‘All we need is you,’ Toronto mayor tells builders as housing starts slow

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uli chow

Michael Lewis

Special to Ontario Construction News

Toronto Mayor Olivia Chow says the city has funding in place, has slashed construction permit approval times and is developing housing on a scale not seen in decades. But “we can’t do it alone.

“All we need now is you, the builder,” she said at a recent housing forum whose audience included executives from the residential construction industry.

She said municipal staff have identified an initial 52 public sites in Toronto that could be developed for mixed income housing but the city “does not lay the bricks. We are going to partner, so I need you to step up, folks in this room, because we are ready to build the kind of housing the city really needs.”

uli chowMayor Chow said she is in talks with Ontario housing minister Paul Calandra about amending zoning rules to allow high density high rise residential projects along the transit corridors the province’s transit agency is building in the city’s “yellow belt” — where development is currently restricted to a single dwelling per lot  or to low rise multi-unit housing.

But she said the city will only approve intensification if the development includes rent geared to income or subsidized housing, with rents typically capped at 30 per cent of a household’s month income. City data shows that as of 2023 more than 85,000 applicants were on the waiting list for RGI housing in Toronto.

If the province agrees, then developers must be willing to forego rental revenue in exchange for the right to build greater density faster.
“The city can approve those densities but I want to make sure there is inclusionary zoning along the lines,” the mayor said during her remarks at the New Housing Playbook event at First Canadian Place on Feb. 15.

uli chowThe event was presented by the Urban Land Institute Toronto in partnership with the University of Toronto’s School of Cities.

“Some of it also needs to be affordable so we need [builders] to say that inclusionary zoning is ok,” the mayor said. “As long as the financials work, we can get everyone in. As long as your return is good why fear it?”

But getting the financials to work can be a challenge.

In Montreal, for example, the so-called 20-20-20 bylaw that requires real estate developers to construct social, affordable housing in the city has driven housing development to north and south shore communities, said Scott Figler, national research director at real estate services firm JLL.

He called the shift out of the city “an unintended consequence of inclusionary zoning.”

Cole Starkman of the Schulich School of Business said affordable housing needs to be promoted in a positive way to developers “so it’s not coming directly out of their pockets … so they’re not reluctant to build.”

“We as developers are struggling to burden the 70, 80, 90 per cent of the market with the burden associated with the additional cost to deliver affordable housing,” added a developer in a question session at the forum, suggesting that allowing more floors is not enough.

While he said the industry has not been building enough affordable housing in Toronto, such housing on its own is only going to be delivered in limited quantities. “You need to think of a market solution as well as an affordable solution.”

“I agree completely,” Chow responded, adding that the city can offer financial incentives including the suspension of property taxes and other levies. She said Toronto has removed up to 200 days from the building approval process and is allowing greater density, potentially adding to a builders’ bottom line.

“More density and less waiting mean more money,” she said. “We can fast track. It has worked before. I’ve done that kind of deal,” said the mayor who previously served as a downtown Toronto city councillor.

She also acknowledged that most developments need to be comprised mostly of market rate units with a smaller percentage of RGI housing mixed in, otherwise builders won’t be able to obtain financing.

Still, Mayor Chow said the existing model of private developers allocating affordable units hasn’t produced the needed affordable housing.

“It hasn’t happened. For 30 years the private sector has been building homes in Toronto — lots and lots of housing — but not necessarily affordable.”

One example of a builder that says it is embracing the mayor’s vision for a greater supply of different types of housing is Canada’s largest residential builder Mattamy Homes, whose name has not always been synonymous with housing in Toronto.

“That’s about to change,” said Niall Haggart, the company’s GTA urban division president who is responsible for expanding Mattamy’s mid rise and high rise presence in the region.

He said Mattamy, among forum sponsors, is developing 5,000 high-rise units all near transit centres in Toronto with another 5,000 planned on future lands. “We are in a moment of consensus,” he said while introducing Mayor Chow at the event.

“We must come together as partners, industry, all levels of government.”

Toronto, meanwhile, has received $114 million from Ontario’s Building Faster fund as a reward for exceeding the 2023 building target set by the province, with 31,656 starts including 794 conversions to units such as basement suites.

Mayor Chow said the city is considering providing repayable financing to homeowners to retrofit basement rental units and construct laneway suites and other forms of added rental accommodations.

The mayor also noted that she meets every two weeks with Toronto Community Housing Corp. CEO Jag Sharma to review a dashboard charting progress of housing starts in the city.

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