Planning & Development Report: Community Amenity Contributions Policy and the Provision of Affordable Housing

COMMUNITY AMENITY CONTRIBUTIONS POLICY AND THE PROVISION OF AFFORDABLE HOUSING

RECOMMENDATION

THAT the Committee recommend to Council that the Community Amenity Contribution Policy No. 6400-041 be amended to:

• increase the Cash Amenities target rate per detached dwelling unit or lot from $5,500 to $6,000;
• increase the target rate for Cash Amenities for other types of residential uses from $3,500 to $4,000 per unit; and
• add a new policy for 10% of the amount of Cash Amenities received to be transferred to the Capital Regional District Housing Trust Fund.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS

I concur with the recommendation.

DIRECTOR OF DEVELOPMENT SERVICES’ COMMENTS

I concur with the recommendation.

PURPOSE

To follow up Council’s referral of the June 2, 2021 report from the Senior Planner titled “Community Amenity Contributions Policy Amendment – Affordable Housing” to the Community Development Advisory Committee about the possibility of requiring 10% affordable housing units in all new multi-family developments.

BACKGROUND

April 13, 2021 Committee of the Whole

In response to Council’s request that staff provide information on the possibility of requiring 10% affordable housing units in all new multi-family developments, the April 8, 2021 report from the Director of Development Services “Action List - 10% Affordable Housing” presented the following key points:

a. The impact of additional requests from municipalities on the bottom line for developers is often the difference between a project proceeding or not. b. Not having projects proceed because the economics no longer work is a risk and will have impacts to future assessments, building permit fees, and more. Existing requirements from the Town include frontage and servicing requirements, Community Amenity Contributions, Development Cost Charges, permit fees and more. Hidden costs include carrying costs and risk associated with rezoning and development permit approvals. c. The capacity of existing staff resources to manage an elaborate housing policy is limited. d. The simplest option is to pass a cash amenity onto the CRD Regional Housing Trust Fund to supplement the Town’s annual contribution. e. The next simplest option is a cash contribution that is allowed to accumulate and then is used for things like offsetting DCC charges is more realistic for a community of our size (will take many years to accumulate sufficient funds). f. Options that include monitoring of rentals add to long term work loads. g. Engagement with the development community is recommended to understand any concerns and impacts to future development in View Royal.

June 8, 2021 Committee of the Whole meeting

The June 2, 2021 report from the Senior Planner titled “Community Amenity Contributions Policy Amendment – Affordable Housing” was presented and then referred to the Community Development Advisory Committee for review and comment. Discussion points included:

a. Amending the policy to make specific allocations towards affordable housing through one or both of the following: i. Allocating a set percentage of CAC amounts received for affordable housing ii. Increasing the target rate by $500 per unit for affordable housing b. Consider how to treat CAC funds for affordable housing, such as: i. Transfer the amounts to the CRD Regional Housing Trust Fund (staff recommendation). ii. Collect funds to offset DCC waivers for affordable housing projects. iii. Collect funds for a project within the Town. c. Negotiating for affordable housing units as an amenity in rezoning proposals for large developments.

September 28, 2021 Community Development Advisory Committee

The June 2, 2021 report from the Senior Planner titled “Community Amenity Contributions Policy Amendment – Affordable Housing” was presented. The Advisory Committee passed the following motions:

CDAC-03-21 THAT the Committee recommend to Council that the Community Development Advisory Committee supports the recommendation in the Community Amenity Contributions Policy to increase the community amenity contribution rate;

AND THAT staff consider looking at reductions to incentivize projects that are in line with the needs as demonstrated in the Housing Needs Assessment report.

CDAC-04-21 THAT the Committee recommend to Council that in addition to current contributions, the Town allocate a portion of the community amenity contributions collected toward the Capital Regional District’s Regional Housing Trust Fund with staff to recommend the specific amount to Council.

DISCUSSION

1. Proposed amendments to the Community Amenity Contributions Policy
2. Considerations for requiring 10% affordable housing units in all new multi-family developments

1. Proposed amendments to the Community Amenity Contributions Policy

With respect to the recommendations from the September 28, 2021 Community Development Advisory Committee meeting, it is proposed that the policy be amended as follows:

a. Policy Section 1.9 - increase the target rates for Cash Amenities by $500 per unit for all types of residential units.

