High Art Capital, a private Canadian investment firm, has partnered with the Ontario government on a $1.3-billion fund that will acquire roughly 2,200 newly completed, unsold condo units and convert them into long-term rental housing.
Approximately 550 of these homes will offer rents at 25 per cent below market or capped at 30 per cent of the median household income in the GTA. The units are intended to remain permanently affordable for workers who do not qualify for rent-geared-to-income or other subsidized programs.
The public-private initiative uses a first-of-its-kind financing model at this scale in the Greater Toronto Area. The Building Ontario Fund (BOF), a board-governed Crown agency, is anchoring the fund with a $300-million contribution that is primarily structured as a repayable loan and includes a smaller portion as an equity stake. Michael Fedchyshyn. BOF CEO, said the project requires no development charge, tax waivers, or direct subsidies to realize its affordability objectives.
The fund also expects to raise approximately $733 million in additional loans from other investors, while maintaining ownership of the units for at least five years. After that period, the plan is to sell the units, at which point the BOF’s loan would be repaid.
High Art Capital recently launched a submission portal for developers and vendors. Eligible submissions must contain blocks of at least 10 vacant units in registered residential or mixed-use condo buildings, which have been completed on or after January 1, 2023, and are located in Toronto or the regional municipalities of Durham, Halton, Peel or York.
The firm said is has also reached agreements with developers Tridel and Menkes to manage the leasing and tenancies, and will engage a not-for-profit partner to allocate the affordable units to eligible applicants.
“Timing matters in this market. There is a rare opportunity right now to convert newly completed but unsold housing into long-term rental supply at scale,” said Ryan Roebuck of High Art Capital. “This initiative is designed to create real housing availability in the near term, preserve a meaningful affordable component and help stabilize a critical segment of the GTA housing market, all of which has become possible through our partners at BOF.”
