Federal government loans $650M to build nearly 1,300 rental units near Scarborough Town Centre

The federal government is providing a $650-million loan to support the construction of 1,285 new rental units in Scarborough, officials said Tuesday.

The units will be located in three residential towers built on the west side of the Scarborough Town Centre shopping mall, according to a news release Tuesday by Oxford Properties, the real estate developer that is building the property. 

268 units, or about 21 per cent, will be designated as affordable housing.

"Scarborough is growing and is thriving. It's a place where more and more people are choosing to work, study, live and raise families," said Michael Coteau, MP for Scarborough-Woburn, speaking at a news conference Tuesday. 

"But families are having hard times finding homes that meet their needs and finding homes they can afford." 

He said the project will give families "a fresh start" and help them build a stronger future. 

The announcement comes as Ontario's housing starts for the first quarter of this year reached the lowest levels since 2009, according to a report by the province's financial accountability officer. 

Toronto Deputy Mayor Paul Ainslie, who represents Scarborough-Guildwood said the rental supply needs to be increased in Scarborough as it undergoes a "transit transformation." 

The Scarborough subway line has been under construction since 2021 for a three-stop extension. It's currently set to open in 2030. 

Ainslie said the City of Toronto is supporting the rental unit project through its Rental Housing Supply Program, which provides financial contributions including capital funding and relief from development fees and charges.

Units will likely be unaffordable for OMERS members: expert

Oxford Properties is owned by OMERS, the Canadian defined benefit pension plan for Ontario's municipal employees.

But one housing expert said the bulk of the project's units are unlikely to be affordable for the workers whose pension fund is backing it.

Carolyn Whitzman, senior housing researcher at the University of Toronto's school of cities, said the planned units — other than the 268 designated as affordable — will be likely too expensive for most OMERS members.

"If you are a firefighter, child-care worker [or] seniors care worker, you would not be able to afford the apartments that are going to be created," she said. 

In a statement, Daniel O'Donnell, senior vice president of corporate affairs with Oxford Properties Group, said Whitzman's comments amount to "speculative theatre."

"Not only will this development help generate returns to pay pensions, it will be delivered across a variety of price points to ensure it is attainable for everyday Torontonians and front-line workers," O'Donnell wrote.

Mark Richardson, who is HousingNowTO.com's technical lead, agrees with the need for more affordable housing. HousingNowTO is a civic tech organization that tracks affordable housing around the city.

"Maybe they can create co-op units or benefit units that are available to public health nurses, to paramedics, to the kinds of people who we need to keep the city running," he said.

Richardson also stressed the lack of disposable income city workers have.

"Many of the new employees [who work at City Hall] might only be making 50, 60, $70,000 a year ... That really limits what you can afford to spend on rent. Under $80,000 a year, you really can't afford to spent more than $2,000 a month in total on your accommodations," he said.

While it's good that there are purpose-built rental housing projects, the loan shouldn't have to be repaid, Richardson says.

"It's important that the federal government also gets into the business of providing forgivable loans to rental housing developers so that we can begin to create deeper affordability in these projects at a bigger scale," Richardson said.

Construction on the rental units is expected to be completed by summer 2029.