Update on the Strategy to Create

Affordable Housing and Demonstration Projects

The Corporate Services Committee recommends the adoption of the Recommendations of the Council Strategy Committee for People without Homes, embodied in the following communication (November 18, 1998) from the City Clerk, subject to the following properties not being declared surplus at this time:

(1)Southerly Grand Avenue Site; and

(2)the Legion Road Site; and

the Commissioner of Community and Neighbour Services be requested to consult with Councillors Irene Jones and Blake F. Kinahan, Lakeshore-Queensway, in regard thereto:

The Council Strategy Committee for People without Homes at its meeting of November 16, 1998, had before it a report dated November 12, 1998, from the Commissioner of Community and Neighbourhood Services, advising on the progress to date related to the strategy for creating affordable housing adopted by Council on July 29, 1998, and recommending steps to be taken to support the development of proposals for affordable housing demonstration projects on City-owned sites.

The Council Strategy Committee for People Without Homes, directed that the following recommendations, as contained in the noted report, be forwarded to the Community and Neighbourhood Services Committee and the Corporate Services Committee for consideration:

"It is recommended that:

(1)The Committee recommend to Council that the Lawrence/Allen Road (Ward 8) site continue to be held from sale and the Commissioner of Community Services be requested to report back by April 1999 on the results of the proposal call for transitional housing, as outlined in this report;

(2)the Committee recommend to Council that the two City-owned sites on Grand Avenue (Ward 2) continue to be held from sale, the Commissioner of Corporate Services be requested to expedite the soil remediation study now underway, and based on results of that study, the Commissioner of Community and Neighbourhood Services be requested to report back by April 1999 on the results of a proposal call for affordable rental and ownership housing as outlined in this report;

(3)the Committee recommend to Council that the Legion Road (Ward 2) site be released for sale, given that it is not suitable or feasible for affordable housing development;

(4)Council confirm the decision of the Council of the former City of Toronto of October28, 1996 that the City-owned site at 419-425 Coxwell Avenue (Ward 26) and 331Bartlett Avenue North (Ward 21) will continue to be used for affordable housing purposes and any proceeds from sale will be returned to the Social Housing Reserve Fund, as the site was obtained under the Section 36 (now 37) density bonusing provisions of the Planning Act; and

(5)Council confirm the decision of the Council of the former City of Toronto of October28, 1996 that the City-owned sites at 156 Munro Street (Ward 25) and 30 St. Lawrence Street (Ward 25) be used for affordable housing purposes; the City-owned site at 275Ontario Street (Ward 25) continue to be retained by the City; and any proceeds from sale of these sites be returned to the Land Banking fund of the former City of Toronto to help retire the debenture debt related to that fund."

The Council Strategy Committee for People without Homes also had before it a communication dated November 13, 1998, from Councillor Irene Jones, requesting that if the northerly Grand Avenue site is used for affordable housing, that it have a community-controlled process for the project.

The Council Strategy Committee for People without Homes also submits the noted communication from Councillor Irene Jones, for consideration by Committee.

(Report dated November 12, 1998, from the Commissioner

of Community and Neighbourhood Services,

addressed to the Council Strategy for People Without Homes.)

Purpose:

(i)To update the committee on progress to date related to the strategy for creating affordable housing adopted by Council on July 29, 1998.

(ii)To recommend steps to be taken to support the development of proposals for affordable housing demonstration projects on City-owned sites.

Financial Implications:

None.

