Toronto will receive nearly half a billion dollars in housing funding from the federal government as part of an agreement announced Thursday that would see the city fast-track the construction of close to 12,000 additional units over the next three years.

Speaking in Toronto, Prime Minister Justin Trudeau said Ottawa will give Toronto $471 million through the federal Housing Accelerator Fund in an effort to help meet the housing demand in the city.

“Through this funding, Toronto will make it easier to get projects rolling by simplifying rezoning requirements and modernizing regulations,” he said.

“It will also update old zoning rules, it will expand existing affordable rental programs, and it will build more homes near transit.”

That work will also help spur the construction of more than 50,000 homes over the next decade, Trudeau added.

The $4-billion housing accelerator fund is a federal initiative to encourage municipalities to make changes to bylaws and regulations that would spur more housing construction, in exchange for more money. Some of the changes Ottawa has pushed for include denser zoning and faster issuance of permits.

Federal Housing Minister Sean Fraser, Toronto Mayor Olivia Chow and others were alongside Trudeau for the funding announcement.

Chow called the agreement a “hopeful new beginning” in a city where more than 10,000 people sleep in shelters each night.

“We will make it easier and faster to get approvals. We will allow for more density and more types of housing. Today’s announcement is a significant step,” she said.

The city said it submitted its application for the funding in June and put in a revised version in August, outlining eight initiatives aimed at creating more affordable housing.

Those include developing city-owned land and expediting the delivery of new, permanently affordable rental homes, expanding so-called “missing middle” housing options and simplifying the planning approvals process to increase purpose-built rental supply in apartment neighbourhood zones.

Including Thursday’s announcement, Ottawa has reached deals with 16 municipalities across the country. The city of London, Ont., was the first to sign such a deal under the national housing accelerator fund in September.

This report by The Canadian Press was first published Dec. 21, 2023.