Affordable rental units 

Affordable housing is a big social expense that our society believes in as long as they do not have to pay for it and the voters would drive out of office any politician who raised taxes for social housing.

So here is another expensive social cost that can be downloaded onto condominiums.

Section 37j
Developers can be tempted into providing affordable rental units in their new condo developments if there are profits to be made in doing so. So Section 37j of the city plan will state:

A maximum of 20 individual affordable rental units, located in a registered condominium, provided the units are owned and operated as rental housing by a registered non-profit housing provider satisfactory to the City and meet established criteria, including securing through an agreement the maintenance of affordable rents for at least 25 years and rental tenure for at least 50 years. Such units will be deemed to be rental housing notwithstanding the definition of rental housing that would otherwise exclude condominium-registered units.

Radical socialism?

Not even close. It will not be like the movie Dr. Zhivago where the owners were pushed into only one room in their own homes to provide housing for the hoi polloi.

Nor will the homeless, alcoholics, drug addicts, mentally ill or welfare recipients be moving in anytime soon. The "approved" agencies will qualify potential tenants who will have to meet certain standards.

The renters will also have to pay "affordable rents". Rents at or below Canada Mortgage and Housing Corporation’s average market rent are considered to be “affordable’’ under the City of Toronto’s Official Plan definition. The average market rent for a two-bedroom apartment in the Toronto area is $1,149.

Present projects
In exchange for neighbourhood accepting condominium towers along King Street West, Urbancorp, sold the first three stories of their Westside Gallery Loft condominium building, at 38 Abell Street for $8.4-million, to Artscape. Artscape in turn sold 48 units to artists and rented the other 20 units to artists.

Artscape is a not-for-profit organization that provides affordable studios and living accommodation for artists.

The "Charlie," a Great Gulf Homes condo to be built at Charlotte and King will be home to four households in need of affordable housing. Great Gulf has given Kehilla four condos in exchange for extra density from the City of Toronto.

Kehilla is the official housing agency of UJA Federation of Greater Toronto.

Kehilla will retain ownership of the units, and under an agreement with the City, will ensure that the units remain affordable. Councillor Adam Vaughan championed these units to be offered within the building, not offsite, thus meeting the goal of inclusionary zoning.

Ten York
Ten York, a 62-storey tower with a four-storey podium set for completion near late 2016, is to have 694 condo units, 12 of which will be owned and managed as co-ops by the Co-op Housing Federation of Toronto. Tridel is providing about $5 million for Ten York’s affordable units.

Units are priced from $350,000 to $4 million—and the purchasers have been made aware of the rental units.

Tenants renting Ten York’s affordable units will be people who are “employed, and meet certain thresholds and criteria,’’ says Steve Upton, Tridel’s vice president of development and planning.

The Ten York development is among close to a dozen medium to high-rise condo buildings in Councillor Adam Vaughan’s Trinity-Spadina Ward either under construction or planned—that will have an affordable rental component. He states that the total number of units in all these buildings is about 40 to 50.

“Is it going to solve the problem of people on the waiting list for affordable housing in Toronto? No, I’m not naïve. But it’s better than doing nothing, and for a decade we’ve been doing nothing,’’ Vaughan said, referring to the shortage of new affordable housing projects in the city. “If we started to roll this out as a city-wide program, we might be in a position where we start attacking the housing waiting list,’’ he added.

East Bayfront
From 70 to 80 rental units will be built in a 220 condominium building in the new East Bayfront waterfront project. The affordable rental units will be fully segregated from the market-value condos.

The city will own the units and the rental apartments will be managed by Artscape who will select the "artists" that will rent these units.

How is it controlled?
In general, rental units are owned by non-profit housing providers so there is less risk of them being sold or converted to ownership tenure in the future. The proposed policy thus includes additional criteria of a minimum affordability period of 25 years and a minimum period of 50 years for which the rental tenure is secured.

These were the terms accepted by Artscape where the City approved a site-specific Official Plan Amendment to authorize condominium-registered rental units in 38 Abell Street.

How does it work
The affordable rental units may be grouped on one or more storeys or wings of the building and secured as rental housing, with the rental section not included in the condominium registration.

This arrangement is commonly used when the City of Toronto secures replacement rental housing in a section of a larger condominium building or complex.

The bottom one or two residential floors may contain the rental units. At some projects, the elevators servicing the condo units are in the lobby and they bypass the affordable rental floors. A separate elevator at the end of the ground floor hallway services those floors.

Other developers scatter the affordable rental units throughout the lower floors in the building so there is no internal "ghetto".

Who wins?
The lucky few who get to live in a new subsidized apartment.

The city wins by downloading the administration costs of running this program onto the non-profit agencies. They also face less political pressure to build more public housing.

The non-profit agencies gain by owning free housing units and gets to say who can live in them.

The developer makes more profits by being allowed to build more units on the site than would normally be allowed.

Who loses
Serious flaws in this system will not show up until sometime down the road. When that day comes it will be the condo owners and the agencies that own these units who will find that they are stuck with unexpected costs.

What could go wrong?
Even if the "social housing" part of the property is separated from the privately-owned condos as successfully as the steerage passengers were segregated from their first-class betters on the Titanic, if the ship sinks, everybody gets wet.

If the rental units are exempt from paying maintenance fee increases, special assessments and loans, it will place an increased burden on the regular condo owners.

Will the residents in the rental units be required to follow all the requirements of the corporation's declaration, bylaws and rules? If not, the regular condo owners may have good reason to be upset.

If they are covered by the condo corporation's "laws" do the non-profit agencies understand the possibility of absorbing high legal costs if any of their  tenants get out of line?

We will have to wait and see how this all plays out.

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