Recommendations:

It is recommended that:

(1)the Committee recommend to Council that the Lawrence/Allen Road (Ward 8) site continue to be held from sale and the Commissioner of Community Services be requested to report back by April 1999 on the results of the proposal call for transitional housing, as outlined in this report;

(2)the Committee recommend to Council that the two City-owned sites on Grand Avenue (Ward2) continue to be held from sale, the Commissioner of Corporate Services be requested to expedite the soil remediation study now underway, and based on results of that study, the Commissioner of Community and Neighbourhood Services be requested to report back by April 1999 on the results of a proposal call for affordable rental and ownership housing as outlined in this report;

(3)the Committee recommend to Council that the Legion Road (Ward 2) site be released for sale, given that it is not suitable or feasible for affordable housing development;

(4)Council confirm the decision of the Council of the former City of Toronto of October 28, 1996 that the City-owned site at 419-425 Coxwell Avenue (Ward 26) and 331 Bartlett Avenue North (Ward 21) will continue to be used for affordable housing purposes and any proceeds from sale will be returned to the Social Housing Reserve Fund, as the site was obtained under the Section 36 (now 37) density bonusing provisions of the Planning Act; and

(5)Council confirm the decision of the Council of the former City of Toronto of October 28, 1996 that the City-owned sites at 156 Munro Street (Ward 25) and 30 St. Lawrence Street (Ward 25) be used for affordable housing purposes; the City-owned site at 275 Ontario Street (Ward 25) continue to be retained by the City; and any proceeds from sale of these sites be returned to the Land Banking fund of the former City of Toronto to help retire the debenture debt related to that fund.

Background:

At its July 1998 meeting, Council adopted in principle a strategy for creating affordable housing in the City of Toronto. In light of the critical shortage of affordable housing and the need for longer term solutions to homelessness, the strategy recognizes that the City must play a key role in facilitating the creation of affordable housing. However, the strategy also recognizes that the City has limited resources and all levels of government must be involved. It was proposed that the City launch a number of demonstration projects, to show that private and community partners can develop affordable housing without traditional non-profit housing programs. The strategy includes longer term initiatives (e.g., changes to property tax policies to support new rental development) as well as short term incentives for demonstration projects (e.g. making surplus City land and buildings available). Appendix 1 provides a summary of the overall strategy.

This report summarizes progress to date on longer term initiatives and demonstration projects.

Comments:

Longer Term Initiatives:

Special Property Tax Class for New Rental Housing:

At its meeting on October 28 and 29, 1998, Council agreed to make a change to property tax policy in order to encourage the development of new rental housing in the City of Toronto. Council has agreed to implement, beginning in 1999, a new special property tax class for newly-constructed multi-residential rental housing. This class will allow Council, if it chooses, to reduce the amount of property tax paid for new rental buildings to a rate that is more competitive with condominium buildings for the first eight years after construction. It is hoped that this action will help to make rental production economically feasible; for example, it is estimated that the gap between the cost of operating new rental housing and the market rent revenues that can be achieved is approximately $3,000.00 per year. Equalizing property tax rates between new rental and condominium housing helps to reduce this rate by about $1,200.00. The greatest impact of this policy change is that it signals to the private sector and to senior levels of government that Council is willing to do its part to stimulate affordable housing development. It is recognized that other measures will be needed, such as reduced federal and provincial taxes (e.g., GST and PST) on rental housing and reduced federal mortgage insurance premiums.

At the October meeting, Council also re-affirmed its intent to move toward equity in property taxes paid between homeowners and tenants. Staff will begin working on options in 1999.

Capital Revolving Fund for Affordable Housing:

A recent survey of 186 organizations across Canada, found that 38 per cent. of these groups were able to develop, or are developing, affordable housing projects without ongoing government subsidies (New Ways to Create Affordable Housing, Canada Mortgage and Housing Corporation, January 1998). The survey also found that the biggest obstacle faced by organizations trying to develop affordable housing without government subsidy was the difficulties they had in obtaining financing (followed by cost of land and site acquisition and then difficulties with development approvals). This does not mean these groups wanted or needed free money - rather the groups needed assistance with cash flow during project development and construction, and help to obtain mortgage financing (e.g.,second mortgages) given that they had very little equity at the start.

As a result of this gap, access to pre-development funding and capital financing must be a key element of an overall strategy. At its meeting of July 29, 30 and 31, 1998, Council agreed, in principle, that a capital revolving fund for affordable housing should be established to provide financial support to projects that demonstrate the City's role in facilitating the creation of affordable housing, and requested the Chief Financial Officer, the Commissioner of Corporate Services and the Commissioner of Community and Neighbourhood Services to report back on options for establishing such a fund and potential funding sources. A report is now being prepared on this matter, to come forward in December, and staff are planning to present the proposed approach to the Council Strategy Committee on November 16, 1998.

