HomeMy WebLinkAboutPSD-016-02
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Cl~-!lJgton
REPORT
PLANNING SERVICES
Meeting:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Monday, March 4, 2002 /101 Resolution #C!/I-/O!?-() ~
Date:
Report #:
PSD-016-02
Flle#:
PLN 11.2.6
By-law #:
Subject:
REPORT FROM DURHAM REGIONAL CHAIR'S TASK FORCE ON
SUST AINABLE/AFFORDABLE HOUSING
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report PSD-016-02 be received;
2. THAT the Durham Regional Chair be advised that the Municipality of Clarington
supports in principle the proposal that the Municipality participate with the Region Area
Municipalities to develop programs and strategies including financial incentives to
encourage the development of affordable rental housing subject to further review of the
financial implications on the Municipality of Clarington,
3. THAT the Municipality support Durham Region in requesting the Federal and Provincial
levels of government to act on the recommendations directed at them specifically by
Durham Region's Task Force on SustainablelAffordable Housing.
4. THAT the Municipality agree to undertake a review of the financial implications of
waiving development fees and charges at such time as the Federal andlor Provincial
Governments commit to renew the funding of social housing and provides such funds for
Durham Region.
5. THAT a copy of Report PSD-016-02 be forwarded to the Regional Clerk, the Regional
Chair, the Clerk of each of Durham's Area Municipalities, the Premier of Ontario and the
Deputy Prime Minister.
Submitted by:
Reviewed bY;:~ ~c~ ~
Franklin Wu
Chief Administrative Officer
David . Crome. M.C.I.P.,R.P.P.
Director, Planning Services
BN*DJC*lw
February 26, 2002
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1 C 3A6 T (905)623- 3379 F (905)623-0830
648
REPORT NO.: PSD-016-02
PAGE 2
1.0 BACKGROUND
The Regional Task Force on Sustainable/Affordable Housing was created in May
2002 by Regional Council to address the need for affordable housing in the
Region of Durham. The main objectives of the Task Force were:
· To review with the private sector the types of barriers which impede
developers from constructing a range of affordable housing in Durham; and
. To develop an action plan that identifies ways to overcome these barriers and
provide incentives to stimulate the creation of new affordable housing in the
Region.
On December 5, 2001, the Task Force presented a report with its findings and
recommendations to the Regional Committee of the Whole which recommended
that the Report be referred to the Area Municipalities for consideration and
comments.
The Executive Summary of the Regional Task Force on Sustainable/Affordable
Housing is attached to this report as Appendix 1. A full copy of the report is
available at the Planning Services Department for inspection.
The purpose of this report is to summarize the findings of the study and provide
comments on the recommendations particularly as they relate to the Municipality
of Clarington.
2,0 DISCUSSION
2.1 Study Findings and Recommendations
In essence, the Regional Chair's Task Force on Sustainable/Affordable Housing
Report did two main things: (1) identified the need for new affordable rental
housing; (2) recommended strategies that can be used by different levels of
government to encourage the development of new affordable rental housing.
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REPORT NO.: PSD.016.02
PAGE 3
2.1.1 Need for Affordable Rental Housinq
According to the Task Force Report there is a dire need for additional affordable
rental housing in the Durham Region. This is demonstrated by the fact that 22%
of homeowners and 43% of tenants pay more than 30% of their gross income for
shelter. According to Canada Mortgage and Housing Corporation housing is
considered affordable when expenditure for shelter does not exceed 30% of the
gross monthly income. In effect, this means that 22% of homeowners and 43%
of tenants in Durham Region do not have affordable shelter.
The need for additional affordable housing is attributable to several factors
including low rental housing vacancy rates (1.7%); rental rate increases
outstripping inflation and household income and a waiting list of 4,700 applicants
for social housing
Based on a number of assumptions the Report concluded that affordable rental
and ownership housing should be produced at less than $1,250 per month
(excluding utilities) and $172,900 (excluding insurance and utilities) respectively
for rental and home ownership options. These rates are supportable at less then
the $50,000 per annual household income. The Report also concluded that 23%
of the total number of households in Durham has a total household income of
under $30,000 which at best yield affordable rent at $750 per month and home
ownership at $103,700.
