housing now: a response to the toronto housing crisiscity of toronto, affordable housing office, 55...

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Housing Now: A Response to the Toronto Housing Crisis

Sean Gadon City of Toronto, Affordable Housing Office, 55 John Street, Toronto, Ontario, M5V 3C6

e-mail: [email protected]

Abstract The Housing Now Initiative is a new city-building approach to the disposition of City-owned lands. The Initiative, in its first phase, will utilize 11 City-owned sites to create mixed-income, mixed-use, transit oriented communities proving a range of housing opportunities for Toronto residents. The initiative is expected to create approximately 10,000 new residential units, a minimum two- thirds of which will be purpose-built rental housing with at least 50% of the rental units as affordable rental housing (approximately 3,700 units). Affordable rental units will be affordable to households with incomes between $22,000 and $55,000 a year. Through the Housing Now Initiative, the City will pilot a new Non-profit Housing Capacity fund to support the participation of non-profit organizations in developing and operating these new communities. This paper is written from a practitioner's perspective and explores the challenges and opportunities ahead as the City embarks on implementing the Initiative with a goal to initially create 10,000 new residential units ready for occupancy by 2024.

Keywords: Toronto, City Government, Affordable Housing, Public Land

Introduction

"In lots of ways what I'm calling for has to be an unambiguous leap: a straight-up call for a city organized for a very different kind of social milieu, rooted in an alternative vision of ethics and economic life. It is a vision that will require a certain amount of work, creativity, and antagonism, one that just won't accept neo-liberalism or global capitalism as de facto arbiters of who gets access to the good life. But it's up to us to contest and offer alternatives to the market as the allocator of land, housing, and resources in our society I think there are clear routes to a better future, lots of them existing, some latent, and parts we are just going to have to make up" (Hern, 2010).

In October 2018 the Ontario municipal elections in the City of Toronto featured a run-off between two candidates making bold promises to increase the supply of affordable rental housing. These promises were driven by increasing public concern regarding rising housing costs and low vacancy rates in the City. Incumbent Mayor John Tory promised to deliver 40,000 new affordable rental homes within 12 years – and his competitor Jennifer Keesmaat, the former City Chief Planner, promised 100,000 affordable homes within 10 years. From a civil servant's perspective, this provided an ideal opportunity to advance bold new ideas to achieve this goal. Not only had public commitments been made, but the political will would be there to deliver.

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2 Conference Proceedings: The Future of Affordable Housing, University of Calgary, November, 2019

Municipal governments, compared to other orders of government, do not have the same means to fund housing initiatives. Despite this, cities have been and continue to be leaders in innovation, by using their resources to create the right conditions for other governments to invest. This local leadership is often the catalyst for other governments to act. The Housing Now initiative is no different. To meet the public expectations on housing, the City created a program that takes the first step, the initial leadership, to create new affordable housing in Toronto. The City is using the tools at its disposal– specifically leveraging municipal surplus land at higher-order transit locations to create housing opportunities. This is the genesis behind Toronto’s Housing Now Initiative and its backbone, ultimate success will require investments from all governments. This paper provides a context for the Housing Now Initiative and outlines the progress made within the first 12 months in advancing four of the eleven properties. The paper also reviews the early challenges in delivering the Initiative.

Toronto Housing Market Conditions The Toronto housing market is brutally difficult for many low and moderate income residents to find and keep housing. While existing homeowners and investors have benefited from Toronto's inflationary housing market, many other residents have been left behind. The cost of housing for renters in Toronto had increased by 2016 to the point where 122,000 households reported to Statistics Canada that they were paying more than 50% of their income on the cost of shelter. Increasingly because of limited turn-over of residents and high costs both the private and social housing markets have left many low and moderate-income residents stuck and stressed in a housing system that offers little choice and much risk. This feeling or being stuck with little options, was reinforced through the City's recent consultations held on the development of a new 10-year housing plan. Many individuals expressed dissatisfaction at not being able to find and keep an affordable place to live. To provide an evidence base for the City’s new 10-year housing plan the City commissioned the Canadian Centre for Economic Analysis (CANCEA) and the Canadian Urban Institute (CUI) to conduct a Toronto Housing Market Analysis Study. The report tracked 24 key housing indicators including forecasts of housing conditions in 2030 and 2040. The key findings include:

