Toronto City Staff Propose Bold Plan to Build 20,000 Rental Homes Amid Housing Crisis

TORONTO – City of Toronto staff are championing a major initiative to alleviate the city’s housing crisis, with a new report recommending strategies to deliver 20,000 rental homes over the coming years, including 16,000 purpose-built rentals and 4,000 affordable units. Through the report titled Build More Homes: Expanding Incentives for Purpose-Built Rental Housing, City staff aim to kick-start the first 7,000 rental homes using Toronto’s resources, signaling a commitment to long-term rental stability amid rising costs and demand.

Toronto has grappled with a lack of purpose-built rental housing since the early 1990s, a situation worsened by limited investment and rising inflation, interest rates, and construction costs, factors that have constrained new residential development. As the city’s population grows and homeownership remains out of reach for many, rental demand is surging, especially among middle- and low-income residents.

New Incentives to Activate Purpose-Built Rentals

The City’s new Purpose-built Rental Homes Incentive seeks to support the development of 20,000 rental units, including 4,000 affordable homes. The first phase, expected to begin this year, includes an immediate call for applications for 7,000 rental units, with incentives such as indefinite development charge deferrals and potential property tax reductions to encourage private developers to increase rental supply.

City of Toronto staff report aims to unlock 20,000 new rental homes, immediately kick-starting process to create 7,000 new rental homes

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— City of Toronto (@cityoftoronto) October 30, 2024

Qualifying projects will receive benefits including:

• Deferral of Development Charges: Estimated at $37,636 per rental unit.
• Property Tax Reductions: A recommended 15% tax reduction over 35 years, amounting to $20,396 per unit.
• Affordable Housing Support: Full financial incentives for affordable rentals, valued at approximately $97,264 per unit.

To secure these benefits, projects must dedicate at least 20% of units to affordable housing under Toronto’s income-based affordability standard, maintain rental status for up to 99 years, and start construction by 2026.

Toronto also proposes a new Multi-Residential Property Tax Subclass in the 2025 budget, providing a 15% tax reduction on eligible new rentals—a move designed to stimulate further rental development.

Urgent Need for Provincial and Federal Support

Acknowledging that Toronto cannot address the housing crisis alone, the report appeals to provincial and federal governments for essential funding. Recommendations include a $1 billion Build More Homes Rebate from Ontario to cover development charge exemptions and partial property tax relief, as well as $7.3 billion in low-cost federal financing to support the entire 20,000-unit project.

In addition, City staff propose a Canada-Ontario-Toronto Build program, with $225.3 million each in provincial and federal grants to help create 2,600 affordable rental units. Toronto is also looking to collaborate on broader housing goals, aiming for 285,000 housing starts by 2031.

Next Steps

The Build More Homes report is slated for review by the Executive Committee on November 5 and will proceed to City Council later in the month. As Toronto continues to innovate solutions to the housing crisis, the staff report underscores that strong intergovernmental partnerships remain crucial to delivering on affordable and sustainable housing goals for the city’s current and future residents.

For further details on the report and upcoming meetings, visit Toronto’s website at www.toronto.ca or follow updates on the City’s social channels.

SOURCE City of Toronto