The Report further found that apart from low vacancy rate and the lifting of rental
control, the main barrier to the development of new rental housing is the cost of
development versus the potential rate of return. Using different development
scenarios the report demonstrated that a new one bedroom walk-up apartment
could be rendered at a rental rate of $1,065 per month requiring an annual
household income of $42,600 while a two and three bedroom high-rise can be
rendered at a minimum of $2,000 monthly rent requiring an annual housing
income of $50,000 to $80,000. The private market is currently producing
condominium and freehold housing in the $100,000 to $173,000 price range
making demand for renting larger apartments non-existent.
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REPORT NO,: PSD-D16-02
PAGE 4
2.1.2 Task Force Recommendations
To stimulate the rental housing market the Task Force made a number of
recommendations directed at each level of government involved in the supply of
housing. Some of these recommendations are made possible by The New
Social Housing Reform Act and recent changes to the Municipal Act which
enable the Region to stimulate the production of affordable housing through such
measures as the provision of grants, loans and exemptions from development
fees and charges. The Task Force is proposing that the Region adopt a
"Municipal Housing Facility" by-law as required to extend such incentives to the
private and non-profit sectors.
Task Force Recommendation for the Region
Specifically, the Task Force recommended that the Region:
1. Waive fees and charges for planning approval applications; waive the
Regional portion of development charges, and lower the property tax rate
from multi-residential property class to the residential property class.
2. Make Regionally owned land available at a minimal cost or long-term
lease for affordable housing.
3. Target a maximum of 100 units annually to be eligible for subsidies and to
be distributed equally across the municipalities.
4. Establish a Regional Rent Supplement Program for two thirds of the units
produced.
5. Affordable housing incentives will be allocated to the most cost effective
housing proposals.
6. Recognize housing need as an ongoing Regional initiative.
7. Maintain Regional Official Plan policies that permit accessory apartments,
infill and other intensification opportunities.
8. Maintain Regional Plan Polices discouraging condominium conversion
and demolition of existing and affordable rental housing.
9. Work with Federal, Provincial and Area Municipal governments to identify
surplus government sites that may be suitable for affordable housing.
Create an inventory of such sites and work with non-profit housing
organizations and lor private developers to make these sites available at
nominal cost for affordable housing purposes.
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REPORT NO.: PSD-016-02
PAGE 5
Task Force Recommendations for Area Municipalities
The Task Force recommended that Area Municipalities be encouraged to:
1. Consider waiving the following fees and charges for new rental housing
projects that meet the definition of affordable housing:
· fees and charges for planning approval applications, including official
plan amendments, zoning by-law amendments and site plan approvals;
· building permit fees;
· development fees and charges;
· parkland dedication fees; and
· storm water management fees.
2. Consider innovative designs, reduced floor areas and reduced landscaped
open space requirements for new rental housing projects as defined;
3. Amend zoning by-laws to permit accessory apartments as-of-right in all
detached dwellings, subject to Fire Code, Ontario Building Code and local
building codes and standards;
4. Review zoning by-laws to eliminate any barriers to the provision of
residential accessory apartments in commercial areas and permit
standards and criteria that support such activity;
5. Amend official plans and zoning by-laws to permit rooming housing,
boarding housing and lodging houses under specified conditions in
appropriate zones;
6. Amend minimum floor areas where appropriate to permit bachelor
apartments at the Ontario Building code standard of 22m2; and
7. Adopt a policy supporting the conversion of "brownfield" sites to residential
use for affordable housing under specified conditions and prepare
inventories of such sites for consideration by developers and other
housing providers.
2.2 Comments
2,2.1 The Municipality of Clarington supports the Regional proposal that advocates a
multi-participant approach to the provision of affordable rental housing. The
Municipality also fully supports the recommendations directed to the Provincial
and Federal Levels of government as outlined in pages xii and xiii of the Task
Force Report.
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REPORT NO.: PSD-016-D2
PAGE 6
2.2.2 The recommendations directed at the Region are also supported but with two
cautionary notes. Firstly, it is felt that 100 affordable rental units per annum is
too modest a target to meet the rental housing needs in this Region. Secondly,
the Region should be careful that in selecting the most cost effective approach
for the allocation of affordable housing incentives quality is not compromised,
otherwise, the negative image currently associated with subsidized housing
would be further exacerbated. It is imperative that a high quality of housing
including landscaping be maintained and that affordable housing integrate
harmoniously with the surrounding environment.
