KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY

Transcription

1 Report to COW # Appendix B Kingston Model KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY FINAL REPORT FEBRUARY 2005

2 ACKNOWLEDGEMENTS This study was undertaken on behalf of the City of Kingston, Housing Division, under the direction of Greg Grange, Manager. We wish to thank the City of Kingston Technical Resource Team and the Housing Division staff for providing valuable input into key aspects of the study. City of Kingston Staff: Name Greg Grange Mila Kolokolnikova Lawrence Cleary Chris Laundry Hollis Amey Lorraine Mustard Shirley Bailey Wendy Carman Shawn Crosier Alan McLeod Paula Nichols Title Manager, Housing Division Supervisor of Program, Policy & Research, Housing Division Supervisor of Finance, Housing Division Supervisor of Administration, Housing Division Secretary, Housing Division Finance Clerk, Housing Division Senior Policy Planner, Department of Planning & Development Senior Policy Planner, Department of Planning & Development GIS Administrator, Information Systems Senior Legal Counsel, Legal Services Manager, Parking Services, Department of Operations Community Champions Name Dave Jackson Jay Abramsky Organization Co-ordinator, Tipi Moza/Phoenix Homes & Kingston Not-for-Profit Housing Association (KNFPHA) Principal, Keystone Property Management Inc. Extend Acknowledgement to: Name Don Elliott Organization Vice President, Clarion Associates of Colorado KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY i

3 Consulting Team: The Kingston Model for Affordable Housing Supply has been prepared by the consulting firm, SHS Inc. The consulting team for this study was comprised of: Edward Starr, Principal, SHS Inc. Christine Pacini, Principal, SHS Inc. Jodi Ball, Senior Policy Analyst, SHS Inc Keele Street, Suite #3 King City, ON L7B 1G2 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY ii

4 TABLE OF CONTENTS 1 INTRODUCTION COMPARATIVE ANALYSIS OF MUNICIPAL PRACTICES Municipally-Led Affordable Housing Programs City of Toronto Regional Municipality of Waterloo City of Hamilton City of London City of Peterborough Denver, Colorado Recent Affordable Housing Developments Toronto Projects Other Projects Across Ontario Success Factors THE KINGSTON AFFORDABLE HOUSING MODEL A STRATEGIC VISION FOR HOUSING COMMUNITY HOUSING NEEDS INTEGRATING THE KINGSTON MODEL INTO THE MUNICIPAL HOUSING BUSINESS Community Participation and Decision-Making Building an Affordable Housing Team City of Kingston Council and Community Services Committee Establishing an Affordable Housing Development Committee Multi-Disciplinary Staff Team Appointing an Affordable Housing Co-ordinator Establishing the Kingston Affordable Housing Centre Taking a Flexible Approach LEGISLATIVE AND REGULATORY TOOLS TO STIMULATE AFFORDABLE HOUSING SUPPLY The National Housing Act Creating the Environment to Provide Municipal Incentives Social Housing Reform Act, Municipal Act Municipal Housing Facilities Bylaw Planning Act Density Bonusing and Transfer of Development Rights Environmental Assessment Act Development Charges Act Brownfield s Act KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY iii

5 7.5.1 Brownfields Initiatives Provincial Legislation Kingston s Brownfields Strategy Federal and Provincial Taxation Policies Overview Goods and Services Tax (GST) Treatment of Capital Gains Capital Cost Allowance (CCA) Deductibility of Soft Costs Capital Taxes on Rental Properties Other Tax Changes Financing New Rental Development Recent Changes to CMHC Mortgage Insurance Practices Additional Recommendations of the Housing Supply Working Group GST Rebate For Affordable Housing CMHC Mortgage Loan Insurance for Non-Profit Groups Municipal Planning Policies and Practices Adequate Supply of Serviced Land The Kingston Urban Growth Strategy Provincial Policy Statement on Housing Surplus Government Lands Housing First Policy Municipal Housing First Policy Land Banking/Land Trust Official Plan Housing Policies The Former City of Kingston Official Plan The Former Township of Kingston Official Plan The Former Township of Pittsburgh Official Plan Zoning By-Laws Former City of Kingston Former Township of Kingston Former Township of Pittsburgh Second Suites Development Standards Housing Intensification and Downtown Revitalization Control of Demolition and Conversion of Affordable Rental Housing Inclusionary Policy Kingston Transportation Master Plan Cycling and Pathways Study FINANCIAL TOOLS TO STIMULATE AFFORDABLE HOUSING SUPPLY Federal Funding Programs Canada-Ontario Affordable Housing Program CMHC Proposal Development Fund (PDF) Loan CMHC SEED Funding Residential Rehabilitation Assistance Program (RRAP) Emergency Repair Program (ERP) KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY iv

