Capital News: Ontario’s proposed affordable housing rules fall flat, advocates say

Posted February 5, 2018

On Jan. 23, a small group of protesters stood in the freezing rain at the curb of a construction site for a new condo development in Ottawa’s Mechanicsville neighbourhood.
 
As cars splashed past the resilient crowd, members of the Association of Community Organizations for Reform Now (ACORN) Ottawa, a low-income advocacy group, held up signs demanding the Ontario government amend its proposal on increasing affordable housing.
 
Nationwide, rental prices have been increasing at a faster pace than inflation accounts for, which adds pressure to those struggling to pay rent.
 
ACORN members in both Ottawa and Toronto, as part of a province-wide campaign, took to the streets to denounce what they call “pro-developer” rules on inclusionary zoning proposed by the Ministry of Housing.
 
Inclusionary zoning refers to regulations that allow municipalities to demand that developers price a certain number of units from new constructions so that people with lower incomes can afford them.
 
Blaine Cameron, ACORN’s city-wide chair, says the group is calling on the province to increase the minimum number of affordable units required, and that the regulation also be applied to smaller buildings with fewer units, which are exempt from current rules.
 
The proposal
 
The province’s proposal was released in December 2017 as an amendment of the Planning Act, as part of the 2016 Promoting Affordable Housing Act.
 
The proposal outlines provisions about inclusionary zoning and would require developers to temporarily make five per cent of their building units affordable, or 10 per cent if the project is located in a “high density transit-station area”.
 
What is considered “affordable” will be determined by each municipality. However, Statistics Canada says people who spend more than 30 per cent of their total household income on shelter expenses have a “housing affordability problem”.
 
The bylaws outline that developers price the units of the new development or redevelopment as affordable for a minimum of 20 years up to a maximum of 30 years, meaning after this period the sale of the unit could be at market rate.
 
Under the proposed inclusionary zoning rules, each municipality would need to pay 40 per cent of the difference between the market price of the unit and the “affordable” price during the given affordability period.
 
The proposal outlines other incentives for developers, including waiving or reducing planning application fees and reduced payment and requirements related to parking.
 
The proposed rules are limited to new developments or redevelopments with 20 units or more, to which Cameron says small developers — who are more likely to build in areas that are more affordable — will be excluded. The new rules won’t apply to rental units either.
 
What inclusionary zoning could look like
 
At the site of the Mechanicsville neighbourhood protest stands a tall signboard previewing what the shiny new condominium will look like at 121 Parkdale Ave. It is located near Ottawa’s Tunney’s Pasture Station, considered a transit hotspot. Tunney’s Pasture is a connection hub for many OC Transpo bus routes and will eventually have a Confederation Line LRT station.
 
In the Ottawa-Gatineau area, between 2011 and 2016, the number of condos per 100,000 people has increased by almost 400.
 
Under the proposed changes, seeing as it is a new development, 10 per cent of the condo units would need to be sold at an affordable price, and the City of Ottawa would then pay 40 per cent of the difference between the average market price of the condo units and the determined affordable price. The rest would need to be financed by the developer.
 
Cameron says he thinks this is realistic.
 
“Over the lifetime of that building, [the developers] are going to make oodles and oodles of money.” he says. “They can afford to put in affordable units,” says Cameron adding that a property in such a location should have up to 50 per cent of its units allocated to affordable housing.
 
A representative from Brigil, the developer behind the new condo development, said in an email that the province’s proposal on inclusionary zoning is new to them, and that they are currently watching what will be done in the industry before commenting.
 
Tim Daniel Aubry, a University of Ottawa social housing expert says, “In Ottawa, as we put up condos … we’re losing other low-end housing. It’s squeezing the rental market for the people at the low end of the economic ladder.”
 
Aubry says that collaboration between the public and private sectors is essential in addressing the issue across Canada.
 
However, he adds it’s important to make building affordable housing “worthwhile” for the private sector. “I don’t think we’ve figured that out yet,” he says.
 
Canada’s current state of housing
 
Rental prices have been on the rise across the nation for decades, according to the Canada Mortgage and Housing Corporation.
 
When it comes to social housing, Aubry says, “Canada has a lot of catching up to do,” when compared to other countries, such as the United Kingdom.
 
According to the City of Ottawa, there are about 22,500 social housing units available, which makes up about four per cent of the city’s overall dwellings. In some U.K. cities, social housing units make up between 17 and 43 per cent of their overall dwellings.
 
According to the Alliance to End Homelessness Ottawa, there were 10,052 households on a waiting list for affordable housing as of December 2016. The number of households on the list dropped by only 47 from the year before.
 
Gisele Bouvier, chair of ACORN Ottawa’s Vanier chapter says “it’ll take centuries before people get their affordable housing” if the province proceeds with the drafted regulations.
 
Bouvier points to inclusionary zoning rules set in the U.S. to be used as a benchmark, where the minimum number of affordable housing units is 20 per cent, calling Ontario’s proposed five per cent “measly” in comparison.
 
According to the NYU Furman Center, more than 300 cities, towns and counties across the U.S. have some form of inclusionary zoning, including major cities like San Francisco and Boston.
 
Meanwhile, the Government of Canada announced in November the implementation of a $40 billion National Housing Strategy that aims to reduce chronic homelessness and remove households from housing need over the next 10 years.
 
Part of the strategy includes the launch of a portable housing benefit by 2020. The federal government announced it will work with provinces to provide an estimated average of $2,500 per year to recipient households, with the goal of assisting at least 300,000 families.
 
Aubry says this will help address the issue of affordable housing because “it puts the control into the hands of … individuals to get housing.”
 
“It’s a rapid kind of response, rather than waiting for developers to actually put up buildings.”
 
Until then, Aubry says Canada needs to make sure it’s setting the right price of the benefit since he thinks it may not make a huge difference on a monthly basis.
 
According to the CMHC, the average vacancy rate sits at 1.6 per cent, the lowest it’s been since 2000.
 
With high demands and little supply, Aubry questions the attainability of what’s left on the market for individuals in low-income situations.
 
Ultimately Aubry says the biggest challenge regarding the inclusionary zoning laws comes down to the bottom line. He says affordable housing doesn’t have the same profit margins as building condos that people can sell at market rates.
 
“It’s night and day,” he adds.
 
Cameron says developers need to realize that many citizens face socio-economic barriers due to a lack of affordable housing.
 
He adds, “They can part of the solution or they can be part of the problem.”
 
In an opinion piece for the Toronto Star, Ontario Housing Minister Peter Milczyn wrote that the draft on inclusionary zoning will not be the final version and that already he has heard many good ideas from the public and housing advocates.
 
He wrote that it is important the province “strike a balance between creating affordable housing and not disincentivizing developers to build.”
 
The province accepted comments on the proposal until Feb. 1.
 
 
***
Article by Alyssa Del Castillo-Roussy for Capital News