In Canada, the arrangement you are describing is most commonly found under the National Housing Strategy (NHS), specifically through programs managed by the Canada Mortgage and Housing Corporation (CMHC). While "condo" developers primarily build for-sale units, the government has shifted significant focus toward purpose-built rental projects to address the housing crisis. However, developers of mixed-use or multi-unit buildings (including those with condo components) often enter into these agreements to secure low-cost financing in exchange for social benefits.

 In Canada, the arrangement you are describing is most commonly found under the National Housing Strategy (NHS), specifically through programs managed by the Canada Mortgage and Housing Corporation (CMHC).

While "condo" developers primarily build for-sale units, the government has shifted significant focus toward purpose-built rental projects to address the housing crisis. However, developers of mixed-use or multi-unit buildings (including those with condo components) often enter into these agreements to secure low-cost financing in exchange for social benefits.

1. Key Programs and Agreements

The most prominent "agreement" for private developers is through the Apartment Construction Loan Program (ACLP) (formerly the Rental Construction Financing Initiative).

 * How it Works: The federal government provides low-interest, long-term loans to developers. This is "public funding" in the form of debt with much more favorable terms than private banks (e.g., up to 50-year amortization and lower interest rates).

 * The "Trade-off" (Affordability): To get the loan, developers must agree to specific "social outcome" requirements.

 * The Percentage: Under current ACLP rules, at least 20% of the units must meet affordability criteria (usually rents at or below 30% of the median total income for the area) and remain affordable for at least 10 to 21 years.

2. The Affordable Housing Fund (AHF)

For developers willing to dedicate an even higher percentage to public or "below-market" housing, the Affordable Housing Fund provides a mix of low-interest loans and forgivable loans (which effectively act as grants).

 * Requirement: At least 30% of the units must be at or below 80% of the Median Market Rent (MMR) for a minimum of 20 years.

 * Target: This is often used by private developers partnering with non-profits or municipalities to build "deeply affordable" housing within a larger development.

3. Inclusionary Zoning (Municipal Level)

While the federal government provides the funding, provincial and municipal governments often provide the mandate. 

 * Definition: "Inclusionary Zoning" (IZ) is a policy where a city requires a developer to set aside a certain percentage of a new condo project (often 5% to 10%) for affordable housing as a condition of planning approval.

 * Recent Conflict: In 2025, some provinces (like Ontario) sparked debate by pausing or reducing these requirements, arguing they acted as "red tape" that slowed down overall construction.

Comparison of Developer Agreements

| Program | Funding Type | Affordability Requirement | Duration |

|---|---|---|---|

| ACLP (Standard) | Low-interest Loans | 20% of units @ <30% median income | 10+ Years |

| Affordable Housing Fund | Loans + Forgivable Loans | 30% of units @ <80% market rent | 20 Years |

| Inclusionary Zoning | Planning Approvals | 5% to 10% (varies by city) | Varies (often 25-99 yrs) |

Summary of the "Developer Deal"

The logic behind these agreements is that private developers often cannot make the "math work" for affordable housing due to high land and interest costs. By providing public funding (low-cost debt or grants), the government lowers the developer’s risk and cost, "buying" the right to have a portion of those units rented out at social or public housing rates.

> Important Note: In 2026, many of these programs have seen "top-ups" in funding (billions of dollars) to try and bridge the gap between high construction costs and the desperate need for more units.

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To participate in these agreements, developers must meet rigorous financial and social benchmarks. In 2026, the federal government has streamlined these processes to accelerate supply, but the "entry price" for developers remains tied to long-term affordability commitments.

1. Developer Eligibility Requirements

For a private developer to access these low-cost government loans, CMHC (Canada Mortgage and Housing Corporation) evaluates three main pillars:

 * Financial Strength:

   * Net Worth: For the Affordable Housing Fund, for-profit entities typically need a minimum net worth of $250 million and must own more than $1 billion in multi-residential assets.

   * Debt Coverage: Projects must demonstrate a Debt Coverage Ratio (DCR) of at least 1.10 for the residential portion.

   * Experience: Proponents must usually show at least five years of experience operating similar properties or partner with a general contractor who has that track record.

 * Social Outcomes (The "Trade-off"):

   * Affordability: At least 20% to 30% of units must be affordable for at least 10 to 20 years.

   * Accessibility: Usually, at least 20% of units must meet or exceed accessibility standards.

   * Energy Efficiency: Projects must often demonstrate a 25% reduction in energy consumption and greenhouse gas emissions compared to building codes.