2.2.3 The Municipality of Clarington is also generally supportive of the
recommendations directed to the area municipalities, as they will indeed help to
stimulate the affordable rental housing supply in this Municipality. At first glance,
it would appear that Clarington does not have a housing afford ability problem.
Between 1991 and 2000 approximately 57% of the new residential building
permits issued were for semi-detached, row/townhouses and apartments
(Municipality of Clarington). Despite this, Clarington's rental units represent only
18% of its total stock compared to 32% in the Region (Census Canada, 1996).
Although current information on tenure is not available, based on the types of
permits issued in the recent past the pattern of tenure is not anticipated to be
significantly different.
As the apartment component of the housing stock is small it would appear that
the ownership of small lot singles (links), semi-detached and multiple housing
forms provide a viable option to rental. This does not mean though that
Clarington's residents are any better off than the rest of the Region as far as
housing affordability is concerned. Similar to the situation in Durham Region
21% of homeowners and 44% of renters in Clarington pay over 30% of their
household income on shelter (Census Canada, 1996).
2.2.4 Our comments with respect to the specific recommendations for area
municipalities are as follows:
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REPORT NO.: PSD-016-D2
PAGE 7
. Undoubtedly, waiving of all development fees and charges will help to
lower the cost of developing rental housing. However, as the impact of
this recommendation on the Municipality's revenue has not been fully
assessed, we support consideration of the recommendation in principle
only. An assessment will be undertaken at such time as the Federal and
lor Provincial levels of government commit to renew the funding of social
housing and provide such funds for Durham Region. In addition, policies
regarding waiving of fees and charges will be developed for Council's
approval at the same time. Any waiving of fees should be considered in
the context of other planning objectives such as encouraging mixed-use
development of Central Areas, providing a transit supportive environment
and redevelopment of brownfield sites. The Region should consider a
strategy to maintain and upgrade mixed-use housing stock in historic
downtown areas.
. The Municipality of Clarington supports the recommendation to consider
innovative designs and reduced floor areas as appropriate but not reduced
landscape open space requirement if it would affect the overall
appearance of the development and reduce amenity space available for
residents.
. Clarington implemented recommendation 3 in 1997 allowing accessory
apartments (apartments-in-house) and providing for the registration of
these units. Other recommendations regarding residential accessory
apartments in commercial areas and rooming, boarding and lodging
houses are supported and are addressed in Clarington's planning
documents. Rooming, boarding and lodging houses are allowed through
rezoning as required by the Official Plan. Consideration will be given to
amending the Official Plan and permitting these housing types under
specified conditions in appropriate zones in the Zoning By-law.
. Clarington currently allows bachelor apartments to be built at 40m2
minimum. It is felt that 22m2 minimum for bachelor apartments as
recommended by the Task Force may be appropriate for large cities but
not a place like Clarington where land cost is considerably cheaper.
. The Municipality has a few "brownfield" sites that may be suitable for
conversion into affordable housing. Every effort will be made to facilitate
this where suitable and feasible.
3.0 CONCLUSION
The Regional Chair's Task Force on SustainablelAffordable Housing clearly
demonstrated that there is a need for affordable rental housing in Durham
Region and that this need cannot be met without the collaborative effort of all
levels of government and the private sector. Clarington generally supports in
principle the recommendations of the Task Force pending further analysis of their
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REPORT NO.: PSD-D16.02
PAGE 8
financial implications for the Municipality. It is also felt that any standards or
guidelines developed for affordable housing should be done in consultation with
the Area Municipalities.
The Director of Finance reviewed this report and concurs with the comments and
recommendations pertaining to financial implications.
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REPORT NO.: PSD-016-02
PAGE 9
Attachments:
Attachment 1 - Executive Summary of the Regional Task Force on
Sustainable/Affordable Housing
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-0830
656
'.
