The costs for a Willowdale development aimed at providing low-cost housing for Torontonians experiencing homelessness has more than doubled, according to the Toronto Star.
A report for action concerning the City’s Modular Housing Initiative Phase 2 project provides updates on the progress of two key housing projects (at 175 Cummer Avenue and 39 Dundalk Drive) and is seeking approvals from Council for amendments to purchase orders.
Confidential attachments outlining the revised pricing and project delivery details were included but aren’t publicly available. According to the Star, one of the attachments shows that the budget for the development on Cummer Avenue is expected to be $36.3 million, which is a drastic increase from an earlier estimate of $14.6 million (an increase of nearly $22 million).
The confidential report attributes the higher costs to elevated charges for already planned work as a result of delays (the extra work isn’t stated), as well as more work required due to holdups to zoning approvals.
According to the public report, since the project was launched in 2021, Toronto’s residential construction sector has experienced “rapid price escalation”, related to material and labour shortages, material price increases, inflation, and other factors.
According to StatsCan Building Construction Price Indexes (Residential), Toronto construction costs have escalated 82% from Q1 2020 to Q1 2024. This includes year-over-year cumulative residential construction cost increases of 13.9% in 2021, 26.7% in 2022, 17.6% in 2023, and 7.6% in 2024. The City’s action report states that 175 Cummer has been exposed to these cost escalations.
“Unanticipated costs associated with transportation and long-term indoor storage have also been incurred as a result of zoning delays. With zoning now in place, purchase order amendments are required to complete remaining work on the project, including all excavation, foundation, utilities, interior finishing, and landscaping work,” the report states.
The modular housing initiative was launched in April 2020 in response to the Covid-19 pandemic and its disproportionate impact on the homeless.
The initiative aims to create at least 250 new rent-geared-to-income and supportive homes via modular construction. To date, four out of five projects have been tenanted, providing affordable homes and support services to over 200 people who were formerly homeless.
The development at 175 Cummer Avenue was announced in 2021, along with 540 Cedarvale Ave. and 39 Dundalk Dr. Cedarvale is complete, and Dundalk is nearing completion—but the Cummer Ave project has received opposition from local residents and politicians.
“…first because Council’s request for a Minister’s Zoning Order did not yield a response, and second because of an appeal to the Ontario Land Tribunal (OLT) of Council’s approval of the new zoning by-law for the development in August 2022,” according to the City.
A hearing of the appeal was held at the OLT in November 2023. In January 2024, the OLT dismissed the appeal and ruled in the City’s favour. The appellants later requested a further review of the OLT’s decision, but this request was dismissed by the OLT in February.
A motion for leave to appeal the OLT’s decision to the Ontario Divisional Court was also denied last month. So, as it stands—zoning is in place to allow the proposed development to proceed.
This report requests authority to enable City Divisions to restart and complete the projects at Cummer Ave. and Dundalk Dr. by approving purchase order amendments for both projects to ensure funding is in place to complete the required work.
This item will be considered by the Planning and Housing Committee on Thursday and will be considered by City Council on June 26.
