Housing Accelerator Fund | PRE-APPLICATION REFERENCE MATERIAL

Action plan initiatives

The action plan must include initiatives that will help the applicant achieve their committed housing supply growth target and any additional targets. The action plan items must support enhancements achievable within the program’s timeframe, but the intent is for changes to outlive the HAF.

The minimum number of initiatives depends on the application stream, as follows:

• Large/Urban: A minimum of seven initiatives.
• Small/Rural/North/Indigenous: A minimum of five initiatives.

All initiatives included within the action plan should be new initiatives that have not yet started. In exceptional circumstances, CMHC may be willing to consider initiatives that started after the 2022 federal budget (April 7, 2022), which announced the Housing Accelerator Fund, in cases where an applicant may be challenged to meet the prescribed minimum number of initiatives.

The applicant must indicate how each initiative will increase the supply of housing and associated timelines, as well as any other expected results.

The applicant must identify and explain how each proposed initiative supports at least one of the objectives of the program (see section three (3)).

The following list of initiatives are aligned with the objectives of the HAF program and reflect common practices in urban planning, contributing to more housing supply. Applicants are encouraged to select from this list where it makes sense to do so given the local context. There is flexibility for CMHC to consider alternative initiatives proposed by applicants. Actions that do not support the objectives of the program will not be considered.

• Promoting high-density development without the need for rezoning (as-of-right zoning), e.g., for housing developments up to 10 stories that are in proximity (within 1.5km) of rapid transit stations and reducing car dependency
• Allowing increased housing density (increased number of units and number of storeys) on a single lot including promoting “missing middle” housing forms typically buildings less than 4 stories
• Encouraging Accessory Dwelling Units—a second smaller unit on the same property as a primary unit
• Enable mixed-use redevelopment of city-owned properties, while where appropriate maintaining the current government use, e.g., building housing on top of a library or office space
• Promoting infill developments (adding new units to existing communities) with increased housing density and a variety of unit types (e.g., duplexes or secondary suites)
• Implementing rental only zoning
• 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
• Implementing revised parking requirements such as reduced or eliminated parking spaces for new developments
• Implementing disincentives, costing or fee structures to discourage such things as unit vacancy, underdeveloped/idle land, and low-density forms of housing
• 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)
• Aligning development charges with the costs of infrastructure and servicing
• Implementing incentives, costing or fee structures, for example density bonusing, to encourage such things as affordable housing and conversions from non-residential to residential
• Waiving public hearings on all affordable housing projects that conform to the official community plan
• Implementing measures to address or prevent flood plain or climate change risk for example making flood plains park land and/or creating relocation programs to move housing units out of at-risk areas
• Incorporating a climate adaptability plan into Official Community Plan
• Promoting and allowing more housing types that serve vulnerable populations
• Promoting regulated multi-tenanted housing forms (e.g., boarding houses or single room occupancy)
• 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
• Encouraging alternative forms of housing construction such as modular housing, manufactured housing, and prefabricated housing
• Create a process for the disposal of city-owned land assets for the development of affordable housing as-of-right (not requiring rezoning)
• Implementing new/enhanced processes or systems such as case management, e-permitting, land and building modelling
• Implementing changes to decision making such as delegating development approval authority to municipal staff based on established thresholds or parameters
• Partnering with non-profit housing providers to preserve and increase the stock of affordable housing
• Updating infrastructure planning to align with official community plans, growth targets, and housing needs assessment
• Reducing and streamlining urban design and character guidelines, i.e., elimination of height restrictions, visual character requirements, view cones, setbacks, etc.

It is the responsibility of the applicant to determine and confirm that it has the requisite authority, expertise, capacity, and resources to implement any and all chosen initiatives. The contribution agreement shall include a representation and warranty by the applicant confirming the above and CMHC will be relying on the representation and warranty without any independent investigation. All action plans must be approved by elected Council (or equivalent, including delegated authority) and include an attestation of the applicant’s Chief Financial Officer (or equivalent) on the viability of the plan using the prescribed form. The attestation must be obtained by the applicant before applying to the HAF. The approval may be obtained by the applicant before applying to the HAF and is required before the contribution agreement is signed.

Note: CMHC may provide successful applicants with an opportunity to propose additional initiatives and increase their housing supply growth target in the event there is unused funding in the later years of the program.

8. INCENTIVE FUNDING AND PERMITTED USES

The HAF is about driving transformational change and creating the conditions for more housing supply over the short and longer term. The HAF is intended to incent applicants to commit to change, show progress and be provided with funding in return.