ATTACHMENT 1
DURHAM REGION AFFDRDAIILE HOUSING TASK FORCE REPORT
Final Raport: December 5, 2001
EXECUTIVE SUMMARY
1) Region of Durham Creates Task Force
Within the Regional Municipality of Durham a wide diversity of residential
dwellings by type, size and tenure to satisfy the social and economic needs of
residents has not been provided in the last few years. A number of factors
demonstrate the need for more affordable housing in the Region, including low
rental housing vacancy rates (1,7%); rental rate increases outstripping inflation
and real household income; the significant percentage of residents paying more
than 30% of their gross income on shelter (22% of homeowners and 43% of
tenants); the three-to-five year waiting list of some 4,700 applicants for social
housing; and the growing number of homeless.
The Region recognizes that the public sector lacks the resources to fill these
gaps, Accordingly, in May 2001, Durham Regional Council approved the
creation of a Regional Chair's Task Force on Sustainable/Affordable Housing.
The objective of the Task Force was to review with the private sector the types of
barriers which impede developers from constructing a range of affordable
housing in Durham and to develop an action plan that Identifies ways to
overcome these barriers and provide Incentives to stimulate the creation of new
affordable housing in the Region.
2) Recent Provincial Legislation on Affordable Housing
The Province of Ontario recently passed new legislation (Le, the Social Housing
Refonn Act ) and made a number of changes to existing legislation (i.e. Municipal
Act and Planning Act) and regulations to provide munlclpalities with many of the
tools necessary to address local housing needs. The Province has provided
these new tools for municipalities designated as service managers to encourage
affordable housing production.
In particular. recent amendments to Section 210 of the Municipal Act allow
designated municipalities (i,e. service managers) to add 'housing' as a ciass of
municipal facilities and complement the new municipal authority for housing
under the Social Housing Refonn Act. The amendments give the RegIon of
Durham (and other service managers) the authority to stimulate the production of
new affordable housing by providing grants, loans and exemptions from
development feeS' and charges. Other forms of assistance can include providing
land at less than market value and establishing a reserve for housing.
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'. '
DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
FInal Report: December 5, 2001
~
3) Definition of "Affordable Housing"
In order to provide these Incentives, the Municipal Act amendments require the
Region of Durham to pass a municipal housing facilities by-law which would
define "affordable" housing, establish policies for public eligibility, and set out
provisions to be contained In site specific agreements for housing created under
the by-law. The Task Force developed the following definition of affordable
housing for use in the necessary by-law:
Affordable housing means houSing which would have a market price or rent that
would be affordable to households of low and moderate income. Households of
low and moderate income are those households within the lowest 40 percent of
the income distribution (4r1' percentile) for the Region of Durham.
Housing that is affordable to households of low and moderate income is defined
as follows:
a) Affordable rental housina is housing where monthly rent costs (excluding
utilities) do not exceed 30 percent of tenant gross monthly household
income
b) Affordable ownershiD housina is housing where monthly housing
expenses (including mortgage principle, interest and property tax but
excluding insurance and utilities) do not exceed 30 percent of gross
monthly household income.
For the purposes of calcu1atJng affordable rent and housing prices the following
criteria shal/ be applied:
· Household income distribution for the Region of Durham shall be in
accordance with the most recent available Statistics Canada Census
infonnation or other accepted Information.
· Ownership housing costs wil/ be. calculated using the following assumptions:
a monthly tax rate equal to 0.125% of the house value; a 10% down payment;
a mortgage interest rate consistent with current average rates and a 25 year
amortization period.
The following table illustrates that affordable housing Initiatives should be aimed
at producing rental housing with rents lower than $1,250 per month (excluding
utilities) and ownership housing costing less than $172,900 (excluding insurance
and utilities).
658
ii
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
Affordable Rent and Ownership Costs Based on Household Income
Household Income Number of % of Total Affordable Rent Affordable Ownership
Households Households (Monthly) (Unit Cost)
Under $10,000 6,295 4.1% Under $250 Under $34,600
$10,000 to $19,999 14,600 9.5% $250 to $500 $34,600 to $69,200
$20,000 to $29,999 13,660 8.9010 $500 to $750 $69,200 to $103,700
$30,000 to $39,999 15,220 9.9% $750 to $1,000 $103,700 to $138,300
$40,000 to $49,999 15,475 10.0% $1,000 to $1,250 $138,300 to $172,900
Sub-total 65,250 42.4%
$50,000 and over 88,850 57.6% $1,250 and higher $172,900 and higher
~otal 154,100 100.0% -
Source: Statistics Canada, 1996 Cansus, and Region of Durham Calculations
The Region of Durham Housing Directions Study, anticipated to be published in
2002, is exploring ways to ensure the production of new affordable housing units
occurs. Infonnation gathered for this study has demonstrated that the private
market is creating housing in the $100,000 to $173,000 price range. Forthis
reason, the Task Force decided to focus on an action plan that addresses the
construction of new rental housing, not ownership housing.
