Planning & Development Report: Action List--10% Affordable Housing
A staff report analyzing the feasibility and implications of requiring 10% affordable housing units in all new multi-family developments.
TOWN OF VIEW ROYAL
Planning & Development Report
TO: Committee of the Whole DATE: April 8, 2021 FROM: L. Chase, Director of Development Services MEETING: April 13, 2021
Action List--10% Affordable Housing
RECOMMENDATION:
THAT the report titled “Action List—10% Affordable Housing” dated April 8, 2021 from the Director of Development Services be received.
CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
At the July 16, 2019 Council meeting a motion was passed directing staff:
To report back on the possibility of requiring 10% affordable housing units in all new multi-family developments.
TIME CRITICAL:
No.
BACKGROUND DISCUSSION:
Housing affordability is a challenging issue throughout the CRD. The Town has taken a variety of steps over the years on this topic. Some of the more recent activities related to housing are highlighted below:
- The Housing Gaps and Needs study was completed in 2020. The study highlights that affordable housing is needed in View Royal with 355 households in core housing need as of 2016. In short there is a need for more than 200 non-market rental units, as well as programs and supports for affordable ownership. The report also highlights that housing affordability has both supply and demand influences, and that increased supply of housing (particularly multi-family units) will have an impact on affordability.
- The Town has been a long-time contributor to the CRD Regional Housing Trust Fund. One new CRD housing project opened in View Royal in 2020. It is comprised of 150 units of near market and below-market housing. The Town granted partial relief from Development Cost Charges for this project.
- The 2011 Official Community Plan included polices related to affordable housing:
- HS1.4 Housing Amenity Contributions
- Ensure that any proposed multi-unit residential development requiring a rezoning provides a ‘housing amenity’ contribution to the Town, which could be directed to the Regional Housing Trust Fund as part of the Town’s annual contribution.
- Action HS2
- Consider preparing a comprehensive Housing Strategy to address housing issues in View Royal, such as identifying gaps in the provision of non-market and market housing options, provision and replacement of affordable housing, seniors housing, family-oriented, workforce housing, and special needs housing, and residential infill development.
- HS1.4 Housing Amenity Contributions
- Council adopted an amended Community Amenity Contribution policy in February 2021. This policy states ‘Community amenity contributions are not expected for residential units that would be in perpetuity non-market, below-market or for special needs’.
This report will review:
- Recent development applications in View Royal that have included CAC’s or housing amenities
- The impact/connection to CAC’s
- What other CRD municipalities are doing
- Other tools for consideration
- Issues for Council consideration
DISCUSSION:
Recent Development Applications in View Royal
Over the last 5 years the Town has benefitted from an increase in development applications, many of which have included commitments to affordable housing and/or community amenity contributions. A list of the projects, and the expected contributions are below:
| Project Address/Name | Amenity Contribution |
|---|---|
| 242/244 Island Highway | $27,500 cash |
| 7 Erskine | $3500/unit |
| 9 Erskine | $3500/unit, rental project, 10% of units to be affordable and secured by a Housing Agreement Bylaw |
| 298 Island Highway | $3500/unit |
| 3, 5, 7 Helmcken 1449 Burnside Road | $3500/unit, support for existing tenants to relocate. |
| 2861 Craigowan | $750,000 cash contribution for affordable housing initiatives or CRD Housing Trust Fund. Housing Agreement Bylaw includes Rental only covenant, relocation package, right of first refusal for new units, 33 most senior tenants granted rent in new buildings at current rental rate for comparable units. Offsite improvements including signalization of Shoreline Drive and Island Highway, Island Highway lane improvements, sidewalks, bike lanes on Shoreline Drive, pedestrian lighting. |
Housing and Community Amenity Contributions
The economics involved in seeing a site through the development process from rezoning to occupancy are challenging. Increasing land, financing, material, construction, and labor costs all impact the developer’s decision to proceed with a development or not. It is a careful balancing act for local government to not place too many additional burdens on development, and to remove roadblocks where possible so that the kind of development anticipated in an Official Community Plan can be realized.
The Community Amenity Contribution (CAC) Policy recently amended by Council recognizes that amenities come in a variety of forms, and that affordable housing is an amenity. The existing policy suggests that Council can either achieve affordable housing or receive a CAC contribution. The exception to this may be very large projects where there is more latitude for negotiation. The other opportunity to possibly achieve both objectives may be where Council takes the step to pre-zone sites (thus eliminating significant risk and carrying costs) using density bonus zoning or is prepared to make concessions on other requirements (for example parking). There are no restrictions on Council making decisions to use CAC funds to support affordable housing initiatives.
Related to this is the question of who administers affordable housing units. Existing agreements require that a rent roll be provided yearly to the Town to ensure that the affordable units continue to be available and occupied as per the housing agreement.
