Ontario Is Converting 2,200 Condos Into Rental Apartments

The Short Version

Ontario is investing $300 million through the Building Ontario Fund to help convert roughly 2,200 completed but unsold condominium units across the Greater Toronto Area into professionally managed rental apartments. The private sector is putting up the rest, bringing the total fund to approximately $1.3 billion. Of those 2,200 units, 550 will be designated affordable, with rents locked below market rates through legal agreements on title.

No new construction is involved. These are finished condos sitting empty in buildings that have already been built. The goal is to get them occupied as rentals quickly, bypassing the years-long timeline of building from scratch.

How the Fund Works

The initiative is a partnership between the Ontario government and High Art Capital, a Canadian investment firm. Here's how the money flows:

• The Building Ontario Fund (a provincial Crown agency) is contributing $300 million, structured mostly as a repayable loan with a small equity stake for governance oversight.
• High Art Capital is raising an additional $733 million in loans from private investors.
• The fund will acquire blocks of 10 or more vacant units in residential or mixed-use buildings completed on or after January 1, 2023.
• Tridel and Menkes, two of the GTA's largest developers, will handle leasing and property management.
• A not-for-profit partner will manage the allocation of affordable units.

The fund plans to hold the units for at least five years. After that, the condos can be sold and the Building Ontario Fund's loan gets repaid. This is not a grant or a subsidy in the traditional sense — the province expects its money back.

Where These Units Are Located

All 2,200 units are in the Greater Toronto Area. The eligible regions include:

These are all areas where unsold condo inventory has been piling up. Developers finished building during the pandemic-era boom, but slower sales and higher interest rates left thousands of units sitting empty. This fund is designed to absorb that inventory and put it to use.

The Affordable Housing Component

Of the 2,200 units, 550 will be designated affordable. The province is defining “affordable” using a two-part test — rents must be set at whichever is lower:

• 25% below prevailing market rates in the area, or
• 30% of the median household income across the GTA

The affordability is protected through legal agreements registered directly on the title of each unit. The stated intention is for these units to remain affordable for a lifetime — not just during the fund's five-year hold period.

Why This Matters for Ontario Landlords

This is not a direct policy change that affects your existing tenancies or obligations under the RTA. But it does reshape the rental landscape in the GTA in several meaningful ways:

What This Does Not Change

To be clear, this announcement does not alter any existing landlord obligations:

• The 2026 rent increase guideline (2.1%) is unchanged
• Your N1, N4, and other LTB notice requirements remain the same
• Bill 60 provisions are unaffected
• The post-2018 rent control exemption still applies to qualifying units
• There are no new reporting or registration requirements for existing landlords

This is a supply-side initiative. The province is adding rental stock to the market, not changing the rules for landlords who are already operating.

The Bigger Picture

Ontario's condo market has been under strain. High interest rates slowed sales, and developers who launched projects during the pandemic boom are sitting on completed units with no buyers. At the same time, rental vacancy rates in the GTA remain extremely low and rents have been climbing.

This fund tries to address both problems at once: it helps developers move unsold inventory, and it adds rental supply where it's needed most. Whether 2,200 units will make a meaningful dent in a region with millions of renters remains to be seen, but it signals a shift in how the province is thinking about housing — working with the private sector to repurpose existing stock rather than relying solely on new construction.

Building Ontario Fund CEO Michael Fedchyshyn emphasized that this approach “requires no development charges, tax waivers, or direct subsidies” — the units already exist, and the financing is structured as a loan, not a grant. For a government trying to show housing results quickly, converting finished condos is a faster path than breaking ground on new builds.

What to Watch For

If you're a landlord operating in the GTA, keep an eye on a few things as this program rolls out:

• Which buildings are selected — once specific properties are announced, you'll know if the new rental supply directly overlaps with your market.
• Rent levels on the market-rate units — the 1,650 non-affordable units will be priced at market rates, which will signal what institutional operators consider competitive rent in your area.
• Whether the model expands — if the fund performs well, the province may scale it beyond the initial 2,200 units. This is described as a “first-of-its-kind” initiative.
• Tenant experience comparisons — professionally managed condo rentals with full amenities will set expectations that tenants may carry into negotiations with independent landlords.

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