Accordingly, the target of,the Task Force's action plan Is the construction
of new rental houslno with rents below $1,250 per month (excluding
utilities).
4) Barriers to the Production of New Affordable Housing
Significant research has been undertaken In the last few years that identifies
numerous barriers to the constructi6n of new affordable housing in Ontario.
By understanding and addressing these barriers, approaches can be developed
to help overcome identified concems and generate the housing required to meet
the Region's affordable housing needs.
The barriers to the provision of affordable housing that are most commonly
mentioned In the research and which were considered by the Task Force are
listed by topic area below. They are discussed In detail in Section B ofthe Task
Force report.
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
FInal Report: December 5, 2001
"
a) Official Plan
b) Zoning By-laws
. Accessory apartments and Garden Suites
· RoominglBoarding/Lodging Houses
. Development Standards
. Minimum Unit Sizes
c) Intensification
d) Development Costs
e) Development Fees and Charges
f) Municipal Approval Process
g) Control of Demolition and Conversion of Rental Housing
h) Municipal Taxation Practice
i) Affordable Housing Sites
j) Senior Govemment Policies and Regulations
· Key Income Tax Rules Affecting Rental Housing
. Goods and Services Tax (GST)
· Canada Mortgage and Housing Corporation (CMHC) Mortgage
Insurance
. Provincial Sales Tax (PST)
. Decline in Federal and Provincial Funding for Social Housing
Development
5) Region's Potential Partners
The Region can only achieve significant results in its action plan through working
together with a number of key partners: These partners bring a variety of
resources and capabilities to help meet the Region's housing needs. They
include the private sector (e.g. development and finance industries), community
agencies (e.g, non-profit housing agencies, service clubs, religious institutions),
Area Municipalities, the Provincial Govemment and the Federal Govemmenl
6) Cost to Develop New Rental Housing
The Task Force used a real estate model to develop a number of "generic' case
studies to Illustrate the nature of the problem of developing affordable rental
housing in Durham Region. The model is detailed in Section D of the Task Force
report. The case studies detennined development costs, operating costs, rate of
retums on investment and resuiting rents.
The following table summarizes average monthly rent charges for existing rental
units and the monthly rental amounts required to cover costs for newly
constructed units as Illustrated by the case stugi6D
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DURHAM REOIONAFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
Monthly Rent Cost for New Rental Housing Units
Building Form Unit Type CMHC Required Rent Required
Average Amounts for Household
Rents In Reasonable Rate Income To
ExIsting of Return (10%) Afford
Buildings Rent*
***
Townhouse** 1-bedroom nla n1a n1a
2-bedroom nla $1,410 $56,400
3-bedroom n1a $1,610 $64,400
Walk-up Apartment 1-bedroom $684 $1,06~ $42,600
2-bedroom $n8 $1,265 $50,600
3-bedroom $879 $1,365 $54,600
High-rise Apartment 1-bedroom $684 $1,700 $68,000
2-bedroom $n8 $1,900 $76,000
3-bedroom $879 $2,000 $80,000
* Assumes 30% of household Income is spent on housing
.. Does not include utilities
- Average rents for Oshawa CMA, All Private Apartments
Without Incentives, the case studies demonstrated that the cost of oonstructing
new rental housing would require monthly rent charges that exceed current
average mar1<et rents and the affordablllty threshold of $1250 per month. The
Task Force concluded that affordable rental housing cannot be constructed
without incentives being introduced to reduce development oosts.
7) Impact of Incentives ot:' Monthly Rents Required to Cover
Costs .