For clarity, HAF is not directly underwriting specific housing projects or reimbursing proponents for specific costs incurred. Rather, HAF funding can be used in support of housing under any of the following four categories. For further details on how HAF funding would be advanced refer to section 13.

Permitted uses of HAF funding:

• Investments in Housing Accelerator Fund Action Plans
  • any initiative included in the proponent’s action plan and approved by CMHC.
• Investments in Affordable Housing
  • construction of affordable housing
  • repair or modernization of affordable housing
  • land or building acquisition for affordable housing.
• Investments in Housing-related Infrastructure
  • drinking water infrastructure that supports housing
  • wastewater infrastructure that supports housing
  • solid waste management that supports housing
  • public transit that supports housing
  • community energy systems that support housing
  • disaster mitigation that supports housing
  • brownfield redevelopment that supports housing
  • broadband and connectivity that supports housing
  • capacity building that supports housing
  • site preparation for housing developments.
• Investments in Community-related Infrastructure that supports housing
  • local roads and bridges
  • sidewalks, lighting, bicycle lanes
  • firehalls
  • landscaping and green space.

Proponents will be asked to estimate how much of their funding will be allocated to each category as part of their application (% of total estimated funding). If approved to participate in the program, proponents must report on how HAF funding was used in the form and timelines prescribed. Additional information on reporting requirements can be found in section 12.

Subject to the permitted uses outlined above, HAF funding can be used in conjunction with other CMHC or federal government programs, unless expressly prohibited under the terms of such initiatives. Please note that funding from the HAF will not be considered as local or PT (Provinces & Territories) cost-matching under the existing CMHC-PT NHS bilateral agreements, which exclude contributions from Government of Canada sources or from CMHC.

9. EVALUATION CRITERIA

CMHC will review all applications to determine if they meet program requirements of the HAF. The evaluation of the application will be based on the criteria listed in Table 1. All applications will be assessed and scored.

All initiatives outlined in the action plan will be individually assessed and scored; however, for prioritization purposes only the top five initiatives under the Small/Rural/North/Indigenous stream or top seven initiatives under the Large/Urban stream will be considered. While only the top five or seven initiatives will be used for prioritization purposes, additional initiatives should still be put forward within the action plan as required to support the committed housing supply growth target and alignment with HAF priorities.

The evaluation criteria are used to assess the application and to determine which applicants are selected to participate in the HAF. It will not dictate funding amounts. There is a separate funding framework for those that are selected to participate in the program. Refer to section 10 for the funding methodology.

Table 1: Evaluation criteria

There is only one planned intake window. CMHC will consider take-up across jurisdictions and may adjust application rankings to support a national distribution. CMHC will make formal recommendations to the Minister of Housing and Diversity and Inclusion. Once approvals and final funding decisions are made, CMHC will advise applicants of the outcome.

10. FUNDING METHODOLOGY

For those applicants that are selected for participation in the HAF program (see section nine (9)), a funding framework will be used to determine the amount of funding per successful applicant.

There are three components of the funding framework: (1) base funding, (2) top-up funding and (3) an affordable housing bonus. For the base funding, the per unit amount will be higher for applications pertaining to the territories or Indigenous communities.

While the funding envelope is determined on the basis of per unit amounts, the HAF incentive funding is designed to support the costs associated with the initiatives within the action plan, as well as any other permitted use of funds in order to accelerate the supply of housing in Canada (see section eight (8) for permitted uses of funds). The proponent will have flexibility in how HAF funding is used provided it is for a permitted use.

Components of the funding framework:

1. Base funding is designed to incent all types of supply across the housing spectrum. Base funding is estimated at $20K* per HAF incented unit ($40K* per HAF incented unit for applications pertaining to the territories or an Indigenous community). The per unit amount will be multiplied by the number of HAF incented units. HAF incented units refers to the difference between two projections: (1) the number of permitted units that are anticipated without the support afforded by the HAF program and (2) the number of permitted units that are anticipated with the support afforded by the HAF program. The latter would establish the housing supply growth target, which would be included in the action plan and reflected in the contribution agreement.
2. Top up funding is designed to incent certain types of housing supply. Top up funding will depend on the type of housing and the associated projected increase in the number of permitted units. There is no top up funding available for single detached homes. The value ascribed to each category will be multiplied by the associated projected increase in the number of permitted units. The targets established for each unit type would be included in the action plan and reflected in the contribution agreement.
3. 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 the support afforded by the HAF. The percentage growth will be multiplied by the ascribed value and then by the total projected permitted units with the support afforded by the HAF. The target would be included in the action plan and reflected in the contribution agreement.