• People are feeling stuck – Toronto's housing and homeless supports system is bursting at the seams - services and affordable housing programs are oversubscribed;

• There is a significant shortage of new purpose-built rental housing – there are new units but most are not affordable;

• The rental market is becoming more expensive and middle-income households are priced out of the ownership market – many young families are stuck and the number of empty nesters are growing, making it challenging for parents;

• The City has significant areas of population decline;

• Housing affordability is a key driver of homelessness – incomes are not at pace with the current market;

• Toronto's population will grow at a faster pace than in the last 10 years;

• The city's population will get older;

• Demand for long-term care will increase significantly;



• More people will live in low-income households;

• More people will be in core housing need;

• The social housing waitlist will continue to surpass the number of available units; and

• Demand for mental health and addiction supportive housing will grow faster than the population.

These findings are supported by the fact that there is a 1.1% vacancy rate for rental apartments; only 2% of new housing built or approved over the last 5 years is affordable; 80,000 new condominiums have opened in the last five years, compared to 4,500 purpose built rental homes; 23% of renter households pay more than 50% of their before-tax income on housing; and 38% of Toronto families earn less than $52,000 per year. The Toronto Housing Market Analysis confirmed what many already knew – the housing situation in Toronto is grim and will only get worse without bold action.

Housing Now Initiative Several days following Mayor Tory’s successful election in late October 2018 he announced that the City would activate public land for new affordable housing and requested City staff to report on making sites available for immediate development. This created a great opportunity for City staff to develop a program to address affordable housing but also develop mix-income transit-oriented communities. The approach was a distinct break from past business practices where the City’s disposition of surplus municipal land sought to achieve the highest financial return. Inevitably this approach to city building resulted in the development of market condominiums. The political will at this moment in time provided staff with the opportunity to respond to housing needs in Toronto in a creative way and with the clout of the Mayor's office to deliver. In December 2018 City staff reported to Council and presented a new set of non-market principles as part of a strategy focused on creating mixed income communities with a minimum of two-thirds of the housing to be purpose built market and affordable rental housing. The December report was followed in January 2019 with a staff report to Council setting out eleven surplus sites located at higher order transit stations. In January City Council approved proceeding with the Housing Now Initiative based on several key public outcomes to be achieved. These included:

• Sites to be activated to achieve the highest possible public benefits;

• A priority be provided to optimize the development of market and affordable rental housing with a mix of unit types and sizes;

• A requirement be included in the offering of the sites to create homes affordable for a diverse range of incomes including deeply affordable homes;

• Through the planning and development process, existing City and other operations and uses on the 11 sites be appropriately addressed and accommodated;

• Utilization of the surplus properties with a priority for the public retention of sites including long-term land leases; and



• A strong commitment to public consultation and engagement with City Councillors and local communities be included in planning and developing of each site.

In addition to the outcomes to be achieved the Housing Now Initiative included the pre-approval of the City’s suite of financial incentives to support the affordable rental housing. City Planning with the City’s Real Estate Agency and the City’s Housing Secretariat would advance the Official Plan and Zoning requirements prior to the marketing of the sites for development. City staff were also delegated the authority to award the sites to proponents. All of these and other measures were designed to create a high level of certainty in moving forward and delivering the planned mixed income and affordable housing outcomes. The City coordinated these actions based on years of input from the development and non-profit sectors indicating that approval process was too long; that re-zoning takes up time and resources and in many cases makes projects unviable if affordable housing is a goal. This interdivisional staff approach has been key in getting sites ready and providing development certainty for the groups that will be responsible for building the new communities.

