Downloading affordable housing 

Mike Harris downloaded the cost of building and operating public housing onto the municipalities. However city councils do not want to raise taxes to pay for maintaining the existing buildings and building new affordable and public housing.

As waiting lists for affordable and public housing grew, the municipalities were looking for a way out. Some city councillors and the social housing agencies think they found a solution. Since Harris balanced the provincial budget by downloaded the cost of affordable housing onto the municipalities, the city can help balance their budget by downloading the cost of affordable housing onto new condominium developments.

Section 37i
There are political pressures being put upon city councillors and incentives given to developers to add a few units specifically for low-income owners in new condo developments.

The city proposes to add "affordable ownership housing" to Section 37i so it will read:
purpose built rental housing with mid-range or affordable rents, land for affordable housing, affordable ownership housing, or, at the discretion of the owner, cash-in-lieu of affordable rental or ownership units or land;

Habitat for Humanity
Habitat for Humanity has written a report, proposing that developers of new condo projects be granted extra density rights—the ability to add lucrative floors and units—in exchange for allowing Habitat access to new condos for under $130,000 each.

159 Wellesley Street East
This new development by Diamond Corporation (later sold to Aterra) is the first Habitat for Humanity participation in a new condo tower development using the Planning Act although they have worked with the Daniels Corp. and the Monarch Group.

Diamond Corp. has previously provided affordable housing units at 210 Simcoe Street with OCADU and Artspace.

159 Wellesley East

Habitat will get eight 900 square foot, three-bedroom units in a 35-story highrise. This is a part of the developer's Section 37 compensation to Councillor Kristyn Wong-Tam's Ward 27 for being allowed to build such a high density tower on such a very small lot.

The projected occupancy date is October 2019. The market prices start at $302,000 for a unit, $50,000 for a parking spot and $5,000 for a locker.

Affordable units
Habitat looked at what the expected condo fees and taxes would be and that with the mortgage payments, homeowner costs will fall within the 30 per cent of income criteria.

Habitat for Humanity Toronto offers low-income families  no-interest, no-profit mortgages with payments set at less than 30 per cent of gross income. A family of three requires an income would be $29,400 to $38,153, while a family four needs an income of $32,600 to $45,322 to be eligible for a home.

The Habitat owners will have full access to the amenities and will pay full common element costs. To make this possible, the condo will have no expensive amenities such as a swimming pool.

The Habitat model also requires homeowners to put in 500 hours of “sweat equity” and, along with other volunteers, help build their homes.

That is harder to do on a highrise construction site. The general contractor will build the units but leave an empty shell. A lot of the inside finishing, such as drywalling, plastering, painting, flooring and installing kitchen cabinets will be done by the Habitat volunteers and the home owners.

Deed restrictions
Since they are getting their units at far below market rates, the owners cannot flip their units or make a large profit when they sell a few years later.

Habitat's model is to hold a deed restriction on the units to ensure they remain affordable. If the home buyer of a Habitat unit sells for more than the purchasing price, the profit is shared with Habitat and/or the property is sold to another family earning less than the maximum income.

An artist's rendering of 159 Wellesley

Is this a win-win situation?
This looks like a great idea. Low-income families get to own their own homes in the downtown core. This program  also puts a few low-income homes in among higher income units so the city is spared another large public-housing ghetto. Finally, the city and the province doesn't have to spend money that they don't have.

However, critics claim that the Section 37 money that the developers give to these non-profit agencies would be better spent if it was all pooled together and used to build more public housing or used to repair the city's existing crumbling public housing stock.

These programs can only assist a very limited number of low-income families and they completely ignore the needs of the very poor and the homeless. They will remain in the rundown and dangerous public housing projects.

The city also loses out on land for parks, public playgrounds and civic improvements as the Section 37 money that is used to subsidize these low-cost units can't be used to pay for other public amenities that the downtown wards require.

I also wonder if putting a low-income family into a large condominium tower is such a great idea. A few years down the road expensive repairs may create the need for huge special assessments or if the condo corporation assumes multi-million dollar loans, it will be impossible for the low income families to pay their share of the costs.

Any candidate for the board promising no fee increases should be able to count on those eight proxies.

Cinema Tower
In the spring of 2014, the Daniels Corporation partnered with Habitat for Humanity to provide two families a new condominium unit in the Cinema Tower Condominium at 21 Widmer Street Toronto.

This 43-storey residence that is fully equipped with spectacular building features and amenities, and is conveniently located near shopping centres, with access to streetcars and subways.

The key exchange and dedication ceremony that marked a new beginning for the first partner family was held on Sunday, March 23, 2014.

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