Affordable Housing Strategy

Description and Rationale

The City could develop a guidance material to help homeowners plan and build additional residential units on their lot that has a ground related house. This material could supplement and reference similar guides published by the Province of Ontario to provide homeowners with a user-friendly guide and checklist to help build legal additional residential units.

The guidance material should include information related to:

• Municipal zoning requirements and standards for second units, including parking requirements, exits and entrances, servicing and minimum or maximum unit size, etc.
• Instructions for getting a building permit
• References to guides on landlord and tenant rights and responsibilities
• References to City’s Fire Retrofit Program for making existing dwelling units fire-safe

Description and Rationale

Development standards are the rules that municipalities use to guide the planning, design and construction of residential communities. Planning and engineering standards relate to lot size and frontage, street pavement and right-of-way widths, parking and the location of sewer, water and utility lines. Development standards ultimately affect the cost and environmental impact of new developments, as well as the quality of life enjoyed by a community’s residents. Changes to planning and engineering standards can reduce the costs of residential development (e.g. reduced frontage).

Alternative development standards are intended to replace traditional standards with more flexible and innovative regulations. For example, right-of-way and road pavement widths can be reduced without compromising safety, resulting in land cost savings; lots can be smaller or configured differently to increase densities; and parking requirements could be reduced. Municipalities can reduce capital and maintenance costs for itself and developers, while facilitating pedestrian-friendly and transit-supportive areas, through agreements that reduce requirements or exempt owners or occupants of a building from providing and maintaining parking facilities, particularly where public transit is available.

Municipalities can also change urban design requirements for particular tenures (e.g. purpose-built rental buildings) to allow for simple designs or permit stratification of infrastructure by allowing parking for private use under or above city infrastructure. Lastly, municipalities could use this tool to facilitate the construction of modular homes, pre-fabricated homes, shipping container housing, and/or tiny homes.

Advantages

• Increased housing affordability, achieved by reducing the cost of servicing lots, lowers housing prices for consumers when savings are passed on.
• More intense use of land ensures lower per-dwelling land costs and reduced municipal infrastructure costs.
• A reduced environmental footprint through more compact development, which can reduce greenhouse gas emissions.
• Greater variety in housing types encourages more inclusive and affordable neighbourhoods.
• Helps to overcome supply constraints due to minimum size standards and lets the market supply reach moderate-income households.
• Specific agreements with developers could set conditions that require affordable housing in order to ensure that housing is provided in exchange for alternative development standards.

Challenges

• Risk aversion: conventional engineering standards reflect built-in safety factors and are only likely to be relaxed when there is clear evidence that doing so can provide public benefits without undue risk.
• A lack of understanding and support: modifying development standards can involve or affect many different participants including elected officials, planners, engineers, construction managers, environmental professionals, etc.; not all groups will have the same level of understanding and offer the same support for the new programs and policies.
• Conflicting financial perspectives: the bottom line is important to both developers and municipalities; however, these key stakeholders account for their investment costs and benefits differently, making it difficult to identify agreed-upon financial impact costs.
• Complex and costly municipal approval process: where new development standards are first proposed in a development application, the involved parties must negotiate the application of the standards as well as the sharing of costs and responsibilities.
• A piecemeal application: the aggregation of several alternative standards in one development may yield a different result than the simple sum of its parts.
• Not all cost savings may be passed on to the consumer if no proper agreements are in place requiring developers to do so.
• Over the long-term the reduced standard could result in an unacceptably reduced level of service for future residents. (i.e. reduced parking standards that may have been acceptable to a 2-person household may no longer be acceptable when the households family or work status changes and there is a need for a vehicle).

Legislative Requirements

• Planning Act (section 40)

Impact

The impact of this tool depends on the difference between the existing standards and the agreed upon alternate standards. However, alternative development standards can encourage developers to use the available land and building materials more efficiently. Especially when combined with a requirement to apply cost savings to rents/house prices or other community benefits. This could provide incentives for private developers to create units that include purpose-built rental housing or affordable ownership housing. In addition, it could attract non-profit, as well as supportive housing providers to the City of Richmond Hill as these alternate standards can make them more competitive with the private sector. 

The cost savings achieved through alternative standards make could be significant, in particular because this tool could expand the amount of developable land per lot while reducing hard-costs (a cost that is usually more or less fixed). This suggests the impact on affordability can be relatively high depending on how existing development standards are changed. 