*All per unit amounts for the base funding, top up funding and affordable housing bonus are estimated amounts that may assist potential applicants for budgeting purposes. CMHC may adjust these amounts and this flexibility is to help ensure that CMHC can support higher than anticipated housing supply growth targets and outcomes across Canada within the overall program funding.

The following tables provide an illustrative example of the funding framework.

Table 2: Base Funding

A total of 500 HAF incented units * $20K per unit = $10M. *All per unit amounts for the base funding, top up funding and affordable housing bonus are estimated amounts that may assist potential applicants for budgeting purposes. CMHC may adjust these amounts and this flexibility is to help ensure that CMHC can support higher than anticipated housing supply growth targets and outcomes across Canada within the overall program funding.

Table 3: Top-up Funding

For example, an increase of 250 missing middle housing units * $12K per unit = $3M. *All per unit amounts for the base funding, top up funding and affordable housing bonus are estimated amounts that may assist potential applicants for budgeting purposes. CMHC may adjust these amounts and this flexibility is to help ensure that CMHC can support higher than anticipated housing supply growth targets and outcomes across Canada within the overall program funding.

Table 4: Affordable Housing Bonus

An increase in the share of affordable housing units of 1.50% * 6,000 total projected permitted units with HAF * $19K per unit = $1.71M. *All per unit amounts for the base funding, top up funding and affordable housing bonus are estimated amounts that may assist potential applicants for budgeting purposes. CMHC may adjust these amounts and this flexibility is to help ensure that CMHC can support higher than anticipated housing supply growth targets and outcomes across Canada within the overall program funding.

Total Incentive Funding: $16,160,000 Base funding ($10M) + top up funding ($4.45M) + affordable housing bonus ($1.71M) = $16.16M

The average amount for each HAF incented unit is: $32,320 Total incentive funding of $16.16M / the number of HAF incented units of 500 = $32,320

Definitions

• Single-detached homes refers to a building containing 1 dwelling unit, which is completely separated on all sides from any other dwelling or structure. This includes link homes, where 2 units may share a common basement wall but are separated above grade. It also includes cluster-single developments.
• Multi-unit housing in close proximity to rapid transit refers to any form of multi-unit housing in close proximity (1500m) to rapid transit, which operates frequent service with high capacity and priority over other modes of transportation typically achieved through an exclusive right-of-way.
• Multi-unit housing characterized as missing middle refers to ground-oriented housing types that exist between single-detached and mid-rise apartments. This includes garden suites, secondary suites, duplexes, triplexes, fourplexes, row houses, courtyard housing, low-rise apartments (less than 4 stories).
• Other multi-unit housing refers to all multi-unit housing excluding missing middle and multi-unit housing in close proximity to rapid transit.
• Affordable housing refers to housing units that are intended for households whose needs are not met by the marketplace. The local definition will be used for the purposes of HAF or in the absence thereof the provincial/territorial definition.

11. MINIMUM DOCUMENTATION REQUIREMENTS

To support their application, applicants will be asked to submit the following minimum documentation:

• Completed application form, including action plan
• Signed integrity declaration
• Most recent audited financial statements (if not available publicly)
• Current housing needs assessment report (if available at time of application)
• Attestation letter signed by the applicant’s Chief Financial Officer (or equivalent) using the prescribed form on viability of the action plan.

The action plan template will provide applicants with an opportunity to outline stated goals, objectives, and expected results. The applicant should be able to provide analysis or statistics to support the initiatives put forward in the action plan. This supporting information could be referenced directly in the application or be submitted as supporting documentation, for example, the applicant may wish to refer to a recent housing needs assessment, or other report outlining needs or opportunities for increased housing supply growth.

12. REPORTING REQUIREMENTS

There are three main reporting obligations under the HAF. The proponent will be required to adhere to specific reporting requirements, which include:

• Progress on the initiatives and commitments outlined in the action plan.

  • Actual start and completion date of each initiative
  • Percentage complete for each initiative
  • Overall status for each approved initiative (i.e., Completed, On Track, Delayed, Not Started)
  • Start and completion date of the milestone(s) for each initiative
  • Overall status for the milestone(s) for each initiative (i.e., Completed, On Track, Delayed, Not Started)
  • Rationale for the status of each initiative and/or milestone. Where there are delays and/or milestones have not been met, the applicant must provide a detailed rationale, including a proposed plan to get the initiative back on track
  • Number of net new units permitted for residential buildings during the reporting period*. *Permitted unit refers to units for which building permits for new housing construction were issued during the reporting period for residential buildings. The reference to “net” is to consider any demolitions or conversions that may have also taken place during that period.

