Creating New Affordable Housing Opportunities through Phase Two of the Housing Now Initiative

Work is well underway to advance Phase One of the Housing Now Initiative. This report recommends Council's approval of six additional sites (outlined in Appendix I) to the Housing Now Initiative. The additional six sites (the "Phase Two Sites") are estimated to add between 1,455 and 1,710 new residential units to the program, including approximately 1,060 to 1,240 purpose-built rental units with approximately 530 to 620 being affordable rental units. In addition, the report recommends Council's approval of an estimated $47,652,480 in Open Door incentives to support the delivery of up to 620 homes. Expanding the Housing Now Initiative recommended in this report will complement other City initiatives to increase the supply of permanent affordable housing for low-and-moderate income residents. It will also contribute toward the City's target of approving 40,000 affordable rental units, including 18,000 supportive housing units, over the next 10 years as outlined in the HousingTO 2020-2030 Action Plan. Increasing the supply of permanent affordable rental housing is of particular significance at this time due to the COVID-19 pandemic. The pandemic has quickly highlighted that access to a safe, secure and affordable home is essential to a person's health and well-being, and the overall well-being of our society. Increasing affordable housing opportunities for residents will also make a profound contribution towards our socio-economic recovery from the pandemic. Specifically, investments in residential construction deliver one of the largest economic multiplier effects, with a total of 10 jobs created (including five direct and five additional indirect and induced jobs) for each one million dollars invested in housing[1]. Expanding programs such as Housing Now will help get people back to work, while creating a range of much-needed housing. Investments in permanent housing would also significantly reduce costs to the health care, emergency shelter and justice systems. Implementation of the Housing Now Initiative and the larger HousingTO 2020-2030 Action Plan will require a strong partnership among all orders of government. Increased investments in permanent affordable housing and a quick deployment of resources are necessary to recover from the pandemic and build our resilience as a city, region and country. Additionally, support and participation from the non-profit and private sectors will be essential to help deliver these outcomes.

2. City Council authorize the Deputy City Manager, Corporate Services, where it is determined such action is appropriate to achieve the objectives of the Housing Now Initiative, to declare all or portions of each of the Phase Two Sites surplus, and to amend any prior declaration(s) of surplus, subject to the retention of those areas and interests as have been determined critical to the operational requirements of a division or agency. 3. City Council amend the existing delegated approvals and signing authorities in Item EX27.12, City-Wide Real Estate - Delegated Authorities Framework and Transition Plan, adopted by City Council on October 2, 3 and 4, 2017, to authorize the Deputy City Manager, Corporate Services and Chief Financial Officer and Treasurer to approve any lease, transfer and other property transactions involving these Phase Two Sites for the purpose of achieving the City's affordable housing objectives notwithstanding that the related compensation may exceed $5 Million Dollars, and authorize the Deputy City Manager, Corporate Services and Chief Financial Officer and Treasurer to treat the estimated value of the rental savings that will be realized by tenants of the affordable housing units as compensation received by the City when assessing whether a proposed transaction reflects market value, provided that the Executive Director, Housing Secretariat, and the Board of CreateTO or the Board of Directors of the relevant CreateTO corporate entity concur with the proposed transaction terms. 4. City Council waive the restrictions of Section 2.4(a) of the shareholder direction of Build Toronto Inc., controlled by the Board of CreateTO, solely for transactions relating to the Phase Two Sites on terms and conditions satisfactory to the City Manager and in a form approved by the City Solicitor, and allow for donations or similar contributions to any charity or charitable organization, or to a non-profit organization for the purpose of facilitating the provision of affordable housing units at the Phase Two Sites where determined appropriate by the CreateTO Board of Directors, in consultation with the Deputy City Manager, Corporate Services and the Executive Director, Housing Secretariat. 