6 8.1.6 Shelter Enhancement Program (SEP) Supporting Communities Partnership Initiative (SCPI) CMHC Homeownership Education and Training Program Provincial Funding Programs Provincial Homelessness Initiatives Fund (PHIF) Off the Street, Into Shelter Fund (OSIS) Redirection of Emergency Hostel Funding Initiative (REHF) Rent Bank Energy Emergencies Strong Communities Rent Supplement Supportive Housing/Special Needs New Places to Live Initiative Ministry of Health and Long-Term Care Additional Forms of Affordable Housing Self-Help Housing Model Rent-To-Own Model Life Lease Housing For Seniors Home Ownership Co-operatives Portable Rent Subsidy Other Municipal Financial Incentives Development Charges, Fees and Levies Municipal Taxation Policies Establishing a Municipal Affordable Housing Revolving Fund BUILDING COMMUNITY CAPACITY Key Stakeholders Education and Training Topics Gathering Resources PARTNERSHIPS MUNICIPAL LEADERSHIP AND COMMUNICATION PUBLIC CONSULTATION MONITORING FINANCING THE KINGSTON MODEL Day-to-Day Operations Staffing Costs Cost of Equipment, Supplies, Communications and Space Sources of Funds Contributions to Housing Programs Waivers of Fees and Charges/Property Tax Reductions/Donation Portable Rent Subsidy Program Land Banking/Land Trust KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY v

7 Kingston Affordable Housing Revolving Fund ADVICE ON DEMONSTRATION AFFORDABLE HOUSING PROJECTS Kingston & Frontenac Housing Corporation - 41 Unit Seniors Apartment Byron Parking Lot - 52 Unit Singles/Family Apartment Habitat for Humanity 2 Semi-Detached Affordable Homeownership Units Elizabeth Fry Society of Kingston - 6 Unit Transitional Housing Project LIST OF APPENDICES Appendix 1: Kingston Affordable Housing Forum Questionnaire Appendix 2: Cmhc October 2004 Rental Market Survey Appendix 3: Municipal Housing Facilities Bylaw By-Law No Appendix 4: 2003 Municipal Fees And Charges For A Typical 40 Unit Rental Apartment Project Appendix 5: Suggested Resolutions For Council To Consider Related To Affordable Housing Advocacy Appendix 6: Capital And Operating Budget, Kingston & Frontenac Seniors Project Appendix 7: Capital And Operating Budget, Byron Parking Lot Project Appendix 8: Capital And Operating Budget, Habitat For Humanity Project Appendix 9: Capital Budget, Elizabeth Fry Transitional Housing Project Appendix 10: Continuum Of Housing Needs In The City Of Kingston Appendix 11: Community Consultation Appendix 12: Bibliography LIST OF TABLES Table 1: Response of Kingston Affordable Housing Conference Delegates Regarding Priorities for Affordable Housing Table 2: Kingston Community Needs Along Housing Continuum Table 3: Ratio of Multi-Residential to Residential Tax Rates, Table 4: Value for City of Kingston Tax Equalization Based on Present Value Table 5: Potential Municipal Subsidy Costs for Demonstration Projects Table 6: Potential Revenues Generated for Municipality and Housing Providers by Demonstration Projects KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY vi

