BILD urges Toronto to change course on housing plan

Key Takeaways:

• The Building Industry and Land Development Association (BILD) argues that Toronto’s current proposal to expand incentives for purpose-built rental housing is insufficient. They believe it won’t effectively jump-start the tens of thousands of stalled rental and condominium units, thereby failing to address the larger housing crisis.
• BILD points out that the city’s plan is narrowly focused and primarily benefits city-led Housing Now projects or those receiving federal subsidies through programs like the Apartment Construction Loan Program. This means that the vast majority of private rental and condo projects—estimated between 29,000 to 37,000 units currently stalled—will not qualify for the proposed incentives.
• BILD is urging the City of Toronto to collaborate with higher levels of government to develop a more comprehensive housing strategy. They emphasize the need to address the financial viability of sidelined housing projects to prevent a worsening housing shortage in the next 3-5 years and are willing to work with all parties to create the necessary housing solutions.

The Whole Story:

The Building Industry and Land Development Association (BILD) is calling for a more robust approach to address housing needs in Toronto.

The group made its case this week in a deputation before the City of Toronto’s Executive Committee, arguing that the City’s current proposal, “Expanding Incentives for Purpose-Built Rental Housing”, is too limited and will not jump start the tens of thousands of stalled new rental and condominium units currently sidelined. The group explained that the lack of a comprehensive solution is threatening the city’s pipeline of future housing supply and setting up conditions to make the housing crisis worse in the years ahead.

“While the current proposal acknowledges the challenges posed by rising cost to build, it represents a limited solution to a much larger problem,” said Dave Wilkes, President and CEO of BILD. “If the city’s own housing projects, built on city land, with federal subsidies cannot proceed without development charge and tax relief, it is no wonder that market units are struggling with costs to build, which is in turn acting as a barrier to adding the housing Toronto requires.”

BILD stated that the specifications of the proposed solution are narrowly defined and would only be applicable to the city’s own Housing Now projects or projects that have received a federal subsidy through its Apartment Construction Loan Program. 

According to BILD, the vast majority of rental and condominium projects, including the 29,000-37,000 units that are currently stalled in the development pipeline, will not qualify. They believe that such a niche solution means that as the crop of new buildings currently under construction are completed, very little new residential construction activity will be able to commence, greatly diminishing new housing supply in the region over the next 3-5 years.

“Today’s costs to build are out of sync with the ability of the market to absorb. As a result, new rental projects can’t pencil and pre-construction sales for condominiums have plummeted to less than 25% of the 10-year average levels,” added Wilkes. “Housing starts are declining and without a comprehensive solution this slide will continue – putting Toronto on the cusp of a very large housing shortfall by 2027-2030.”

BILD is encouraging the city to urgently seek the involvement and assistance of higher levels of government to expand its solution and develop a comprehensive housing strategy that addresses the financial viability of the sidelined housing projects.

“There is a window to take action today and avert a housing crisis of tomorrow,” said Wilkes. “We stand ready to work with the City of Toronto to encourage all levels of government to come to the table and create the comprehensive housing package the City needs.”

Toronto’s plan is to unlock 20,000 new rental homes by 2030, including the immediate support of 7,000 new rental homes, comprising 5,600 purpose-built rental units and at least 1,400 affordable rental homes. To incentivize development, the city will introduce a 15% property tax reduction for new purpose-built rental projects over a 35-year period and defer development charges for eligible developments as long as they remain rental properties. These measures are estimated to represent a municipal investment of over $325 million.

Acknowledging the limitations of acting alone, the city is also calling on the provincial government to establish a $1 billion “Build More Homes Rebate” to cover development charges and provide further property tax reductions for an additional 10,400 purpose-built rental homes. The city is also requesting the federal government allocate $7.3 billion in low-cost financing to support the construction of these homes.

City officials stressed that without immediate and coordinated action from all levels of government, the housing shortage will worsen. They warned of increased housing instability, a deepening staffing crisis in essential services, and economic challenges as businesses struggle to attract the workforce needed to thrive.