5. City Council authorize the Deputy City Manager, Corporate Services, to approve the transfer of title to any of the Phase Two Sites, or a portion thereof to corporate entities controlled by the Board of CreateTO at nominal consideration where permitted by law, and where the Deputy City Manager, Corporate Services, the Executive Director, Housing Secretariat and the Chief Executive Officer, CreateTO have agreed upon the terms of transfer that will be reflected in a Transfer Agreement between the City and the corporate entity controlled by the CreateTO Board. Planning Process 6. City Council request the Chief Planner and Executive Director, City Planning, to: a. provide key planning principles and guidelines for each of the Phase Two Sites to be included as part of the public market offering process; b. expeditiously advance Official Plan Amendments and Zoning By-law Amendments and plans of subdivision required to prepare the properties for marketing and ensure a range of housing opportunities within each of the Phase Two Sites; and c. support the Housing Now Initiative by implementing an expedited review process and setting timelines for the completion of review of the related development applications submitted by the selected developers of each site. Affordable Housing Program 7. City Council approve an overall development target across the Phase Two Sites including a minimum of one-third affordable rental units (with average rents not to exceed 80% of annual Canada Mortgage and Housing Corporation average market rent), a minimum of one-third market rental housing, and a maximum of one-third ownership homes. 8. City Council direct the Deputy City Manager, Community and Social Services and the Deputy City Manager, Corporate Services in consultation with the Executive Director, Housing Secretariat and the Chief Executive Officer, CreateTO, to report to the June 15, 2020, meeting of the Planning and Housing Committee on measures to limit annual rent increases on market rental units in all Housing Now Initiative sites, and, as part of the annual Housing Now Initiative Update report, on any proposed changes to the current accessibility standards under the program. 9. City Council exempt the up to 620 affordable rental homes anticipated to be developed throughout the Phase Two Sites, from taxation for municipal and school purposes for the term of the municipal housing facility agreement, with the property tax exemption having an estimated net present value of approximately $18,093,019 over 99 years. 10. City Council authorize the Executive Director, Housing Secretariat to offer the Open Door incentives for affordable rental housing, for the term of affordability, and to exempt the affordable rental housing, including any applicable ancillary and related, parking amenity space on the Phase Two Sites from the payment of development charges and provide a waiver of all planning and building permit fees and parkland dedication fees. 11. City Council authorize the Executive Director, Housing Secretariat, to negotiate and enter into, on behalf of the City, municipal housing facility agreements (the City's Contribution Agreement) with the developers chosen for each of the Phase Two Sites, on terms and conditions satisfactory to the Executive Director, Housing Secretariat, and in a form approved by the City Solicitor. 12. City Council authorize severally each of the Executive Director, Housing Secretariat and the General Manager, Shelter, Support and Housing Administration to execute, on behalf of the City, any security or financing documents required by the developers of the Phase Two Sites to secure construction and conventional financing and subsequent refinancing, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the municipal housing facility agreement, as required by normal business practices, and provided that such documents do not give rise to financial obligations on the part of the City that have not been previously approved by Council. 13. City Council authorize the Deputy City Manager, Corporate Services, in consultation with the Deputy City Manager, Community and Social Services, to provide any consent necessary to transfer or encumber the Phase Two Sites or the affordable rental housing portion thereof, and to negotiate and enter into any agreements or other documents required to effect any future transfer or assignment of any of the Phase Two Sites or the affordable rental housing portion thereof, and the associated legal agreements with the City to another legal entity, on terms and conditions satisfactory to them and in a form approved by the City Solicitor. 14. City Council authorize City staff to cancel or refund any taxes paid after the effective date of the municipal housing facility agreement. Funding and Budget Considerations 15. City Council direct the Deputy City Manager, Community and Social Services and the Deputy City Manager, Corporate Services in consultation with the Executive Director, Housing Secretariat and the Chief Executive Officer, CreateTO, to report to the June 15, 2020, meeting of the Planning and Housing Committee, as part of the annual Housing Now Initiative Update report, on any funding required to activate the Phase Two Sites. 