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Housing Accelerator Fund progress and 2026 rental-market conditions

Toronto's Housing Accelerator Fund (HAF) zoning-reform work is roughly a third of the way through its three-year term, and the city's rental market has been softening through 2026 on almost every measure tracked by the major industry and government sources — vacancy, availability, incentives, and asking rents have all moved in the direction of a more tenant-favourable market than in recent years, even as one segment (the lowest-cost rent quartile) stays tight.

The finding

As of the City's February 5, 2025 Council report, Toronto had completed 21 of the 35 milestones in its HAF agreement, reaching 37.5% of its three-year, 60,980-home target in the first year alone. Two distinct zoning changes are easy to conflate but should be kept separate: city-wide as-of-right permission for buildings of up to four units was already adopted in 2022, before HAF; the initiative actively advancing under HAF is expanding that to six units city-wide, piloted through a Scarborough North (Ward 23) study that found 61% of local lots could accommodate a sixplex under existing standards, with city-wide sixplex recommendations expected in June 2025 CSRL2-813.

A fresh S1 discovery this pass (T-0065 batch 4) resolves this page's own previously-flagged open question about whether those recommendations were adopted: they were not, at least not city-wide. Council's June 25, 2025 vote (18-6) diluted the proposal to permit sixplexes only in Toronto-East York wards and the existing Scarborough North pilot area, leaving other wards to opt in individually rather than legalizing sixplexes city-wide as the HAF agreement's own milestone expected — putting a portion of the City's $471.1 million HAF agreement at risk under the agreement's 25%-of-annual-payment non-compliance penalty [CL-90674].

On the rental market itself, CMHC's 2026 mid-year update found that Toronto's two-bedroom rent gains "remained modest" compared to other major markets in year-over-year Q1 2026 data, and that vacancy and turnover increased across most — not literally all — rent quartiles in both Toronto and Vancouver. Pressure remained concentrated in the persistently tight first (lowest-cost) quartile CSRL2-814.

Urbanation's Q1 2026 report on the Greater Toronto and Hamilton Area's post-2000 purpose-built rental stock found a 5.4% vacancy rate, an 8.0% availability rate (a record high), and 66% of surveyed projects offering leasing incentives, up from 62% a year earlier. Net effective rents fell to $3.52 per square foot, down 3.8% annually to a 16-quarter low. New rental construction starts in the quarter itself totalled 3,674 units, up 12% year-over-year CSRL2-815.

Asking-rent data compiled by Rentals.ca and Urbanation (relayed via CP24, since the primary report pages themselves block scripted fetches) found Toronto's February 2026 asking rents fell furthest among Canada's largest markets for most individual dwelling types: studios down 7.9% year-over-year, one-bedrooms down 6.9%, and two-bedrooms down 7.1%. Toronto's overall blended average asking rent across all unit types was a separate, smaller decline of 5.3% year-over-year, to $2,482 — the 7.9% studio figure is not the city's overall average and should not be cited as such CSRL2-816.

Toronto Regional Real Estate Board (TRREB) data for the same quarter found the average bachelor/studio condo apartment rent at $1,821, down 2.3% year-over-year CSRL2-817.

Why it matters

Two things are happening at once. On the supply-policy side, Toronto's zoning reform under HAF is proceeding in stages — an already-completed move to four-unit-as-of-right, with six-unit-as-of-right still in progress — against a fixed three-year federal funding timeline the city is currently about a third of the way through. On the market side, nearly every independent measure of the existing rental stock (CMHC, Urbanation, Rentals.ca, TRREB) points the same direction for 2026: rising vacancy, rising availability, more landlord incentives, and falling rents, particularly for smaller units. The one partial exception — continued tightness in the lowest-cost rent quartile — means a market-wide softening does not necessarily translate into the segment that matters most for affordability at the bottom of the market.

What this page does not cover

This page no longer needs to verify whether the city-wide sixplex recommendations were adopted (see above — they were not, city-wide). It does not track HAF milestone completion past the February 2025 report cited here — a fresh S1 search this pass found one primary "Progress Update" document, but it matched the same February 2025 reporting period already cited (RES-788), not a newer one, so this remains a genuinely unresolved question needing its own updated primary-source check when a later report becomes available. It also does not independently confirm Urbanation's own trailing-12-month rental-construction-starts figure (reported elsewhere as 10,388 units); only the single-quarter Q1 2026 figure (3,674 starts) was directly re-confirmed against Urbanation's own text, so only that figure is cited here. It does not attempt to reconcile the several rent figures cited above (Rentals.ca/Urbanation asking rents by unit type, TRREB's condo-specific bachelor rent) into a single number — they come from different methodologies and dwelling-type scopes and are presented here as separate, source-specific findings, not as interchangeable measures of "the" Toronto rent.

Sources

Jurisdiction: Toronto · Topics: housing-accelerator-fund, rental-market, vacancy-rates, asking-rents, zoning-reform · status: working draft · review: pending (the library’s own tags, kept visible) · published 2026-08-17 · corrections welcome.