Housing developments involve a variety of municipal costs and fees that add up and significantly impacts the level of affordability and even the financial feasibility of affordable housing projects.

Case study – City of North Vancouver, Development Cost Charges Waiver Bylaw 2010 No 8130

In 2010, the City of North Vancouver approved a bylaw to reduce 100% of Development Cost Charges for ‘that portion of a development which provides Non-Profit Rental Housing provided that the Non-Profit Rental Housing:

1. May be secured through a zoning restriction; and
2. Is secured through a covenant on title which restricts the use of that portion of the applicable development class for the life of that portion of the building.”

2021 reference stats:

• Development Cost Charges for Townhouse: $62.17/m2
• Development Cost Charges for Apartments: $62.17/m2

 

Property taxes are a municipal issue. Local governments can waive or reduce property taxes for non-profit and co-op housing providers to incentivize and support the construction of new affordable housing developments.

Case study – City of Quesnel, Multi-unit Housing Incentive Program

The program aims to provide a 10-year tax exemption incentive for the development of multi-unit housing that meets set design and livability standards and improves accessibility to affordable housing. Additionally, development cost charges (DCCs) may also be waived for providing non-profit housing units and for developments that have low environmental impact if they first meet the tax exemption incentives.

City Council approved the program in 2016 for two neighbourhoods and amended it to include a third one in January 2021.

 
2021 reference stats:

• City of Quesnel Municipal Property Tax rate for residences: 3.33572
• City of Quesnel residential Development Cost Charges: $1,244.37 – $1,849.10/per dwelling unit.

 

Municipalities can sell or lease land they own to non-profiting housing developers at a reduced rate or at no cost to facilitate the construction of new affordable, non-market housing.

Case Study – Town of Gibsons, Innovating to lease land to partners

Since 2018, the Town of Gibsons has leased three lots of land to different partners to develop nearly 85 affordable housing units. This initiative works in tandem with support from City Council to approve OCP and zoning amendments to help increase the scope of the projects.

 

One of the biggest barriers for building new affordable housing is uncertainty around approvals timelines. Lengthy approvals processes can substantially increase costs for all forms of development but particularly for non-profit housing. On September 1^st, 2021, the government of BC launched the Local Government Development Approvals Program to help municipalities find ways to streamline development approval processes and accelerate the delivery of new homes to communities. Moreover, the provincial government introduced amendments to the Local Government Act to:

• Remove the default requirement for local governments to hold public hearings for zoning bylaw amendments that are consistent with the official community plan; and
• Enable local governments to delegate decisions on minor development variance permits to staff.

In May 2018, the Province of British Columbia made amendments to the Local Government Act and to the Vancouver Charter to add new capabilities to Zoning Bylaws to limit the form of tenure to residential rental. This can be applied to a full zone, a part of a zone, or a specific location where multi-family residential is permitted. It allows municipalities to determine that a number, a portion or a percentage of a development must be for residential rental tenure.

One of the major drawbacks of this tool is that, though it limits the kind of tenure, it lacks the ability to secure affordability of any new rental units produced under the new zoning.

Case Study – City of New Westminster, Zoning Amendment Bylaws No. 8123, 2019 and No. 8078, 2019

The City of New Westminster was the first municipality to adopt RRTZ. In January 2019 City Council adopted these two bylaws to:

1. Amend the zoning for six stratified rental properties and twelve city-owned properties to restrict occupancy of multiple-unit residential buildings at these properties to rental tenure. This would protect the sites’ historic operation as rentals.
2. Clarify definitions of residential rental tenure and how it does not apply to commercial properties, as well as revising descriptions of the affected properties to ensure that changes in legal status (e.g., cancellation of strata plan), do not change the effect of the bylaw.

 

Using zoning or development policies, municipalities can establish a ratio of replacement for every rental unit demolished in a new construction or redevelopment project. Usually, these policies work alongside with other tenant relocation and rent control policies.

Case Study – City of Burnaby, Rental Use Zoning Policy

The City of Burnaby adopted this policy in 2019 and amended it in 2020 to integrate feedback from the stakeholder community and the Planning and Development Committee around clarity and inconsistencies around the language used.

The policy requires all new multi-family residential rezoning in Burnaby to include affordable rental units and to replace any purpose-built-rental units demolished.

Replacement rental policy summary:

• 1:1 replacement of all existing rental units.
  • If this is less than 20% of the total market unit count, inclusionary rental units must be added to make up the difference
• Replacement rental units must have the same number of bedrooms as the existing units.
• Rents for replacement rental units must be set to existing rents for returning tenants, plus any annual increases permitted by the Residential Tenancy Branch between demolition and occupancy.
  • For units without a returning tenant, rents must be set to 20% below CMHC market median rents.
• Displaced tenants will be offered right of first refusal for replacement rental units.

 

These funds are created by municipalities to provide financial support to affordable housing initiatives. The sources of revenue usually consist of mandatory or voluntary contributions from the private sector associated to their development activities, or the interest gained on the fund.

Case Study – City of Colwood, Affordable Housing Reserve Fund

As part of the City of Colwood’s Affordable Housing Policy, all new developments must contribute the Affordable Housing Reserve Fund. The city then uses the fund to support the provision of new housing for households in different income groups and at varying stages of life based on the Housing Needs Assessment.

Reference Stats:

• Dispositions about the rates of contributions are incorporated in the Land Use Bylaw and are associated to each individual zone. Contributions are calculated based on the number of dwellings being proposed at a usual rate of $500/unit but ranges from $200/unit to $2,500/unit depending on the district.
• The city can agree to waive this contribution from any given project.
• Recent grants from the Affordable Housing Reserve Fund have ranged from $220,000 for a 104 affordable housing units project, to $496,000 for a 124-unit building.

 

Although municipalities in BC are not able to zone for housing targeted to households in specific income groups, they can engage private developers to provide affordable housing units within their projects by using different strategies to offset the cost of construction. One of the benefits of Inclusionary zoning, is the ability to promote social diversity as a strategy to overcome economic segregation. BC’s Local Government Act can do this by:

• Designation of affordable housing areas within zones (with consent of property owners)
• Housing agreements
• Density bonuses

Include the date of when the policy was passed, etc, like the other sections.

Case Study – City of Victoria, Inclusionary Housing and Community Amenity Policy

This policy seeks to encourage the supply of new affordable housing, through the creation of inclusionary housing units. It balances the need for new inclusionary housing units or payments in lieu of the proposed development’s ability to provide Community Amenity Contributions (CACs) by limiting the value of expected CACs to a reasonable fixed amount per square foot of increased density or a negotiated CACs amount equal to 75% of the value of the increased density.

A two-level bonusing system:

• One or both levels can apply to a single project.
• Level ‘A’ Bonus: Existing Zoning to OCP Base Density
  • For all project sizes
    • Cash-in-lieu contributions at $5/ft² of bonus floor space
  • Level ‘B’ Bonus: OCP Base Density (or zoning whichever is higher) to Proposed Density
    • For projects ≥60 units
      • Inclusionary housing rental units at 20% of the project’s total FSR or total units
      • Inclusionary housing ownership units determined by economic analysis
    • For projects <60 units
      • Cash-in-lieu contributions at varying rates depending on the area of the city.
    • Cash-in-lieu contributions are distributed 70% to fund affordable housing initiatives and 30% for community amenities.