16. City Council direct the Chief Financial Officer and Treasurer to transfer any proceeds from the sale or lease of any of the Phase One properties identified in Appendix 3 of report EX1.1 (January 11, 2019) and the additional Phase Two Sites to the Capital Revolving Reserve Fund for Affordable Housing (XR1058) to be administered by the Executive Director, Housing Secretariat, in consultation with the Chief Financial Officer and Treasurer, the Deputy City Manager, Community & Social Services and the Deputy City Manager, Corporate Services, and be used to offset costs directly related to implementing the Housing Now Initiative including: preparing the properties for marketing including undertaking necessary environmental studies and remediation, market analyses, planning and other consultant studies; legal costs; overhead and administration costs; relocation costs; costs of on-site City programming requirements; costs of required on- or off-site infrastructure upgrades or improvements; funding shortfalls, etc. 17. City Council direct the Deputy City Manager, Community and Social Services to compensate CreateTO for provision by CreateTO of the services referred to in Recommendation 16, with payment to be made on a cost-recovery basis from the Capital Revolving Reserve Fund for Affordable Housing, utilizing the proceeds from the sale or lease of any of the Phase One properties. Market Offering Process 18. City Council direct the utilization of the Phase Two Sites identified in Appendix 1 for the Housing Now Initiative through a market offering process with a priority of retaining public ownership through long-term land leases. 19. City Council direct the Deputy City Manager, Corporate Services, Deputy City Manager, Community and Social Services and the Chief Financial Officer and Treasurer to approve the business case and marketing offering process for each property provided that the Executive Director, Housing Secretariat and the CreateTO Board of Directors or the Board of Directors of the relevant CreateTO corporate entity, concur with the proposed business case and market offering process. 20. City Council direct the Chief Executive Officer, CreateTO, in consultation with the Executive Director, Housing Secretariat to administer the market offering process for the Phase Two Sites and utilize its existing pre-qualified Broker roster to expedite marketing, where required, and to negotiate the leases, purchase agreements and other contracts with the successful development partners, other than the municipal housing facility agreements in Recommendation 11 above, and subject to the approvals required in Recommendation 19 above. 21. City Council direct the Executive Director, Housing Secretariat, in consultation with the Chief Executive Officer, CreateTO, to administer the market offering process for sites designated exclusively for non-profit participation, and to negotiate the leases, purchase agreements and other contracts with the successful non-profit development partners. 22. City Council request the Executive Director, Housing Secretariat to work with the Chief Executive Officer, CreateTO, Deputy City Manager, Corporate Services and Chief Financial Officer and Treasurer in overseeing the market offering process related to the Phase Two Sites including the selection of preferred proponents, and the co-ordination of government funding and financing incentives to ensure that the affordable housing projects are financially viable. 23. Council request the Executive Director, Housing Secretariat and the Chief Executive Officer, CreateTO to encourage the involvement and participation of non-profit and co-operative housing organizations in the market offering process for the Phase Two Sites, and provide greater consideration to submissions that exceed the affordable rental and market rental housing delivery targets and increase supportive housing opportunities. 24. Council request the Executive Director, Housing Secretariat and the Chief Executive Officer, CreateTO in consultation with the Executive Director, Social Development, Finance and Administration to incorporate, in the market offering process measureable community benefits opportunities, such as social procurement and apprenticeship, training, and/or other hiring opportunities for people from equity-seeking communities. Other Considerations 25. City Council authorize the Deputy City Manager, Community and Social Services to request the Federal Government, through the Canada Mortgage and Housing Corporation, to: a. approve a portfolio approach to the funding and financing of the Phase Two Sites identified in Appendix 1 to this report; and b. consider the City's previous requests for the federal government to dedicate surplus lands in Toronto to be utilized for increasing the supply of affordable and purpose-built rental housing. 26. City Council authorize the Deputy City Manager, Community and Social Services to request the Ontario Government to support the creation of supportive housing opportunities as part of the Housing Now Initiative by providing assistance to individuals with housing and support needs through the provision of operating, and to identify surplus lands within Toronto be utilized to create new mixed-income communities, with new affordable rental homes, including supportive housing opportunities.