Description and Rationale

In 2020, the provincial government introduced regulations that will give municipalities the ability to introduce a community benefits charge by-law, which, among other things, will replace density bonusing (section 37 of the planning act) to create a more streamlined process and reduce risk for developers. Municipalities can impose a 4% charge on the value of a property one day prior to the submission for a building permit by a developer. Alternatively, an applicant may have the option to provide “in kind” benefits. Accordingly, the 4% land value equivalent could be in the form of the municipality’s desired affordable housing. Among a number of things, the community benefits charge could be used by a municipality to fund housing or affordable housing projects. This will be a new revenue stream that municipalities can use to achieve some of their housing targets and objectives. Municipalities must create a community benefits charge strategy prior to developing such a by-law. 

Advantages

• Creates more certainty for developers in the development application process.
• Provides more certainty and flexibility for municipalities with respect to how section 37 benefits can/will be spent.
• Provides an ongoing source of funds to dedicate to affordable housing, which might fund possible municipal financial incentives.
• The funds received can be put towards land banking for affordable housing.

Challenges

• Need to balance CBC funds earmarked for affordable housing with other municipal initiatives to be funded through a CBC

Legislative Requirements

• Planning Act (section 37, updated)

Impact

Depending on how the municipality intends to allocate the proceeds collected through the community benefits charge, this tool could impact all, or only few aspects of the housing continuum.

The impact on housing affordability of this tool cannot be assessed at this point in time as it would depend on how such a charge is structured and how the funds collected are allocated.

Description and Rationale

A community planning permit system integrates zoning, site plan, and minor variance approvals into one application and approval process.

This tool helps improve the review and approval timelines, can provide more certainty and cost savings through early community participation, upfront development rules and, once the system is in place, limit third party appeals to the LPAT on specific development permit applications that meet the requirements and community vision set out in the OP and development permit by-law. Such a permit system also provides for a more flexible approval process whereby municipalities can incorporate a specified range of variation for development standards.

The savings achieved by housing developers in reduced wait times during the approval process could help eliminate long wait times before beginning construction and reduce risk of holding undeveloped land for prolonged periods of time. Affordable housing developers are especially affected by long wait times as financing and funding opportunities are often based on the speed at which applications can be received and approved.

In addition, areas with a community planning permit system may also include an inclusionary zoning policy. Therefore, implementing such a system can greatly enhance the number of areas where a municipality can require developers to include affordable housing units in their developments.

Advantages

• For all residential developments, faster approvals mean that the costs of developing housing are decreased, and that if savings are passed on to consumers, this will result in housing that is more affordable.
• A more efficient approval process makes for a more efficient use of developer and municipal staff time and resources.
• Shorter approval times can reduce development risk.
• Allows a municipality to implement an inclusionary zoning policy outside of a Major Transit Station Area.
• Reduced opportunity for matters to be appealed by a third party compared to the traditional approvals process which reduces risk for the developer/builder when deciding to bring forward an application for development that is compliant with the CPP By-law.

Challenges

• The implementation of a more efficient and/or automated system requires more client and staff training, and sometimes involves high upfront implementation costs for the municipality.
• Monitoring is required to ensure that a reduction in approval times is not the result of a decrease in the quality of planning and design decisions.
• The City would need to adjust its development approval process. 
• If the CPPS is used in only some areas of a municipality and not in others, this may cause confusion for applicants, public and Council to understand which system is in play and where. 
• Would require a lot of staff/Council/Public education.

Legislative Requirements

• Planning Act (section 70.2)

Impact

Implementing a community planning permit system may provide more certainty for developers and significantly reduce the planning application process. This could lead to additional development of market rental housing and ownership housing. In addition, in particular when combined with an inclusionary zoning policy, a CPPS may result in the development of some purpose-built rental and ownership housing, as well as community housing that is affordable to moderate- and low-income households.

Due to the new legislation introduced by the Provincial Government through Bill 108, the impact of a community planning permit system can be moderate to high. In particular when it is combined with an inclusionary zoning policy. This combination could greatly increase the number of places in a municipality where inclusionary zoning is allowed and require developers to construct dwellings that are affordable to low- and moderate-income households. Similar to the previous tools described in this section, a CPPS can also reduce development times and risk for developers. These savings can be passed on to households looking for a home in Richmond Hill. In addition, the CPPS can encourage a wider variety of housing to be built as the municipality can impose conditions to development that it is not otherwise permitted to be imposed through traditional zoning. 

Description and Rationale

Protected Major Transit Station Areas (PMTSAs) are a subset of MTSAs. MTSAs are lands generally within a 500 to 800 metre radius (a 10-minute walk) of a transit station or stop. MTSAs are intended for high density, mixed-use development with access to amenities, housing and jobs. PMTSAs are planned to accommodate increased density with highly urban, mixed-use, transit-supportive forms of development.

The PMTSA designation must include Official Plan policies that include the following:

• A minimum number of residents and jobs per hectare.
• The permitted land uses in the major transit station area and of buildings or structures on lands in the area.
• The minimum densities with respect to buildings and structures on lands in the area.

