Before Dr. Gail Pool’s presentation, I wanted to add what City Council officially passed for context.
City Council October 5 2020 Agenda
“NEW BUSINESS –
a. Affordable Housing – Councillor B. Ioannidis has given notice that he will introduce the following motion for consideration this date:
WHEREAS the City of Kitchener recognizes the importance of strong and diverse neighbourhoods where residents can grow and thrive; and
WHEREAS a key action in the City of Kitchener Strategic Plan is to create a caring community through the development of a Housing Strategy, aimed at addressing challenges to housing affordability in Kitchener across the housing continuum; and,
WHEREAS Kitchener’s Housing Need assessment found that rapid price and rent increases are making housing unaffordable all along the housing continuum, including middle income households; and,
WHEREAS the City of Kitchener has identified affordable housing as a priority in the City and has adopted Council Policies to encourage development to fees/charges; and
WHEREAS the City of Kitchener continues to seek options to encourage a broader range of housing options and increase the supply of affordable housing opportunities available; and,
WHEREAS Inclusionary zoning is one important, cost effective tool that can be used to deliver more affordable units to help address growing affordable housing needs; and,
WHEREAS Bill 108 restricted the use of inclusionary zoning to areas around major transit stations providing rail or bus rapid transit, and provincially mandated community permit system areas; and,
WHEREAS there are city-wide opportunities to achieve affordable housing through inclusionary zoning in a manner that is finanicially sustainable for both municipalities and developers;
THEREFORE BE IT RESOLVED that the City Counil request the Province to reinstate the Planning Act provisions enabling a municipality to apply Inclusionary Zoning provisions within its entire jurisdiction, or at minimum, to enable Inclusionary Zoning along Major Transit bus routes through the City;
BE IT FINALLY RESOLVED that a copy of this resolution be sent to the Ontario Minister of Municipal Affairs, to the local MP’s and MPP’s, to the Federation of Canadian Municipalities, to the Association of Municipalities Ontario, and to the Region of Waterloo and local area municipalities.
Dr. Gail Pool Presentation
Good evening Mayor and Councillors,
I want to address the Resolution proposed by Council Ionnidis, in particular the phrase:
“WHERAS, The City of Kitchener has adopted Council Policies to encourage development of new affordable rental housing units, which provide exemptions and deferrals of development fees/charges.”
We need to be careful in allowing exemptions from fees. Development fees help finance the additional costs for roads, water and waste needs, and parkland. Cancelling development fees increases the burden on the budget and thus on taxpayers, so it is a real cost. The recent period of development fee exemption cost tens of millions to regional governments.
The NBLC consultant does not address fees. And the external review by Urban Metrics did not evaluate fees and charges, assuming them to be accurate and already vetted by the municipalities. If fees are not adequately evaluated, the affordable housing goals of the City are in jeopardy.
Are there alternatives?
- If we must give developers incentives to build, then let them be tied to the Council policy to reduce greenhouse gasses. A developer would be required to put in ground source heat pumps, solar panels, green roofs and other energy reducing features. A new build would have to be LEED Platinum, the highest achievement in all areas of environmental design.
- If we keep development fees, let’s re-direct them to create affordable housing for those in income levels below those covered by the current IZ proposal.
- Scope of IZ Study
I am concerned that the IZ consultant’s report is focused on market economics. In the words of the consultant:
“The costs of inclusionary zoning cannot be passed [on]… through higher prices/rents because developers are already pricing units as high as the market will bear… Without the prospect for sufficient profit, developers will not be motivated to build” (City of Kitchener, PSI Agenda – 2020-09-28).
In short, it is assumed that developer profits cannot be reduced.
However, in one review of IZ, several factors need to be considered not just the economic one. Adequate analysis should also get feedback from social housing experts, advocacy groups, and residents (“Determining In-Lieu Fees in Inclusionary Zoning Policies: Considerations for Local Governments” Aaron Shroyer, May 2020).
[See slide 1]
When you start with a principal that developers will not build if their profits are not high enough and you consult principally with them, the social aspects of IZ are discounted.
In sum, I would ask that a similar assessment of IZ be done from a social needs perspective. IZ can be a solution but it has to be inclusive of the working poor.
If the City starts by partnering with the developers and ends with minimum land market disruption, it will miss the basic aim of addressing housing for those in need.
My suggestion is to partner with all stakeholders. Get expert advice from social planning experts. Get expert advice from the CMHC Collaborative Housing Research Network. Here is an alternative view:
Finally, the current IZ proposal does not work for the lowest income cohort, as the consultant’s chart shows:
Minimum wage is $25,700, assuming a full-time job and employment for the entire year. A minimum wage earner would have to spend about 70% of their income to meet the average market rent of $1,100. Does IZ address the need of even the lowest income decile? The following chart shows the range of incomes by percent spent on housing:
Proceeding with IZ as it stands would create Exclusionary Zoning, since it would not even cover those on minimum wage.
Additional comments from the question by Debbie Chapman:
1) There needs to be a good balance between affordable housing goals and developer interests. The expert analysis focusses on developer interest.
2) The balance needs to be more on the public benefit.
3) Access to adequate housing is a human right for everyone in Canada
Under The National Housing Strategy Act (2019) “the right to adequate housing is a fundamental human right affirmed in international law”
We need to ensure that right is attainable.
What are your ideas? How do you feel about the City of Kitchener City Planner’s approach to Inclusionary Zoning and Affordable Housing?
– Kelly – Ann Callaghan