Evaluating Affordable Housing Outcomes in Toronto: An Analysis of Density Bonusing Agreements
Over the last several decades, municipalities have increasingly relied on the private sector to help build affordable housing. In that time, and prior to recent legislative and policy changes, the City of Toronto in particular used Section 37 of Ontario’s Planning Act to secure affordable housing and other community benefits. Section 37 allowed the City to negotiate density bonusing agreements that exchanged increases in permitted height or density for affordable housing, public art and other amenities.
In a new paper for the Institute on Municipal Finance and Governance (IMFG), 2020-2021 Post-Doctoral Fellow Julie Mah analyzes and maps the affordable housing outcomes achieved in Toronto through Section 37 agreements. Mah demonstrates that, between 1988 and 2018, the ad hoc use of Section 37 generated a limited number of affordable units. The tool was more successful at securing funding for affordable housing, but these cash contributions translated into relatively few units as the funds were received in many small amounts over a period of years, further reducing the effectiveness of this approach to creating new affordable housing.
In November 2021, the City of Toronto adopted a new inclusionary zoning policy that requires developers to set aside a percentage of new housing units as affordable housing. As this new policy gets implemented, Mah’s analysis of where, how many, and what type of affordable units were produced through Section 37 agreements creates a baseline against which a future approach can be evaluated.