8 LIST OF FIGURES Figure 1: Continuum Of Housing Needs Figure 2: 125 Van Order Drive Site Plan Figure 3: 125 Van Order Drive Site Figure 4: Byron Project Housing Project Sketch Figure 5: The Byron Project Site Figure 6: Proposed Habitat for Humanity, Semi-detached Affordable Homeownership Site Figure 7: Proposed Elizabeth Fry Society Transitional Housing Project KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY vii

9 1 INTRODUCTION The Kingston Model is being developed to provide a practical, action-oriented approach through which the City of Kingston and its community partners can take positive steps to meet the range of affordable housing needs facing the City today and in the future. A particular emphasis is being placed on expanding the supply of various forms of housing to address the full continuum of housing needs in the area. This report sets out the components of the Kingston Model and recommends a range of actions aimed at expanding the supply of affordable housing throughout the City of Kingston. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 1

10 2 COMPARATIVE ANALYSIS OF MUNICIPAL PRACTICES 2.1 Municipally-Led Affordable Housing Programs In order to help provide direction, it is important to examine approaches to meeting affordable housing needs that have been taken by other Municipal Service Managers in Ontario. A number of Municipal Service Managers have put together active development programs to help meet community housing needs. These programs tend to take advantage of local resources and incentives, recent changes in Federal and Provincial legislation, senior government funding programs, funds available through private and public foundations, etc. In many cases, these initiatives involve public/private partnerships to help expand the supply of various forms of affordable housing. A survey was undertaken of Municipal Service Managers involved in active affordable housing development programs to provide information on the range of approaches currently underway across Ontario. The results are summarized below City of Ottawa The City of Ottawa s Housing Branch is responsible for affordable housing. In February of 2002, Ottawa City Council approved an Affordable Housing Strategy. The Affordable Housing Unit, managed by the Director of Housing, includes capital programming staff, residential support staff as well as a SCPI-funded position. Tools for implementing this strategy include as-of-right incentives, discretionary incentives, program application and approval incentives and housing facilitation. Program application and approval incentives include the Rent Supplement Program and Action Ottawa. Action Ottawa is the affordable development initiative aimed at helping non-profit and private developers build new affordable rental housing. Tools within this initiative include capital grants (up to $25,000 of Federal and/or Municipal funds), relief from municipal development charges and other fees, reduced municipal property taxes; longterm lease opportunities on City-owned land and rent supplements. The City requires its successful applicants to build affordable units for a minimum of twenty years and 60 percent of the units must be affordable to lower income families. The City of Ottawa makes available Requests for Proposals in order to determine which projects to support. Each RFP includes specific evaluation criteria. City staff, using the evaluation criteria, will produce a report on each RFP. This report then goes to a KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 2

11 selection committee. This committee is created based on the RFP and does not have a set membership. As an example, a recent selection committee included a banker, a community advocacy representative, a planner, the housing director, a provincial representative and a private sector homebuilder. Council has final approval on each project. Consultations are open to the public. The Housing Unit is responsible for the development of the RFPs as well as the management of funds and contracts. The City is the main funder of Action Ottawa. Additional funds come primarily from the Federal/Provincial Community Rental Housing Program. Action Ottawa offers many financial incentives for developers of affordable housing, including: Capital grants of up to $25,000 per unit. Lowered property taxes for new multi-residential housing, which will effectively pay the residential rate for a 35-year period. (savings of approximately $10,000 per unit in the first 10 years) Development Charges Exemptions - worth approximately $6,100 - $9,500 per unit. Building permit exemptions - worth up to $1,000 per unit. Parkland Levy Exemptions - worth approximately $1,000 per unit. Planning fee exemptions - worth approximately $200 per unit. Rent Supplements - worth the monthly difference between the average market rent and approximately 30% of a low-income household's income. The City will also make available parcels of surplus municipal land for affordable housing where possible. The Housing Branch has identified a target of the development of 500 low-income affordable housing units per year. This development is targeted to households at and below the 20 th income percentile ($30,055 in 2003). The City s Official Plan defines affordable housing as being affordable to households who are at or below the 40 th income percentile ($54,273 in 2003). The Official Plan outlines a target of 25 percent of ALL new housing to be affordable. The Housing Branch provides a continuum of housing and housing support services to sustain and enhance social housing, promote options for increasing the supply of affordable housing, ensure the delivery of emergency and supportive housing services, and manage the development and implementation of a community action plan to prevent and end homelessness. The Affordable Housing Division works with external developers (private and not-forprofit) who have expressed interest in the development of affordable housing. Internally the Division works with Development Services, primarily regarding the achievement of the Official Plan targets for affordability, and the management of the Municipal Housing Statement. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 3

