The chronically underfunded Toronto Transit Commission is preparing a plan to create a for-profit development arm to unlock billions of dollars worth of land on and near its bus and subway properties.

The TTC is keeping the plan under wraps, but it has the support of Mayor David Miller, who says he hopes a transit development corporation can also deliver new affordable housing, accomplish some of the densification called for in the new official plan and demonstrate the effectiveness of a design and architectural review panel.

TTC staffers are forbidden to speak about the report, saying even its working title is "not public information." The study was commissioned at the urging of Mr. Miller when he was still a city councillor, and likely will be ready next month.

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"My intent was to look at all the different models, particularly Hong Kong, and see what could be adapted to Toronto," he said. "It has taken quite some time because this isn't the usual way of doing things here. We traditionally have sold off the land."

Ed Levy, a transportation planner and engineer, said: "If this plan is indeed based on the Hong Kong model, it could be explosive. Really, if they do it up properly -- and that would absolutely have to include some real separation between the development arm and the TTC -- it could be the most significant change since the city took over the [privately owned]Toronto Street Railway in 1921."

The main Hong Kong transit company, MTR Corp., is owned 76 per cent by the state. Its shares are publicly traded and are among the better performers on the Hang Seng index. MTR has been in the black every year since it was founded in 1977, and for the year that ended with March, 2004, it reported nearly $1-billion (Canadian) in profit, almost all from real-estate development at subway stations.

In its 2003 annual report, MTR said its business model "has given Hong Kong a world-class urban railway system without costing government or taxpayers anything." Hong Kong is considerably more transit-friendly than Toronto. More than 80 per cent of all trips there are made by transit. In greater Toronto, more than 80 per cent of trips are by private car.