It Is clear that, If some approaches could be found to help offset costs, rents
could be reduced and the mnge of households able to afford such
accommodation Increased. Given the high demand for rental housing In the
Region, there would be an incentive for private devalopers to mova ahead with
new rental development in the Region,
661
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
FInal Report: December 5, 2001
The Task Force considered the following incentives:
· waiver of Regional development charges
· waiver of Regional and area municipal development fees and charges
· property taxes equal to residential property tax rate
· inclusion of the proposed Federal capital grant of $12,500 per unit
· availability of surplus govemment lands contributed at no cost
The table below shows the cumulative effect on required monthly rents of
potential incentives for two generic case studies. High-rise construction was
deemed too expensive by the Task Force to warrant detailed analysis.
Cumulative Effect on Monthly Amounts Required to Cover Construction
and Operating Costs
(Whitby Townhouses and Pickering Walk-up Apartments)
Monthly Amounts Required to Cover Costs
Whitby . Pickering
Incentives Townhouses Walk..lJp Apartments
2 bdnn 3bdnn 1 bdnn 2bdnn 3bdnn
($) ($) ($) ($) ($)
Full Cost Recovery of Construction and 1,410 1,610 1,065 1,265 1,365
Operating CostsINo Incentives
Regional Waiver Only 1,320 1,520 1,010 1.210 1,310
Area Municipality Waivers Only 1,345 1,550 1,015 1,215 1,315
.
Reg+Area Waiver+Residential Tax 1,080 1,280 835 1,035 1,135
ReglAreafTax + Fed. Grant 950 1,150 715 915 1,015
ReglAreafTaxlFed + Free Land 750 950 615 815 915
Note: Shaded areas reflect monthly amounts below the "affordable" threshold of ~ 1,250.
This table clearly shows the reductions in rent levels that are achievable through
the various measures noted above and incorporated Into the scenarios. It also
shows the significant affordablllty gains that can be achieved through the
combined efforts of several levels of govemment.
The Task Force concluded that for every $10,000 reduction in development cost
per unit, the rent required can be reduced by approximately $85 per month,
which equates to a reduction in required household income of approximately
$3,400 per year.
662
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DURHAM REGION AFFDRDA/ILE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
Similarly, the rent reductions achievable by taxing units at the residential rate as
opposed to the multi-residential rate are also significant, although they VBI}'
depending on the type of housing and local tax rate. The scenarios show that
taxing units at the residential rate cen bring rents down by over $100 per month
for most fonns of rental housing in most perts of the Region. Each $100 per
month reduction in rent equates to a $4,000 per year reduction in required
household income.
8) Regional Rent Supplement Program
The above incentives can be successful in bringing market rents to levels
affordable by households with incomes up to $50,000. However, such rent levels
are out of reach of those households with Incomes at the lowest levels,
particularly those in receipt of social assistance or on fixed Incomes.
An approach that has been successfully applied by senior levels of govemment
In the past has been to provide rent supplements to households at the lowest
levels of income to enable them to pay no more than 30% of their income on
housing. With the transfer of soclal housing to the municipal level, the
responsibility for creating and funding any new rent supplement program is likely
to fall on service managers such as the Region of Durham.
The following table provides an example of potential costs for a rent supplement
program for a 100 unit walk-up apartment in Pickering. The example assumes all
available incentives have been applied and that rent supplement would be
available to two-thirds of the tenants of which 50% would be at the deep level
and 50% at the shallow level.
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
or nt e ng a -upw u ncent es Applied
Type of Unit Type Monthly Monthly Annual Annual Annual
Supplement Amount Rentl Unit Operating Rent Regional
RequlredJUnlt by Type of Cost Revenue Supplement
to Cover Costs Supplement Costs
IA) IB) IC) ID) (0 Minus C)
No Rent 1bdrm $615 $615 $81,180 $81,180 $0
Supplement - 11 units
Full Cost 2bdrm $815 $815 $107,580 $107,580 $0
Recovery 11 units
3bdrm $915 $915 $131,760 $131,760 $0
Rent Amount 12 units
Shallow 1bdrm $615 $461,25 $81,180 $60,885 $20,295
Supp/ement* 11 units
2bdrm $815 $611.25 $107,580 $80,685 $26,895
11 units
3bdrm $915 $686.25 $120,780 $90,585 $30,195
11 units
Deep 1bdrm $615 $246 $81,180 $32,472 $48,708
Supplement* 11 units
2bdrm $815 $326 $107,580 $43,032 $65,548
11 units
3bdrm $915 $366 $120,780 $48,312 $72,468 I
11 units
TOTAL 100 units $7035,00 $5041,75 $939,600, $676,491 $264,109
Potential Rent Supplement Costs
F 100 U I Pick Ii W Ik Ith F III Iv
NOTE: For the purposes of calculatlllg shallow and deep supplement levels. the medIan
amounts of 40% income to rent and 75% of income to rent was used
The annual costs for a rent supplement program for newly constructed rental
housing will vary, depending on the unit rent amount and the actual household
Incomes of all tenants. In this example, the annual cost to the Region would be
$264,109.
