Item - 2022.PH35.21

The Planning and Housing Committee recommends that:  

Lease/Sub-lease Authorities for Modular Supportive Housing Projects

1. City Council authorize the Deputy City Manager, Corporate Services, in consultation with the Executive Director, Housing Secretariat, to approve and execute, on behalf of the City, long-term, nominal rent or below market rent leases/sub-leases and related agreements with the non-profit housing operators to be selected through a request for proposals process for 540 Cedarvale Avenue and 150 Dunn Avenue, substantially on the major terms and conditions set out in Attachment 1 to the report (June 23, 2022) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, and such other terms as deemed appropriate by the Deputy City Manager, Corporate Services in consultation with Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

2. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat, to negotiate, approve and execute, on behalf of the City, a below market rent sub-lease with Homes First Society or a related entity at 39 Dundalk Drive for up to five (5) years, with an option to extend the term for up to 5 additional years, substantially on the major terms and conditions set out in Attachment 1 to the report (June 23, 2022) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, and such other terms as deemed appropriate by Executive Director, Corporate Real Estate Management in consultation with Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

3. City Council authorize the Executive Director, Housing Secretariat to negotiate and execute on behalf of the City, a Municipal Housing Facility Agreement (the City's "Contribution Agreement") with Homes First Society or a related entity, for 39 Dundalk Drive, to set out the terms of the operation of the new affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

Authority to Extend Property Tax Exemptions – Modular Housing Initiative Phase Two

4. City Council exempt the 150 affordable rental homes to be developed in Phase Two of the Modular Housing Initiative from taxation for municipal and school purposes for an additional 15 years (in addition to the 35 year exemption previously authorized by City Council pursuant to CC20.6) through the Open Door Affordable Housing Program as outlined in the Financial Impact section of the report (June 23, 2022) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management.

Authority to Enter into a Lease with the University Health Network for Several Residential Properties and a Sub-lease with a Non-profit Housing Provider

5. City Council authorize the Deputy City Manager, Corporate Services to enter into a long-term nominal lease with University Health Network for the residential properties identified as 74 and 82 Dunn Avenue, 1, 3, 5, 7, 9, 11, 13, 15 and 17 Close Avenue, and 74 and 78 Springhurst Avenue ("House-form Properties"), for a 49-year term, on terms and conditions set out in Attachment 2 to the report (June 23, 2022) from the Executive Director, Housing Secretariat and Executive Director, Corporate Real Estate Management, and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management division in consultation with the Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

6. City Council direct the Executive Director, Housing Secretariat, in consultation with the Executive Director, Corporate Real Estate Management, to issue a competitive Request for Proposals and select a qualified non-profit housing provider to operate and maintain the House-form Properties.

7. City Council authorize the Executive Director, Corporate Real Estate Management to enter into a sub-lease with the selected non-profit housing provider for the House-form Properties, substantially on the major terms and conditions set out in Attachment and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management in consultation with the Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

8. City Council authorize the Executive Director, Housing Secretariat to negotiate and enter into a municipal housing facility agreement (the "Contribution Agreement') with the non-profit housing provider selected through the process in Part 6, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form acceptable to the City Solicitor, to secure the House-form Properties as affordable rental housing for the term of the City's Contribution Agreement with the selected non-profit provider.

9. City Council enact a site specific by-law amending the criteria for "Affordable Housing" in the Municipal Housing Facility By-law 183-2022, to exempt the House-form Properties, from the requirement that affordable rental housing units be “new” housing to meet the definition of “Affordable Housing” in Municipal Housing Facility By-law 183-2022.

10. City Council, conditional on the enacting of the site specific by-law amendment referred to in Part 9 above, exempt the House-form Properties, from taxation for municipal and school purposes for the term of the City's Contribution Agreement with the selected non-profit provider.

11. City Council authorize the Controller to cancel or refund any taxes paid after the effective date of the exemption from taxation for municipal and school purposes, as set out in the Contribution Agreement, referenced in Recommendation 10 above.

12. City Council authorize the Executive Director, Housing Secretariat to execute, on behalf of the City, any security or financing documents required by the provider selected through the process in Part 6, where permitted under the sub-lease and the Contribution Agreement, 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. 

Extension of Operating Agreement for 444 Logan Avenue with the City

13. City Council authorize an extension of the operating agreement and the date by which WoodGreen Community Housing Incorporated, or its successor, is obligated to re-convey the property at 444 Logan Avenue to the City, to August 1, 2024, to allow time for the City to negotiate the terms of the continued operation of this social housing project.

14. City Council direct Executive Director, Housing Secretariat  to report back on the results of the negotiations with WoodGreen Community Housing Incorporated and a recommended course of action by no later than the third quarter of 2023.

Federal and Provincial Housing Programs

15. City Council extend the application of the approvals and delegated authorities set out in Parts 1, 2, 7, 9, 10, 12, 13, 14, 16, 17, 18, 19 and 20 of Item PH26.4, as adopted by City Council at its meeting on October 1 and 4, 2021 (Rapid Housing Initiative-Phase Two), to any time-sensitive federally or provincially funded housing programs that become available in 2022 ("Housing Programs"), with such changes as may be necessary to enable the City to take all steps necessary to participate in and implement such program(s).

