Advancing Partnerships with the Community Housing Sector to Build More Affordable and Supportive Homes

A whole of government and whole of community approach has been successful in restarting growth in the supportive housing system in Toronto, even as the broader housing market faces ongoing challenges from high construction costs, supply chain instability, and trade disruptions. However, in comparison to the City's target of approving 18,000 supportive homes by 2030, the progress is lagging. Through the City's continued advocacy, federal and provincial governments have both made recent investments in supportive housing in Toronto. Build Canada Homes (BCH), the new federal entity responsible for affordable housing, announced an investment of $21.6 million in funding for the construction of 54 supportive homes in partnership with the City and University Health Network (UHN) in South Parkdale. Additionally, the Province of Ontario has committed $2.6 million annually in operating funding for support services for this project. This report requests City Council approval to provide City financial support to complement federal and provincial investments, and to enter into required lease and development-related agreements to advance this project to construction start in 2026. While the City welcomes these investments, the scale of need for a range of affordable and supportive homes continues to outpace what the City can do on its own. Federally, additional capital grant funding will be required to build on the initial $1 billion announced through BCH to make meaningful progress on building more supportive homes. Growth in supportive housing will also be limited in the absence of sustainable operating funding from the province for wrap around support services. While the announcement of operating funding for Dunn House Phase 2 is welcome, the City has a further outstanding request for approximately $16 million beginning in 2026, growing to $23 million in 2027, for over 700 supportive homes under construction and projected to open in the next 24 months. Without dedicated long-term operating funding from the Province, the City will not be able to advance additional supportive housing projects. Increasing the community housing sector's share of the housing stock is a key component of building a more equitable housing system for current and future generations. Through the Toronto Builds Policy Framework, City Council has set an objective of prioritizing partnerships with community housing providers in the development and/or operations of new affordable and supportive homes built on public land. This goal is now shared with BCH, which has an objective of building the non-market housing sector's capacity nationally. Advancing this work requires a more efficient and streamlined approach to how the City partners with the community housing sector to develop and/or operate affordable or supportive homes. This report seeks required authorities to establish a pre-qualified list of non-profit and Indigenous housing providers to work with the City on advancing affordable and supportive housing projects. This will complement other City investments in growing the community housing sector, such as the Community Housing Pre-development Fund, launching its second call for applications in Q1 2026. Continued advocacy and action to build more supportive homes will be informed by learnings from previous supportive housing projects, as well as the results of a supportive housing evaluation which is currently underway. This report provides an preliminary summary of findings arising from this evaluation. The evaluation stresses an urgent need for leadership and long-term investment from all orders of governments in housing, health and social support services to enable the City, and its community housing partners, to strengthen and grow supportive housing in Toronto.

2. City Council acknowledge the Government of Ontario's announcement of $2.6 million in operating funding for support services at Dunn House 2, and re-iterate its request that the Government of Ontario maintain its previous commitment to partner with the City of Toronto to create new supportive homes for people experiencing or at risk of homelessness, by: a. Providing sufficient operating funding for any net new supportive homes, including those funded by Build Canada Homes and any other capital sources; b. Providing an additional investment of $16 million in 2026, and $23 million in 2027 and annually thereafter for housing benefits and support services for over 700 new supportive homes funded and under construction; and c. Maintaining existing investments through the Homelessness Prevention Program to ensure ongoing stability of housing and supports in occupied supportive homes. 3. City Council authorize the Deputy City Manager, Corporate Services to approve any amendments or additional terms required to finalize the long-term nominal lease with University Health Network for the residential properties as described and authorized in Part 5 of City Council's decision on Item PH35.21 in the report dated June 23, 2022 from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, for the purpose of the operation and/or redevelopment of a range of housing including affordable and supportive housing, as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Development Office and Executive Director, Housing Secretariat and in a form satisfactory to the City Solicitor. 4. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Executive Director, Housing Development Office, to select a qualified non-profit housing provider(s) (on either a competitive or non-competitive basis, as determined by the Executive Director, Housing Secretariat) to sub-lease and operate the supportive homes at Dunn House 2, and the affordable homes at the UHN-owned sites referenced in Recommendation 3 above. 5. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Executive Director, Housing Development Office, to negotiate and execute, on behalf of the City, a municipal capital facility agreement(s) (the "Contribution Agreement"), with the non-profit housing provider(s) selected under Recommendation 4 above, for funding and financial incentives and to set out the terms of the operation of affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form satisfactory to the City Solicitor. 6. City Council authorize the Executive Director, Corporate Real Estate Management to enter into a sub-lease(s) with the non-profit housing provider(s) selected under Recommendation 4 above, substantially on the major terms and conditions set out in Attachment 1 to the report (February 11, 2026) from the Executive Director, Housing Secretariat and Executive Director, Housing Development Office and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat and Executive Director, Housing Development Office and in a form satisfactory to the City Solicitor. 7. City Council authorize the Executive Director, Housing Secretariat, or their designate, in consultation with Executive Director, Housing Development Office, to execute, on behalf of the City, any security or financing documents required by the proponent(s) selected under Recommendation 4, as applicable, to secure conventional financing and subsequent refinancing, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the Contribution 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 City Council. 8. City Council authorize the Executive Director, Corporate Real Estate Management and/or the Deputy City Manager, Corporate Services, to execute the agreements relating to nominal lease transactions referenced in Recommendations 3 and 6 above, and any ancillary agreements and documents on behalf of the City of Toronto. 9. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat and Executive Director, Housing Development Office, to negotiate, approve and execute, on behalf of the City, a nominal lease with Homes First Society or a related entity at 805 Wellington Street West - Building A, substantially on the major terms and conditions set out in Attachment 1 to the report (February 11, 2026) from the Executive Director, Housing Secretariat and the Executive Director, Housing Development Office, and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat and Executive Director, Housing Development Office, and in a form satisfactory to the City Solicitor. 10. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Executive Director, Housing Development Office, to negotiate and execute on behalf of the City, a Contribution Agreement with Homes First Society or a related entity for 805 Wellington Street West - Building A, to set out the terms of the operation of the new affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor. 11. City Council authorize the Executive Director, Housing Secretariat, or their designate, in consultation with Executive Director, Housing Development Office, to execute, on behalf of the City, any security or financing documents required by the Homes First Society to secure conventional financing for 805 Wellington Street West - Building A and subsequent refinancing, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the Contribution 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 City Council. Expanding Partnerships with the Community Housing Sector 12. City Council authorize the Executive Director, Housing Secretariat and the Executive Director, Housing Development Office, jointly and severally, to undertake one or more competitive prequalification processes to select Indigenous or non-profit housing organizations ("Non-Profit Delivery Partners") to be pre-qualified for opportunities to develop, finance and/or operate rent-controlled, affordable, rent-geared-to-income, and/or supportive homes on City-owned and/or City-leased land ("Affordable Housing Projects") through a second-stage request for proposals process ("Second-Stage RFP"), and to: a. establish and maintain one or more pre-qualified list(s) of Non-Profit Delivery Partners (the "Pre-qualified List") through the prequalification process and add and remove Non-Profit Delivery Partners from the Pre-Qualified List from time to time in accordance with the prequalification process; and b. enter into, on behalf of the City, framework agreements with the pre-qualified Non-Profit Delivery Partners to govern the terms of their participation in the Prequalified List, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and the Executive Director, Housing Development Office, and in a form approved by the City Solicitor. 13. City Council authorize the Deputy City Manager, Development and Growth Services, when approving business cases and Non-Profit Delivery Partner selection processes for Toronto Builds Projects in accordance with Item 2025.EX25.1, to approve: a. the use of a Second-Stage RFP to select a Non-Profit Delivery Partner from the Pre-Qualified List; or b. a non-competitive process to select a Non-Profit Delivery Partner, provided that the Non-Profit Delivery Partner shall be on the Pre-qualified List and that the Deputy City Manager, Development and Growth Services is satisfied that the non-competitive procurement is required for one of the following reasons: 1. the Affordable Housing Project is required as a result of an emergency which would not reasonably permit a competitive selection process; 2. the delivery timelines for the Affordable Housing Project would not reasonably permit a competitive selection process without putting funding at risk; 3. only one Non-Profit Delivery Partner has the necessary expertise or capacity to deliver an Affordable Housing Project; 4. the selection of an organization other than the applicable Non-Profit Delivery Partner would cause significant inconvenience or substantial duplication of costs for the City; and/or 5. a competitive selection process has been conducted in good faith but has failed to identify a successful Non-Profit Delivery Partner for the Affordable Housing Project, or where the proposals received have been collusive. 14. City Council authorize the Executive Director, Housing Secretariat and/or the Executive Director, Housing Development Office, as applicable, where previously authorized by City Council to undertake any requests for proposals or other competitive processes to select Indigenous or non-profit organizations to develop, finance and/or operate Affordable Housing Projects, to: a. issue a Second-Stage RFP to select a Non-Profit Delivery Partner from the Pre-qualified List; or b. select a Non-Profit Delivery Partner on a non-competitive basis provided that the selected Non-Profit Delivery Partner is on the Pre-qualified List, and that the Deputy City Manager, Development and Growth Services is satisfied that the non-competitive procurement is required for one of the following reasons: 1. the Affordable Housing Project is required as a result of an emergency which would not reasonably permit a competitive selection process; 2. the delivery timelines for the Affordable Housing Project would not reasonably permit a competitive selection process without putting funding at risk; 3. only one Non-Profit Delivery Partner has the necessary expertise or capacity to deliver an Affordable Housing Project; 4. the selection of an organization other than the applicable Non-Profit Delivery Partner would cause significant inconvenience or substantial duplication of costs for the City; and/or 5. a competitive selection process has been conducted in good faith but has failed to identify a successful Non-Profit Delivery Partner for the Affordable Housing Project, or where the proposals received have been collusive. 15. City Council authorize the applicable City official(s) to negotiate and enter into any agreements authorized by City Council in respect of Affordable Housing Projects with Non-Profit Delivery Partners selected through the processes outlined in Recommendations 13 and 14 above, on the terms and conditions as set out in the applicable authorization from City Council and such other terms satisfactory to the applicable City official and in a form approved by the City Solicitor. 16. City Council direct the Executive Director, Housing Secretariat and the Executive Director, Housing Development Office to report back to City Council on an annual basis on Non-Profit Delivery Partners selected on a non-competitive basis in accordance with Recommendations 13 and 14. Property Tax Exemption Approvals for Affordable Rental and Supportive Homes 17. City Council enact a site-specific by-law to authorize the 2 existing rental housing units at 1-3 Strathmore Boulevard as "Affordable Housing" for the purposes of the City of Toronto Municipal Code Chapter 513, Housing Programs. 18. City Council authorize an exemption from taxation for municipal and school purposes for the affordable rental homes as listed and for the periods of time described in Table 1 in the Financial Impact section of the report (February 10, 2026) from the Executive Director, Housing Secretariat, and Executive Director, Housing Development Office. The exemption from taxation for 1-3 Strathmore Boulevard shall be conditional on enacting the site-specific by-law referred to in Recommendation 17 above. 19. City Council authorize the Controller to cancel or refund any taxes paid after the effective date of the exemption from taxation for municipal and school purposes as set out in the applicable municipal housing facility agreement.