The city is planning to start charging developers a fee for new condo units — and a developer will have to provide an incentive package if they want to build.
In the city’s draft rules for a “substantial” new condo project, the proposed fee is $30,000 per unit.
The developers would have to submit a project plan for the cost of the units to be priced.
The city also wants developers to make an incentive payment to developers when they sell their existing buildings.
“We’re asking developers to invest in the building,” Councillor Josh Matlow told reporters after council’s committee on planning and development heard the draft.
“It’s a reasonable amount.
We’re looking at an incentive and then we’re going to see if it’s a sufficient incentive to bring people into the community.”
Marlow said he doesn’t think the fee will be too high, but the proposed measure is “fair.”
The proposed fees, which Matlow said would be similar to those proposed in the Vancouver and Montreal markets, would apply to all new residential buildings in the city.
Toronto city council is expected to discuss the proposed fees at its next meeting on June 18.
Meanwhile, a study by consultants from the University of Toronto and the city found the city does not have enough units to build new housing, even as the population of Toronto grew by over 12,000 people.
City staff is now looking at ways to encourage developers to create more affordable housing in the core of the city, said Councillors Maria Augimeri and Adam Vaughan.
Vaughan said the city is now exploring whether it can create an affordable housing zone within the city limits, which is currently the only way to provide affordable housing.
Council will discuss the issue of affordable housing on Wednesday.
A report released Wednesday by the University’s Center for Housing Policy Research, which examined the impact of the condo tax, found the tax did not affect affordability.
For example, while the average cost of a two-bedroom unit in Toronto increased by $1,000 since the city imposed the condo levy, that was still $1 more than the average price of a comparable home in the United States, where it was $1.25 more.
There were also no significant increases in the number of renters in Toronto, as there were no significant changes in the cost per month of renting, according to the report.
But the report found there was a negative impact on housing affordability for single people.
“In particular, the negative impact of condominium taxes on affordability was greatest for single adults in households earning less than $75,000 and greater than $100,000,” the report said.
“The effect of the tax on housing was greatest among single adults and was greatest in areas where there was the greatest concentration of single adults.”
The University of Ottawa’s Richard Kavanagh said there are still “significant gaps” between the housing costs of single and two-person households in Toronto.
Kavanagh added that the report’s conclusion that the city should build more affordable units is “very important” because “it’s going to be a challenge for a city that’s built on housing.”
The city’s current plans for new housing in Toronto focus on the core, and the idea is to build more than 1,000 new homes, said Vaughan.
But the city will still need to figure out how to build the new housing that is necessary to build an affordable city, he added.
“There’s going a lot of work ahead of us, and I think the best advice I can give to you is that the council has the mandate to do the right thing, but I think that there are some significant issues that are going to need to be addressed,” Vaughan said.
Matlow said council will look at what the province does to build housing.
“I’m not sure that the provincial government is up to the task of doing the right things.
We have to be creative.
We can’t just build more.”
The proposed fee would be a one-time payment and would apply only to new units in condos that are no more than six storeys or less than six stories tall.