The City of Toronto stands at a critical crossroads in its housing strategy as it faces the potential loss of $30 million in federal funding following a contentious city council vote. In a decision that has sent ripples through municipal and federal relations, Toronto’s council rejected a proposal to implement citywide sixplex zoning—a move that now threatens to derail crucial federal housing support at a time when the city grapples with one of Canada’s most severe housing crises.
The vote, which came after heated debate among councilors, rejected the zoning reform that would have allowed property owners to construct residential buildings with up to six units on lots previously restricted to single-family homes. The reform was positioned as a key measure to increase housing density and affordability in a market where the average home price has soared beyond the reach of many residents.
Federal Housing Minister Sean Fraser expressed profound disappointment with the council’s decision, confirming that the rejection puts Toronto at risk of failing to meet the requirements of the Housing Accelerator Fund agreement signed last year. “This vote directly contradicts commitments made by the city to implement these necessary zoning changes,” Fraser stated in remarks following the council meeting.
The Housing Accelerator Fund represents a cornerstone of the federal government’s strategy to address Canada’s housing crisis, offering municipalities financial incentives to eliminate barriers to housing development. Toronto’s agreement, valued at $74 million, explicitly required the implementation of sixplex zoning as a condition for receiving the full funding package.
Mayor Olivia Chow, who supported the zoning reform, now faces the challenging task of navigating the fallout. “We cannot afford to lose this funding when so many Torontonians are struggling to find affordable housing,” Chow remarked. “The council’s decision undermines years of work to secure these resources for our city.”
The decision has drawn criticism from housing advocates and urban planning experts. Cheryll Case, founder of CP Planning, described the vote as “a significant step backward in addressing Toronto’s housing shortage.” She added, “At a time when we need bold action to increase housing supply, this vote reinforces exclusionary zoning practices that have contributed to the current crisis.”
Council members who opposed the measure cited concerns about neighborhood character, infrastructure capacity, and insufficient public consultation. Councilor Jon Burnside, who voted against the proposal, argued that “a one-size-fits-all approach doesn’t account for the unique characteristics of Toronto’s diverse neighborhoods.”
The rejection comes at a particularly challenging time for Toronto’s housing market. Recent data from the Toronto Regional Real Estate Board indicates that rental costs have increased by 15% year-over-year, while housing availability remains at historic lows. The Canada Mortgage and Housing Corporation estimates that Toronto needs to build approximately 30,000 new housing units annually over the next decade to meet demand—a target that experts now say appears increasingly unattainable without significant policy reforms.
The federal government has given Toronto a deadline of October to reconsider its position before the funding is officially withdrawn. Minister Fraser indicated that while the government remains open to working with the city, the requirements for receiving the funds remain unchanged.
As Toronto faces this pivotal moment in its housing policy, the question remains: can the city afford to stand by traditional zoning restrictions when the cost may be both millions in federal funding and the continued exacerbation of its housing crisis?