12 Affordable Housing has three areas of business: 1. Facilitating affordable housing development by identifying and negotiating mechanisms to improve the regulatory and development system to improve affordability, including negotiating and advocating with other levels of government, community agencies, developers and other city departments. 2. Developing and managing funding and incentive programs to support the development of affordable housing by leveraging other resources, including federal and provincial funding, private funding, land and other equity. 3. Developing community capacity by brokering partnerships in the community to transfer and share knowledge and expertise, and to leverage additional resources towards increased supply of affordable housing. The objective of the Affordable Housing Division is to develop and implement a systematic approach to increase the supply of affordable housing by creating community capacity on all levels; financial, knowledge, skills and resources in response to the City Council mandated 20/20 Growth Plan, Human Services Plan, Ottawa Official Plan, and the Ottawa Affordable Housing Strategy City of Toronto All services within the City of Toronto related to social housing, homelessness and new affordable housing are within one division (Shelter, Housing and Support Division) within one department (Community and Neighbourhood Services). Under the City s Capital Facilities By-law, it has equalized the property tax rate for all new multiresidential buildings with the rate for single family homes. The City has also in many cases waived all municipal property taxes for twenty years, particularly for transitional housing developed with financial assistance through the SCPI Program. An initiative under the Social Housing Unit of the City of Toronto s Shelter, Housing and Support Division is the Let s Build Program. This Program was initiated in accordance with recommendations contained in the Mayor s Action Task Force Report on Homelessness prepared by Anne Golden in Its primary purpose is to assist private and non-profit developers to create new rental housing at or below average market rents. This program also co-ordinates the development of transitional and supportive housing. The housing can be created through new construction and/or conversion/renovation of existing residential and non-residential buildings. The Social Housing Unit is responsible for administration of all developments under the Let s Build Program. Once the project/building is completed its governing body (i.e. owner/sponsor group) enters into a City Operating Agreement (also known as an Affordable Housing Agreement). These agreements generally contain terms and conditions outlining the incentives being provided to the project by the City in return for KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 4

13 a commitment by the proponent to ensure the project remains affordable for a specified period of time (usually a minimum of years). Let s Build staff are made up of a team of full-time, experienced housing professionals to provide assistance to community non-profits and private developers who are building affordable housing. There are approximately 10 full time staff: one Special Advisor, one support staff and eight Housing Officers. They play a variety of roles, including providing assistance to proponents in developing proposals for affordable housing, administering RFP s, negotiating affordable housing agreements, coordinating community capacity building, leading community education initiatives about affordable housing, cutting red tape within City Hall to help accelerate developments, and so on. The financing of new projects is assisted by the City s Capital Revolving Fund for Affordable Housing (CRF). The CRF is a reserve fund which was initiated following approval of the Mayor s Task Force Report with an initial amount of $12 million. These funds were actually part of the funding received by the City as a result of the transfer of social housing in Funds from the CRF are loaned out by the City at 1% below prime to assist in the development of affordable housing projects. Generally, the CRF assistance represents no more than 25 percent of total project capital costs. The balance of project financing comes from other grant programs, owner equity contributions and mortgage financing. CRF loans are repaid over a 25-year amortization period. The repayment of the loans ensures the fund is continually replenished to be able to offer an ongoing source of financing for affordable housing. Other financial support can come from such sources as CMHC RRAP, SCPI, Provincial Rent Supplement Programs, the new Federal-Provincial Affordable Housing Program, Provincial Supportive Housing Programs, surplus government lands, private equity investment and non-profit fundraising. Affordable housing projects, therefore, involve partnerships with the private/public sector as well as with different levels of government. This fund is managed by an external Reference Group who provides advice to City staff and Council. Membership includes representatives from City Council, the development and property industry, the financial sector, the community-based housing and services sectors and provincial and federal governments. The fund is financially managed by the City s Chief Financial Officer and Treasurer. Toronto City Council determines how the CRF is replenished and has final approval authority for each project proposal, subject to any terms and conditions of senior government programs. The City of Toronto is also one of the few municipalities in Ontario that acts as the agent for CMHC in the delivery of the RRAP Program. This provides the City a strong degree of control in allocating funds to strategically support affordable housing proposals involving use of multiple programs to achieve important community goals. At the same time, the City earns significant fees from CMHC for administering the program. Indeed, there are also administrative fee recoveries for Municipal Service Managers from the KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 5

