It’s no secret that the GTA needs more affordable housing and that creating it is a challenge.
One of the biggest hurdles stems from a historic lack of government funding and incentive programs. Over the last few decades, the responsibility for delivering affordable housing has largely shifted to municipalities and social agencies, which have limited resources.
We need more housing for people with lower incomes — but this housing should not come at the expense of housing affordability for everyone.
Earlier this year, the provincial government introduced proposed legislation for inclusionary zoning which would allow municipalities to mandate the inclusion of affordable housing units in new development projects. If passed, the legislation would give local government the option to establish policies which would require housing applications to include a certain percentage of affordable housing units.
The intent of inclusionary zoning is to encourage development of affordable units that would not otherwise be built. But in order for it to be successful, the policy needs to be supported by incentives and partnerships as done in the U.S.
We all know that nothing is free and, without government investment and financial support, the cost burden is laid upon new homeowners in the pursuit to create affordable housing in new development projects.
Policies like inclusionary zoning can only be effective as part of a broad-based tool box that must include financial incentives and programs, and a desire from both the public and private sectors to work collaboratively.
Partnerships among the private sector, non-profit organizations and governments are a critical component if inclusionary zoning is to work in the GTA. We each have a role to play to improve access to housing.
The Urban Land Institute, a U.S. think-tank on land use and real estate, recently published “The Economics of Inclusionary Development.” The study shows how in most U.S. cities where inclusionary zoning policies are in force, various types of development incentives ensure the cost to build affordable housing is not transferred to other units within that development project and ultimately paid by new homebuyers.
Direct government subsidies, density bonuses, tax abatements and reduced parking requirements are all examples of these development incentives.
The study goes on to demonstrate how the policies vary and that there is no single way to deliver affordable housing.
For example, in cities like San Francisco, New York and Seattle, affordable housing is being built through private, public and non-profit sector partnerships. San Francisco has increased its number of affordable housing units through a partnership model and also with incentives like capital subsidies and bonds to for-profit and not-for-profit developers of affordable housing projects.
Our government needs to put the incentives, programs and a partnership framework in place that will make projects viable without undermining housing affordability.