COMMITTEE OF THE WHOLE REPORT - CANADIAN MORTGAGE AND HOUSING CORPORATION’S HOUSING ACCELERATOR FUND

COMMITTEE OF THE WHOLE REPORT

TO: Committee of the Whole DATE: May 10, 2023 FROM: Leanne Taylor, MCIP, RPP, Director of Development Services MEETING DATE: June 13, 2023 SUBJECT: CANADIAN MORTGAGE AND HOUSING CORPORATION’S HOUSING ACCELERATOR FUND

RECOMMENDATION:

THAT the Committee recommend to Council that:

1. the Town of View Royal apply to Canadian Mortgage and Housing Corporation’s Housing Accelerator Fund Program;
2. support of the following action plan initiatives to accelerate housing supply in accordance with the funding requirements: i. promoting higher density development and reducing car dependency without the need for rezoning (i.e. pre-zoning land or applying other potential zoning measures) on lands in proximity of the identified rapid transit stations, including Atkins Road and Helmcken Road ii. encouraging accessory dwelling units – a second smaller unit on the same property as a primary unit (i.e. garden suites) iii. implementing land use changes mandating a minimum number of family units (units with more than two bedrooms) or allowing for office conversions to residential with minimum family unit requirements iv. promoting infill developments (adding new units to existing communities) with increased housing density and a variety of unit types, such as duplexes and secondary suites. v. implementing revised parking requirements such as reduced or eliminated parking spaces for new developments vi. ensuring that development and amenity charges – fees that cover necessary infrastructure to support new housing and amenities such as libraries and recreation centres in and adjacent to the communities where development is occurring – are clear, transparent and pre-determined (not subject to negotiation) vii. implementing inclusionary zoning (the requirement that a developer builds a certain percentage of their units at affordable (below market) prices or rents) in ways that foster development.
3. the Town of View Royal commit to a housing supply growth target within the action plan that increases the average annual rate of growth by at least 10% and a growth rate of at least 1.1%.

PURPOSE:

The purpose of this report is to present the Committee of the Whole with information, analysis and recommendations on Canadian Mortgage and Housing Corporation (CMHC) Housing Accelerator Fund (HAF) program for local governments and seek Committee’s support on applying for incentive funding to further advance housing initiatives.

TIME CRITICAL:

In March, CMHC announced an incentive funding opportunity for local governments. The deadline to submit an application to the HAF has not been formally announced; however, CMHC has indicated to local governments that the formal application form will be made available later in 2023 and that municipalities should be prepared to submit a formal application sometime in the summer.

EXECUTIVE SUMMARY:

The overall objective of the HAF program is to accelerate supply of housing through land use planning and development approvals. As part of the funding application process, a municipality must outline action plan initiatives that will be taken to increase housing supply and reflect these initiatives in an action plan. In addition to establishing an action plan, a municipality must commit to a housing supply growth target within the action plan that increases the average annual rate of growth by at least 10%. The growth rate must also exceed 1.1%.

Staff recommend for Committee’s consideration that the Town apply to the HAF program and commit to a housing supply growth target that increases the average annual rate of growth by at least 10% and a growth rate of at least 1.1% by implementing the proposed seven action plan initiatives that would result in an increase housing supply and streamline development approvals in accordance with the funding program.

BACKGROUND:

In response to the current housing crisis, escalating rents and a shortage of affordable housing, the Federal Government has allocated $4 billion in funds towards the HAF program to be made available to local authorities to incentivize the implementation of local actions that remove barriers to housing supply, accelerate the growth of supply, and support the development of communities that support the following priorities:

• the development of complete communities that are walkable, consisting of appropriate residential density and a diverse mix of land uses, providing access to a wide variety of amenities and services through public and active transportation;
• the development of affordable, inclusive, equitable and diverse communities that encourage clear pathways to achieve greater socio-economic inclusion largely achieved through the equitable provision of housing across the entire housing spectrum; and
• the development of low-carbon and climate-resilient communities.

To be eligible for incentive funding, the Town must commit to and meet the following minimum requirements:

• develop an action plan that specifies a housing supply growth target and commit to a minimum of seven initiatives to be undertaken to grow housing supply and speed up housing approvals;
• commit to a housing supply growth target within the action plan that increases the average annual rate of growth by at least 10%. The growth rate must also exceed 1.1%;
• provide a housing needs assessment report; and
• submit periodic reports to CMHC in the form and timelines prescribed as follows:
  • progress reporting on the initiatives and commitments within the action plan;
  • micro-level permit data for residential buildings for all permitted units; and
  • details that support that HAF funding was used for a permitted purpose.

DISCUSSION:

Action Plan

To be eligible for incentive funding, the Town must provide an action plan consisting of seven action plan initiatives to accelerate housing supply. The reference material (attached) includes a comprehensive list of initiatives to choose from, which are aligned with the objectives of the HAF program and reflect common practices in urban planning that contribute to more housing supply.