16. City Council authorize the Executive Director, Housing Secretariat to select non-profit and Indigenous housing providers through a non-competitive process to operate any properties approved under Housing Programs, where necessary to participate in and implement such program(s) and to meet urgent timelines associated with getting new housing projects ready for occupancy, and to negotiate and execute, on behalf of the City of Toronto, municipal housing project facility agreements with the housing providers selected to secure the financial assistance being provided and to set out the terms of the operation of the new affordable rental housing, on terms and conditions satisfactory to the Executive Director, Housing Secretariat and in a form approved by the City Solicitor.

17. City Council delegate authority to the Executive Director, Corporate Real Estate Management, to approve and execute, on behalf of the City, nominal rent or below market rent leases and related agreements for a term of up to fifty (50) years with the non-profit housing providers to be selected by the Executive Director, Housing Secretariat through a competitive process, and for an initial term of up to five (5) years, with an option to extend the term for up to five additional years with the non-profit housing operators to be selected by the Executive Director, Housing Secretariat through non-competitive process, in connection with any such Housing Programs, on such terms and conditions as may be acceptable to the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor, for such properties approved under the Housing Programs.

18. City Council authorize up to 600 affordable rental homes, to be acquired or developed through the Housing Programs to be eligible for Open Door Affordable Housing Program incentives including waivers of fees for planning applications, building permits and parkland dedication fees, and an exemption from development charges.

19. City Council authorize the Executive Director, Housing Secretariat, to provide capital funding from the Development Charges Reserve Fund for Subsidized Housing (XR2116) in an amount not to exceed $300,000, inclusive of the Harmonized Sales Tax and disbursements, to pay for due diligence work incurred to identify and prepare properties for consideration under the Housing Programs. 

20. City Council approve the necessary adjustments required to allocate federal or provincial funding, received during Council recess, for the Housing Programs to the Capital Revolving Reserve Fund for Affordable Housing (XR1058) to be overseen by the Executive Director, Housing Secretariat and used to support the acquisition by the City of real estate interests suitable for the Housing Programs , the purchase of modular housing, related pre-development and pre-construction costs (e.g. community engagement, planning, communications, environmental site assessments, cost consultant reports, permits, architectural or engineering reports, appraisals, legal/closing costs related to acquisition of land and buildings) and all other costs permitted under any secured federal or provincial housing programs to secure and develop affordable housing, in each instance on terms satisfactory to the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management.

21. City Council approve the necessary adjustments required to amend the 2022 Capital Budget for the Housing Secretariat to include any federal or provincial funding received during Council recess for the Housing Programs to enable staff to begin implementation of projects.

22. City Council direct that if any community consultations on the projects covered by this item be held before the end of the current term, that the Deputy City Manager, Community and Social Services and the Executive Director, Housing Secretariat consult, where possible, with the local ward councillor on the consultation plan.

Increasing the supply of affordable and supportive housing is one of the key objectives of the HousingTO 2020-2030 Action Plan ("HousingTO Plan"). The City continues to move rapidly to implement or advance a number of key programs, projects and initiatives to scale up the supply of a range of new homes in all areas across Toronto. Concurrently, there is a keen focus on maintaining our existing supply of homes and taking action to improve housing conditions for current and future residents. This report recommends City Council approval for staff to take a number of actions over the upcoming months to advance these objectives.

Specifically, this report recommends Council approval to enter into long-term leases/sub-leases with non-profit housing providers to operate a number of new affordable and supportive housing sites. The report also recommends Council approval for the City to enter into a long-term lease with the University Health Network for the purpose of creating new affordable housing, following the due diligence work referenced in PH17.4, and subject to the terms and conditions outlined in Attachment 2 of this report.

In addition, this report seeks City Council approval for staff to provide a two-year extension agreement to WoodGreen Community Housing Incorporated ("WoodGreen") to delay their re-conveyance obligations to the City with respect to the social housing building at 444 Logan Avenue. This extension will allow more time for WoodGreen and the City to negotiate the terms and conditions for WoodGreen's continued use of the property over the long term.

Further, this report recommends a number of authorities for staff to be able to take advantage of new federal and provincial funding programs, should they become available before the end of 2022. This includes, but is not limited to, future phases of the Rapid Housing Initiative, which has been a key program for the City to create new deeply affordable homes to help people exist homelessness. The authorities being recommended will allow staff to enter into legal agreements, and receive and spend any new funding in line with both program and City rules and regulations.

There are currently over 17,000 new affordable rental and supportive homes at various stages of development in the City's pipeline, including over 2,000 new supportive homes. In May 2022, through Item EX32.6, City Council approved a new 24-month plan, the '2023-2024 Housing Recovery and Resilience Plan' to further expedite delivery of new homes for people experiencing homelessness.

Delivery of the 2023-2024 Housing Recovery and Resilience Plan, and the larger 10-year HousingTO Plan, requires new and enhanced investments from the federal and provincial governments. The current economic environment and challenging housing situation also require projects, programs and initiatives to be expedited to create new affordable housing opportunities as quickly as possible. City Council's approval of the recommendations in this report will help support these actions.