Input into Official Plan Process:

Urban Planning and Development Services staff are in the process of developing a strategy for the new Official Plan. This will be presented to the Urban Environment and Development Committee early next year at which time it can also be presented to this Committee. The presentation will address the role of the Council Strategy Committee in making input on affordable housing policy. As outlined in the strategy adopted in June, there are a number of land use planning tools that can support the creation of affordable housing. Many of these tools have been used by the former municipalities in the past and some are part of the exist official plans that remain in effect until a new plan is adopted. Some potential tools include: requiring that affordable housing be included in large redevelopment projects in the City; density incentives for developers in certain areas in return for affordable housing benefits; etc.

Development of Demonstration Projects:

Demonstration projects are intended to test new affordable housing models and address housing needs (such as household types, income ranges, tenure types, housing forms, need for community supports) in the following key areas:

(a)housing that provides a transition from living in emergency shelter to stable, longer term housing, and which includes appropriate community supports (Transitional Housing Projects);

(b)affordable rental housing for target groups which do not require community supports (Affordable Rental Projects); and

(c)ownership housing that is sufficiently low-cost that it can be purchased by households (in particular, families) with moderate to low incomes (Affordable Homeownership Projects).

The Council Strategy Committee adopted a strategy based on using proposal calls to seek community partners, and to provide a fair basis for providing City land, buildings and other resources for new affordable housing projects.

Status of Surplus City-Owned Sites:

Based on a report to the July meeting of Council and a subsequent staff report to the September meeting of the Corporate Services Committee, four surplus City-owned sites have been held back from sale pending a review of their potential for affordable housing development. The sites include Grand Avenue (2 sites - Ward 2), Legion Road (Ward 2)and Lawrence/Allen Road (Ward 8). This report provides an update on the review of these sites. Corporate Services has been consulted as part of preparing recommendations about these sites, and agrees with the recommendations made.

(a)Lawrence/Allen Road (Ward 8):

Based on our review, the Lawrence/Allen site has significant potential as a site for transitional housing. As described in the June strategy report, our approach to this type of housing is to first issue a "concept proposal call" to find community partners who are experienced with the client group and who have the capability to develop full proposals. The proposal for Lawrence/Allen is focused on low income women with children. This is a population that faces severe affordability problems in the City and for which short term accommodation (e.g.,shelters and motels) is inadequate to their needs. Staff have prepared a concept proposal call document that is now being discussed with the local councillors and local planning staff.

Based on the results of the concept proposal call, up to three community groups would be asked to prepare more detailed proposals. We plan to provide funding of up to $5,000.00 to each proponent assist them in preparing a proposal, recognizing that these agencies generally do not have the internal staff capacity or expertise to prepare development proposals. Funds are available within the budget approved for the Council Strategy Committee in 1998, and can be provided under the authority given to staff at the last meeting. We are currently discussing with Canada Mortgage and Housing Corporation the potential for these proposals to also qualify for Proposal Development Fund (PDF) loans of up to $75,000.00 offered by their Centre for Public-Private Partnerships. For those proposals that are not selected, we will consider alternative ways to implement them (e.g. on other City sites) if feasible. At this time we recommend that the Lawrence/Allen site continue to be held back from sale and staff report back by April 1999 on the results of the proposal call process.

(b) Grand Avenue (Ward 2):

Our review of the two Grand Avenue sites suggests that the northerly block has the greatest potential for development as affordable rental and/or ownership housing. The use is compatible with the surrounding area and is in keeping with the Etobicoke Official Plan. The site could potentially accommodate up to 366 units, likely enough to allow for some internal cross-subsidy to support a percentage of units at below-market rents. The southerly block, on the other hand, is designated in the OP as open space and may be needed to accommodate a future school. Both sites, however, require soil remediation to deal with the effects of a former incinerator and sewage plant. A study is underway to determine the cost of clean-up and until this is complete, a proposal call cannot be issued. We recommend that the Commissioner of Corporate Services be requested to expedite this study. We recommend that the Grand Avenue sites continue to be held back from sale and that staff report back by April 1999 on the results of a proposal call, provided that the clean-up costs are manageable.

