Pushback from real estate trusts prompted province to weaken city's affordability requirements
Ontario has scrapped Toronto’s proposed affordable housing requirements for nearly 70 redevelopment sites across the city, replacing mandatory quotas with non-binding language after pressure from major landowners, including several real estate investment trusts (REITs).
The province’s decision came in late January, just ahead of Ontario’s 2025 election call, more than a year after Toronto city council submitted amendments to convert parcels of former employment land for residential use.
The city’s original proposal included affordability mandates requiring a percentage of new units to be priced below market rates for at least 99 years. However, the Ford government’s final approval changed the requirement to a suggestion, stating that affordable housing was merely “encouraged.”
According to documents reviewed by the Toronto Star, at least three REITs lobbied against the affordability conditions, warning the rules could stifle development or render projects financially unviable.
“During a housing crisis, this dangerous disincentive acts directly contrary to the provincial and municipal mandate to bring housing to market faster,” wrote lawyers for CT REIT, which owns land at 4630 Sheppard Ave. E.
Requirements could halt projects
CT REIT’s legal submission called Toronto’s requirements “unauthorized,” “premature,” and inconsistent with planning law and precedent set by the Ontario Land Tribunal. They claimed the quotas could result in “no redevelopment” of the property.
Choice REIT, owner of 681 Silver Star Blvd. in Scarborough, raised similar objections. Planning consultants argued that the policy might “sterilize a site from residential redevelopment” if affordability demands proved too steep, especially for properties with long-term commercial leases.
“The affordable housing policy could potentially sterilize a site... if the requirement is too substantial and impacts upon the feasibility of redevelopment,” the consultants wrote, noting they expected “several years” of further study before advancing plans.
A third submission, from representatives of 401 Weston Centre Ltd. and Calloway REIT (Weston401 Inc.), which own the Crossroads Shopping Centre in North York, urged the province to eliminate the city’s affordability targets altogether.
Their proposal for roughly 36,000 new housing units would include some affordable homes, they claimed, but they opposed fixed quotas, which they said would cause “additional delays” and ignored the project’s potential to deliver homes and jobs.
Province overrides city tradeoffs
Toronto city council had approved the land use conversions with clear tradeoffs, including minimum affordable housing contributions, which city staff considered key to ensuring new developments served residents across income levels. But Ontario’s Housing Ministry changed that balance without offering a public explanation.
“The province has all the power to determine what the city is and isn’t allowed to do,” said Paul Hess, a planning expert at the University of Toronto. He noted that while cities are delegated some authority, the province can override municipal decisions at any time.
After the province made its decision, Toronto’s chief planner Jason Thorne circulated a memo to elected officials emphasizing that council’s support for the conversions was tied directly to the affordability provisions. The memo, obtained through a freedom of information request, warned that the province’s revision could jeopardize approximately 5,000 affordable units.
Read next: Ontario's housing affordability crisis – how bad is it?
Ontario’s move to ease affordability rules comes as the province struggles with a sluggish housing market that threatens its target of building 1.5 million homes by 2031. In Wasaga Beach earlier this year, Premier Doug Ford defended his government’s pro-developer stance.
“If you won’t support and create the environment and the conditions for companies to build, they just won’t build,” Ford said, adding his administration was doing everything it could to cut “red tape and regulations.”
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