Staff has completed a thorough review of the prescribed action plan initiatives provided by CMHC through the lens of which initiatives would further advance key housing objectives in the 2011 Official Community Plan, Community Climate Action Strategy, and the draft Strategic Plan and would be feasible to accomplish over the next three years. If the Committee wishes to pursue the HAF opportunity, then Table 1 below provides a list of top seven action plan initiatives for the Committee’s consideration that staff feel are aligned with the Town’s key policies and support one or more of the HAF objectives.

Table 1: Proposed Action Plan Initiatives

Other alternative action plan initiatives that the Committee could also consider should any of the proposed seven initiatives in the above table are not supported, are the following:

• aligning development charges with the costs of infrastructure and servicing
• waiving public hearings on all affordable housing projects that conform to the official community plan
• implementing changes to decision making such as delegating development approval authority to municipal staff based on established thresholds or parameters (i.e. reduce processing times by delegating certain development applications to municipal staff, subject to certain thresholds and parameters set by Council).

Housing Supply Growth Target and Incentive Funding

To be considered for incentive funding, the Town must establish two housing projections based on a three-year period ending September 1, 2026, as follows:

• the total number of permitted housing units projected without HAF; and
• the total number of permitted housing units projected with HAF.

A municipality must also commit to a housing supply growth target within the action plan that increases the average annual rate of growth by at least 10%. The growth rate must also exceed 1.1%.

There are three components to the funding program, including base funding, top up funding and an affordable housing bonus. The base funding is estimated at $20,000 per HAF unit. The top up funding is to incent certain types of housing supply, and does not include single family dwellings. The top up funding is estimated as follows: $15,000 per multi-unit housing within 1500m of rapid transit; $12,000 for missing middle housing (i.e. garden suites, triplexes, fourplexes, townhouses, apartments less than four storeys); and $7000 for other multi-unit housing near rapid transit. The affordable housing bonus is designed to reward an applicant that can increase its share of affordable housing units relative to the total projected permitted units with HAF, and the amount is estimated to be $19,000 per affordable housing unit.

Incentive Funding and Permitted Uses

The HAF reference material states that the program is about driving transformational change and creating the conditions for more housing supply over the short and longer term. The HAF is intended to incentivize local governments to commit to change, demonstrate progress and be provided with funding in return. HAF funding can be used in support of housing under any of the following four categories:

• investments in housing accelerator fund action plans (i.e., any initiative included in the action plan and approved by CMHC and can include consultant fees, or hiring a temporary housing planner to assist in implementing the action plan)
• Investments in Affordable Housing, including:
  • Construction of affordable housing
  • Repair or modernization of affordable housing
  • Land or building acquisition of affordable housing
• Investments in housing-related infrastructure that supports housing, including:
  • drinking water infrastructure
  • wastewater infrastructure
  • solid waste management
  • public transit
  • community energy systems
  • disaster mitigation
  • brownfield redevelopment
  • capacity building
  • site preparation for housing developments
• Investments in community-related infrastructure that supports housing, such as:
  • local roads and bridges
  • sidewalks, lighting, bicycle lanes
  • firehalls
  • landscaping and greenspace.

As part of the application, the Town would be required to estimate how much of the funding would be allocated to one or more categories listed above as part of the application (% of total estimated funding). Applicants have flexibility to spend their HAF funding in any of the four categories listed above, including directing all the funding into one or two categories if they wish to take this approach.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The HAF will assist the Town in further advancing housing and climate action objectives in the community. It will allow the Town to invest in community-related infrastructure to support housing growth and develop a low-carbon and climate-resilient community.

FINANCIAL IMPLICATIONS:

This funding opportunity does not require the Town to match the funds. If the Town applies to the HAF program, and is a successful applicant, then the funding would be advanced in four installments over four years, as follows:

ALTERNATIVE:

CMHC has set specific eligibility criteria for the HAF program with the objective to accelerate housing supply and streamline development approvals in local communities. The funding can be used towards the implementation of housing action items and amenities to support population growth.

Should the Committee not wish to proceed with this funding opportunity then the Town will not benefit from receiving funds for some important housing initiatives and community-related infrastructure that are supported in policies and plans.

CONCLUSION:

CMHC has established the HAF program to allow local authorities to incentivize the implementation of local actions that remove barriers to housing supply, accelerate the growth of supply, and support the development of communities. It is recommended for Committee’s consideration that the Town apply to the HAF program and commit to a housing supply growth target that increases the average annual rate of growth by at least 10% and a growth rate of at least 1.1% by implementing the proposed seven action items that would result in an increase housing supply and streamline development approvals in accordance with the funding program.

ATTACHMENTS:

Attachment 1: CMHC Pre-Application Reference Material.