When Prime Minister Mark Carney announced Wednesday that his government is providing $2.7 billion in funding to build more rental housing in Toronto, his emphasis was mainly on the benefits for residents. But concern is growing that roughly two-thirds of the money is going to loans for private developers.
Bruno Dobrusin, co-chair of the Toronto Tenant Union, calls this “highly problematic.”
“I think it’s part of a continuing bailout that the developers are getting,” in addition to the HST rebate on new homes and development charges relief, he said.
Carney, speaking at a co-op housing site Wednesday with Toronto Mayor Olivia Chow, pledged $319 million for nine projects to be delivered through the new Build Canada Homes federal agency, for a total of nearly 1,900 homes on city land. More than 700 will be affordable (meaning the rent will be less than 30 per cent of the before-tax income for residents).
The rest of the money is going to private developers, with $1.8 billion being made available via the Canada Mortgage and Housing Corp.’s Apartment Construction Loan Program. That money has already been allocated for nine projects across the city, from Scarborough to Weston, that will include more than 3,700 rental homes.
While the nine projects will include some affordable housing, many of the homes will be new market rental units, so Ontario’s rent control regulations will not apply.
“We’re going to be having these fancy new units that people cannot afford,” said Dobrusin.
CMHC says money will boost rental housing
Canada Mortgage and Housing Corp. (CMHC), which will administer the loan program, says that even though much of the money will go to private developers, it will still provide much-needed new rental housing for the city.
The loan program “provides fully repayable low-interest loans to encourage the construction of more rental housing for Canadians in under-supplied housing markets,” said CMHC spokesperson David Harris in an email.
“It plays a crucial role in filling Canada’s housing supply shortage by providing homebuilders with the necessary low-cost financing to support faster construction of more rental supply across the country.”
Asked how much of the funding is new, he said that “while some of the properties were mentioned in previous City of Toronto news releases, yesterday’s announcement provided new funding details for all nine projects.”
The program provides lower-cost, fixed-rate loans for a 10- or 20-year term, he added, with a fixed interest rate during the riskiest periods of development. He would not comment on the interest rates, citing confidentiality, but said they’re typically lower than alternative financing available in the market.
Homebuilders can qualify for an amortization period of up to 50 years, Harris added.
Scott Aitchison, the federal Conservative shadow minister for housing, criticized the program, saying it is made up of “disproportionately smaller rental apartments,” in an emailed statement.
The MP added that these are “not the single-family homes young Canadians aspire to own.”
Dobrusin is calling on the federal government to impose requirements for getting the housing cash, such as rent control in all units. He also wants the government to state what the rents will be up front.
“If the rents are going to be $2,000, $2,500 or higher than that, that is not going to be affordable for most working-class people in the city,” Dobrusin said.
Harris of CMHC said seven of the nine projects announced Wednesday qualified under the City of Toronto’s Rental Housing Supply Program.
He added that all of the projects were “prioritized and selected based on market need and proposed affordability and social outcomes.”
The new Toronto housing projects
Counted in the $2.7 billion total is “up to” $600 million in additional Apartment Construction Loan Program financing for future Toronto projects that meet the requirements, according to an online background document from the government.
The list of projects includes two that were originally marketed as condos.
All of the new projects, according to the government’s website, will include some affordable and some market rent units, except for one at 1552 Weston Rd. where all of the units will be affordable, and 20 per cent deeply affordable.
One project, at 55-75 Brownlow Ave., contains plans for 121 replacement units for an existing older apartment building.
Another project will involve a parcel of land owned by the United Church of Canada, with about 30 per cent of the units affordable.
Nichola Taylor, who sits on the national board of tenant advocacy group ACORN, told the Star the money for private developers was “worrying.”
ACORN is calling for all federal funding for housing to include rent control, and bans on bad faith evictions.
The announcement was heralded by builders.
Building Industry and Land Development Association (BILD) CEO and president Dave Wilkes told the Star on Wednesday that his organization applauds the move.
“We believe it will address affordability, create jobs and create economic activity.”
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