Designation of PMTSAs can assist in creating affordable housing given that minimum and maximum densities can be prescribed in zoning by-laws and are not subject to appeal.

Advantages

• Appeal rights are restricted in PMTSAs.
• Facilitate implementation of densities that support higher order transit infrastructure projects.
• PMTSA designation permits a municipality to adopt an Inclusionary Zoning by-law.

Challenges

• The limited opportunity to challenge PMTSA-related Official Plan policies or zoning by-laws in establishing key intensification parameters, means property owners must understand how the new planning framework may impact their development aspirations in potential PMTSA areas at the outset.

Legislative Requirements

• Planning Act (sections 16 (15) to (19), 17 (36.1.4) to (36.1.7), 22 (2.1.3), (2.2), and 34 (19.5) to (19.8))

Impact

Designating PMTSAs assists in creating affordable housing because of the reduced risk for a developer that is compliant with the by-law as no third-party appeals are permitted with respect to height or density. This also creates certainty for residents and businesses in the area because developers are not able to exceed or go below the prescribed maximum or minimum density as there is no right of appeal from the developer in that regard should Council refuse or not make a decision on such an application.

Through the designation of MTSAs and PMTSAs, municipalities encourage transit-oriented development. Furthermore, Inclusionary Zoning is limited to a PMTSA or areas within a Community Planning Permit system ordered by the Minister of Municipal Affairs and Housing.

Description and Rationale

The City of Richmond Hill should work with the Region to promote the Developers’ Handbook to increase the capacity and knowledge of housing developers and community agencies on how to build affordable housing in Richmond Hill, including available funding programs, incentives, and partnership opportunities. This should also include presentations of successful partnerships among community agencies and private developers, as well as the successful management of the Region and community agencies of affordable units located within private market rate rental and condominium buildings.

This Developer’s Handbook may work to support non-profit housing providers in Richmond Hill in their quest to expand their affordable housing portfolio by facilitating collaboration with private sector developers.

While some not-for-profits have the financial resources and capacity to develop affordable housing on their own, others can seek out partnerships with private developers to do so. As competitiveness for government housing funds increases, partnerships are a potential strategy for improving a project’s ability to compete for these limited funds. As such, socially motivated private developers can also benefit from partnerships with the not-for-profit sector.

Advantages

• Promotes further residential development.
• Facilitates the development process through identification of available funding programs and alternative design standards that can save costs.
• Identifies how funding programs can be stacked to ensure viability of projects.
• Encourages partnerships between the for-profit and the not-for-profit sector which builds the capacity of both sectors.

Impact

The Developers’ Handbook should be updated on a regular basis to include the most recent information on available funding programs that help reduce the cost of affordable residential development, promising innovations in residential development, potential partnership opportunities between the private and not-for-profit sectors, and any other information that could encourage the provision of affordable housing.

Description and Rationale

Development charges are levies that municipalities impose upon new development to off-set the increased costs related to growth.

Development charges can be deferred for a period of time, waived or reduced to incentivize the creation of affordable housing. The Region of York currently has a development charges deferral program that requires a local municipal program for it to be operative. Another way for the municipality to  assist in the creation of affordable housing is to waive or reduce municipal fees and charges that  are typically imposed on new development.

Such fees and charges include, building permit fees, planning review fees, engineering review fees, parkland or cash-in-lieu of parkland. A reduction or waiving of the fees for applications required for an affordable housing development would help to reduce associated costs with the development.

Advantages

• Lowers costs for affordable housing developers.
• Acts as an incentive to private developers who are considering developing affordable housing.

Challenges

• Municipal governments require these fees and charges to cover the costs of new development.
• Any shortfalls in revenues would need to be accounted for.

Legislative Requirements

• Municipal Act, 2001
• Development Charges Act, 1997
• Planning Act (section 69)

Impact

Reducing the cost of development can have a strong impact on the delivery of affordable housing as it reduces the capital cost. In addition, providing incentives can offer some control to a municipality over the type of housing that gets built. This could help housing providers with the development of affordable rental and ownership housing, as well as community housing. In addition, it could incentivize for profit developers to develop purpose-built rental housing over ownership options. In 2019, York Region Council adopted an incentive program for purpose-built rental housing which includes development charge deferrals for these types of developments of up to 36 months or longer, depending on the project. Conversations with York Region staff indicate that the City can leverage this program with any incentives of its own.

Reducing the cost of development by lowering fees and charges can provide a significant cost saving for developers, but the impact depends on the fee or charge that is waived and represents a one-time cost saving on the capital cost as opposed to a structural saving that can be passed on to households over time. Therefore, it is considered to have a medium impact and would likely need to be combined with a range of other incentives/tools to provide housing that is affordable to low- and moderate-income households.

