Loading...
HomeMy WebLinkAboutCAO-007-19 Clarftwn CAO Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: June 17, 2019 Report Number: CAO-007-19 Resolution: GG-415-19 File Number: By-law Number: Report Subject: Tax Rebate for Parkview Lodge Recommendations: 1. That Report CAO-007-19 be received; 2. That the Region of Durham be advised that the Municipality of Clarington supports the proposed affordable housing project (Parkview Lodge expansion) recommended for award by the Region of Durham pursuant to the evaluation of the Request for Proposals 1060-2018, under the Federal-Provincial Social Infrastructure Fund — Investment in Affordable Housing Program (SIF-IAH Program); 3. That the Region of Durham be advised that the Municipality of Clarington will take the necessary steps to set the municipal tax rate for the affordable housing project at the single residential rate for twenty years from the date of building occupancy for any unit that receives funding under the SIF-IAH Program; and 4. That all interested parties listed in Report CAO-007-19 and any delegations be advised of Council's decision. Municipality of Clarington Page 2 Report CAO-007-19 Report Overview Parkview Lodge, a local non-profit housing provider, is in the process of building a 37-unit seniors' affordable housing development in Newcastle. The development will include 18 affordable units and 19 units at market rate. It has received funding support from the Federal and Provincial governments as well as other consideration from the Region of Durham. In order to meet the funding conditions for affordable housing financing through CMHC, the host municipality must apply the residential property tax rate, not multi-residential, to the affordable units. 1 . Background 1.1 Parkview Lodge has owned and operated a 43-unit seniors' building in Newcastle for over 37 years. With the increasing pressure for affordable housing in our community, Parkview is in the process of building a new 37-unit seniors' housing development. It will include 18 affordable units and be built adjacent to their existing site. 1.2 They have received confirmation of federal-provincial funding through the Region of Durham, as well as a co-investment loan and other financial incentives from CMHC. In addition to this, the Region of Durham has offered to provide a deferral of development charges. 1.3 In order to qualify for the affordable housing funding under the SIF-IAH Program, Parkview requires that the Municipality set the property tax rate at that of residential, not multi-residential. The Municipality extended such support to the affordable housing development on Bowmanville Avenue, which was approved by Council in 2016. 1.4 In a letter to Mayor Foster dated May 13, 2019, the Parkview Board of Directors provided an overview of incentives other municipalities have provided affordable housing developments being built in their communities. Staff are currently undertaking a review of potential affordable housing incentives that could be employed to support this project and others like it going forward as part of an Affordable Housing Toolkit (more information will be available after the regulations under proposed Bill 108 are clarified). 2. Tax Revenue Impact 2.1 The program requires the Municipality to provide financial support through a rebate of property taxes. For the first 20 years after building occupancy, the 18 new affordable units would be taxed as part of the New Multi-Residential tax class with a rebate equivalent to the difference between the Residential Rate and the New Multi-Residential Rate. After 20 years, the property would be taxed at the New Multi-Residential tax rate until year 35, at which point it moves to the "Multi-Residential Tax Class". Municipality of Clarington Page 3 Report CAO-007-19 2.2 Assuming an assessed value of $10,000,000 (this is based on the May 13, 2019 letter from Parkview), the annual foregone revenue to the Municipality would be $1,972/year in 2019 dollars. This is based on the fact that the New Multi-Residential tax class is at a 1.10:1 ratio with the Residential Tax Class. This does not take into account taxes for the Region of Durham or the Province of Ontario (education taxes). 2.3 When compared to regular multi-residential units, the savings on the municipal portion for the entire project would be approximately $35,000/year in 2019 dollars, assuming an assessment of $10 million. This is due to the fact that new multi-residential properties already have favourable tax status for the first 35 years in an effort to promote new purpose built rental buildings. 2.4 The impact for future years will be dependent on market value assessments, tax rate adjustments, budget adjustments and other variables which are not readily determinable. Therefore the total support to this project from the Municipality cannot be precisely quantified. 2.5 Each year the Region of Durham will certify that the project meets the requirements for the tax rebate. Parkview will pay the applicable taxes at the New Multi-Residential rate and, provided it remains a qualifying property, the Municipality would then issue a rebate. This protects the Municipality in case the property no longer qualifies as affordable housing. 3. Concurrence This report has been reviewed by the Director of Finance/Treasurer who concurs with the recommendations. 4. Conclusion It is respectfully recommended that Council support the rebate described in this Report provided that the expansion remains an eligible affordable housing project. Municipality of Clarington Page 4 Report CAO-007-19 5. Strategic Plan Application The recommendations contained in this report conform to the Strategic Plan. Submitted by: Andrew C. Allison, B. Comm, LL.B. CAO Staff Contact: Trevor Pinn, CPA, CA, Director of Finance / Treasurer, 905-623-3379 ext.2602 or tpinn@clarington.net List of interested parties to be notified of Council's decision: Parkview Lodge (c/o Joyce Kufta and Theresa Vanhaverbeke) Alan Robins, Director, Housing Services Division, Durham Region Newcastle Village and District Historical Society Newcastle/Bond Head Ratepayers Association The Catholic Women's League of Canada A Gift of Art, The Clarington Artist & Artisan's Outlet Newcastle & District Chamber of Commerce The Lions Club of Newcastle Jean-Anne Symak Nancy Stephenson