Market conditions may expand housing in East Harbour

Andre Bermon, Publisher –

Cadillac Fairview is signaling to the city and province it wants more housing and less office space than was planned on its East Harbour lands.

According to a city staff re­port, market conditions for commercial development in the wake of the post-Covid-19 office space glut prompted the real es­tate firm, wholly owned by the Ontario Teachers’ Pension Plan, to switch tack.

The city’s master plan for East Harbour, which governs zoning for the area of the former Unile­ver soap factory east of the Don River, requires a minimum of 926,000 square metres of com­mercial space to be developed. In 2022, the Ford government passed a Ministerial Zoning Or­der (MZO) approving 302,000 square metres (around 4000 units) of residential develop­ment in addition to the commer­cial space. Currently, more than a dozen towers are slated, with heights from 16 to 68 storeys.

Artist conception of future East Harbour transit-oriented community. Image: Cadillac Fairview

East Harbour is one of 11 transit-oriented communities the province designated for de­velopment near future stations of the planned Ontario Line subway. East Harbour is by far the biggest, offering nearly a quarter of all residential units zoned by the province near the Ontario Line.

The site will also connect the new subway with existing GO train lines. In many respects, it will be a Union Station of the east.

Cadillac Fairview, via lawyers Goodmans LLP, last September asked the city to eliminate min­imum requirements for the site’s non-residential space. Its letter argues the East Harbour master plan is “highly problematic,” too prescriptive and at odds with the province’s MZO for residential housing.

The letter suggests foregoing any minimum or maximum rules, and permitting the al­ready zoned 926,000 square metres of commercial space to be as-of-right. This would per­mit future commercial develop­ment to exceed or fall short of the designated amount without consequence, potentially open­ing up more room for housing.

City staff are to respond to the request by the end of 2024.

Office vacancy rates in Toron­to are growing. According to the commercial real estate firm CBRE, the city’s office vacancy rate in the first quarter this year was 19.2 percent, the highest since the 1990s. Vacancy levels will likely remain elevated, as many leases were signed before the pandemic induced work-from-home orders.

In the city’s master plan, East Harbour “was supposed to be an office park (but) that’s prob­ably not going to happen,” says Aaron Ginsberg of More Hous­ing Toronto, an advocacy group. “We would like to see more housing than the current allot­ment, but I don’t know what’s going on behind closed doors. Are we going to get way more housing or just a couple more units?”

Negotiations for the East Har­bour site are ongoing, but the City of Toronto is only a minor player. The province is leading the discussions, and additional housing units would likely re­quire tweaking the provincial MZO.

A city staff report states that Toronto must rely on the prov­ince to enforce the city’s “con­tribution agreement” with Ca­dillac Fairview, which includes $300 million of infrastructure and community benefit subsi­dies.

Within the package is money for 215 rent-geared-to-income affordable housing units – cov­ering only five per cent of the total permitted residential gross floor area on the East Harbour lands. The housing units are to be secured for 99 years.

The city states that any addi­tional housing on the site would require more community bene­fits from Cadillac Fairview, in­cluding more affordable housing units on top of the 215 already planned. (The city target is 20 per cent of any new housing project.) Critics believe more can be done.

HousingNowTO’s lobbying of the province to increase af­fordable housing targets has drawn little response, said Mark Richardson, volunteer techni­cal lead of the advocacy group. And Cadillac Fairview, though owned by the teachers’ pension fund, “is not in the business of building affordable housing that young teachers can afford to live in…their only fiduciary respon­sibility is paying out to their pension holders.”

Toronto is “having trouble attracting and retaining young teachers, daycare workers, early childhood educators,” he com­mented to the bridge. “Twen­ty-five years ago, a first-year teacher could afford to rent a one-bedroom apartment by themselves in the city.”

More affordable housing can be built on the East Harbour site if teachers and their pension fund demand it, said Richard­son. “We feel that the fund has an obligation to the next gener­ation of teachers, not just to re­tired ones.”

Public sector unions have the power to change investment behaviour, he believes, citing public pension plans that disin­vested from industries like Big Tobacco.

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