Item - 2021.PH28.3

The Planning and Housing Committee recommends that:

1. City Council authorize the Executive Director, Housing Secretariat to issue an open and transparent competitive proposal call under the Multi-Unit Residential Acquisition Program (the "MURA Program" or "Program") on an annual basis to experienced non-profit and Indigenous affordable rental housing providers and to select the best proponents, in her sole discretion, to purchase or establish long-term conventional financing, renovate and operate affordable rental housing to be acquired under the MURA Program.

2. City Council increase the 2021 Housing Secretariat Operating Budget by $3.5 million gross and $0 net, fully funded from the City's Development Charges Reserve Fund (XR2116), for the purpose of funding the 2021 proposal call under the Multi-Unit Residential Acquisition Program, with such funding to be payable to the non-profit and Indigenous organizations selected through the process outlined in Recommendation 1 above, for the purpose of acquiring and renovating affordable rental housing under the Program.

3. City Council authorize the Executive Director, Housing Secretariat to negotiate and enter into a municipal capital facility agreement for housing purposes ("Contribution Agreement") providing for the advance of the Program funds to the non-profit and Indigenous groups or a related corporation selected through proposal calls under the Program, whether advanced before or after the entering into of the Contribution Agreement, on terms and conditions satisfactory to the Executive Director, Housing Secretariat, and in a form acceptable to the City Solicitor.

4.  City Council authorize the Executive Director, Housing Secretariat to advance a portion of the funding to be provided to the selected non-profit and Indigenous groups, for the purposes of providing funds for deposits and other pre-purchase expenses, prior to the proponent entering into a Contribution Agreement.

5. City Council authorize the Executive Director, Housing Secretariat to allocate 20 percent of annual funding allocations under the Program to support the acquisition of market rental properties by Indigenous housing organizations to create permanent affordable rental homes for Indigenous residents.

6. City Council authorize the Executive Director, Housing Secretariat to support the selected non-profit and Indigenous groups on any applications to the federal or provincial governments to secure funding to support the acquisition and/or renovation of affordable rental housing under the Program, and to execute any agreements or other documents required with respect to same, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form acceptable to the City Solicitor.

7. City Council authorize the Executive Director, Housing Secretariat to execute, on behalf of the City, any security or financing documents or any other documents required to facilitate the funding process, including any documents required by a selected not for profit, or its related corporation to complete third party financing and refinancing, when required during the term of the City's agreement with the successful non-profit and Indigenous groups or their successors.

8. City Council authorize the affordable rental units secured through the Program be eligible for Open Door Program incentives including waivers of planning application and building permit fees, as outlined in the Financial Impact Section of the report (October 14, 2021) from the Executive Director, Housing Secretariat. 

9. City Council amend Municipal Housing Facility By-law 1756-2019 to include as a category in the criteria for "Affordable Housing" units acquired pursuant to the Multi-Unit Residential Acquisition Program.

10. City Council, conditional on the enacting of the by-law amendment referred to in Recommendation 9 above, authorize an exemption from taxation for municipal and school purposes for up to 100 affordable rental units annually to a maximum of 500 units to be secured through the Program for the 99-year term of the Contribution Agreements.

11. City Council authorize the Controller to cancel or refund any taxes paid after the effective date of a Contribution Agreement.

12. City Council authorize the Executive Director, Housing Secretariat to issue a Request for Proposals and to select non-profit and Indigenous housing providers to operate properties acquired by the City under the Program.

13. City Council authorize the Executive Director, Housing Secretariat to negotiate and execute on behalf of the City, municipal housing facility agreements for housing purposes (the City's "Contribution Agreement") for 99 years with the non-profit and Indigenous housing providers selected through the competitive process referred to in Recommendation 12, or a related corporation, to secure the financial assistance being provided and to set out the terms of the operation of the affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

14. City Council authorize the Executive Director, Housing Secretariat to execute, on behalf of the City, any security or financing documents required by the non-profit and Indigenous housing providers, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the municipal housing facility agreement, as required by normal business practices, and provided that such documents do not give rise to financial obligations on the part of the City that have not been previously approved by City Council.

15. City Council re-iterate the request that the federal and provincial governments establish acquisition programs that would support the acquisitions and renovations/ conversions for all types of private market residential properties and other properties, to create new permanent affordable and supportive homes.

16. City Council authorize the City Solicitor to introduce the necessary Bills to give effect to City Council's decision.

17. City Council direct the Executive Director, Housing Secretariat to incorporate an intersectional gender equity lens to ensure that the Multi-Unit Residential Acquisition (MURA) Program provides equitable housing opportunities and outcomes to all equity-deserving groups including women, non-binary and LGBTQ2S+ communities.

