A shortage of new rental apartments has Toronto considering giving builders a break on development charges if they’ll build rental buildings rather than condos.

While condominium construction sets records, for many years very few rental apartment buildings have broken ground. On Tuesday, the city’s executive committee set up a working group to study whether giving builders a special deal would stimulate apartment construction.

Meanwhile, the committee, led by Mayor Rob Ford, endorsed an across-the-board increase in development charges, which are levied to help pay for city infrastructure.

Assuming city council gives final approval next month, the charge on a 2-bedroom unit, whether condo or rental, will rise in phases, from $12,412 now to $21,203 by February 2016.

The working group, composed of city staff and industry representatives, will look at letting apartment builders delay paying those charges until the units are actually completed. It will report back early next year.

Postponing payment “could increase financial flexibility and marginally improve the business cases for new purpose-built market rental development,” the staff report said.

Over the past decade, only a few hundred rental units have been built each year, in a city whose population is rising by almost 40,000 a year.

“There’s been insignificant construction of purpose-built rental for decades,” said Daryl Chong, president and CEO of the Greater Toronto Apartment Association.

“The consistent theme in most reports from city planning and other departments is we want more purpose-built rental,” Chong said.

While rental condos have helped fill the gap, tenants can get the boot any time the owner wants to sell.

“The fact that condos are being rented is not a good thing over the long term,” said apartment building broker Derek Lobo. “When the condo owner wants to sell, the tenant has to move. They have no tenure. That’s the issue.”

Chong said he wants the working group to look at other measures in addition to postponing payment of development charges.

The city already offers a property tax break, but it could go further, Chong suggested, as well as easing the burden of contributions builders must make for things such as parkland and public art.

Lobo said there is no magic bullet that will spur rental apartments.

“This is a 45-year-old problem since rent controls came in,” Lobo said. “It’s going to take hard work from the city, the developers and the financiers, and it’s going to take a number of years to solve. But we’ve got to get started.”

The association for condo developers says it has no issue with giving rental apartments a break.

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“I think any kind of incentive the city takes to try and encourage a positive development that is not currently happening is a good thing,” said Steve Deveaux, vice-chair of the Building Industry and land Development Association (BILD).

Development charges boost city coffers by an average of $100 million annually — $150 million last year. Under the changes endorsed Tuesday, the city’s take would rise to the range of $170 million to $250 million a year, depending on development activity.