Toronto's new policy to introduce more affordable housing met with mixed reaction

A new Toronto policy to introduce more affordable housing is drawing mixed reaction, with critics saying it isn't bold enough to tackle the city's housing crisis and developers arguing it could be a disincentive for new projects.

The majority of Toronto city council voted Tuesday in favour of a policy framework that will make it mandatory for certain new developments near major transit stations to include affordable rental and ownership housing units beginning in 2022.

To start, the proposed inclusionary zoning policy will require developers to set aside five to 10 per cent of a new condo development that has at least 100 units for affordable housing. That requirement will increase gradually to eight to 22 per cent by 2030.

ACORN, a national organization advocating for low- and middle-income residents, said it saw the framework as somewhat of a win but called it "very timid."

Alejandra Ruiz Vargas, chair of ACORN's East York chapter in Toronto, said it falls short of what a city feasibility study found was possible that condo projects in stronger market areas could be required to set aside at least 20 per cent for affordable housing.

"Even though we had some wins ... this was a great opportunity to create more affordable housing," she said.

Coun. Mike Layton, who advocated for a higher rate of affordable housing to be set aside and a full implementation of the policy by 2026, said he had "mixed emotions" about the framework that was approved.

"This was a really big step forward ... but at the same time, I can't help but think we lost a bit of an opportunity," he said. "Rather than go all in on a policy that we were told would maintain developers' profits, that would drive them to keep building, we added a more conservative second qualification for how high the rates could go -- that really did hold it back."

Dave Wilkes, president and CEO of the Building Industry and Land Development Association, said his association is "disappointed" with the policy, noting it doesn't provide financial offsets to cover the cost of building the affordable housing units.

"The City of Toronto's current approach will transfer approximately $67,000 to the cost of a new condominium apartment, meaning that market purchasers will be subsidizing the cost of below-market units, or will make some projects economically non-viable," he said in a written statement. "More affordable housing is a good idea, the City of Toronto's approach is a bad plan."

David Amborski, a professor at Ryerson University's School of Urban and Regional Planning, also noted that Toronto's policy lacked a partnership system between developers and the city.

"One of the concerns about the market is how the burden will fall upon the industry and be passed down to the homeowners," he said.

The city said the policy is believed to be the first of its kind in Ontario - it has been used in various jurisdictions in the United States and other parts of Canada.

Deputy Mayor Ana Bailao called it "balanced, forward-looking and equitable."

She said the phased implementation will give land values "time to adjust" and noted that the policy will be reviewed a year after its implementation.

"If we see that the result is not being achieved as we expected, that if we can accelerate it like the advocates want, that should we put incentives like the developers want - those are the things that we need to be constantly be looking at," she said. "We need to be evaluating it often. But we need to implement it right away."

The provincial government has the option to appeal the framework within 20 days. The Ministry of Municipal Affairs and Housing said it was aware of Toronto's new framework and would continue to work with municipal partners to help build more homes faster.