Toronto secures $2.5B in low-cost loans to build homes

Key Takeaways:

• The federal government is providing $2.55 billion in low-cost financing, while the City of Toronto is contributing $234.83 million in financial incentives to build 4,831 rental homes, including at least 1,075 affordable units.
• The funding is part of a broader $7.3 billion federal commitment through the Apartment Construction Loan Program (ACLP), conditional on Ontario’s financial participation. The City is also working toward its goal of 65,000 rent-controlled homes by 2030.
• The federal government is allocating $25.8 million to support Toronto’s encampment response, complementing $400 million from the Province of Ontario. This will fund outreach services, shelter expansions, and Indigenous-led housing initiatives.

The Whole Story:

In a landmark partnership with the City of Toronto, the federal government has announced $2.55 billion in low-cost financing to unlock 4,831 rental homes including a minimum of 1,075 affordable rental homes. The City is also investing approximately $234.83 million in financial incentives such as relief from development charges, fees and property taxes. 

“Every Torontonian deserves an affordable place to call home,” said Mayor Olivia Chow. “Today’s landmark housing agreement will reduce barriers so more than 4,800 homes will be built faster. By working together with our federal partners, we are securing affordable homes in Toronto for generations to come.” 

The financing, delivered through the Apartment Construction Loan Program (ACLP) and administered by the Canada Mortgage and Housing Corporation (CMHC), responds to requests from Toronto City Council that the federal government provide the City with low-cost loans to support the delivery of a range of affordable and purpose-built rental homes. 

The federal government has set aside up to $7.3 billion in ACLP low-cost financing over three years, conditional on securing required financial support from the Government of Ontario. The City has requested the provincial government to partner on expanding the Purpose-built Rental Housing Incentives stream and support more rental homes get built faster.  

Through the newly announced ACLP low-cost loans, the City will be able to advance the delivery of seven rental housing projects that are set to start construction by the end of 2026 and have at least 20% affordable rental homes. This includes several projects approved in December 2024 under the Purpose-Built Rental Housing Incentives stream as well as Housing Now projects that create mixed-used housing on transit-oriented, City-owned land. The financing will support: 

• 1,267 rental homes at Quayside. This complements the recent $975 million federal, provincial and City investment to complete enabling infrastructure to support 14,200 new homes along Toronto’s waterfront at Quayside and Ookwemin Minising.
• 1,226 rental homes at 49 Ontario St.
• 767 rental homes at 50 Wilson Heights Blvd.
• 705 rental homes at 777 Victoria Park Ave.
• 370 rental homes at 250 Wincott Dr.
• 341 rental homes at 26 Gilder Dr.
• 155 rental homes at 3379-3385 Lawrence Ave. E.  

The City says it is committed to working with other orders of government to achieve its 10-year goal of approving 65,000 rent-controlled homes by 2030. This includes 41,000 affordable rental, 6,500 rent-geared-to-income (RGI) and 17,500 rent-controlled homes. More information can be found on the City’s website. 

City officials also reaffirmed continued collaboration with the Government of Canada to address the needs of people experiencing homelessness in Toronto.  

As part of the Unsheltered Homelessness and Encampments Initiative (UHEI), the federal government has committed $25.8 million over two years to support the City’s immediate needs related to encampments. This complements the City’s contribution of $400 million secured through a partnership with the Province of Ontario. 

The City will use this funding to expand outreach work and enhance shelter services that support people to transition from encampments to homes. Planned initiatives include: 

• Leveraging partnerships with health, mental health and addictions services providers to support people with complex needs living in encampments.
• Hiring and training up to 20 additional front-line City staff to support encampments, along with partner agencies to provide additional street outreach. Together, these staff will allow the City to expand the Enhanced Outreach Model, which has seen great success in reducing large encampment sites in the last 18 months by moving people into shelter and housing.
• Supporting Indigenous-led, culturally-appropriate projects that help people from those communities who are disproportionately affected by homelessness.