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ULI Toronto’s WLI dives into affordable housing issue

The Humber is being developed in Toronto by Options For Homes. (Courtesy Options for Homes)
The Humber is being developed in Toronto by Options For Homes. (Courtesy Options for Homes)

Momentum is growing to create more affordable and attainable housing in Ontario, but more cooperation and coordination is needed among all stakeholders for it to become a reality.

That was the consensus among participants of a March 30 webinar led by Urban Land Institute Toronto’s Women’s Leadership Initiative (WLI) to mark International Women’s Month and examine how developers, lenders and non-profit housing organizations can unlock opportunities to provide affordable and attainable housing at scale.

WLI Toronto’s mission is to promote the advancement and development of women, and increase the visibility of women as leaders within the industry. 

The session was hosted by Aird & Berlis LLP counsel Paula Boutis and moderated by York University Development Corporation president and CEO Salima Rawji.

Options for Homes 

Options for Homes, founded in 1994, is Canada’s largest non-profit developer of attainable ownership condominiums. 

Those looking to use its services need as little as five per cent for a down payment; Options for Homes will help to access 10 to 15 per cent more to increase that amount. It’s only available for people intending to live in the condos.

“We had historically used the term affordable housing, but affordable has become this moving target as the market has shifted dramatically, and maybe what was affordable a few years ago was no longer affordable and the incomes to afford it have really shifted,” CEO Heather Tremain said. “So we've started to use the terms attainable housing and attainable home ownership.”

Options for Homes has completed more than a dozen communities and 3,200 housing units in the Greater Toronto Area and has a pipeline of over 2,000 more homes. It’s currently developing The Humber in Toronto and the multi-phase Markham & Dunelm in Scarborough that will include two towers, two mid-rise residences and townhomes.
Options for Homes is also involved with a 232-unit development nearing occupancy across from the Union Pearson Express station in Weston. Options for Homes was the first market development group to build a new condo in Weston since the 1980s, according to Tremain.

“We've really kind of helped catalyze that neighbourhood and, sort of in a funny way, a relatively small non-profit has helped build that market in Weston,” Tremain said. “It is a place that other people are now willing to invest in, and we probably can't afford to be there anymore.”

Spotlight Development 

Toronto-based Spotlight Development was launched by president Sherry Larjani in 2010 and specializes in acquiring properties to redevelop into high-density residential and mixed-use projects.

Current Toronto projects include a mixed-use building at River Street and Queen Street East in partnership with Liberty Development, and Reina Condos (Canada’s first condo designed and developed by an all-woman team) at The Queensway and Royal York Road in partnership with Urban Capital.

Spotlight is also working on a proposed mixed-use, affordable home ownership and rental project at 1635 Lawrence Ave. W. near Black Creek Drive known as The Inclusive that will have towers ranging from 15 to 35 storeys and mid-rise buildings. It is to provide over 1,700 units in the first phase. 

The 3.5-acre site is to include medical-related space, retail, a 24-hour daycare, outdoor amenities, employment and skills training services, food services, and clothing and hygiene product provision. Larjani said 60 to 70 per cent of the units will be affordable and attainable.

Spotlight has partnered with several not-for-profit organizations, including WoodGreen Community Services, The BlackNorth Initiative, Trillium Housing, The Good Shepherd, Brands for Canada, Wigwamen, Habitat for Humanity and Aria Foundation.

“I think partnerships make everybody stronger because everybody brings something to the table that you might be missing otherwise,” Larjani said. “Our partners have been doing this for a very long time and for someone like me, who's a lot newer to this world and to the development industry overall, I need their help, participation and knowledge.”

Spotlight is also working on an affordable and attainable housing project in Kitchener-Waterloo.

Vancity Community Investment Bank

Vancouver-based Vancity is a credit union which develops products and builds partnerships with communities to address its members’ needs. Vancity Community Investment Bank (VCIB) was born from Vancity and has offices in Vancouver and Toronto. It similarly supports enterprises committed to positively impacting communities. 

“We provide both construction and term financing that help finance impact-driven commercial real estate projects,” said vice-president Jennifer Hutcheon. “This includes market projects as well as affordable rental housing developments, condo projects that incorporate affordable housing units, land trusts and co-operative housing.

“Since 2017, we’ve financed over 3,000 units of affordable housing and it continues to be a main focus of our real estate group.” 

Hutcheon said VCIB provided first mortgage financing of about $8.5 million for Union: Sustainable Development Co-operative in Kitchener last year to acquire two apartment buildings and preserve the affordability of the 58 two-bedroom units they contain. Waterloo Region Community Foundation and multiple impact investors were also involved in a deal complicated by rising interest rates.

“We weren't sure it was going to work out, but it really showed me that we need to be there as lenders, as a partner, to be flexible, and to be willing to work through periods of volatility to really make these high-impact deals happen,” Hutcheon said. 

The role of governments and lenders

Rawji cited the Ontario government’s mandate of creating 1.5 million new homes by 2031, aspects of its Bill 23, the federal government’s Housing Accelerator Fund, Canada Mortgage and Housing Corporation programs, and the City of Toronto’s HousingTO 2020-2030 Action Plan for getting people talking about the affordable and attainable housing crisis.

Tremain said aspects of Bill 23 are helpful to Options for Homes, including development charge, parkland levy and community benefit payment exemptions for non-profit and co-op housing.

Hutcheon said it’s difficult for non-profits to raise sufficient equity through grant subsidies and fundraising, and to obtain sufficient financing for projects.

“The other issue we see more on the rental side of affordable housing is that, because the rents are so low and affordable, projects are generating very low net operating income and this is a real constraint for lenders to be able to lend enough money that they need to complete the project.

“So the waiver of development charges is certainly a super-positive change and we are expecting to see more non-profits moving forward with their projects that may have been on hold in the past.”

More partnerships are needed

Hutcheon hopes for more partnerships between lenders, developers and governments. 

“The government contribution piece, whether it's through capital investments or loan guarantees, for example, can really be a game-changer,” Hutcheon said. “Lenders obviously have to invest in loans that are not going to go into default, and some lenders are more willing than others.” 

Hutcheon would like to see governments step up with more loan guarantees and capital injections to provide equity at the start of projects and for lenders to become more flexible with their guidelines when dealing with non-profit housing providers.

“Everybody can come up with their own legislation as to what they want to see and what they hope to see,” Larjani said of involvement by different levels of government, “but they're not all working on the same thing and working together.

"Everybody comes up with their own different programs.”

The role of ESG in affordable housing

Larjani would like to see pension funds and other institutional investors become more involved as part of their environmental, social and governance (ESG) commitments. 

“I think the problem we have is that the ’S’ is not getting as much attention,” Larjani said. “The social aspect of life is not being brought into the conversations about ESG as much as it should.”

“We do have people we think are interested, but they want to know what their impact is going to be, and that piece isn’t as well-developed as it probably needs to be yet,” Tremain added.

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