Description and Rationale

An empty homes tax levies an additional tax on properties which remain empty for more than a set period of time. The goal of this policy is to ensure the most efficient and effective use of the existing housing supply.

Ontario’s Fair Housing Plan introduced in 2017 by the Provincial Government has provided municipalities with the option of imposing an additional tax on empty homes. 

Advantages

• Stimulates property owners with unused properties/units to rent them out, thus adding to the rental stock and potentially easing pressures on prices.
• Could encourage owners of multiple properties to sell them rather than horde them and speculatively drive up prices.
• Provides an ongoing source of funds to dedicate to affordable housing, which might fund municipal financial incentives.
• Has the potential to support more diverse communities that are safer due to a decreased number of empty homes.

Challenges

• An empty homes tax may encourage developers who are undertaking a land assembly to prematurely demolish housing units, thereby reducing housing stock, and impacting the look and feel of a neighbourhood.
• Will require some administrative capacity to oversee, however these costs could be off-set by the tax itself.

Legislative Requirements

• Municipal Act, 2001 (section 338)

Impact

Depending on the allocation of the funds collected, this tool could impact all, or only few aspects of the housing continuum.

The impact on housing affordability of this tool cannot be assessed at this point in time as it would depend on how such a tax is structured and how the funds collected are allocated.

 Encourage more Transit Oriented Mixed-Use Development

Description and Rationale

Encouraging more mixed-use development that is transit oriented would allow households to engage in more active transportation and would require less people to own and use cars. Furthermore, mixed-use developments create additional employment opportunities in areas that are close to homes. This would allow more households to both live and work in Richmond Hill and contribute to vibrant communities. Owning a car and commuting to work on a daily basis can be a significant cost to households. By creating more work opportunities in neighbourhoods throughout Richmond Hill, households can save more of their incomes and create wealth.

Advantages

• Promote further residential development.
• Decrease reliance on cars.
• Enhance housing affordability through reduced parking requirements and construction costs.
• Create job opportunities and potential income increases. 

Challenges

• Some households rely on cars to get around due to mobility issues.

Impact

The desired outcome of this tool is to improve housing affordability for residents of Richmond Hill through new jobs in mixed-use developments. In addition, the reduced need for cars when residing near transit can improve household consumption costs overall. 

Description and Rationale

Encouraging shared accommodation where multiple individuals/families who do not belong to the same household share a unit is a way to generate additional affordable housing in the existing housing stock. A group of individuals or households can combine resources to make housing more affordable. This is particularly useful for people with disabilities who need supports and single households such as students, as well as seniors who intend to age in place.

Having a broader definition of shared housing allows for the development of different models and innovative housing forms throughout different communities in the City, and does not limit development to traditional models such as group homes or student housing.

Advantages

• Unlocks affordable units in single-detached homes.
• Potential to provide a significant supply of affordable units to small families.
• Intensifies the density without adjusting the built-form.

Challenges

• May encounter opposition from the community in fear of decreasing property values, increases in traffic/parking, and disregard for property maintenance standards.

Legislative Requirements

• Promoting shared housing can be achieved through amendments of the Official Plan.

Impact

Promoting shared housing can lead to a more efficient use of the existing housing supply and create housing forms that are more suitable for seniors and individuals with a disability to live with a “room-mate” or friend. In addition, it can help students leave their parental home and find affordable accommodation, as well as create opportunities for young couples who cannot afford to buy a home to purchase/rent such a dwelling with friends. Lastly, it could help organizations who help new immigrant or homeless individuals and families to establish transitional homes in the community.

In recent years, shared accommodation has also been marketed to young professionals as a luxury accommodation through technology companies such as co-living.com.

Shared housing has the ability to significantly reduce housing costs. These forms of housing can be affordable to some of the lowest income groups in the community, as well as make some of the most expensive stock attainable to moderate-income households, while maintaining the existing character of the neighbourhood.

Description and Rationale

Reducing the length of time involved in approving an affordable residential development has been a component of affordable housing strategies in many areas. The premise here is that a normal length development approval process makes it challenging to develop housing. The main benefit associated with fast-tracking is the reduction of costs associated with holding undeveloped land. Fast-tracking affordable housing developments can be done by moving affordable housing projects to the highest priority in the application review process and/or assigning a staff resource to help navigate the review and approval process. 

Advantages

• The expediting or fast-tracking of affordable housing developments means construction can start sooner and financing costs will be lower.
• A more efficient approval process makes for a more efficient use of developer and municipal staff time and resources.
• Shorter approval times can reduce development risk.