(c)Legion Road (Ward 2):

Our review of Legion Road has confirmed that the site faces significant environmental issues, particularly related to its location in the floodplain of Mimico Creek. We conclude, therefore that affordable housing development is not feasible, and suggest the site be released for sale.

Sites Retained by the Former City for Affordable Housing:

Included in the list of former City of Toronto surplus sites are a number of land parcels that had been acquired for development as non-profit housing. Many of these sites were acquired either through the former City's land-banking program or through density bonus agreements with developers under Section 37 of the Planning Act. A report dated June 22 from the Commissioner of Corporate Services indicates that the revenues from the sale of such properties must be allocated to the land-banding fund or social housing reserve fund, under policies adopted by the former City of Toronto. They are not included in the $50 million target of revenues to be generated through the sale of City property in 1998.

There are a limited number of former City sites that were specifically retained for affordable housing development following cancellation of the non-profit program. In October 1996, the former Council adopted a report proposing that 5 sites not be sold and that staff develop proposals to create affordable housing without non-profit housing subsidies (such as affordable home-ownership). It was assumed at the time that there would be no revenue recovery for the sites as the land value would be needed to leverage affordability on the sites. The five sites retained "for affordable housing purposes" were the southerly portion of 419-425 Coxwell Avenue, 331 Bartlett Avenue North, 30 St. Lawrence Street, 156 Munro Street, and 275 Ontario Street. As the committee is aware, a project is already under development on 30 St. Lawrence. The Bartlett property has been leased to Cityhome and contains a renovated building that is being managed as affordable artist live/work housing by the City's Housing Company. The new City's land disposition process has not altered these or other similar decisions of the former municipalities.

Consistent with the Strategy to Create Affordable Housing adopted by Council at its July meeting, staff are now considering the Coxwell and Munro for affordable housing purposes. As noted in the last update report, staff were proceeding with a proposal call for affordable ownership on the Coxwell site and were in the process of consulting with the local councillors. As discussed below, staff are also proceeding with a concept proposal call to seek a community partner for the 156 Munro site. At this time, staff have no plans to proceed with development or sale of 275 Ontario Street, and will report back if this changes. Given that proposal calls are now being issued for Coxwell and Munro, we would like to confirm the previous Council's decision that these sites are being retained and any proceeds of sale for these properties must be returned to the appropriate reserve fund (Social Housing Reserve Fund or Land Banking Fund).

Re-Allocation of Other City-Owned Property:

In addition to sites already declared surplus, there are potentially hundreds of sites and buildings that will become surplus to the needs of City Departments and agencies in the coming months as a result of re-organization and service restructuring. At its July meeting, Council adopted a process for declaring properties surplus which will require that potentially surplus properties be circulated to Departments, to the Council Strategy Committee for People without Homes and to non-profit organizations to determine their interest in sites. The real estate policy also creates a Property Management Committee (of senior staff) which will have the authority to make decisions on re-use of land (e.g., to re-allocate sites for housing purposes). Housing staff have already expressed an interest in a number of potentially surplus sites that have been circulated. However, the Property Management Committee has not yet been established and as a result, decisions on these sites have not yet been made. The Commissioner of Corporate Services was also asked by Council at its July meeting to report on a policy for the use of City land or proceeds from land sales to meet social objectives. We would ask that the Committee recommend that the establishment of the Property Management Committee and creation of a policy for meeting social objectives be expedited.

Projects Under Development: 30 St. Lawrence and 11 Ordnance:

Appendix 2 provides a summary of the progress of the transitional housing projects under development at 11 Ordnance Street and 30 St. Lawrence Street.

