Housing, eventually: Why Toronto’s rapid homebuilding program has yet to build a single home

Standing in a car park beside Toronto’s Wilson TTC station, Mark Richardson is dissecting all the ways things have gone wrong.

“The equivalent size to four or five parking spaces is a one-bedroom apartment,” says the affordable housing advocate, as he scans dozens of empty spaces where cars can linger for $5 on a weekday.

By now, this parking lot should be a construction site, nearing its grand opening as a mixed-use development boasting hundreds of affordable rental homes as well as market-priced rentals, condos, a daycare and an acre-sized park.

That was the promise four-plus years ago when, on the heels of John Tory’s second mayoral election win and to great fanfare, city hall vowed to offer up 11 pieces of underused land to rapidly build thousands of affordable homes.

But the ground at Wilson Heights remains unbroken, despite initial targets of starting to build on the land by 2020. Construction hasn’t started anywhere across the city’s now 21-site Housing Now initiative, touted as its “signature” affordable housing program — with those promised lower-cost homes still out of grasp, in a city where rent prices have continued their uphill climb. It’s a reality that, each day, threatens to push more Torontonians out of the city for good.

So, what happened? How did a program backed with more than a billion dollars worth of land and resources falter?

The story of Wilson Heights is emblematic of Housing Now as a whole, and indeed, of the trials of building affordable housing in Toronto at large. It’s a tale of high hopes and good intentions crashing into bureaucracy, ill-equipped infrastructure, cost overruns, community ire, staff shortages, a pandemic and — at its core — a city slowly learning to do something new.

It’s an entanglement Toronto’s next mayor will inherit. Right now, a record number of candidates are making their pitch to voters, including vows to address the deepening housing crisis. If the next mayor wants to get new affordable homes built — whether through Housing Now or their own visions — they will likely face many of these same forces. The lessons to be taken from Housing Now will be critical to tackling one of the city’s most prolific problems.

At stake is the trajectory of Toronto itself, and who will be able to call it home.

In December 2018, a newly re-elected Tory called a press conference at city hall. The details of his pitch were fuzzy, but the goal was clear: the city would charge ahead with building low-cost homes on its own land.

“I want to build as much affordable housing as possible, and I want to do it as quickly as possible,” Tory told reporters. CreateTO — the city’s real estate agency — had identified 11 potential starter sites, which it said had “limited operational and logistical barriers to development.”

By January, city council had approved the first phase of the project, totalling up to 3,700 affordable homes at 11 different locations with Wilson Heights set to be among the first builds.

Initial timelines were ambitious. The city hoped to break ground at 50 Wilson Heights in 2020, but problems began to crop up across Housing Now within months, ranging from construction hang-ups involving TTC and Metrolinx projects to concerns raised by some locals near Wilson Heights — including the area councillor — about the loss of a commuter parking lot.

While officials such as CreateTO CEO Vic Gupta and Housing Secretariat director Abi Bond say those discussions were important, they frustrated Richardson, who, as part of the volunteer group HousingNowTO, has been closely tracking the city’s progress on each of the Housing Now sites. “Those transportation reports aren’t free,” he said. “Time is money, time is units, time is risk.”

It wasn’t the only problem. The city’s proposal required the TTC to relocate a private bus driveway that connected its bus terminal to Wilson Heights Boulevard, and required work on the sewers to handle the new density — the kind of work that CreateTO would eventually acknowledge, in reports, was less than ideal for a Housing Now site.

“Future potential sites that fall within the large parcel typology may not be suited for the Housing Now portfolio in the absence of city investment to provide municipal infrastructure,” one report reads. (Gupta, asked about that report in 2023, said he’d still turn to properties like Wilson Heights again today — arguing their size made them “fabulous sites for densification.”)

By late 2019, the city was still in talks with the TTC about cutting its private bus access at Wilson Heights — which staff believed would allow an extra 300 homes. The TTC said it needed time to review all the relevant studies, meaning any zoning changes would be bumped into the next year.

CreateTO, in a report, would later concede that more due diligence could have been done on Housing Now sites, and there could have been earlier obligations established where a development would require “intensive” co-ordination with other agencies, particularly the TTC.

Still, in October 2019, CBRE — the broker hired by city hall — announced it would accept bids for Wilson Heights and two other Housing Now sites that December.

But shortly thereafter, COVID-19 grinded Toronto to a halt.

“Everything shut down for three to six months,” recalls Gupta. And it was hard to restart. “Once you put the brakes on big, big projects, it’s like trying to turn an ocean liner. It takes time to get it back going again.”

The delays at Wilson Heights hit 15 months, with a new target of breaking ground by June 2022. But fear was simmering about the side-effects of the pandemic. Would fewer developers sign on if the real estate market softened? What if costs kept climbing for materials and labour?

By fall 2020, the city had tapped developers Greenwin Holdings and Tridel Builders for Wilson Heights, and rezoned the land to allow the 1,484-home development, up from an initial vision of 1,150. It took a while to iron out the details, with agreements between the city and the developers finalized by September 2021. Those deals were, at that point, conditional on financing.

But that soon became a much harder prospect than anticipated. Interest rates started climbing in 2022, as the Bank of Canada raised its overnight lending rate seven times in a year. The equity the developers had to demonstrate to qualify for needed loans was rising, and there was some anxiety about how quickly they could get sign-off from financers, as the market continued to shift.