Housing Now Delivering Affordable Rental Homes Through the Housing Now Initiative the City is leveraging the value of surplus municipal land, providing municipal financial incentives and by pre-zoning sites is providing a high level of certainty for the development community. These are real and tangible benefits that help support the business case for the overall development, including the new long-term affordable rental housing. Through the Housing Now Initiative the affordable rental homes are targeted to serve households earning between $21,000 and $52,000 per year who would pay no more than 30% of their income on their housing (Figure 1). These households represent residents who are key workers within the Toronto economy who are unable to find and keep affordable housing. In addition, some rental homes may be more deeply affordable through working with non-profit organizations who have access to rent-geared-to-income funding programs and/or though housing allowance programs. Figure 1. Housing Now, Affordable to whom?

Source: CreateTO, September 2019



Building Non-Profit Housing Capacity and Non-Profit Engagement In approving the Housing Now Initiative, Toronto City Council also requested staff give consideration to the involvement of non-profit housing organizations in the development and operation of the new affordable rental homes. To support this objective the City established a one million dollar non-profit capacity building fund. The fund is designed to support non-profit organizations who are bidding themselves, as part of a non-profit consortium or in partnership with a private sector developer. The involvement of non-profit housing organizations in the Housing Now Initiative has the potential to bring a number of positive benefits to the development and operational phases of the Housing Now sites. Non-profits have the experience in knowing what works in terms of physical design and building specifications. Non-profit organizations also have a wealth of expertise in the management and operation of housing, including with tenant groups with low-incomes, special needs and requiring support services. Non-profit housing organizations can also provide a "tenants first" perspective focusing on resident selection, maintaining a residents housing stability and improving the quality of life of residents. The delivery timeline for the Housing Now Properties is described in Figure 2 and described in detail below. Figure 2: Delivery Timeline for Housing Now Properties

Source: CreateTO, September 2019



Phase One – Activating Eleven Sites Phase One of the Housing Now Initiative identifies 11 surplus City properties located at higher-order public transit corridors (Figure 3). The properties identified in Figure 4 are the first properties identified for the Housing Now initiative. Additional properties for activation for new mixed income communities, including affordable housing, are anticipated in future years. The City prioritized four sites to be expedited through the planning approval and market offering process in 2019 with construction to start in 2020/2021. The additional seven sites are planned to come forward in 2020. Extensive public engagement also occurred during Phase One (Figures 4 and 5). Figure 3: 11 Housing Now Sites situated in the City of Toronto

Source: CreateTO, Summer 2019

Figure 4: Stakeholder Engagement / Community Consultation 50 Wilson




Figure 5: Stakeholder Engagement / Community Consultation 140 Merton Avenue


Case Studies – First Four Properties

140 Merton Street 140 Merton Street is located at the main intersection of Merton Avenue and Yonge Street. It is approximately 400 meters or seven minutes from a subway station, designated a mixed use area and currently zoned as office and industrial space. The opportunity at Merton Street opens the door to create 180 new seniors-oriented rental homes with a target of up to 100% of the units be affordable rental. The property will include community and social amenity space for building residents. The City is looking for a non-profit housing developer and provider and will retain the ownership of the property as this property will be leased long-term. (Figures 6 and 7). Figure 6: Site Plan for 140 Merton Street

Source: CreateTO, 2019



Figure 7: Landscape Plan for 140 Merton Street


705 Warden Avenue 705 Warden Avenue is situated at Warden Avenue and St. Clair Avenue East. It is approximately 200 meters from a subway station and is designated a mixed use and apartment neighbourhood area. The opportunity at 705 Warden Ave will create new rental supply, new community space, child care space and an expanded public park. This property will also be leased long-term. This property will open doors to 466 new rental units with 50% of the units being affordable rental. The goal is to have approximately 10-20% of the units in this building accessible. (Figures 8 and 9). Figure 8: Site Plan for 705 Warden Avenue