18. City Council direct the Chief Financial Officer and Treasurer in consultation with the Executive Director, Housing Secretariat, as part of the report back on the Vacant Home Tax, to consider the feasibility of allocating a portion of revenues to be received by the City from the future Vacant Homes Tax to the Capital Revolving Loan for Affordable Housing (XR1058), to be allocated to the Multi-Unit Residential Acquisition Program.

In October 2020, through Item PH17.5, City Council adopted the process developed as part of the Rooming House Acquisition Pilot Project to support the acquisition of private market rental housing by non-profit housing organizations, including co-operative housing providers. Council also directed staff to report back on establishing an ongoing rental housing acquisition program that would provide dedicated financial support to non-profit housing organizations or community land trusts, to facilitate the purchase and conversion of at-risk private market affordable housing to permanently affordable rental homes.

This report responds to Council's request and recommends a new program, to be called the Multi-Unit Residential Acquisition ("MURA") Program, for approval. The primary objectives of the MURA Program are to remove properties from the speculative housing market and create permanently affordable rental homes; improve housing stability for current and future tenants; improve the physical conditions of buildings; increase capacity in the non-profit and Indigenous housing sectors; and ensure the long-term financial sustainability of the homes.

The report recommends a number of actions to begin implementation of the MURA Program in 2021. The proposed Program will provide grant funding and Open Door Program incentives to qualified non-profit and Indigenous housing groups to support their purchase, renovation and operation of market rental properties to create permanently affordable rental homes for Torontonians with low-and-moderate incomes. The Program will also support the City's acquisition of at-risk affordable rental housing that non-profit and Indigenous organizations will operate long term.

The MURA Program will be implemented through an open annual proposal call process to establish a list of qualified and experienced non-profit and Indigenous housing providers. Selected proponents will be given pre-approval of available funding which would provide certainty and allow them to move quickly to secure properties available for purchase on the open market. Proponents will have up to one calendar year from the date of approval to submit properties for consideration on a rolling basis.

To advance the City's commitments to truth, reconciliation and justice, it is also proposed that 20% of the annual funding allocations under the MURA Program be dedicated to support acquisitions by Indigenous housing organizations for Indigenous Peoples.

Subject to City Council approval of this report, the first proposal call will make $10,000,000 in funding available from the Development Charges Reserve Fund (XR2116). Subsequent funding will also be available from the City's Land Acquisition Reserve Fund subject to Council's approval of the strategic disposal of the City asset at 249 Queens Quay West which will be considered by the Executive Committee in October 2021. The strategic disposal of 249 Queens Quay West supports previous Council direction in PH17.5 to establish a small sites acquisition program (now MURA).

Under MURA, eligible properties will include small apartment buildings (up to 60 units) and multi-tenant houses (also known as rooming houses) that are either vacant or occupied and at-risk of being lost due to conversion. Based on projects previously supported by the City and advice from the non-profit housing and financial sectors, the MURA Program proposes that apartment building acquisitions and renovations be eligible for up to $200,000 in funding per dwelling unit and multi-tenant houses be eligible for up to $150,000 per dwelling room. Any additional costs will be funded and/or financed by the housing operators. Through the 2021 proposal call, it is anticipated that between 50 and 67 rental apartments and/or dwelling rooms will be converted to permanently affordable rental homes.

Recognizing that most residents will have their housing needs met through the city’s existing rental supply over the next decade, it is crucial that these homes be preserved and maintained. While the City is taking a leadership role in launching MURA to protect existing rental housing, it is critical that the federal and provincial governments also support these efforts. An acquisition and renovation/conversion program from other orders of government, focused on protecting existing rental housing, could be combined with the City's MURA Program to increase grant funding and/or provide low-cost financing to support acquisitions. Alternatively, other orders of government could allocate funding to the City, to support the expansion/enhancement of MURA in the future. This would ultimately result in a greater number of properties being converted to non-profit, Indigenous and publicly-owned permanent affordable rental housing. Through the stacking of government programs, deeper levels of affordability can also be achieved for lower-income residents, including vulnerable and marginalized people experiencing or at-risk of homelessness.

Implementation of the MURA Program will help advance key strategic actions identified in the HousingTO 2020-2030 Action Plan. Specifically, it will help prevent homelessness and improve pathways to housing stability; maintain and increase access to affordable housing; ensure well-maintained and secure homes for renters; and increase the supply of 'For Indigenous, By Indigenous' affordable housing.