Wednesday, September 5, 2018

Affordable rentals would be 10% to 15% of new Victoria condo projects

Between 10 and 15 per cent of units in new Victoria condo projects would have to be built as affordable rental units under a proposed “inclusive housing” policy.

The idea is to provide housing in new strata developments for working people who are being priced out of the Victoria housing market, said Jonathan Tinney, the city’s director of planning.

“This isn’t supportive housing where these are high-needs folks,” he said. “These are just households that happen to make a little bit less money than some of the people living as their next- door neighbours.”

City staff estimate demand for below-market-price rental at 124 units a year — 20 per cent of the anticipated annual housing demand of 520 units.

Those 124 units would include 74 for singles earning between $20,000 and $55,000 a year and 50 family units of two or more bedrooms, affordable to those earning between $35,000 and $85,000 a year.

Mayor Lisa Helps called the recommendations “a good start,” noting she would like to see more focus on the provision of affordable three-bedroom units.

Helps would like council to consider allowing 10 per cent more density in downtown developments than spelled out in the Official Community Plan in exchange for additional affordable units.

“Overall, this is the direction we need to move,” she said.

“Victoria is an inclusive city, and, if we want it to remain that way, we need to ensure that regular working people have homes here.”

The inclusive housing policy would replace the city’s bonus density policy, making affordable housing units a priority over other amenities. Bonus density is an incentive-based tool applied in rezoning that allows developers to build more floor space than normally allowed in exchange for helping to achieve public policy goals.

The proposed changes follow council’s direction to staff last July. The existing density bonus policy has brought in contributions of $5.1 million toward heritage improvements and $3 million to a variety of city reserves since it was last revised in 2016. It has also led to construction of 97 affordable rental and supportive housing units, and 359 market rental units.

The new policy would apply to strata developments only and not to market rental projects.

“The analysis shows that purpose-built rental simply can’t support that and it’s important that we don’t disincentivize purpose-built rental through this policy,” Tinney said.

The proposal would provide developers of projects with fewer than 40 units the option of making a cash contribution in lieu of including affordable units.

In developments of 40 units or more, the affordable units would be required.

For a project being built in the core, 15 per cent (six of the 40 units) would have to be affordable. In city neighbourhoods outside the core, 10 per cent (four of 40 units) would have to be affordable.

The proposal recommends rental rates for new affordable units be set at 80 per cent of Canada Mortgage and Housing Corp. average rents at the time of application. Based on current rents, that would be $684 for a studio, $793 for a one-bedroom unit, $1,058 for a two-bedroom and $1,374 for a three-bedroom.

Staff are recommending that council consider the policy and direct staff to consult further with stakeholders, adopt the affordable housing targets and levels of affordability, and further explore pre-zoning.

Under pre-zoning, the maximum density allowed in a zone could be achieved only in exchange for the provision of some affordable units, Tinney said.

“In smaller projects, it takes some of the guesswork out for the developer and makes it very clear what council’s doing. Some cities have done that,” Tinney said.

“It does take away some level the discretion council has around the project itself.”

Kathy Hogan, executive director of the Urban Development Institute capital region branch, a non-profit association for the real estate development industry, wants more consultation.

“We want to make sure that it doesn’t stop developers from building condos,” Hogan said.

“If the policy is too stringent, then it could have negative connotations on that.”

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