03/14/2019 13:47 EDT | Updated 03/14/2019 14:07 EDT

Feds Invest $89M To Combat 'Unacceptable' Toronto Housing Costs

A developer will use the loan to build an affordable rental building.

Samantha Beattie/HuffPost Canada
Minister Jean-Yves Duclos (centre), responsible for Canada Mortgage and Housing Corporation, announces the federal government has provided an $89 million loan for an affordable rental building in Toronto on March 14, 2019. Toronto MPs Adam Vaughan (left) and Borys Wrzesnewskyj joined him.

TORONTO — In one of Canada's most difficult places to find rental housing, the federal government announced Thursday the construction of a desperately needed apartment building.

To be completed within the next couple of years, the building, constructed with funding assistance from a low-cost government loan, will add 259 affordable units in Toronto's Etobicoke Central. The vacancy rate in the west-Toronto neighbourhood is 0.6 per cent, compared to a city-wide rate of 1.1 per cent and a nationwide rate of 2.4 per cent, according to the Canadian Mortgage and Housing Corporation.

"Toronto is a vibrant city, but unfortunately like in many Canadian cities, the demand for housing has far outstripped supply," said Minister Jean-Yves Duclos, responsible for the Canada Mortgage and Housing Corporation, at the announcement.

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Jean-Yves Duclos, minister of families, speaks to the media at a the Toronto Housing Summit on Sept. 30, 2016.

"The very people who make our cities run cannot afford to live in them anymore. That means teachers, nurses, store clerks, construction workers — many find it impossible to work, live and make ends meet in our large urban centres. It is unacceptable."

The largest project of its kind so far in Canada, the federal government is providing an $89-million loan to Princess Management through the National Housing Strategy's Rental Construction Financing Initiative, Duclos said.

The majority of the units will be priced at or below 30 per cent of the median household income in the area, and 10 per cent will be accessible.

The initiative was launched in 2017, to spur developers to build homes for middle-income families, and generated an "incredible" amount of interest, said Duclos. The government increased the money available from $2.5 billion to $3.75 billion for 14,000 new rental units across Canada.

Government policies alone aren't enough: poll

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Low cost apartment buildings in Toronto in December 2018.

Eighty-two per cent of Canadians considered housing affordability to be a major issues that's having a negative impact across the country, according to a Zoocasa survey of that surveyed 1,000 people earlier this month.

New measures could be announced in the federal government's upcoming budget March 19, and pressure has certainly been mounting, said the survey report's author Penelope Graham, Managing Editor at Zoocasa.

"The survey reveals Canadians aren't overly optimistic about whether government intervention can make a difference," Graham said.

Even though housing is likely to be a major federal election issue, only 21 per cent of respondents were confident that the government can improve housing affordability in the next five years. Fifty-five per cent agreed it cannot be fixed by government policy measures alone.

Toronto needs more rental buildings

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Mayor John Tory as the executive committee debates the budget in February 2019.

Located on an old parking lot, surrounded by other apartment buildings and across the street from detached homes, Toronto Mayor John Tory said the Etobicoke Central project demonstrates how rental housing can be built in mature neighbourhoods.

"This program is one Canada's mayors had been asking for, for years and that this government has delivered," Tory said. "The money is actually flowing, showing it's not just a document sitting in someone's office in Ottawa."

While the new building is a good start, it only touches the surface of what's needed in Toronto.

"I'm frankly counting on many more of these occasions in the City of Toronto in the months and years ahead," he said.

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