Ontario rejects Toronto affordable housing requirements after pushback from three REITs, documents show
Ontario rejected the City of Toronto’s proposed affordable housing requirements on dozens of specific properties after at least three real estate investment trusts asked them to do so, the Star has learned — with two trusts suggesting the quotas could result in no housing development at all.
City hall in 2023 agreed to convert nearly 70 parcels of former employment lands across Toronto to allow for housing development, so long as a certain percentage of new units were set aside for lower costs. The Official Plan Amendments making those changes, which included the affordability criteria, required provincial sign-off to take effect.
On the eve of Ontario’s election call in late January, more than a year after the city submitted their proposed changes, the province approved the land use conversions — but changed the city’s wording so that affordable housing was “encouraged” instead of required. As previously reported by the Star, city hall warned the modification could jeopardize around 5,000 affordable units.
The province, which previously approved other Toronto conversions with city hall’s proposed affordability rules intact, has not responded to repeated questions from the Star on the reason for the change on these properties.
But an examination of arguments made during the provincial consultation process, which allows open submissions by any parties interested in the decision, shows Queen’s Park was facing pressure from at least three real estate investment trusts (REITs) to remove the affordability quotas on their properties.
The rules as written by city hall varied across sites. On some properties, for example, any new condos built would have to contain at least five per cent affordable rentals or seven per cent affordable owned units, guaranteed as affordable for at least 99 years. The amount of space required to be set aside for affordable homes could also rise with time, for example, by 1.5 per cent per year until certain milestones in the development process are reached.
Lawyers representing CT REIT, which owns affected land at 4630 Sheppard Ave. E. in Agincourt South-Malvern West, wrote in submissions last year that the city’s proposed affordability quotas could result in “no redevelopment” of their property at all, with development viability at risk. “During a housing crisis, this dangerous disincentive acts directly contrary to the provincial and municipal mandate to bring housing to market faster,” they wrote.
Planning consultants for Choice REIT, which owns 681 Silver Star Blvd. in the Milliken area of Scarborough, also warned the criteria could stifle redevelopment entirely. “The affordable housing policy could potentially sterilize a site from residential redevelopment if the requirement is too substantial and impacts upon the feasibility of redevelopment,” they wrote.
The CT REIT lawyers stated it was “unclear what authority the City relies upon” in mandating affordable housing through the conversion process — at various points calling the requirements “unauthorized,” “premature,” and in conflict with planning law and past cases at the Ontario Land Tribunal.
In their own submissions, the Choice REIT consultants wrote that the affordability requirements were “inappropriate” and did not “represent good planning.” They took particular issue with the escalating affordability quotas, noting they anticipated “several years” worth of additional study before they advanced a plan for their site, with their timeline being complicated by existing leases with on-site tenants such as No Frills.
Instead, the planning consultants suggested ironing out affordability targets later in the development process.
In a third, separate submission, a planning firm representing the owners of the land currently home to the Crossroads Shopping Centre in the Pelmo Park-Humberlea area of North York — 401 Weston Centre Limited and Calloway REIT (Weston-401) Inc. — suggested eliminating the specific affordability criteria.
They wrote that their development vision — which included some 36,000 new housing units — could still yield a mix of housing with some affordable units.
“Our client is concerned with the further additional delays caused by the imposition of further study … as well as the imposition of requirements that are onerous,” the letter said, accusing the city of failing to recognize the potential of their redevelopment to provide homes and jobs “in an expeditious manner.”
Requests for comment emailed to a spokesperson for CT REIT and the president listed in corporate records for 401 Weston Centre Limited and Calloway REIT (Weston-401) Inc. went unanswered by the time of publication. A spokesperson for Choice REIT declined to comment.
The provincial Housing Ministry and a spokesperson for the housing minister, who took on the portfolio after the election, also did not respond to inquiries.
The argument over city hall’s authority to enact these kinds of quotas is an example of a long-standing tension in Ontario’s planning and housing system, says Paul Hess, a planning expert with the University of Toronto.
“The province has all the power to determine what the city is and isn’t allowed to do,” Hess said. Cities had some powers delegated to them, he said, but the province could step in and override or change the rules.
After the change was announced by the province, a memorandum to elected officials from chief planner Jason Thorne — obtained by the Star through a freedom-of-information request — stressed that the city had agreed to the land conversions specifically because of the trade-offs it had written in, including the provisions around minimum affordable housing.
The province is meanwhile grappling with a sluggish housing development market that has threatened their goal of having 1.5 million new homes built across Ontario by 2031.
Premier Doug Ford told reporters in Wasaga Beach this month that his government was doing everything they could to cut “red tape and regulations,” the Star’s Rob Ferguson reported. “If you won’t support and create the environment and the conditions for companies to build, they just won’t build,” the premier said.
This article was first reported by Star