Figure 9: Landscape Plan for 705 Warden Avenue


777 Victoria Park 777 Victoria Park is located at the main intersection of Victoria Park Avenue ad Denton Avenue. It is the current commuter parking lot of Victoria Park station and owned by the Toronto Transit Commission. It is designated as a mixed use site. The new space of approximately 15,306 square feet will open the door create approximately 508 new rental units with 50% of those units being affordable rental. The City will lease this land through a long-term lease to a developer successful through the market offering phase. (Figures 10 and 11). Figure 10: Site Plan for 777 Victoria Park

Source, CreateTO, 2019



Figure 11: Landscape Plan for 777 Victoria Park


50 Wilson Heights 50 Wilson Heights is situated at the intersection of Wilson Avenue and Allen Road. It is designated as a mixed use area. The opportunity at this location will create both rental and ownership opportunities with the City retaining ownership of the lands to the rental component through a long-term lease. This property is expected to generate a total of 1,464 units with 488 being affordable rental units. (Figures 12 and 13). Figure: 12, Site Plan, 50 Wilson Heights




The Results of the Public Consultations In advancing the four selected Housing Now sites City Planning, the Housing Secretariat and CreateTO hosted eight local community consultation meetings in which more than 1,000 residents and housing stakeholders attended. At these meetings the public provided information on the Housing Now Program and specific details on each of the sites. While each site attracted specific comments there were some common themes expressed by the public at all of the meetings, which included:

• Strong support for the mixed income community concept and providing affordable rental housing;

• Support for the inclusion of community facilities and childcare as part of the overall development concept;

• Support for the inclusion of more and deeper affordable rental housing;

• Concerns were raised about the loss of affordable commuter parking at three of the sites;

• Concerns about whether the new developments were to be public housing and whether crime would increase and local property values would decline; and

• Concerns about the height of buildings and possible shadow impacts. The Housing Now Initiative also benefited from the emergence of a new public interest organization called HousingNowTO. This organization is a civic tech project focused on advancing and improving the affordable housing outcomes of the Housing Now Initiative. As a public advocacy group "…the goal of their volunteers has been to crowd-source knowledge from data analysts, urban planners, architects, and affordable housing operators to provide trust-worthy and accessible information about the "Housing Now" Program to the average Torontonian". The HousingNowTO group engages in public and media advocacy to raise awareness, increase the affordable rental housing outcomes, and speed up the overall approval process.

Challenges and Opportunities The Housing Now Initiative represents a new approach to City building and leveraging the value of surplus City properties. The activation of eleven sites is the first phase of a program intended to support the City's target of providing 40,000 new affordable rental homes between 2018 and 2030. Although the Housing Now Program is new there are some preliminary observations concerning challenges and opportunities. The challenges in Housing Now include:

• Managing public expectations on the speed and delivery of the Housing Now sites given that the development and completion of the new affordable housing is a multi-year process - yet the need for affordable housing is immediate.



• Recognizing the limitations of delivering long-term affordable housing rental and mixed income communities without upfront federal/provincial capital and operating funding – in essence there is a limit on how much affordable housing can be secured when leveraging the value of surplus municipal land and municipal financial incentives.

• Marshalling the necessary City staff resources and consultant teams to scale up the delivery the Housing Now sites – many of which have had alternative uses or been dormant for decades.

• Scaling up the Housing Now Initiative beyond City sites to achieve a 40,000 affordable rental housing target within 12 years.

• Shifting the focus of the building industry away from a condominium development business model to new model mixed-income model that addresses the need for purpose built rental affordable and market housing.

The opportunities of Housing Now include:

• Restoring public confidence in the role and power of government to use land-use planning and public programs to deliver urgent public benefits.

• Contributing to providing a range of City building goals such as creating new mixed income communities, providing new neighbourhood amenities such as childcare and community hubs.

• Supporting the City's purpose built private rental housing industry and non-profit housing sectors.

• Kick-starting new affordable and mixed income housing development with the expectations that the federal and provincial governments will participate through their respective programs.

