Toronto risks losing $30M in federal funding after vote against sixplexes citywide

The City of Toronto is at risk of losing $30 million in federal housing funding after city council voted last month against allowing sixplexes citywide, a key condition of its deal with Ottawa.

At its meeting on June 25, city council debated the motion to approve sixplexes in all parts of the city, but that was amended by councillors who approved maintaining permissions for fourplexes citywide while limiting sixplex construction in eight Toronto-East York district wards and Ward 23 (Scarborough North), where a pilot is already in place.

In March, then-federal housing minister Nate Erskine-Smith warned Toronto Mayor Olivia Chow that any deviation from a citywide policy permitting sixplexes would result in 25 per cent less federal funding, which translates to almost $30 million of the total $118 million that Ottawa has pledged annually to Toronto from its Housing Accelerator Fund, a program that provides incentive funding for cities to build more homes.

Gregor Robertson, Canada's new housing minister, has not indicated whether he will follow his predecessor's lead. In a statement to CBC News on Thursday, a spokesperson said the federal government is working with Toronto to meet its sixplex goals. 

"The Housing Accelerator Fund rewards ambitious housing initiatives from local governments, with a focus on reducing bureaucracy, zoning restrictions, and other red tape. We are working closely with the city of Toronto to meet these goals and remain ready to work with all levels of governments to tackle the housing crisis," said spokesperson Mohammad Hussain.

Allowing sixplexes would mark a "significant milestone" in meeting Toronto's commitments under the federal Housing Accelerator Fund to allow more low-rise, multi-unit housing development through as-of-right zoning bylaws in its neighbourhoods, according to a report by Toronto's chief planner from last month.

Last year, council decided to permit multiplex housing across the city.

This year, as part of a pilot project in Ward 23, staff began studying the potential of permitting low-rise multiplexes with up to six dwelling units and with heights of up to four storeys. Based on that study, city staff made their recommendation last month that city council approve by-law amendments to permit fiveplexes and sixplexes in low-rise residential neighbourhoods across the city.

Alison Smith, professor of political science at the University of Toronto, said there are better ways for the federal government to help municipalities meet their housing targets other than cutting funds.

A good solution would be housing-enabling infrastructure to ensure municipalities have what they need in order to build more homes, she said.

"I think a better way for the feds to go about it would be to set municipalities up for success by providing an environment in which they can succeed, rather than using money as a punishment or as a penalty," Smith told CBC News. 

"The federal government has the money, but doesn't have the power to make changes," she said. "They can't just send money out and not get results, so I think the federal government is feeling the pressure to show that its investments are making an impact and are making changes."

Coun. Gord Perks, who was pushing for a city-wide adoption at the council meeting in June, warned councillors that the city could be denied funding if it voted against approving sixplexes.

"I've spent a considerable amount of time and effort working with my colleagues on council, trying to find majority support for doing what this council already committed to in 2023, which is citywide sixplexes," he said after the council debate. "But I've been unable to find that."