Challenges

• Monitoring is required to ensure that a reduction in approval times is not the result of a decrease in the quality of planning and design decisions
• While a developer may promise to build affordable housing at the onset of a project, and thus receives a fast-tracked application approval, there is no mechanism to prevent the developer from reverting the affordable rates to market rates.
• Some additional administrative capacity may be required by the municipality to dedicate specific resources to the fast-tracked process.

Legislative Requirements

• Planning Act (section 70)

Impact

Prioritizing affordable housing in the development approval process could help the City of Richmond Hill attract non-profit developers to the City to help with the construction of community housing. It could also help reduce the cost of construction of affordable rental and ownership housing. Tying priority to the level of affordability reduces the impact such a policy might have on market rental and ownership housing.

While this tool could stimulate the development of community and affordable housing, the overall level of impact of this tool is relatively low. Prioritization in the development process only leads to limited cost savings compared to the overall project costs. It does reduce the risk of incorporating some affordable/community housing options in a new development, which may lead to private developers being more open to create partnerships with non-profit housing providers to improve the chance of their project receiving the required planning approvals.

Description and Rationale

Land prices have been increasing, providing surplus land owned by governments or school boards may be a more efficient way of providing assistance to non-profit organizations and other developers of affordable housing. Some municipalities have adopted “housing first” policies calling for surplus lands to be used for housing purposes first. These municipalities have usually made such sites available on a lease basis for $1 in return for the provision of various forms of affordable housing.

Advantages

• Reduced land costs for developers of affordable housing.
• More efficient use of government-owned surplus land.
• Low investment for government with the potential of high returns in terms of affordable housing.

Challenges

• The municipality (or other level of government) may be passing up a chance to sell the land at a much higher rate.
• Land may not be in an ideal location for affordable housing (e.g. not close to transit or services).

Legislative Requirements

• Municipal Act, 2001 (sections 107 and 270)

Impact

The reduction/removal of the cost of acquiring land suitable for development can have significant impacts on the delivery of affordable housing by reducing the capital cost. This could help housing providers to extend their existing portfolios or attract new developments to the City at relatively little cost.

While reducing land cost can provide a significant saving for developers, it is a one-time cost saving on the capital cost as opposed to an ongoing saving on operational costs that can be passed on to tenants over time. Therefore, it is considered to have a medium impact and would likely need to be combined with a range of other incentives to provide housing that is affordable to low- and moderate-income households.

Description and Rationale

Through inclusionary zoning, municipalities can require for-profit developers to construct some proportion of new residential development as affordable housing. In Ontario, municipalities may require developers to do so within a Protected Major Transit Station Area (PMTSA) or in areas with a community planning permit system in place. The affordable units could also be provided on a different location (“off-site”). The initial price or rent of the affordable units is usually based on the definition of affordable housing in a municipality’s Official Plan.

Municipalities can, if they desire to do so, provide incentives, but developers are required to contribute affordable housing as a condition of development approval. The inclusionary zoning initiative depends, in most circumstances, on a thriving housing market where existing land-values can accommodate a reduction in sales prices due to the affordability requirements imposed by the municipality.

Advantages

• Inclusionary housing policies enforce development and retention (for a set number of years) of affordable housing units in markets where  affordable housing would otherwise not be developed (primarily in high-growth areas.). The City can direct developers to include certain types of units (ones that the market generally does not provide at an affordable price, i.e.  2+ bedroom units).
• Tempers land values and creates a level playing field for all developers in an PMTSA.
• Helps to overcome local opposition to affordable housing.
• Helps to offset high housing costs to lower income consumers during periods of rapid growth in market housing.
• Helps to promote diverse communities where households of a wide range of incomes can live.
• Would help to secure land and/or units for affordable housing in large scale redevelopment areas e.g. Richmond Hill Centre.

Challenges

• Resistance from the for-profit development industry.
• The City must undertake analysis before imposing inclusionary zoning to ensure that its imposition does not jeopardize the viability of a project, which municipal resources in advance of developing the IZ policy and implementing by-law.
• Local ratepayers may object to higher densities in return for affordable housing because of perceived impacts on the neighbourhood’s character.

• Units might only be affordable for a set period of time after which residents would pay market rates.
• Inclusionary policies require administrative support from all level of government, including identifying affordable housing prices and rents, monitoring development, and enforcing policies.
• If the inclusionary zoning units have an affordability period associated with them, there is a disadvantage to the occupant of such an affordable ownership unit when it comes time to sell the unit since they may not receive the full market value for the unit, which means they do not have as much equity to carry into their next purchase.

