Toronto Secures Over $2.7 Billion for Rental Housing Development

📅 4 days ago

The federal government and the City of Toronto announced a significant investment in rental housing, aiming to produce over 5,600 homes through various initiatives over the next three years.

In a major announcement on Wednesday, Prime Minister Mark Carney and Mayor Olivia Chow revealed that the federal government, along with the City of Toronto, will invest more than $2.7 billion into 18 rental housing projects throughout the city over the next three years. This substantial funding is projected to yield over 5,600 rental homes, which will encompass a variety of types including affordable, supportive, rent-geared-to-income, and rent-controlled units. Construction for more than 4,500 of these housing units is scheduled to commence before the end of 2026.
The funding will be allocated through two distinct pathways. On the non-market side, Build Canada Homes is set to contribute over $310 million towards nine projects located on City-owned land, which will produce close to 1,900 rental homes. Of these, more than 700 are classified as supportive or affordable housing, while over 1,100 will be rent-controlled units developed through the non-market housing sector. The City of Toronto is complementing this investment by offering public land at nominal value, along with over $530 million in capital funding and incentives, as well as property tax exemptions that can extend for as long as 99 years.
On the market side, the Canada Mortgage and Housing Corporation (CMHC) is providing more than $1.8 billion in low-cost financing through its Apartment Construction Loan Program for an additional set of nine projects, which are expected to deliver more than 3,700 rental homes, including upwards of 1,000 affordable units. Furthermore, the federal government has earmarked up to $600 million in additional financing under this program for other Toronto projects as they become ready for construction.
Highlighted projects in this portfolio include a 100-unit Indigenous-led supportive housing development located at 15 Denison Avenue, a mass-timber construction at 1113-1125 Dundas Street West, and a volumetric-modular project situated at 805 Wellington. The government has noted that utilizing mass-timber and modular construction methods has the potential to reduce construction emissions by as much as 22% compared to traditional building techniques.
The construction efforts associated with this housing initiative are projected to support approximately 2,100 jobs annually, with a strong focus on sourcing materials such as Canadian steel and lumber, in line with the federal Buy Canadian policy.
This announcement builds upon a series of federal housing initiatives introduced over the past year. The Build Canada Homes program, which was launched in September, has now committed to nearly 17,000 units through 17 partnerships across the nation, with more than 1,900 units already under construction.
Additionally, Ottawa has eliminated the Goods and Services Tax (GST) on homes priced up to $1 million for first-time buyers, which translates to potential savings of up to $50,000. The government is also removing the full 13% Harmonized Sales Tax (HST) on new homes in Ontario, a move that could save buyers up to $130,000.
Separately, the Canada-Ontario Partnership to Build has directed $1.5 billion towards the City of Toronto, aimed at reducing residential development charges by 40% to 60%, thereby lowering the cost of a new single or semi-detached home by approximately $83,000.
"Toronto is becoming a model for how a great city can build its way forward," Carney stated during the announcement. Mayor Chow emphasized the importance of this partnership, noting that it will assist residents in "staying close to their communities" while the city works diligently to expand its affordable housing stock.

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