Developers could soon be forced to build affordable housing
Yorkregion.com
May 26, 2016
By Lisa Queen
One of the fastest growing areas of the country.
Ballooning housing prices.
Young people blocked out of the housing market by astronomical prices.
Business owners worried about a workforce that can’t afford to live in the area.
While it may sound a lot like York Region, it’s actually Denver, CO.
Faced with a hot housing market that created hardships for many people looking for a reasonably priced place to live, Denver introduced an inclusionary housing ordinance in 2002 requiring developers building new residential projects of more than 30 units to include 10 per cent affordable housing.
Denver is one of more than 400 U.S. communities that have introduced inclusionary zoning since the 1970s, policies that have helped create more than 150,000 affordable units over the past decade.
The policy has encountered snags, Stephanie Inderwiesen, Denver’s affordable housing co-ordinator, and Rick Padilla, the city’s director of housing and neighbourhood development, acknowledged during a phone call Tuesday.
For example, there was an increase in the number of housing projects of 29 or fewer units proposed by developers, Padilla said.
And policies have to be flexible to, for example, adapt to fluctuations in the housing market, Inderwiesen said.
But a week after the Ontario provincial government introduced legislation giving municipalities the ability to force builders to include affordable housing in new developments through tools such as inclusionary zoning, Denver officials are praising the policy as an important measure to get residents into housing they can afford.
“In 2002, there were a variety of studies conducted and there was some demand for affordable housing. People who were working in Denver couldn’t necessarily afford to live in Denver.
Denver really wanted it to be a work, live, play experience for people. Obviously, the need was significant enough that city council felt that it needed to take action by requiring and implementing this ordinance,” Inderwiesen said.
“Our program has over 1,200 affordable units.”
Not only did Denver - with a population of more than 682,500 compared to less than 560,000 10 years ago - want to boost its stock of affordable housing, it also wanted to encourage diverse neighbourhoods with a variety of income levels, Inderwiesen said.
“A lot of diverse incomes really adds to the stability of a neighbourhood,” she said.
“Not only does it add to the stability of a neighbourhood but it also provides opportunities for affordable homeowners and their children as far as community, stability, education, services.”
The average cost of a home in Denver was $336,600 last month, almost laughable by York Region’s average of $777,927 for a resale home and $987,106 for a newly built house in 2015, but it is significantly higher than the U.S. national average of $187,000.
In Denver and its surrounding counties, one of the fastest growing areas of the country and a magnet for millennials attracted by a robust job market, inclusionary zoning for affordable housing is an important tool, Padilla said.
“It’s critical for a number of reasons. We’re either one or two of the fastest-growing cities in the U.S. and part of what’s driving our growth out here is jobs. Lots of jobs, it’s very entrepreneurial. But job growth and wages aren’t keeping demand with the number of housing units that are being built,” he said.
“I certainly think (inclusionary zoning) is a very worthwhile venture. It’s an economic engine to continue to grow and stabilize your community. You have to address the issue of housing. It’s not only job creation, it’s how do you keep the folks there and how do you keep it affordable across the income spectrum? It could turn into a city of haves and have nots.”
If inclusionary zoning is going to work, governments have to work in partnership with the development industry and stop piling on additional taxes, fees and red tape on building new homes, Joe Vaccaro, CEO of the Ontario Home Builders’ Association, said.
There also has to be a recognition that someone has to pay for creating more affordable housing and that will likely result in higher housing prices for others, he said.
“If the government is serious about making this work, they need to be prepared to be good partners and provide planning and financial incentives. It’s not enough to simply mandate. American jurisdictions that have used this power have always supported it with financial and planning incentives like development charge rebates, property tax holidays and reduced parking standards,” he said.
“Make no mistake, every new policy that is created results in an impact on everyone else’s housing units. So, the reality is, you can say, ‘Developer? Provide these affordable housing units’, but what the developer does, ultimately, it reflects back in the cost to the other unit owners. Someone is going to have to pay for this. It’s just how it finds its way into the price of a new home.”
Newmarket-Aurora MPP Chris Ballard said he appreciates the development industry’s concerns, but is confident developers and municipalities will find creative ways to produce affordable housing.
The legislation gives municipalities the option of using tools such as inclusionary zoning and exempting apartments in newly built homes from development charges, he said, adding the province has set aside $178 million to help implement changes.
“We’re not forcing anything down anybody’s throat,” he said.
At the same time, Ballard, who was vice-chair of a provincial homeless experts’ panel, said the proposed legislation is in response to pleas from municipal leaders and others who have watched their housing markets push affordable housing out of the reach of even people making decent salaries.
“This is probably something we should have done 30 years ago but we didn’t and now we’re really in trouble in terms of a lack of affordable housing. We didn’t pull this idea out of thin air.
Inclusionary zoning is used in the United Kingdom and extensively throughout the United States. We’ve been approached by municipalities to bring inclusionary zoning into play,” he said.
“Will this solve all the problems? No, but it’s a fantastic first step.”
Mary Ann Proulx, executive director of the region’s Citizens for Affordable Housing, has watched affordable housing become a dream for more and more residents with higher and higher incomes over the years.
She’s pleased to see the proposed legislation.
“I think it’s nice to see the government is finally recognizing the importance of inclusionary zoning. If you’re looking at inclusionary zoning, you get more of a social mix (in neighbourhoods),” she said, adding there are about 12,000 people on the waiting list for subsidized housing in the region.
Proulx shares Vaccaro’s concern about who will pay to create affordable housing, but said it is time to take action.
“Proposing legislation is one thing, who is going to pay for it is another. Don’t pass legislation without figuring out who is going to pay. But the U.S. has done this for years now. There is, historically, areas they can look at to see what worked and what didn’t,” she said.
“Let’s get from talking to action.”
Newmarket Councillor John Taylor, chair of the region’s community and health services committee, applauded the proposed legislation.
In the past, municipalities have not been able to make developers build affordable housing.
Inclusionary zoning gives towns and cities a tool to make it happen, while at the same time recognizing the need for developers to be included as partners in discussions about building complete communities, he said.
“I think it’s a positive announcement, a very positive announcement,” he said, adding he has been on an Association of Municipalities of Ontario task force for the past year researching affordable housing issues.
“Everybody has been calling for inclusionary zoning. In theory, it provides us with a real tool, a tangible tool, to bring the development community to the table around affordable housing in each and every development, if we so choose.”
Thornhill Conservative MPP Gila Martow slammed the government for failing to address the need for affordable housing more quickly.
“Ontario has more than 168,000 families on a waiting list for housing, the longest wait time we have experienced,” she said.
“I would like to point out that this Liberal government has had 13 years to address the long wait list. This government’s previous affordable housing strategy promised annual reports than included performance indicators, yet these were never released. Unfortunately, the only measure we have is the increasingly long wait list.”
At the same time, the Conservatives are looking forward to developing a comprehensive plan to address affordable housing in the province, Martow said.
