Federal government announces $1.2B in loans to spur rental construction in Toronto
Nov. 15, 2023
The federal government said Tuesday that it will help build more than 2,600 rental homes in Toronto by providing $1.2 billion worth of fully repayable low-interest loans.
The loans will be provided to seven projects in the city through the federal Rental Construction Financing Initiative and will help build a total of 2,644 rental homes.
“These new homes will be located close to transit, work, and school. Homes for people getting started in their careers, homes for people raising a family, and homes that people of all ages will be proud to call their own,” Finance Minister Chrystia Freeland told reporters at the announcement in Toronto Tuesday.
The federal government says the program, which incentivizes the development of purpose-built rental through low-interest loans, will create 71,000 new rental housing units across Canada by 2027 -28.
Freeland hailed the initiative as “an investment in the city of Toronto, and in the people who rent homes in this great city.”
In a statement she said the federal government “will continue to do everything we can to make housing more affordable for Canadians from coast to coast to coast.”
Increasing the city’s stock of rental housing has been a key part of Toronto’s housing strategy as well.
City council recently passed a housing plan put forward by Mayor Olivia Chow.
It aims to build 65,000 rent-controlled homes by 2030(opens in a new tab), but rests heavily on federal investment, requiring up to $800 million a year from Ottawa and Queen’s Park(opens in a new tab).
Chow welcomed the announcement by the federal government Tuesday and said the city has also incentivized the development of affordable rental housing.
“This kind of partnership is extremely important,” Chow said. “The City of Toronto has put in some of the projects about $40 million of grants and initiatives to support the affordable rental program, because it's important that some of the fees are waived, and some projects require a bit of a grant in order for it to be supported.”
She said people in Toronto are going to bed worrying about food because their rent is so high and added that she looks forward to the government’s fall economic statement to see what other housing incentives they have planned.
The seven projects supported by the federal government’s announcement include:
855 rental homes at 373 Front Street East, with an investment of $444 million;z
484 rental homes at 94 Eastdale Avenue, with an investment of $215 million;
389 rental homes at 55 Broadway Avenue, with an investment of $165.4 million;
390 rental homes at 325 Moriyama Drive, with an investment of $130 million;
233 rental homes at 1555 Queen Street East, with an investment of $126 million;
225 rental homes at 610 Martin Grove Road, with an investment of $93.7 million; and,
68 rental homes at 650 Kingston Road, with an investment of $34.1 million.
Freeland also weighed in on the “new deal” working group which the federal government recently joined to deal with Toronto’s long-term finances. Local and provincial officials have been meeting twice a week to figure out how to come up with a better long-term plan for providing Toronto more sustainable and reliable funding. The city is currently facing a $1.5 billion operating shortfall.
Freeland told Chow in a letter earlier this year that the federal government did not have “infinite” money to spend on Toronto(opens in a new tab) when the municipality reached out for help.
The federal government initially declined to join the working group, but agreed to take part several weeks ago.
“My deputy minister Chris Ford is there,” Freeland said Tuesday. “It's important to be collaborative, it's important to provide information and to understand what every level of government is doing and their perspectives. I'm very glad that the city and the province have initiated this effort.
“We have been hearing from provinces across the country an assertion of their jurisdiction over municipalities and we can see that as also a recognition of the responsibility that provinces across the country have for municipalities. And I would love to see that recognition manifest in more support for the cities.”
The working group is expected to table an interim report later this month.