be made available through the Canada Mortgage and Housing Corporation (CMHC) or the Canada Housing Infrastructure Fund, a new $6-billion program unveiled in the 2024 federal budget.
Chow asked the federal government to “immediately allocate” $7.3 billion over three years through CMHC to help prospective developers get low-cost financing at competitive rates.
She also asked Ottawa for an additional $225 million in grants to build and subsidize affordable rental units.
According to the city’s income-based definition of affordability, an affordable one-bedroom unit would cost $1,090 per month. A two-bedroom would cost $1,661 per month while a three-bedroom would cost $1,858 per month.
While the federal government was quick to offer signs of support, the Doug Ford government was more circumspect.
Chow’s plan says the city needs $1 billion from the provincial government to make up for lost revenues from cutting property taxes on the rental units.
Colin Blachar, a spokesperson for Ontario Finance Minister Peter Bethlenfalvy, said he was “pleased” to see the mayor’s proposal but he didn’t say whether Queen’s Park would come forward with the requested $1 billion.
“While the proposal will continue to be reviewed by Toronto's own executive committee next week, and from all members of council next month, Ontario encourages all municipalities to continue finding ways to reduce local costs and burdensome red tape that slows down the construction of much-needed housing,” he said.
One of the biggest construction lobby groups in the province questioned whether the city’s funding requests would ever come through.
“With considerable financial requests already on the table to these senior levels of government, it is tenuous to say the least that this funding will ever be realized,” said Richard Lyall, president of the Residential Construction Council of Ontario, in a letter to the city.
Chow’s proposal goes before the city’s executive committee on Tuesday. If and when it passes, it would be considered by the full council for approval later in the year. If council gives it the go-ahead, the city will immediately launch a call for applications for the project’s first phase.
