On November 13, 2024, Toronto City Council voted 23-1 in favour of creating a “Purpose-built Rental Homes Incentives Stream” under the City’s Rental Supply Housing Program. The plan will support the building of 20,000 new rental homes in the city by offering incentives to developers, including a 35-year 15% property tax reduction, exemptions and waivers from certain City fees, and an indefinite deferral of development charges. Qualifying projects will be required to include 20% “affordable” units, as per the City’s definition, which is tied to income.
Key Features of the Plan
This decision builds upon the City’s Rental Housing Supply Program, which was approved by Council in June 2024.
The Purpose-Built Rental Homes Incentives Stream supplements existing incentives to encourage rental housing projects and will introduce a 15% property tax reduction for 35 years, indefinite deferral of development charges for projects that maintain purpose-built rental housing with 20% affordable units, and the waiver of planning application and building permit fees.
The plan would support the introduction of 20,000 new rental homes, of which at least 4,000 would fall into the affordable category. The initial 7,000 units (5,600 purpose-built and 1,400 affordable) would be financed by the city’s Rental Supply Housing Program and the remaining 13,000 units would be supported by provincial and federal funding that has yet to be negotiated.
Going Forward
To qualify for the program, applications must meet specific requirements. Projects must reserve at least 20% of units as affordable rental housing that aligns with the City’s recently adopted income-based affordability definition. These units must also meet City standards for unit mix and size. Furthermore, all units designated as affordable must remain so for a minimum of 40 years, with the goal of maintaining affordability for 99 years. Approved developments are required to begin construction by the end of 2026.
The City has issued a Call for Applications for this program, with a submission deadline of November 29, 2024. City staff will review submissions and report back to Council on the outcomes at the meeting scheduled for December 17-19, 2024.
Related Links
Build More Homes: Expanding Incentives for Purpose Built Rental Housing (Toronto City Council Agenda EX18.2, November 13, 2024).
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