The federal government announced a $1.2 billion investment to build 2,644 rental homes in Toronto earlier this month.
The funding, which comes courtesy of the Canada Mortgage and Housing Corporation’s Rental Construction Financing Initiative (RCFI), was announced on Nov. 14 and will be distributed to seven developments, including three in East Toronto, as fully repayable low-interest loans.
With the recent reports of the federal government joining ongoing talks between Mayor Olivia Chow and Premier Doug Ford as part of the New Deal Working Group, the announcement appears to have come at a favourable time for Toronto Council.
As the city continues to seek funding for desperately needed affordable rental units, residents are hoping these low-interest loans will make a dent in the Toronto’s plan to create 65,000 new affordable units by 2030.
Although the loans were described as funding for “new” projects, it appears some of the developments, including the 68 rental units in a building at 650 Kingston Rd. at Main Street, have already been constructed or are nearing completion.
As of October 2022, the building at 650 Kingston Rd., which provides 19 affordable units, was almost fully occupied with “only three or four units still available for rent” according to the developer.
Similarly, the building at 1555 Queen St. E. which is being developed by Toronto Community Housing Corporation (TCHC), Context and RioCan has already been fully financed “with no amendments or additions” to the TCHC portion of the building.
“None of the funding is coming to TCHC,” said a TCHC spokesperson in response to a question from Beach Metro Community News.
“The funding loan in question will go directly to our development partner, Context-RioCan for the funding of rental housing in the Market Building that will also be on the property.”
Beach Metro Community News reached out to the developers of the buildings in question for information about the specifics of their allocated funds but got no response. Beach Metro Community News also reached out to Toronto-Danforth Councillor Paula Fletcher and Beaches-East York Councillor Brad Bradford for their thoughts on the federal loans, but did not receive a response before our press deadline.
However, WoodGreen Community Services Vice-President, Mwarigha, was able to help shed some light as to why rental buildings that are already constructed or nearly completed might be part of the federal government’s loan funding announcement.
“For you to get CMHC (Canada Mortgage and Housing Corporation) money today, you have to have the front end of the investment – the downpayment money,” he explained. “You have to put your money in first in order for them to give you money to support your mortgage.”
Mwarigha said that the buildings in question possibly don’t need construction financing but could have “all kinds of debt still associated with building it”.
He said he believes that federal investment into the front end of development processes would be a better approach go a long way to controlling the rise in rental costs.
“You have to remember, this [funding] is not cash,” said Mwarigha. “What the CMHC does is to go out and borrow money from the private market and then act as a guarantor. But instead of sitting in the middle and being an insurance broker, why don’t they (the federal government) take the money that we pay in taxes and give down payments to non-profits. Because how else am I, as a non-profit, going to have that money that will allow me to start building?”
In addition to the $1.2 billion allocated to Toronto rental constructions, the federal government also pledged a $1 billion fund to go towards affordable housing across the country.
“Use that to give non-profits like WoodGreen the money they need to build,” said Mwarigha. “If you give enough money upfront, it means they can take out smaller mortgages. If they take smaller mortgages, they can charge residents a lesser rent.”
According to a federal press release, the RCFI is “on track to create more than 71,000 new rental housing units across Canada by 2027-28.”
However, with some of the developments associated with the federal government’s $1.2 billion RCGI loans already completed, it is difficult to determine the exact significance of this announcement as it pertains to increasing the among of affordable rental housing stock in Toronto.
Other sites associated with the federal government’s Toronto announcement include 855 rental homes at 373 Front St. E., with an investment of $444 million; 484 rental homes at 94 Eastdale Ave. in East York, with an investment of $215 million; 389 rental homes at 55 Broadway Ave., with an investment of $165.4 million; 390 rental homes at 325 Moriyama Dr., with an investment of $130 million; and 225 rental homes at 610 Martin Grove Rd., with an investment of $93.7 million.
– Amarachi Amadike is a Local Journalism Initiative Reporter for Beach Metro Community News. His reporting is funded by the Government of Canada through its Local Journalism Initiative.
Amarachi Amadike, Local Journalism Initiative Reporter, Beach Metro Community News