Legislative Requirements

• Planning Act (section 35.2)

Impact

Inclusionary Zoning policies can be a powerful tool for municipalities to require affordable housing. However, because the units are required to be developed by the private sector, the level of affordability that can be achieved through these measures is limited. These policies predominantly lead to affordable ownership or purpose-built rental units affordable to moderate income households. Partnerships with non-profit providers and/or additional funding (e.g. rent supplements) may be required to use this tool as a way to create new supportive and/or community housing options that are affordable to low-income households.

Requiring developers to include a portion of affordable units in their developments can have significant impacts on affordability in the housing market overall. While the units directly developed through this policy might not be affordable to low income households, it will provide units to benefit median income households.

Description and Rationale

Some municipalities impose a levy or surcharge on property taxes specifically to develop affordable/social housing. Some municipalities have successfully introduced infrastructure and storm water surcharge levies on the municipal property tax bill. Consideration could be given to introducing a similar surcharge on all tax classes or certain non-residential tax classes which benefit from the presence of affordable housing in the municipality. However, community acceptance activities would be required to get buy-in from residents.

Advantages

• Provides an ongoing source of funds to dedicate to affordable housing, which might fund financial incentives.

Challenges

• Raises costs for property tax payers and would require extensive public education campaigns to develop acceptance.

Legislative Requirements

• Municipal Act, 2001 (section 312)

Impact

Depending on the purpose of the levy imposed and the allocation of the funds collected, this tool could impact all, or only few aspects of the housing continuum.

The impact on housing affordability of this tool cannot be assessed at this point in time as it would depend on how such a levy is structured and the funds collected are allocated.

Description and Rationale

Multi-tach zoning adds a new zoning-type to the zoning by-law of a municipality. This type of zoning encourages developers to use the existing heights and setbacks to their maximum of what is currently allowed and may include more than two units on a lot/in a building, which could be a duplex, triplex etc. . Multi-tach zoning recognizes that the existing height and set-back limits in residential neighbourhoods allow for significantly more density than is often used. By creating multi-tach zones, a municipality can allow for multi-family buildings containing three to five condominium/rental units that comply to all existing height and setback limits on an existing lot currently zoned for single-detached units only. 

Introducing this zone can stimulate densification in existing neighbourhoods alongside single occupancy homes without changing the character of the neighbourhood and help use existing land and properties more efficiently. In addition, such units can be faster and cheaper to build than typical multi-unit developments. The various sizes and prices of individual units will encourage greater diversity in traditionally desirable neighbourhoods while providing home ownership/rental opportunities to demographics currently priced out of the housing market. Implementation of this concept would connect greater population density to existing utilities, underutilized city services like transit and schools as well as local businesses. 

Advantages

• Multi-tach zoning can provide a solution to the demand for affordable ownership housing for moderate income households who are priced out of the ownership market.
• Assist households facing financial challenges to stay in a community by allowing for development on their lot. This might include households who are not able to finance a home without supplementary income.
• Provide affordable ownership housing in a neighbourhood setting without major government assistance, as these units can be significantly cheaper to build compared to large scale mid-rise or high-rise developments.
• Make better use of existing infrastructure and utilities.
• If multi-tach units are part of a condominium, the condominium corporation can be held responsible for ensuring that property standards are upheld and funds are reserved for maintenance of the building.
• The various sizes and prices of individual units will encourage greater diversity in traditionally desirable neighbourhoods, while providing affordable rental and home ownership opportunities to households currently facing affordability issues in those markets.

Challenges

• Existing owners on the lot may be reluctant to go through the complex procedures associated with creating a secondary/multiple suites, including getting proper approvals.
• Additional units on the same lot may add increased pressure on streets with limited parking.
• There can be strong opposition to additional density from local residents in predominantly low-rise residential neighbourhoods.

Legislative Requirements

• Planning Act (section 34)
• An update of the Official Plan (section 4.9: "Neighbourhood") to allow for greater density 'as of right' within neighbourhoods or parts thereof.

Impact

Introducing multi-tach zoning can stimulate the supply of affordable ownership options for moderate-income households who would otherwise be priced out of the ownership market. In addition, this form of housing might stimulate the development of various forms of supportive housing outside of the traditional group-home model allowing more privacy to a number of residents who live on the same lot. Lastly, usually in combination with a housing benefit, these units could provide affordable accommodation to households with incomes in the lowest income deciles.

When looking at the impact on affordability, multi-tach zoning could greatly increase the number of residents who can live on one lot, currently zoned as single-detached. This lot type is most common in Richmond Hill and could significantly increase the access to homeownership or rental housing within a neighbourhood to a wide variety of households in the community.

Municipal loans and grants must be authorized by a Community Improvement Plan (CIP).