2. Interest Rate Trends (2026)

One of the biggest draws of these agreements is the "indicative rate" provided by the government, which is significantly lower than commercial construction loans.

 * Rate Structure: CMHC rates for these programs are typically "locked in" at the first advance of the loan.

 * The "Spread": For the Apartment Construction Loan Program (ACLP), applications are often qualified using an interest rate that is the higher of 2.00% or the CMHC indicative rate plus a 1% spread.

 * Current Outlook: While private market rates have fluctuated, the government-backed rates remain the most stable option for large-scale builds, often offering 10-year fixed terms and amortizations of up to 50 years.

3. Comparison of Primary Funding Agreements

| Feature | Apartment Construction Loan (ACLP) | Affordable Housing Fund (AHF) |

|---|---|---|

| Primary Goal | Increasing general rental supply | Deep affordability / Priority groups |

| Funding Type | Low-interest repayable loans | Loans + Forgivable loans (Grants) |

| Loan-to-Cost | Up to 100% (Residential) | Up to 95% - 100% |

| Affordability | 20% of units @ <30% median income | 30% of units @ <80% Median Market Rent |

| Duration | 10-year minimum | 20-year minimum |

4. How the "Condo-to-Rental" Shift Works

In the current 2026 market, many developers who originally planned "for-sale" condos are switching to "purpose-built rentals" to qualify for this funding. By doing so, they avoid the risk of high-interest private debt and slow pre-construction sales. The "agreement" with the government essentially turns the developer into a long-term landlord of a mixed-income building.

> Pro-Tip: Developers can also apply for Seed Funding (up to $350,000 in interest-free loans) to cover the initial costs of these agreements, such as rezoning and environmental site assessments.

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In Toronto, the percentage of units available as "public housing" (specifically units that a citizen can apply for via the municipality and pay for using housing benefits) varies significantly depending on who owns the land.

The distinction between "Affordable Housing" (rented by the developer) and "Public/Social Housing" (managed by the city) is the key to understanding your question.

1. Private Condo Developments (Inclusionary Zoning)

On private land, the government uses "Inclusionary Zoning" (IZ) to mandate a set-aside.

 * The Percentage: As of January 2026, the Ontario government has capped these requirements at 5% of the total units.

 * The Status (2026): Notably, as of this week, the provincial government has proposed pausing these inclusionary zoning rules until July 2027 to encourage more construction starts.

 * How you apply: These units are generally not part of the municipal "Centralized Waiting List." Instead, you apply directly to the developer/building manager, though they must verify your income qualifies you for the "affordable" rate.

2. "Housing Now" (City-Owned Land)

When the city provides the land to a developer (a common model in 2026), the public housing percentage is much higher.

 * The Percentage: Typically 33% (one-third) of the units in these projects must be affordable.

 * The "Public" Portion: Of that 33%, a specific portion is often dedicated to Rent-Geared-to-Income (RGI) units. These are the ones a qualifying citizen applies for through the City of Toronto’s MyChoices portal.

 * Example: In a 600-unit project on city land (like the recent Kennedy Green co-op), roughly 200 units might be affordable, and a subset of those (often 10–20% of the total building) would be designated for those on the municipal housing benefit waitlist.

3. Comparison of Unit Allocation

| Project Type | Total Units (Example) | Affordable Units (Private) | Public/Social Units (Municipal Portal) |

|---|---|---|---|

| Private Condo | 500 | ~25 units (5%) | Zero (Usually managed by developer) |- The concern here is that we ask what is private with a high percentage of the project funded with public funds?   It is submitted that 30% of the project even if it's not actual public land should be available for Housing since its nearly 100% publicly funded. It's public funds if not public land. 

| Housing Now (Public Land) | 500 | ~165 units (33%) | ~50–100 units (Can vary by agreement) |

| Non-Profit/Co-op Partner | 500 | ~250 units (50%) | Up to 100% (Depending on the specific non-profit) |

4. How many units per project are "Public"?

In a standard new private development, it is rare for units to be handed over to the municipality to be run as public housing. Instead, the developer keeps the units but agrees to:

 * Lower the rent to a government-set limit (e.g., 80% of Average Market Rent).

 * Accept Housing Benefits: They are legally required to accept tenants using the Canada-Ontario Housing Benefit (COHB), which the tenant applies for through the city.

In summary: If you are looking for a unit managed entirely by the city (where your rent is exactly 30% of your income), these are almost exclusively found in Housing Now projects or Toronto Community Housing (TCHC) redevelopments, where typically 20% to 50% of the building is allocated for this purpose.