*reworded for consistency with Zoning Bylaw

b. Addition of new Policy 1.11 as follows:

“1.11. Cash Amenities 1.11.1 10% of the amount of Cash Amenities received will be transferred to the Capital Regional District Housing Trust Fund to supplement the Town’s annual contribution.”

See Attachment 1 for a draft of the policy marked up with the proposed amendments.

Regarding the second part of motion CDAC-03-21 above with respect to incentives for projects, Policy 1.6 of the Community Amenity Contributions Policy already provides that contributions are not expected for residential units that would be in perpetuity for non-market, below-market or for special needs. As such, it is not proposed to make any further amendments at this time to incentivize projects that are in line with the needs described in the Housing Needs Assessment report. However, if there are other forms of housing that Council would like to incentivize in the future, a reduced target rate could be negotiated on a case-by-case basis at that time.

2. Considerations for requiring 10% affordable housing units in all new multi-family developments

There are no provisions for inclusionary zoning (requiring a given share of new construction to be affordable by people with low to moderate income) in the Local Government Act. In most situations this type of amenity is negotiated through the rezoning process and secured through a Housing Agreement Bylaw and covenants. Some communities achieve the provision of affordable housing units by other means such as defining it as an amenity to be provided through density bonusing scheme. The City of Victoria takes this approach in their Density Bonus Policy (Attachment 2). In the development of that policy, two studies were commissioned by the City:

• Density Bonus Policy Study: For Sites Outside the Downtown Core Area, 2015 (Attachment 3)
• Density Bonus and Affordable Housing Policy: Analysis and Recommendations, 2016 (Attachment 4)

The reports highlight the complexity of rationalizing community amenity contributions and the provision of affordable housing through density bonusing. Recommendations for an approach to affordable housing outside the Core from Section 4.2.3 of the Density Bonus and Affordable Housing Policy: Analysis and Recommendations report are as follows:

“Typical, smaller rezonings outside of the Core Area cannot provide any material number of affordable housing units (likely 1 unit at most). Any requirement for affordable housing units within the smaller rezonings will leave no room for contributions toward other amenities. Therefore, we recommend that smaller rezonings outside of the Core not be required to include affordable housing units.

The City should determine whether it would like to allocate a portion of any cash contributions (from a fixed rate CAC) from smaller rezonings outside the Core toward an affordable housing fund.

If the City wants to secure affordable housing units at rezonings outside of the Core, it should only consider this approach for the major negotiated rezoning applications outside of the Core Area.”

The land development context of the City of Victoria is very different so the recommendations should not be blindly applied to the Town, however it is reasonable to anticipate that thresholds for the provision of affordable housing in View Royal would be higher. If Council wishes to further examine the potential to require affordable housing units in all new multi-family developments, it is recommended that a land use economics study be commissioned to recommend suitable parameters to establish a density bonus policy or to understand the scale of development that can provide affordable housing.

OPTIONS

1. Amend the policy to increase target rates and transfer 10% of Cash Amenities received to the CRD Regional Trust Fund. This option is recommended by staff because it considers the capacity of the Town while still providing flexibility for Council to negotiate on large projects. It also allows funds to be leveraged for maximum regional housing impact.
2. Commission a study to calibrate numbers for affordable units suitable for the Town’s context. Budget approval will be needed. Risks include time to conduct the study, unsatisfactory results, or the project could stall or not complete. Opportunities could be missed in the meantime.
3. Do not amend the policy.

RECOMMENDATION

THAT the Committee recommend to Council that the Community Amenity Contributions Policy No. 6400-041 be amended to:

• increase the Cash Amenities target rate per detached dwelling unit or lot from $5,500 to $6,000;
• increase the target rate for Cash Amenities for other types of residential uses from $3,500 to $4,000 per unit; and
• add a new policy for 10% of the amount of Cash Amenities received to be transferred to the Capital Regional District Housing Trust Fund.

SUBMITTED BY: Jeff Chow, MCIP, RPP Senior Planner

REVIEWED BY: Lindsay Chase, MCIP, RPP Director of Development Services

ATTACHMENTS

1. Community Amenity Contribution Policy No. 6400-041 (4 pages)
2. City of Victoria Density Bonus Policy
3. City of Victoria Density Bonus Policy Study: For Sites Outside the Downtown Core Area, 2015 (75 pages)
4. Density Bonus and Affordable Housing Policy: Analysis and Recommendations, 2016 (45 pages)