A Community Improvement Plan (CIP) is a tool that allows a municipality to direct funds and implement policy initiatives toward a specifically defined project area. Authorized under Subsection 28(1.1) of the Planning Act, a CIP can be utilized to stimulate the provision of affordable housing through municipal grants or loans. In some instances, loan agreements between municipalities and land owners require that specified properties be maintained as affordable housing.

Capital Loan and Grant

Description and Rationale

Various forms of support and incentives are needed to help address the cost of developing new forms of housing so that they become affordable to low- and moderate-income families and individuals. Many municipalities provide capital funding in the form of grants, forgivable loans, or repayable loans to supplement the existing incentives and any funds received by senior levels of government.

Advantages

• Allowing governments to set aside funding without making an open-ended funding commitment
• Loans often carry little or no interest.
• Can be used in conjunction with conventional loans and various forms of government and community assistance.
• Can be used to target specific aspects of development not covered by other sources.

Challenges

• Recipients must not be high credit risks (loan repayment is essential).
• Loan and grant programs can take significant effort from municipal staff to monitor.
• Funding is usually not large enough to replace other sources of funding or to fund entire projects on its own.

Legislative Requirements

• Municipal Act, 2001 (sections 107 and 110)
• Planning Act (section 28; must be accompanied by an adopted CIP for the area in question)

Impact

Efforts to reduce the cost of development have a significant impact on the delivery of affordable housing as it reduces the capital cost. In addition, it can provide control to a municipality over the type of housing that is developed. This could help housing providers with the development of affordable rental and ownership housing, as well as community housing. It could also incentivize for-profit developers to develop purpose-built rental housing over ownership options, if the loan/grant is not available for ownership tenured developments.

Reducing the cost of development by lowering fees and charges can provide a significant cost saving for developers, but it is a one-time cost saving on the capital cost as opposed to a structural saving that can be passed on to households over time. Therefore, it is considered to have a medium impact and would likely need to be combined with a range of other incentives/tools to provide housing that is affordable to low- and moderate-income households.

Tax Increment Equivalent Grant (TIEG)

Description and Rationale

A Tax Increment Equivalent Grant (TIEG) provides grants or rebates to property owners to offset a portion of the property tax increase the owners will face as a result of a redevelopment. The TIEG is payable in instalments, typically over a ten-year period, with year one rebating up to 100% of the tax increase, and the percentage declining over time.

Advantages

• Encourages redevelopment of an area as it decreases the future tax burden.
• Offers a strategy to “self-finance” a redevelopment project without having to raise or impose new taxes.
• Once the TIEG expires, the municipality will receive the full benefit of the property taxes on a much higher property tax base that would otherwise be present.
• Can be an additional revenue stream to meet a community’s housing needs.
• A TIEG can help to ensure rental fees remain low from the outset of development. 
• A TIEG could be combined with an Inclusionary Zoning By-law or Development Charge deferral program where the period of affordability aligns with the TIEG period.

Challenges

• Decreases an important source of revenue for municipalities over the short term.
• Does not make it more affordable to build rental housing, just to operate it.

Impact

This incentive can reduce costs for property owners, if it is passed on to tenants. This can have long-term impacts on rent-levels tenants pay and impacts all forms of rental housing in a community.

Unlike property tax breaks, a TEIG only reduces future cost increases as they are provided as financial assistance equal to all or a portion of the municipal property tax increase following the completion of a project. While this is an ongoing cost saving for a longer period of time, it is usually not sufficient to support the development of affordable housing on its own and has to be combine with additional incentives. In addition, the cost savings from a TEIG would have less impact on affordability compared to a straight decrease in property taxes paid over current rates. Therefore, it is considered that this tool has a medium impact on affordability.

Description and Rationale

In addition to prioritizing surplus land, a municipality can also provide or share some of its own land to housing developers who plan to develop affordable housing. This can be done through land-or ground leases where the length of the lease can be as long as 99 years, which is considered to be comparable in value to freehold ownership. The length of the lease is sometimes tied to the expected life of the building, about 60 years for residential construction, which brings the lease value to about 75 per cent of outright ownership. Leases with shorter periods generally cost less to the lessee than long-term leases.

For many organizations, land leases are generally preferable to donating the land or selling it at a reduced price, because they can provide effectively the same assistance without relinquishing ownership and control of a public asset. For this reason, landholders sometimes choose to lease out the land at nominal rate (for example, $1). Also, through terms in the leasehold agreement, they are able to ensure that the affordability of the housing is maintained for the period of the lease. Another option for municipalities to provide land is to donate the land to an organization, usually a non-profit group, for the purposes of building an affordable housing project on it. Lastly, municipality’s could provide the land at reduced costs by leasing out or sell land at below market rate. They have the option of enhancing affordability even more by offering the land on favourable terms or by deferring payments until they can be covered by the rental income.