• Permit data for all housing units permitted during the reporting period. CMHC plans to leverage the data points consistent with Statistics Canada Building Permits Survey for consistency purposes.

  • Permit number
  • Submission date of permit request
  • Issue date of permit
  • Construction/demolition location (site address)
  • Type of building code
  • Type of work code
  • Dwelling units created (if applicable)
  • Dwelling units lost (if applicable)
  • Units demolished (if applicable)
  • Secondary suite
  • Number of stories.

• Details on how HAF funding was used during the reporting period.

  • Category and sub-category of incentive funding (see section eight (8) of this document)
  • Annual dollar amount per category and sub-category
  • Cumulative dollar amount per category and sub-category.
  • Details on capital projects facilitated with HAF funding.

There may be additional data points required as part of the reporting requirements listed above. Explanations for the data points will be made available for each reporting requirement in support of the HAF application intake opening later in 2023.

Proponents will be required to make progress reports and how funds were used public through normal governance mechanisms or other means deemed appropriate by the proponent.

13. ADVANCING AND REPORTING SCHEDULES

There will be a total of four advances to successful applicants (referred to herein as proponents), with one advance planned for each year of the program. Each advance will be subject to conditions including those noted below.

The reporting obligations for proponents will be outlined in the contribution agreement. Reporting will be required at the following intervals: (i) a report on a prescribed form due no later than 6 months following the date the agreement is signed; and (ii) for each subsequent advance, reports on a prescribed form due within 60 days of the anniversary of the agreement. A final report on the use of the HAF funds will be due within 90 days of the fourth anniversary of the agreement.

The reports provided below must be accompanied by an attestation of the applicant’s Chief Financial Officer or equivalent (on a prescribed form), which confirms that the proponent remains in compliance with the terms and conditions of the contribution agreement and that the proponent’s representations and warranties remain true. Requests for annual payments are dependent on meeting applicable reporting obligations.

*CMHC may on a case-by-case basis consider a higher first advance.

CMHC will consider all relevant circumstances when determining whether to approve a request for advance during the prescribed timelines. CMHC will work with the proponent to address situations where achievement is delayed or not progressing as planned. If satisfactory arrangements to rectify the situation are not implemented, then CMHC may reduce or withhold payment of advances. CMHC will communicate funding decisions in writing.

14. CONTRIBUTION AGREEMENT

To participate in the program, approved applicants will be required to enter into a contribution agreement with CMHC in which it agrees to the commitments and to undertake the initiatives set out in the action plan. The form of contribution agreement will be made available closer to when the portal will be opening later in 2023.

15. APPLICATION PROCESS

The following provides a high-level overview of the application process:

• CMHC publishes program parameters and pre-application reference material, including an action plan template on its website
• Applicants assess their own local context, including housing challenges and opportunities
• Applicants develop an action plan unique to their needs in support of HAF, aligned with the prescribed action plan template
• Applicants obtain appropriate approvals
• CMHC invites applicants to apply/portal opens for application submissions
• Applicants submit their application to CMHC, including their action plan
• CMHC will evaluate and prioritize applications
• CMHC will advise the applicant on the status of their application
• For approved applications, CMHC will confirm the total amount of funding available to incent new housing supply, expectations on progress reports, and the planned schedule of payments
• If approved, the proponent signs the contribution agreement. If not already obtained, Council approval (or equivalent) of the action plan is required before the proponent enters into the contribution agreement
• The action plan will form part of the contribution agreement between CMHC and the proponent.

16. IMPORTANT DATES

The following provides an overview of planned activities. Some modifications may be required as CMHC prepares for implementation. CMHC will provide further details as they become available.

• Detailed program parameters published by CMHC: March 2023
• Potential applicants consider the program and develop their action plans if interested in applying:
• Launch and opening of the application intake portal: Summer 2023
• All HAF participants selected: Summer/Fall 2023
• First advances processed: Summer/Fall 2023
• First reporting period is 6 months following the date the agreement is signed
• Second reporting period is the first anniversary of the agreement, reports due within 60 days
• Second advances processed: Summer/Fall 2024
• Third reporting period is the second anniversary of the agreement, reports due within 60 days
• Third advances processed: Summer/Fall 2025
• Fourth reporting period is the third anniversary of the agreement, reports due within 60 days
• Fourth advances processed: Summer/Fall 2026
• Fifth reporting period is the fourth anniversary of the agreement, final use of funds report due within 90 days.