9) Impact of Incentives to. Regional Levy & Foregone
Revenues .
An analysis was conducted to show the maximum financial impact on the Region
of the various incentives proposed. A number of assumptions were made in the
analysis:
· 100 units per year would be eligible to receive incentives
· All 100 units receiving incentives are walk-up units
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
. One-third of the units produced would be at the cost recovery amount,
one-third would require shallow supplement to make rental units .
affordable to moderate Income households, and one-third would require
deep supplement to make units affordable to households with very low
income
. All other assumptions used in the case scenarios to estimate development
costs are used (e.g. unit mix, land costs, construction costs).
Cost Impact to Region of Potential Incentives
100 Unit Walk-up Apartment Example
Incentive Potential Cost One Time Impact to Foregone
for 100 units or Ongoing Regional Revenues
Cost Levy ($)
(%)
Regional $581,500 . One-time 0.24 n1a
Development
Charge Waiver
Regional Rent $264,109 Annual 0.11 n1a
Supplement (66
units)
Regional Property $ 172,300/year Annual n1a $247,600/year
Tax Reduction
The impact to the Region to provide incentives to the private and public sector to
create new affordable rental housing is estimated to be as follows:
. one-time impact to the general levy of approximately 0.24% to supplement
the development charges reserve fund;
. annual impact to the general levy of approximately 0.11 % to provide rent
supplement for two-thirds of the units;
. approximately $172,300 per year in foregone tax revenue.
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPoRT
Final Report: December 5, 2001
10) Task Force Recommendations
A) Areas of Regional Control
It Is recommended that Regional Council:
1. Adopt the Regional Chair's Task Force on Sustainable/Affordable Housing
report as Regional policy and that Area Municipalities be requested to also
endorse the report.
2. Enact a by-law to implement the Section 210 Municipal Act amendments that
would enable the Region and Area Municipalities to provide incentives to
stimulate affordable rental housing development. The by-law would include
the definition of affordable housing developed by the Task Force, state
poliCies regarding eligibility for the housing units to be created and summarize
the provisions that agreements for affordable housing would be required to
contain.
For new rental housing projects that meet the definition of affordable housing
established by the Region and other conditions set out in the Regional by-law
related to Section 210 of the Municipal Act, incentives could include the
following:
· waiving the Regional portion of development Charges;
· waiving Regional fees and charges for planning approval applications,
including official plan amendments; and,
· property taxation at the residential rate.
Project specific by-laws and associated agreements would need to be created
detailing the incentives to be provided and the conditions under which they
would be made available.
3. Establish a "housing first" policy for surplus Regional lands in order to
consider surplus Regional lands for housing first and make them available at
a minimal amount (e.g. $1) on a long-tenn lease basis to applicants for
projects that meet the definition of affordable housing established by the
Region and other conditions set out in the Regional by-law related to Section
210 of the Municipal Act.
4. Establish a maximum of 100 units as the annual allocation of new rental
housing units that would be eligible for the various affordable housing
Incentives approved by the Region. Ensure projects are distributed across
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
Area Municipalities. One-third of the units produced would be offered at
market rent, one-third would require shallow subsidy and the remaining one-
third would be occupied by households eligible for deep subsidy.
5. Establish a complementary Regional Rent Supplement Program that would
provide rent gearecl-to-Income for up to two-thlrds (maximum 66 units per
year) of the new rental housing units that meet the definition of affordable
housing established by the Region and other conditions set out in the
Regional by-law related to Section 210 of the Municipal Act. Households
eligible for rent supplement would be selected through the Housing Access
Centre.
