Oshawa extends incentives: encouraging rental

NRU
July 8, 2015
By Leah Wong

Oshawa is seeking to encourage new residential rental developments near its post-secondary institutions by extending incentives to developers.

At its June 29 meeting council extended the University and College Area Renaissance Community Improvement Plan from December 31, 2015 to 2020 and its development charges by-law exemption for group dwellings from June 30, 2015 to 2019. After that the exemption would be phased out.

“[The city is] helping the other neighbourhoods, in and around the university, by trying to put the focus of the development onto the Simcoe Street corridor, which the city has been encouraging,” developer Ihor George Lysyk said in a deputation to council.

First adopted in 2010 the CIP has led to new apartments, townhouses and commercial development near Durham College, University of Ontario Institute of Technology and Trent University’s Oshawa campus. In total it has facilitated the construction of 411 dwelling units along the Simcoe Street North corridor, offering a broader range of affordable accommodations through infill and intensification. Property owners have been able to apply for an assessment grant, which phases in tax increases relating to reassessments due to property improvements.

“Housing plays a very important role in [a student’s] success or failure at school,” said Councillor John Aker. He also said he’s heard that more students are choosing to live in Oshawa, rather than commuting to school, as there is an increased supply of quality housing. “It is extremely important that we provide student accommodations to complement Durham College and UOIT, and to ensure those young people have an enjoyable stay in our fair city.”

Council voted to continue the incentive programs following an update from Watson and Associates Economists Ltd. that reviewed the financial implications of extending the city’s DC exemption for group dwellings. The exemption was approved by council in 2014 following Watson and Associates development charges background study.

The lone vote against the recommendation was by Councillor Nancy Diamond, who raised concerns about the loss of revenue from continuing the development charges exemption.

“We have to balance the cost of growth,” she said. “If you are making exemptions for development charges it could lead to a loss of development charge revenue intended to fund growth-related expenditures, which may require funding from the general tax base.”

Diamond acknowledges that exempting development charges will serve as an incentive for developers. But, she said, “It means the general tax base that we are all so carefully protecting will pick up those costs.”

Councillor Nester Pidwerbecki told council that the longterm benefits would outweigh the costs of the programs.

He referenced a letter submitted to council from Podium Developments that said the company decided in 2009 not to invest along the Simcoe Street North corridor as it felt student housing would not be economically viable. In 2011, once the CIP program was in place, Podium invested in two projects along the corridor, which will be 100 per cent leased when the fall semester starts.

While the CIP has largely led to the creation of student rental housing, it can be used for any type of rental housing development services commissioner Paul Ralph told council.

He said the reason those taking advantage of it are student housing developers is because of the location. Councillor Amy England said she would like to see a shift away from purpose-built student housing towards general rental housing that would service a larger portion of the city’s renter population.

“I don’t want us, as a municipality, to be so focussed on student-centric housing that it excludes other people in our community. One-third of our population are renters and our rental housing stock is not at the level it should be,” said England.

While England voted with council to support the extension of the CIP program and the DC by-law exemption, she said she would like council to find a way to leverage these incentives to support more general rental housing. She said that while these types of accommodation could be accessed by students, they would also improve the quality of the city’s rental stock.