What Other CRD Municipalities are Doing
| Municipality | Policy | Exemptions | Notes |
|---|---|---|---|
| Sooke | Affordable Housing & Social Housing Policy (2007) includes 10% of multifamily units in all developments where 10 or more units are being developed. Also applies to subdivisions where 10% of lots created over 10 must be used for affordable housing. | Less than 10 units or lots | Sooke Policy also includes multiple actions for the municipality to facilitate development process. |
| Langford | Affordable Housing and Amenity Contribution Policy (2018) | Designates different areas of community for varying levels of amenities. Combines Affordable Housing Amenity with a contribution for General Amenity Reserve Fund. | Generally, $1000 per Single Family Equivalent for affordable housing. Housing units are required where more than 15 lots are created. Amenity contribution applies to both residential and commercial/ industrial. |
| Colwood | Community Amenity Policy (2009) which has requirements paying into the Affordable Housing Reserve Fund. They have a 2007 Attainable Housing Policy - But it is not followed. | Colwood has recently reviewed and updated their policy. Funding for their Affordable Housing Reserve Fund has been used to offset DCC's and otherwise support the creation of affordable housing by different groups and agencies. | |
| Esquimalt | Esquimalt relies on policy in their OCP and negotiates for amenities with each rezoning application. | Through negotiation process they try to secure units that are suitable for a range of household types including families. 2 and 3 bedroom units are encouraged. Housing Agreements are used to secure. | |
| Victoria | Inclusionary Housing and Community Amenity Policy (2019) | Projects with less than 60 units are exempt from providing units, but do provide cash-in-lieu contributions instead. Rental projects are exempt as are non-market projects. | Includes provisions for density bonusing and contribution is tied to land lift associated with rezoning. Policy targets a return of 75% of land lift. Cash in lieu ranges from $5/ft2 to $35/ft2 but only applies to bonus floor space. |
| Central Saanich | Community Amenity Contributions Policy (2017) Community amenities are defined as a broad range of categories including: public realm enhancements, arts and cultural facilities, public art, parks and environment, heritage conservation, greater housing choice, and adaptable design features, child care facilities, and similar features or facilities. | Amenity Contribution Target Levels: a. Affordable/Supportive Housing Community Amenity - $2,000 per unit/lot or equivalent square metre total floor area commercial/ industrial/ institutional. b. General Community Amenity - $5,500 per unit/lot or equivalent square metre total floor area commercial/ industrial/ institutional. Affordable Housing Fund is to assist in provision of affordable or supportive housing through partnerships with non-profit housing agencies. | |
| Sidney | Bonus Density & Community Amenity Contribution Policy (2019). Target contribution is $150/m2 of additional floor area above the base density of the existing zone. | Primary objective of policy is cash contributions. Council has discretion to waive amenity policy for: below market housing; off-site improvements above requirements; where land improvements and access are provided; for public art; for additional public parking (either underground or on site) |
Other Tools for Consideration
CRD Housing Trust Fund
The Town has been a long-time contributor to the CRD Regional Housing Trust Fund. The CRD is able to leverage the funds for this purpose by partnering with senior levels of government to acquire land and build new housing. One option for consideration is to increase the amount the Town contributes by either allocating a portion of the existing CAC or developing a separate Housing Amenity Contribution to be Policy.
Strata Conversion Policy
Many affordable housing units are contained in older buildings that were purpose built for rental. A strata conversion policy would ensure that those previously occupied units are not strata titled without review and approval by Council. This type of policy usually establishes a minimum vacancy rate for rental accommodation, below which strata conversion applications must come to Council for consideration. This type of policy ensures that existing rental stock is protected, particularly when rental vacancy rates are extremely low.
Amending the Town’s Community Amenity Contribution Policy
The existing amenity policy focuses on the provision of amenities at the discretion of Council. A recent contribution related to 242-244 Island Highway means that there is $27,500 available. Funds are added when a building permit is issued which means that this is not a stable and regular source of funding for amenities or housing projects.
An option for consideration is to amend the CAC policy to explicitly collect funds earmarked for housing (either by allocating part of the existing $3500 target funding amount, or assessing a new Affordable Housing Amenity contribution). This approach is consistent with policy that has been implemented by other CRD municipalities. This approach recognizes that the CRD Housing trust is well established and is able to significantly leverage contributions to create affordable housing in the region. For larger projects it may be advisable to ensure the policy is flexible and does not preclude being able to negotiate for affordable units to be provided (as occurred with 9 Erskine Land and Christie Point).
Issues for Council Consideration
If Council wishes to proceed with a policy direction that supports the provision of affordable housing in all new developments, there are many considerations that are part of that decision making process:
- The impact of additional requests from municipalities on the bottom line for developers is often the difference between a project proceeding or not. The existing requirements from the Town include frontage and servicing requirements, Community Amenity Contributions, Development Cost Charges, permit fees and more. The hidden costs are things like the carrying costs and risk associated with rezoning and development permit approvals. Not having projects proceed because the economics no longer work is a risk and will have impacts to things like future assessments, building permit fees and more.
- The capacity of the existing staff complement to manage an elaborate housing policy is limited. The simplest option would be a cash amenity that is then passed on to the CRD Housing Trust. 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. Staff note that a Town administered fund to support housing projects being completed in View Royal will take many years to accumulate sufficient funds to have a significant impact. Options that include long term monitoring of rent rolls are less sustainable and are subject to human error.
- Engagement with the development community to understand any concerns and impacts to future development in View Royal should Council wish to proceed with development of a policy.
NEXT STEPS:
Should Council wish to continue to develop a policy with respect to affordable housing, staff would recommend amending the existing Community Amenity Policy to collect cash contributions to be forwarded to the CRD Regional Housing Trust fund (over and above our usual annual contribution).
RECOMMENDATION:
THAT the report titled “Action List—10% Affordable Housing” dated April 8, 2021 from the Director of Development Services be received.
SUBMITTED BY: L. Chase, Director of Development Services
REVIEWED BY: K. Anema, Chief Administrative Officer
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