6. Seek affordable housing proposals from the public and private sector that
give consideration to a variety of procurement techniques and management
options, Including using the Durham Regional Local Housing Corporation to
build new rental housing, with a view to selecting the most cost-effective
approach for the allocation of affordable housing incentives across the
Region.
7. Refer the findings and recommendations of the Regional Chair's Task Force
on Sustainable/Affordable Housing to the ongoing Regional initiatives, in
particular the Housing Directions Study, Property Tax Study, Revitalization
Incentive Study, Official Plan Review and Development Charge Study, and
any other related initiatives for consideration In future policy development.
8. Maintain Regional Official Plan policies that permit accessory apartments, inflll
and other Intensification opportunities.
9. Maintain Regional Official Plan policies discouraging condominium
conversion and demolition of existing affordable rental housing.
10. Work with Federal, Provincial and Area Municipal govemments to identify
surplus govemment sites that may be suitable for affordable housing. Create
an inventory of such housing and work with non-profit housing organizations
and/or private developers to make these sites available at nominal cost for
affordable housing purposes. .
B) Areas Beyond Regional Control
Area MunlclDalltles
It Is recommended that Regional Council:
11. Encourage Area Municipalities to consider waiving the following for new rental
housing projects that meet the definition of affordable housing established by
the Region and other conditions set out in the Regional by-law related to
Section 210 of the Municipal Act:
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
· Fees and charges for planning approval applications, including official
plan amendments, zoning by-law amendments and site plan
approvals;
· building permit fees;
· development fees and charges;
· parkland dedication fees; and
· storm water management fees.
12. Encourage Area Municipalities to consider innovative designs, reduced floor
areas and reduced landscaped open space requirements for new rental
housing projects that meet the affordable housing definition established by
the Region and other conditions set out in the Regional by-law related to
Section 210 of the Municipal Act.
13. Encourage Area Municipalities to amend their zoning by-laws to permit
accessory apartments as-of-right in all single detached dwellings subject to
Fire Code, Ontario Building Code and local building codes and standards.
14. Encourage Area Municipalities to review their zoning by-laws to eliminate any
barriers to the provision of residential accessory apartments in commercial
areas and permit standards and criteria that support such activity.
15. Encourage Area Municipalities to amend their official plans and zoning by-
laws to permit rooming houses, boarding houses and lodging houses under
specified conditions in appropriate zones.
16. Encourage Area Municipalities to amend minimum floor areas where
appropriate to permit bachelor apartments at the Ontario Building Code
standard of 22 m2 (250 sq').
17. Encourage Area Municipalities.to adopt a policy supporting the conversion of
"brownfield" sites to residential CIse for affordable housing under specified
conditions and prepare inventories of such sites for consideration by
developers and other housing providers.
Provincial Government
It Is recommended that Regional Council:
18. Encourage the Ontario Govemment to reintroduce the Provincial Sales Tax
(PST) rebate program for rental housing.
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DURHAM REGION AFFORDABLE HOUSING TASK FORCE REPORT
Final Report: December 5, 2001
19. Pursue the allocation of additional provincial rent supplement units for the
Region of Durham.
20, Encourage the Federal and Provincial Govemments to investigate how the
low-income U.S. federal housing tax credits program could be applied in
Canada.
21. Advocate to the Province that it adopt an affordable housing strategy and that
it participate in the proposed new federal housing program.
Federal Government
It Is recommended that Regional Council:
22. Advocate to the Federal Govemment for changes to federal taxation poliCies
identified by the Provincial Housing Supply Wor1<ing Group, regarding capital
cost allowance, deductibility of soft costs, treatment of rental losses,
treatment of capital gains and designation of rental housing as a .passive"
investment.
23. Advocate to the Federal Govemment to amend GST legislation to: eliminate
or lower the GST on the costs of new rental construction; allow developers to
pay GST on a pro-rated basis as units are rented; and, re-classify rents as
.zero-rated" for GST so that input tax credits can be claimed against
expenses.
24. Advocate to the Federal Govemment adopt a national housing strategy and
that it immediately launch its proposed new federal housing program.
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