By Trevor Busch
Rather than approaching inducements to promote the development of medium density housing in the community in a piecemeal fashion, the Town of Taber is instead opting for the creation of a Medium Density Incentive.
At their June 13 regular meeting, Taber town council voted unanimously (6-0) to direct administration to implement a Medium Density Incentive to encourage growth in medium density and affordable housing. Coun. Jack Brewin was absent from the meeting.
“If you would like to create a policy to encourage medium density development, then my recommendation would be that is something that council passes as a motion, that treats all developers the same if they’re asking for a break in their off-site levies to create some medium density attainable housing,” said planning director Cory Armfelt.
At council’s May 24 regular meeting, South Alta Trading Co. Ltd. presented a plan to council to construct medium density housing, and requested they receive an off-site levy relaxation to make the project more financially viable.
“For this particular medium density subdivision that we’re talking about, that South Alta Trading Co. has come to request a break on, that was $104,000, and there are 24 lots. So it basically worked out to about $4,500 (per lot), is what they were looking at getting.”
At that time, council had directed administration to research what other municipalities do to promote the development of medium density housing. Administration consulted eight municipalities to learn about how they incentivise developers to build medium density housing.
“We looked at some other municipalities. Every time a municipality wants something, so to speak, they generally create some sort of incentive program,” said Armfelt. “What you’ll see from the medium density incentives that are listed in the background, is that there’s basically a $7,500 to $10,000 incentive when a municipality would like to incentivise affordable housing, or attainable housing programs.”
Of the municipalities reviewed, Prince George, B.C., offers a suite of programs and grants including downtown incentives, flexible zoning, parking exemptions, multi-family housing incentives, single-family housing incentives including secondary suites and narrow lot housing, and development cost charges, while Edmonton, Alta., offers reimbursement grants of $12,000 per new dwelling up to a maximum of 36 new dwellings for any mixed-use dwellings, as well as a reimbursement grant of $7,000 per new dwelling for multi-use residential.
“The punch-line is many municipalities use either an established program to incentivise medium density development, or they use a reduction in their off-site levy,” said Armfelt. “And they’re usually in that neighbourhood of $7,500 to $10,000, which is more than the South Alta Trading Co. has asked for for their development.”
St. Albert, Alta., facilitates rental housing through provisions of their land-use bylaw, subject to the availability of infrastructure capacit, and. Regina, Sask,. uses property tax and capital incentives to target insufficient supply, and provides a tax exemption on secondary suites in built-up areas as well as a provincially-funded secondary suite program providing financial assistance of up to $30,000 per suite.
“I didn’t recommend moving forward with a reduction in the off-site levies for South Alta Trading Co. for that specific development, because it’s doing so outside of an established process,” said Armfelt.“I just wanted to ensure that council is well aware that you are doing this on a one-off perspective. That you’re not doing something for one developer that you might not do for another.”
The M.D. of Opportunity has a land development grant program featuring a one-time payment of 100 per cent of the total increase in property tax as a result of all servicing and improvements made to raw or vacant land, as well as offering a subsidized subdivision grant program for residential properties which provides the construction of road access, water/sewer tank services and tie-ins, subdivision application fees, endorsement fees, legal survey costs and utility services right of way easements for free.
Medicine Hat, Alta., provides medium density development incentives in various “nodes” throughout the city with varying levels of priority, including assistance of between 40 to 90 per cent for the first two to three years. Brooks, Alta., offers a similar program centered on a charge per dwelling unit, while Kelowna, B.C., encourages growth in affordable housing through a variation of specified amenities provided on site and cash-in-lieu payments for additional density.
Closer to home, the City of Lethbridge’s Downtown Redevelopment Fund (Heart of Our City Committee) also features a housing incentive program.
“The other item is that this subdivision would have to come back to the subdivision authority for approval, so the direction — you could pass a motion here to waive the off-site levy fees for that particular subdivision, because that particular subdivision has been approved by the subdivision authority, and wasn’t appealed,” said Armfelt. “So that applicant, if they wished to get a break on their off-site levies, there’s a process for that, which is a re-application for the subdivision.”
According to administration’s research and recommendation, implementing a Medium Density Incentive would be a more effective choice than relaxing the off-site levy, as this will encourage more developers to build medium density properties without “putting all of the cost onto the taxpayers, who do not directly benefit from the services.”
“I just caution that you are transparent, and if you are going to be delivering medium density funding for medium density development — which I think is needed in Taber, I don’t disagree that there is a need to have some new medium density attainable housing within that $200,000 to $250,000 range built — there is a tool that has been established by other municipalities to use the off-site levy to incentivise this sort of development, and that you adopt that as a process, as a policy, so you’ve got something to fall back on,” said Armfelt.
Sec. 11.1 of Off-site Levy Bylaw 19-2015 allows the Town of Taber to reduce or forgive off-site levy fees.
“Giving a particular developer a break in this instance because it’s too expensive to develop what’s been proposed to develop, may instigate a flood of other applications from other developers that are saying I’d like to make this a little more economically viable for myself, would you give me a break here?” said Armfelt.
Mayor Henk DeVlieger inquired if a proposed policy would include strictures which would prevent potential abuse by developers, such as taking advantage of a suite of incentives to build a medium density project, only to sell the developed properties for a higher price threshold than that established by the town.
“Through the policy, what I would want to do is go back to the development community to make sure that $250,000 or less is a reasonable ceiling for a medium density housing development,” said Armfelt. “And then there would be some sort of guarantee from the developer that if he were to receive that break in the off-site levy, that would be the price point of those houses, not sold for over $250,000 per unit. And if not, then they would be required to pay the off-site levy.”
Coun. Randy Sparks took issue with the proposal on the semantics front, expressing his dissatisfaction with the employment of the term “medium density”.
“That’s what we’re all after here is affordable housing. I don’t even like the term medium density to be honest with you. I don’t care for that term, I prefer ‘affordable housing’, because that’s what we’re in need of in the town. That’s the only reason we’re talking about some form of incentive, is because there is a need here. Medium density could be talking about a lot of different things that are way over $250,000, but we’re trying to create a subdivision here through a developer so people can afford to buy a first-time home and get out of the rental market.”
DeVlieger stated his support for a universal policy approach for developers, rather than handling requests on an ad hoc basis.
“I like the idea of making it kind of the same for all the developers, because the whole idea behind it is to create affordable housing.”
CAO Greg Birch highlighted upcoming changes to the Municipal Government Act as containing the potential to have an impact on medium density development at the municipal level in Alberta.
“As you all know, Bill 21, the new Municipal Government Act, there’s a specific section about affordable housing, essentially requiring it as a municipality on the premise that you give something — you don’t just say ‘you shall provide that’ — it’s a trade off mechanism. So this might also fit in — down the road — but if you’re interested in affordable housing, creating some kind of package of incentives, you might actually be able to require at some point in time future landowners with the intention of subdividing to create this low-cost housing, and then you would have an incentive program already in place.”