Are John Tory and Jennifer Keesmaat’s affordable housing plans achievable?

Thestar.com
August 27, 2018
Jennifer Pagliaro

In a mayoral race that has suddenly heated up, the two top candidates both launched their platforms with promises on the same topic: affordable housing.

A promise to build new affordable rental housing was John Tory’s first official declaration in a lunchtime speech to a business crowd in June. And it was Jennifer Keesmaat’s first at the podium in the infancy of her candidacy two months later.

Election campaigns are often filled with rhetoric. Candidates make pitches to voters that are ready sound bites for TV news but come with few details. The Star will be fact-checking the major promises from top mayoral candidates, asking for those details and speaking to experts to assess whether they hold up.

This is the first in a series.

What are they promising?

John Tory

To create 40,000 new affordable rental units in 12 years.

Jennifer Keesmaat

To create 100,000 new affordable rental units in 10 years.

Can it be done?

Tory

Tory’s office would not make anyone from the campaign available or provide any data for this story, despite repeated requests, making it impossible to examine the viability of Tory’s promise.

During a scrum at an unrelated news conference, Tory told the Star his promise is premised on his signature housing plan from this term, called Open Door. That program was created to provide incentives to developers --government land at low to no cost and breaks on development charges and other fees --in order to secure a percentage of affordable units in new developments that would stay affordable for a period of time, typically 25 to 50 years.

A previous Star analysis of the Open Door program shows it may be difficult to achieve what Tory has pitched using the existing formula.

The program relies on city properties that have been declared surplus. Since it was announced in 2015, the program has yet to meet the council-approved target of creating 1,000 new affordable rental units per year. Tory has insisted the goal has been met based on the number of units approved, rather than actual units built. In 2017, more than 1,200 affordable rental units were approved by the city, but just 210 were built, according to city data. An estimated 525 additional units are expected to be built in 2018.

In 2017, the city investment for Open Door totalled $85.2 million. The federal and provincial governments contributed an additional $43 million.

Tory said the 40,000-unit promise, which works out to more than 3,300 units per year on average, will be met thanks to “increased effort” through the Open Door program. His campaign, in a statement responding to the Star’s request for more information, said only that the target was set after consultations with “city staff, experts and industry stakeholders.”

“I think the scaling it up means that you simply apply the same rules and practices we’ve applied in the very successful Open Door policy to put up more city land, if we can, to attract more people from the private and non-profit sectors to be our partners,” Tory said.

The campaign has not said what city land might be made available or how many units each of those sites could yield. As for financial incentives, it’s not clear how they could be broadened or bolstered to further incentivize developers in order to meet that goal.

Keesmaat

Keesmaat’s campaign team provided a basic model, using conservative estimates, and answered specific questions to show it could be possible to get to more than 100,000 units using city-owned land.

In an interview, Keesmaat said a key difference between her plan and Tory’s is that she is looking to unlock vast swaths of city land, including Green P parking lots and TTC lands, not just properties that have been declared surplus. Her plan also looks at creating more affordable units at 80 per cent of average market rent, whereas Open Door uses the current city standard of 100 per cent of average market rent or better, and proposes to keep the units affordable in perpetuity.

“The city has very slowly been releasing lands that it identifies as surplus in a really inefficient way, one property at a time, and my plan is about recognizing that there is Green P lots that are in use, there’s other city-owned lands that have one-storey buildings on them, whether that be a TTC station or some other kind of use and that we can use this land in a dramatic, in a significant way to be creating purpose-built rental housing that families can afford,” she said.

The campaign’s analysis looks at 4,810,311 square metres of land, choosing types of properties where there are already lowrise buildings that could have housing built on top, like libraries, recreation centres and TTC stations, or readily developable or re-developable lands such as Green P parking lots that could be replaced underground.

The campaign said it removed any employment lands where the city does not currently allow residential properties to be built, park space and other non-developable sites from their analysis using a combination of land use databases.

The campaign assumed low density on those lands equivalent to a row of townhomes. That conservative assumption accounts for, the campaign said, the fact that some lands will not be developable at all, such as heritage sites that are protected, and some of the lands can be developed at a much higher density. Keesmaat said the fit with adjacent neighbourhoods and building livable communities would be paramount.

The campaign accounted for the fact that developments include about 20 per cent non-residential space, like hallways and elevators, and used an average unit size of 1,000 square feet to reflect that units would range from a bachelor to a three-bedroom.

Doing that math, which the Star verified, the analysis produces 103,559 units on the land identified, which is only a portion of all city lands.

Campaign spokesperson Sean Meagher said they have not done a site-by-site analysis that would provide a precise number of units that could be created, but called the example provided to the Star a “cautious estimate” that shows the lands owned by the city have the capacity to see Keesmaat’s promise realized.

Keesmaat’s plan uses the land as incentive for developers, but she said she would offer additional financial incentives to fill a “gap” depending on the value of the land to bring developers on board. She did not specify what types of incentives might be used.

What do experts say?

The Daniels Corp. president Mitch Cohen said it was “great news” that both mayoral candidates have put affordable housing at the top of their agenda.

“We desperately need bold strokes and decisive action and both candidates appear ready to take the necessary steps to make an impact,” he said, adding using all available city-owned land is key, as are funding agreements with the federal government.

“How do we get to 100,000 units? Or even 40,000? We all know how difficult that will be, but the degree of difficulty shouldn’t deter us from putting one foot in front of the other to get there.”

Peter Zimmerman, president of the non-profit New Commons Developments, described Keesmaat’s 100,000-unit proposal as “a reasonable proposition,” noting he has not seen a detailed analysis.

When you consider Green P sites, recreation centres and other lands like Toronto Community Housing properties that should be redeveloped, he said, it’s “easy to see the potential for 100,000 units of new development on city lands.”

Zimmerman said the city must offer financial incentives on top of city land at low to no cost for developers to get them to buy into building more affordable units.

“Land is critical because the land is simply not available at a price that an affordable rental developer can access,” he said, but financial incentives like the ones offered by the city’s Open Door program and the federal co-investment fund are still required to build units at 80 per cent average market rent, even for developers like him who aren’t in business to make a profit.

S. Mwarigha, vice-president of housing and homelessness services for WoodGreen Community Services, said there is capacity in the non-profit sector to build these units. He said WoodGreen is looking to build about 1,000 units a year over the next five years or so. That plan rests on the assumption that the incentives offered by the Open Door program, in which they have previously participated on a Gerrard St. E. site, will remain intact and new city lands are made available, he said.

Jason Lester, vice-chair of development for Dream, which partnered on developing a site in the West Don Lands through the Open Door program, said there is plenty of demand for affordable rental, but there is a challenge in how much of the city’s land is ready to be developed and how much the industry could produce each year.

“Like any program, the devil’s in the details,” he said. “No one’s been specific about identifying where this land is.”