Low Income Singles Demonstration Project:

Staff are taking steps to proceed with a low income singles/single room occupancy demonstration project. A key objective of this pilot project is to build on the experience of the 30 St. Lawrence project to date, i.e., to develop a replicable housing form that serves the needs of low income single adults, that can be built economically, and that can be integrated into existing neighbourhoods throughout the City. The City-owned site at 156 Munro (Ward 25 - see Appendix 3) is being considered for this pilot, pending discussion with the local councillors and planning staff. A proposal call is being issued to identify community partners who have experience with the low income singles population and who are interested in developing a pilot project.

At its last meeting the Committee discussed a number of issues raised in the wake of a recent rooming house fire at 1495 Queen Street. For example there is some question whether existing housing forms such as rooming houses or bachelorettes are an appropriate or acceptable form of housing for some low income populations, particularly those who have become isolated from social supports and are therefore the most vulnerable. A number of alternative singles housing models have been proposed, including the single room occupancy model, and shared accommodation models. There are also many examples of singles housing projects in Toronto with varying levels of success and certain lessons to be learned. We feel it is important that this pilot project help to define a housing model that for low income singles that will serve the needs of this population well, and that can be integrated into existing neighbourhoods throughout the new City.

In addition to seeking community partners for this pilot project, we have been reviewing the experience across North America with single room occupancy housing and will be reporting on specific measures that the City could take to support this form of housing in Toronto. This work will focus on establishing design specifications for this housing form, and identifying regulatory changes, financing tools and appropriate management/support service models that are required to support it. It is hoped that this work will inform the development of a detailed proposal for the pilot project on a specific site.

Implementing the Grow-as-You-Go Concept:

The "Grow-as-You-Go" concept was presented to the Community and Neighbourhood Services Committee earlier this year by architect John Van Nostrand. Given that the model would require the City to be very flexible in terms of building code and other requirements, Housing staff are facilitating discussions with Mr. Van Nostrand and City planning, development and property standards staff on ways in which it could best be to implemented.

Conclusion:

Staff will provide regular updates on the strategy for creating affordable housing, and demonstration projects, through the Council Strategy Committee for People Without Homes.

Appendices:

(1)Framework for the Strategy to Create Affordable Housing.

(2)Project Updates:

(a)30 St. Lawrence Street - Homeless Men and Women; and

(b)11 Ordnance Street - Homeless Youth.

(3)Description of 156 Munro Street.

Contact Name:

Rob Cressman, Phone: 392-0601, Fax: 392-0548, Email: rcressma@city.toronto.on.ca.

Joanne Campbell, General Manager, Shelter, Housing and Support Division.

Shirley Hoy, Commissioner of Community and Neighbourhood Services

________

The Corporate Services Committee reports, for the information of Council, having also had before it the following communications:

(i)(December 3, 1998) from the City Clerk, advising that the Community and Neighbourhood Services Committee on December 3, 1998:

(1)recommended to the Corporate Services Committee the adoption of the recommendation of the Council Strategy Committee for People Without Homes embodied in the communication (November 18, 1998) from the City Clerk; and

(2)directed that the Commissioner of Community and Neighbourhood Services and the Commissioner of Urban Planning and Development be requested to report to the Corporate Services Committee for its meeting on December 7, 1998, if possible, or directly to Council on December 16, 1998, on:

(a)the feasibility of a community design concept use for the northerly Grand Avenue site referred to in Recommendation No. (2) of the report of the Commissioner of Community and Neighbourhood Services;

(b)the need for open space on the southerly Grand Avenue site;

(c)an underpass for the Legion Road site; and

(d)dedication of the Legion Road site to the Toronto and Region Conservation Authority for open space;

(ii)(December 2, 1998) from Councillor Irene Jones, Lakeshore-Queensway, forwarding comments respecting properties located in Ward 2 which had been declared surplus.

(A copy of the Appendices attached to the foregoing report was forwarded to all Members of Council with the December 7, 1998, agenda of the Corporate Services Committee and a copy thereof is also on file in the office of the City Clerk.)