York Region is eyeing ways to get private market developers to build affordable housing, but councillors balked at the possible price tags.
The region is preparing an affordable private market housing implementation plan to create incentives to get more developers to include affordable units as part of bigger builds.
N. Barry Lyon Consultants partner Nick Michael offered three generalized scenarios at the region’s affordable housing task force recently. However, the firm recommended the highest-cost scenario: creating a construction subsidy program that could cost $33 million annually but help create 110 to 330 affordable units per year.
It is the way to deal with “the seriousness of the housing crisis, the magnitude of the housing gaps we’ve identified, the cost of inaction being so high,” Michael said.
The region has struggled to meet its affordable housing targets over the past few years. The region has aimed to hit 35 per cent of new housing units in regional centres and 25 per cent outside of them to be affordable. But new development has fallen short of that for five years running, with only 11 per cent meeting an affordability threshold in 2022.
The region is already attempting to incentivize more purpose-built rental through development charge deferral and servicing allocation.
But the new plan would add to that. At a minimum, Michael proposed the region work on advocacy with upper levels of government for assistance, create a concierge program to help guide developments and consider a property tax discount in addition to development charge deferrals for purpose-built rental.
However, to improve the economics for affordable housing, Michael suggested the region could look at a formal land program that could help developers get land for projects, in addition to a construction subsidy program that could range from $10 to $12 million per year — which could yield 40 to 120 units annually — to $33 million.
Although there is developer interest in building purpose-built rentals, the economics are still challenging, Michael said. Getting affordable units as part of that is also difficult.
“Affordable housing units, unfortunately, it's quite complicated, it’s expensive, it requires such unilateral agreements between all levels of government, non-profit groups and developers,” Michael said. “It’s certainly the type of synergistic environment we’re hoping to create through the AHIP.”
Councillors had some skepticism about the price tag. Newmarket Mayor John Taylor said there should be an evaluation of Housing York undertaking projects itself at those dollar figures rather than putting it all into the private market.
“There’s an alternative model that may be more advantageous that should at least be deeply researched,” Taylor said. “If it holds up equally or close to equality, I don’t know why we wouldn’t go in that direction.”
Whitchurch-Stouffville Mayor Iain Lovatt agreed.
"We can do it. We have a proven track record," he said. "I just don't want to give $33 million to the private market when we can actually do it ourselves."
Michael responded that the advantage of the private market option is that the units tend to be substantively cheaper on a per-door rate.
Staff are set to bring back a report to council in September, with a recommendation based on feedback and consultation.
“It’s a good opportunity for us to look outside the box,” York Region chair and chief executive officer Wayne Emmerson said. “That’s what everyone needs to do going forward.”
