City warns its long-awaited housing plan is ‘at high risk’ in latest report

The ability to deal with the growing housing crisis will be impacted by the lost revenues resulting from the province’s Bill 23, says new report

Thestar.com
March 15, 2023
May Warren
Ben Spurr
Victoria Gibson

Toronto has released details of its long-awaited plan to deal with the housing crisis, but warned that its ability to deliver the program is “at high risk” unless Ontario reimburses it for hundreds of millions of dollars in development charges removed by provincial legislation.

The report released Tuesday doesn’t make new recommendations about how to tackle the housing crunch. Instead, it recommends staff provide annual updates on the city’s Housing Action Plan and progress made on the Ontario government’s goal of building 285,000 new homes over the next decade.

However, according to the report, staff expect to deliver potentially contentious recommendations on legalizing multiplexes of up to four units in neighbourhoods citywide next month, well before the next mayoral election.

In the meantime, the city will begin immediately rolling out measures like publishing data on the health of Toronto’s housing system, producing a public dashboard to track affordable rental supply and establishing an advisory committee on the right to adequate housing.

The report will be debated at council’s executive committee next Tuesday.

Looming over the report is the financial impact of Ontario’s Bill 23, which reduces or freezes the fees cities charge developers. The legislation has been a sore spot for Ontario municipalities, which have argued it will leave huge holes in their budgets. Toronto city staff estimate it will cost the municipal government about $1.2 billion in forgone revenues over the next decade.

The province has pledged to make Toronto whole for the lost revenue, but has yet to make a firm commitment. The city uses development charge revenue to pay for infrastructure like sewers and roadways to support new housing. According to Tuesday’s report, if Toronto isn’t reimbursed $120 million a year and is unable to access other financial and policy tools requested of the federal and provincial governments, it won’t be able to support long-term growth or maintain existing housing programs.

Ontario Housing Minister Steve Clark said Tuesday the province was still working to arrange a third-party audit of the city’s reserve funds and how it administers development charges before any decisions were made about funding the city’s reported shortfalls.

He would not specify a timeline, but reiterated a vow he made in writing to former mayor John Tory in November, which said Queen’s Park would ensure Toronto was “made whole” if provincial legislation affected Toronto’s ability to fund “housing-related infrastructure and services.”

“We’re committed to the spirit of that letter, and ensuring that it happens,” Clark said.

He argued that, under the new legislation, the city could still collect development charge revenue on “most new market housing.” But Clark said ultimately the province needs the city’s co-operation if it’s going to meet its housing targets over the coming decade.

At a press conference at city hall, Deputy Mayor Jennifer McKelvie said she has “every confidence that the plans outlined in this report will help address the housing crisis.

“We’ve made good progress in the last eight years on housing, but we do know more needs to be done, and we want people from all walks of life to be able to call Toronto home, including both those who are here, and newcomers.”

McKelvie, who has temporarily taken over discussions with the Ontario government following Tory’s surprise resignation last month, said she’s not yet concerned the province won’t follow through on its promise to reimburse the city for lost development charge revenue.

But she offered no details on any progress made on the negotiations since the province announced in November it would appoint an auditor to verify Toronto’s claims for forgone revenue were accurate.

Bill 23 is “very much at the forefront of every discussion we have with the province,” McKelvie said.

She said the Progressive Conservative government has “made that commitment to keep us whole, and we’re going to try to hold them to that as much as we can.”

She promised to raise the issue with Ontario Finance Minister Peter Bethlenfalvy at a meeting scheduled for Tuesday.

The deputy mayor also said she had no concerns about council making decisions on controversial issues like multiplexes while Toronto is without a permanent mayor. A byelection to replace Tory is scheduled for June 26.

“We have 25 wonderful councillors that have been elected to represent their communities. I have every faith that they’re able to make a good decision for the city of Toronto,” she said, adding that she believes it’s crucial that whoever is elected this summer keeps the housing plan on course.

“I am hopeful that our next mayor will continue to see that housing is a really important need in the city of Toronto. I think the residents of Toronto are going to tell our next mayor that over the next few months,” she said.

Tuesday’s report is in response to council voting in December for an action plan to meet the province’s housing target. Councillors had asked staff to outline changes to citywide zoning bylaws, which currently protect large swaths of the city for detached and semi-detached houses only, as well as increases to development on major streets and adjustments to allow multiplexes.

The motion asked for new community housing plans that would target growth in the co-op and non-profit housing sector. It requested a strategy to build out student housing, new tracking systems for affordable housing development, and an expansion of a city hall program that buys up and protects existing affordable housing, as part of a lengthy wish list.

The proposed changes had the backing of Tory, who acknowledged in a letter released publicly before the December council meeting that despite the city’s recent efforts, affordability in Toronto had only grown worse.

“A more aggressive approach is required to increase housing opportunities and enhance affordability,” he wrote.