Other problems seemed to contribute to the delays, says Tridel vice-president of planning Mike Mestyan. Frequent turnover in the city’s planning department meant they were continually having to bring new staff up to speed. The city has acknowledged difficulty with retention in its planning department, which it links to issues such as uncompetitive salaries amid skyrocketing cost of living.

Mestyan says it could take months to receive comments on an application, which would come from numerous divisions and require substantial back-and-forth. “That’s the environment and the arena that we live in,” he said.

A city hall source, who the Star is not naming as they are not authorized to speak publicly about the program, says despite individual staff commitment, there seemed a broader lack of urgency to speed along affordable housing projects — something the city source believed would require a much larger “culture shift” to address.

“The promise of acceleration never materialized the way it was intended. It seemed like the treatment of the file was no different from a regular file,” they said.

All-told, by last fall, CreateTO axed expected construction starts at several sites, listing them as “to be determined” in its reports. However, they still hoped to start on Wilson Heights and two other locations by June 2023, another deadline it appears they’ll miss.

In a report released at the time, Gupta said staff knew they needed to move “expeditiously” given the threat of rising construction and borrowing costs to the program’s future.

But the sanitary capacity issues at Wilson Heights continued to be a thorn. While the Westgate sewer didn’t need to be finished for work to begin, it had to be finished by the time the building was ready to be hooked up, Tridel says. And they continued to work through kinks over financing.

It’s under that pressure that city hall and CreateTO started rethinking the Housing Now projects. In March, CreateTO’s board approved renegotiated documents with the developers at Wilson Heights, in recognition that the developers’ projected returns had been “substantially reduced” by cost inflation (the exact details in the documents have not been publicly disclosed).

When Tridel’s Mestyan looks at the Wilson parking lot, he sees what it could soon be: 40,000 square feet of office space, 10,000 square feet of community space, and hundreds of new homes. Construction is now expected to start later this year.

Tridel and Greenwin still don’t have a loan agreement with the Canada Mortgage and Housing Corp., though the city expects one by summer’s end. Bond is hopeful, saying the federal agency now seems to be in closer alignment with the city’s target timelines for Housing Now. The Westgate sewer is under construction via Toronto Water, which aims for completion this year.

“Obviously we’re thrilled that’s the case, although they probably should have commenced sooner,” Mestyan said.

He compares the project to a home renovation, where you do what due diligence you can, but invisible issues are unearthed along the way. “Changing out a faucet that you and I believe is an afternoon at Home Depot may be more challenging than that, once you start ripping things apart.”

To Bond, the tale of Housing Now raises important considerations for decision-makers.

“Even with land, even with the kinds of resources and focus the city has on this, it’s still very difficult to deliver affordable housing — and one question might be, why is it so difficult?”

A report from the Housing Secretariat, released in April, warned that the city’s ability to meet its affordable housing goals was at risk. It said changes to the federal National Housing Strategy programs has meant capital grants are capped at “insufficient” levels to develop new homes in Toronto, and took aim at an Ontario law introduced last year that removes development charge revenues on housing services — revenues the city depended on.

“These factors, along with significant increases in interest rates, labour shortages and global supply chain disruptions impacting the availability of materials, have resulted in many housing projects being stalled in Toronto,” it reads, noting construction costs had gone up by more than 63 per cent since 2019.

Many players familiar with Housing Now also believe the initiative has forced a substantial learning curve for city hall. “We’ve learnt an awful lot about what kinds of work to do earlier, what kinds of conversations to have earlier,” Bond said.

Richardson believes the city may have had to learn more lessons than expected, after diving into the program with such ambitious timelines. “I think (the city) was fully unaware of how many landmines they spent the last 25, 30 years putting in front of housing development.”

Justin Sherwood, an executive with the Building Industry and Land Development Association, says many of the issues that have plagued Housing Now are affecting developments citywide.

“It’s actually a microcosm of what it means to be developing housing across Toronto right now, in that it’s very challenging and time consuming and complicated and in some cases, very bureaucratic,” he said.

The city has in the past tried to create fast-tracking processes for priority developments, but Sherwood says they haven’t been effective. He does see reasons to be optimistic. Late last year, Tory promised a new division to streamline develop approvals and combat existing siloes — work the city confirms is ongoing.

“I think the city came to a recognition that they needed to take a look, fundamentally, at how they were handling development late last year and early this year,” Sherwood said.

Richardson retains abiding faith in Housing Now’s ideals. As he walked around the Wilson lot recently, he wore a blue T-shirt emblazoned with “Future Residents Association” on the back. If construction begins this year, residents could move in by 2026.

Those units could make a real dent in a city where a midincome affordable rental site recently received more than 12 times more applications than available apartments — and where more than 84,500 households are waiting for deeply affordable housing as of March.

But for now, the parking lot looks as it has for years. A development notice plastered on the brick wall of Wilson Station, alerting passersby to a public meeting on the project in 2019, has been peeled away in strips.

“We’ve been standing in this parking lot talking to reporters for four years,” he said. “It’s exactly the same story.”

Victoria Gibson is a Toronto-based reporter for the Star covering affordable housing. Reach her via email: victoriagibson@thestar.ca