• Providing long-term secure and affordable rental homes for low and moderate income households who are at the forefront of Toronto's housing crisis.

Reflections on Developing and Implementing a New Approach Municipal governments play different roles with respect to housing. Traditionally Planning departments direct where housing should be located through Official Plans and issue planning approvals; the Building department issues permits and inspects construction; the City administers federal and provincial housing infrastructure funds and programs; and so on. Working in different City divisions, it is often easy to function in silos and continue operating under the status quo. This need not be the case, while municipal resources are scarce, there are ways to break down silos and drive a housing agenda from inside municipal government. Housing Now was introduced in 2018 but its components are not new – the City has always disposed of land, planning approvals could be streamlined and fees waived. The opportunity presented itself to align these functions to address a housing crisis in the City. The Mayor and City Council shifted the priority from selling off City land for revenue to using it to build housing. It called for coordination and accountability to get results and created a new Housing Secretariat to ensure that the work got coordinated and was on track. While there have been some challenges along the way, this new coordinated approach that responds to the issues raised by developers and non-profit sector to expedite approvals and provide low-cost land, will address housing affordability challenges in Toronto.



Sometimes working in government it is easy to lose sight of the influence one can have in City building or community development. The Housing Now initiative is a reminder that when different divisions come together and coordinate work that big things can happen. In the case of Housing Now it happened faster with the political commitment of the Mayor and Council, but innovation and change also requires empowered civil servants who can champion bold new initiatives.

Conclusion The 2018 City of Toronto election highlighted the issue of affordable housing and resulted in affordable housing being a key priority of the newly elected Mayor and City Council. Toronto's Housing Now Initiative launched in December 2018 is a unique and innovative effort by the City of Toronto to leverage surplus municipal land to support the development of mixed income communities, including providing new affordable rental housing opportunities for ninety nine years. To paraphrase the words of John Hern quoted in the introduction to this paper, the Housing Now Initiative represents the offering of alternatives to the market as the allocator of land, housing and resources in our society and provides a clear route to a better future. As Toronto proceeds with the Housing Now Initiative and other measures to scale up toward a achieving a goal of 40,000 affordable rental homes the real measure of success will be in getting shovels in the ground, having new residents move in and ultimately producing thriving new healthy mixed income communities. Acknowledgements This paper has been prepared with input and assistance of Minha Hassim, Policy Development Officer, Housing Secretariat. Views expressed in this paper are those of the author. References

Canadian Centre for Economic Analysis and Canadian Urban Institute (2019). "Toronto Housing Market Analysis. City of Toronto, Retrieved from: https://www.toronto.ca/legdocs/mmis/2019/ph/bgrd/backgroundfile-124480.pdf

City Manager's Office (2019). Implementing the Housing Now Initiative, City of Toronto, Retrieved from:

https://www.toronto.ca/legdocs/mmis/2019/ex/bgrd/backgroundfile-123663.pdf CreateTO (2019). Housing Now Initiative. Retrieved from: https://createto.ca/housingnow/ Hern, Matt (2010). Common Ground in a Liquid City: Essays in Defence of an Urban Future Pagliaro, J. (2018). Mayoral Candidate Jennifer Keesmaat vows to create 100,000 affordable rental units.

Toronto Star. Retrieved from: https://www.thestar.com/news/toronto-election/2018/08/07/mayoral-candidate-jennifer-keesmaat-vows-to-create-100000-affordable-rental-units.html

Pagliaro, J. (2019). Mayor Tory's affordable housing plan moves forward with four projects across

Toronto. Toronto Star. Retrieved from:

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https://www.thestar.com/news/city_hall/2019/09/23/mayor-torys-affordable-housing-plan-moves-forward-with-four-projects-across-toronto.html

Richardson, M. (2019). 'Is John Tory's Housing Now plan crumbling?' Spacing. Retrieved from:

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http://spacing.ca/toronto/2019/10/02/is-john-torys-housing-now-plan-crumbling/

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