THE CO-OPS ARE COMING
New municipal incentives are nudging private builders to include co-ops in their developments
According to the Find a Co-op tool on its website, the 50-year-old Co-operative Housing Federation of Toronto (CHFT) represents 187 properties in Durham, Toronto and York regions. Filter results by vacancies, however, and the number of properties across the three regions drops to zero. Even waiting lists, it turns out, are off-limits to new applicants; that’s how great the demand is for multiunit non-profit housing that’s owned and operated by the people living in it.
The logjam is set to loosen somewhat in the next few years when 612 new homes become available, likely via lottery, in Ontario’s largest-ever co-op property. Made up of rent-geared-to-income (RGI), affordable and market rental housing, the 1.16-hectare project at 2444 Eglinton Ave. E. in Scarborough will be operated by the CHFT, which was selected to play its usual role by Createto, the six-year-old agency that manages the City of Toronto’s $27-billion real estate portfolio.
As the first privatesector-led project supported by the city’s five-year-old Housing Now program, which funds transit-oriented affordable housing on municipally owned land, 2444 Eglinton will also include 306 condominium units being put on the open market by Civic Developments and Windmill Development Group.
Both were selected by Createto to develop three new buildings on the site — two co-ops of 20 and 34 storeys, and a 43-storey condo tower — offering a mix of studios plus one-, two- and three-bedroom homes along with communal and retail space and new pedestrian connections to the Kennedy GO and subway stations, as well as the future Crosstown LRT line.
By providing approximately $40 million in land value and financial incentives for the project, including a waiver of fees and charges and an exemption from property taxes, the Housing Now program is “creating the kind of situation where private builders want to include co-ops in their developments,” according to CHFT executive director Tom Clement.
He says the project “is a testament to how co-op housing can get built in today’s market,” which is controlled by private-sector developers to a much greater extent than it was during Toronto’s co-op housing heyday from the late 1970s through to the mid-1990s, when successive federal funding programs led to the creation of nearly 6,000 homes.
Since then, however, the total number of units in the GTA has barely budged owing to extensive federal and provincial funding cuts. In 1995 alone, the CHFT reports, 17,000 non-profit and co-op housing units slated for construction in Ontario were cancelled.
Three decades later, “so much GTA housing has been in the unaffordable range for so long that anything brought into the market under sound principles of affordability is a good story,” says Windmill Development Group partner Dan Van Leeuwen.
While 2444 Eglinton’s co-op units won’t have a major impact on Toronto’s affordability problem, the project is “at a scale where it establishes base principles for affordability, creativity and co-operation between the public, private and non-profit sectors,” Van Leeuwen says.
“Over the years we’ve seen a lot of expensive market-rate condos and rental apartments on one side, and shelters and deep-subsidized housing on the other. 2444 Eglinton occupies the missing middle of that continuum by catering to people who are not necessarily in a position to make a down payment on a home but who are trying to structure their cost of living so that one day they are able to do that. If you’re someone looking for good-quality housing, you’re not necessarily hung up on saying, ‘I want to invest in a condo and have it double in value.’ Rather, it’s more about finding a place to live based on sound principles of management and cost.”
Rents for the RGI and affordable co-op homes in 2444 Eglinton will be set between 40 and 100 per cent of average market rent as reported annually by the Canada Mortgage and Housing Corporation (CMHC), with at least 33 per cent of the affordable homes and 15 per cent of the market rental homes being accessible.
The high demand for co-op homes isn’t surprising. For one thing, co-op apartment costs in Toronto are as much as 40 per cent below market costs, according to CMHC data. For another, co-op residents don’t have to worry about excessive increases in rent.
“Landlords raise rents to maximize their profits, but co-ops are non-profit organizations,” explains Createto CEO Vic Gupta. “This doesn’t mean that rents won’t increase. Rents increase regularly as operating costs increase. But the difference is that coop members review the finances of the co-op and budget recommendations of the Board of Directors and members vote on the budget at an annual general meeting. So if there are increases, they reflect true costs, not profit margins.”
While 2444 Eglinton’s development team works to obtain a zoning bylaw amendment and other planning approvals — construction is slated to start in 2026 — the project “will be closely watched by other developers, housing non-profits and various levels of governments,” says Andy Yan, an adjunct professor in urban studies at Simon Fraser University in Vancouver. “This scale of co-op housing may have become financially feasible to develop, but there are plenty of questions beyond that: Can it be supported by the variety of income groups that will live there? How will these different groups respond to fluctuations in prices for construction materials and labour? How will development promises compare with what is delivered in the end? For instance, will the condos all be luxury three-bedroom units, with the co-op units all one bedrooms that can’t support a household with children? What makes this project remarkable is that it is providing non-market housing for mixed-income residents, particularly for middle-income residents.”
While some cynicism around private-sector involvement in 2444 Eglinton is to be expected, affordable housing and developers’ revenue goals aren’t mutually exclusive, Windmill’s Van Leeuwen says.
“There’s always a fear that new housing inventory is solely motivated by greed and profit. But it’s really about balancing community benefits, good-quality development, and getting inventory to the market more quickly. There’s no reason public-private partnerships can’t be mutually beneficial so long as we keep looking for ways to achieve the goals of all the stakeholders, while at the same time creating something that is greater than the sum of its parts in the end.”