Advantages

• Providing land is an effective way of making housing more affordable, by reducing development costs, and thereby reducing the amount of financing that must be raised or borrowed at the outset of a project.
• When leasing municipal lands, even for a nominal fee, the municipality retains the lease tenure and therefore the ability to protect the affordable housing.
• Could enforce local policies to congregate services and amenities in a community for increased efficiency (e.g. develop housing above libraries etc.).
• Such a policy could greatly persuade a Service Manager or non-profit to choose to provide needed housing in Richmond Hill by incentivizing the project through reduced costs.

Challenges

• Providing land is sometimes controversial; it can be viewed as diminishing the value of a tax payer asset.
• Appropriate safeguards must be put in place to prevent abuse, so that affordable housing built on provided land remains affordable.
• In a lease arrangement, affordable housing developers do not benefit from an appreciating asset (land); instead, they are putting equity into a depreciating asset (the building).
• Some lenders may be unwilling to lend on developments with only a leasehold interest, because they have less security in the event of a loan default.
• The market resale value at the end of the lease period may be $0 if there is no guarantee that the leaser will renew the lease, requiring the lessee to vacate the dwellings, demolish the structures and clean up the site.
• May delay development of community amenities (e.g. libraries) as the municipality may be dependent on a private developers’ development timelines.

Legislative Requirements

• Municipal Act, 2001 (section 110)

Impact

Similar to the previous tool, reducing the prohibiting cost of acquiring land suitable for development can have significant impacts on the delivery of emergency, supportive and affordable housing by reducing the capital cost. This could help housing providers to extend their existing portfolios or attract new developments to the City at relatively little cost to the municipality.

While reducing land cost can provide a significant cost saving for developers, it is a one-time cost saving on the capital cost as opposed to a structural saving that can be passed on to tenants over time. Therefore, similar to prioritizing affordable housing on surplus land, it is considered to have a medium impact and would likely need to be combined with a range of other incentives to provide housing that is affordable to low- and moderate-income households.

Description and Rationale

Municipalities may enact by-laws to prohibit and regulate the demolition or conversion of residential rental properties containing six or more dwelling units to a purpose other than residential rental. Some municipalities have developed rental replacement policies in addition to demolition and conversion control policies through their land use processes to ensure the preservation or replacement of affordable housing in existing communities. In Ontario, many municipalities have official plan policies that prohibit the conversion of rental buildings unless the vacancy rate reaches a certain level.

Advantages

• Restrictions on condominium conversions save and except where there is a prescribed “healthy rental market help maintain the scarce purpose built rental stock.
• Where a rental building is demolished to make way for a new development (often of condominium tenure) replacement of the rental units at near pre-existing rent levels helps protect the resource and the affordability.
• This initiative can be combined with the preservation of historic buildings.
• Can help stabilize inner-city neighbourhoods and increase self-sufficiency of tenants.
• Incentivizes owners of rental buildings to continuously upkeep their building to attract new residents or future investors, since they are limited in their ability to convert or demolish.

Challenges

• The process of renovation can be disruptive to tenants, who may have to move temporarily if units are renovated as opposed to demolished.
• Sometimes the upgrading of rental housing results in rent increases When buildings are upgraded, they may become attractive places to live for higher-income earners, and this can push up land values and housing costs.
• A rental conversion policy may be seen as a disincentive to building new rental housing.

Legislative Requirements

• Planning Act (section 33)
  • Includes clauses enabling Section 33.7 which then requires submission of applications for the intended new development.
• Municipal Act (section 99.1 and 99.1(2.1))
  • Enables registration of agreements on title to implement rental replacement policies, in ways similar to how agreements under plans of subdivision or other agreements are implemented and enforced.
  • Section 99.1(3) requires clarification of how the number of units is counted, specifically when multiple parcels are part of a proposed development.
• Planning Act (sections 34, 41, 44, 51)
  • In conjunction with Section 33(7), require that development permits and approvals require a residential rental demolition permit under section 99.1(2.1) of the Municipal Act, where applicable.
  • Require a residential rental demolition permit for all rental demolitions, enabling replacement of rental units even when there are fewer than 6 units in the development.

Impact

Preventing the demolition or conversion of existing rental buildings and requiring replacement of lost rental units when it is not prevented has the ability to protect the existing purpose-built rental housing stock, which is housing that is often affordable to moderate-income and some low-income renters. This housing stock can also be a source for community and supportive housing through rent-subsidy programs and partnerships between landlords and community support service providers.

Older purpose-built rental units are often some of the most affordable housing stock in a municipality. Preventing these units from demolition or conversion can have a significant impact on maintaining the existing affordable housing stock in a community.