14 new Federal-Provincial Affordable Housing Program. The overall principle of cost recovery through such programs, in fact, is an important principle in the delivery of affordable housing programs at the local level. Since launching in the spring of 2000, Let's Build has helped develop 1,000 affordable housing units as stated in the Let s Build newsletter, May Sector partners are key to achieving their goal and making substantial advances in alleviating Toronto's housing situation Regional Municipality of Waterloo In May 2001, the Regional Council for Waterloo approved its Affordable Housing Strategy. An enhancement was made to the Strategy in the spring of This amendment/enhancement broadened the strategy to support affordable ownership housing and affordable rental housing built by the private sector. The goal is to help create 1,000 new housing units by the end of Highlights of the Affordable Housing Strategy include: $7.6 million in capital grants through the Region s Social Housing Reserve Fund $1.37 million in grants to offset Regional Development Charges new property tax rate with an estimated reduction of $600-$1200 per unit per year a Housing First Policy to make available surplus Regionally-owned lands at little or no cost for affordable housing $550,000 in Regional operating funds to create 140 units of additional RGI housing in existing rental buildings. In June 2002, the Region approved a Municipal Housing Facilities By-law to broaden the scope of funding mechanisms for Affordable Housing proposals. In August 2002, Council passed the first project-specific Housing Facility By-law in Ontario that is now supporting assisted private sector rental development Initiatives outlined in the strategy include: Affordable Housing Partnership Projects Rent Supplement Regionally-constructed and managed rental apartments Ministry of Health rent supplement program Grants to mitigate development charges Infill, Conversion and Unit Subdivision within existing Public Sector Portfolio Provincial Rent Supplement top-up Federal-Provincial Affordable Housing Program RRAP KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 6

15 In order to implement this strategy and allocate funds from the Social Housing Reserve Fund the Region issues periodic requests for Expressions of Interest (EOI). These EOIs are reviewed by Regional staff and forwarded to Committee/Council for a priority list. In 2003, the Region of Waterloo became the first municipality to receive funding for 15 affordable housing projects under the Federal/Provincial Community Rental Housing Program (CRHP). As of August 2004, the Region of Waterloo has been successful in creating 740 units of affordable housing over a three year period. These units are occupied, under construction or are in the planning and financing stages. The Region is continuing to work with its partners in the Federal and Provincial government, local municipalities, and non-profit and private sector groups to achieve its affordable housing strategy City of Hamilton Affordable housing for the City of Hamilton falls under the responsibility of the Housing Unit. The Housing Unit has four separate areas. The first is Housing Development, which is responsible for delivering the Community Rental Housing Program, RRAP, the Rent Supplement Program, the Hamilton Home Emergency Repair Program and all CityHousing Hamilton programs. CityHousing Hamilton is City-owned housing (former public housing and municipal non-profits). Within Housing Development there are four staff members, one of which is the Program Manager. The Program Manager also sits on the Board of Directors for CityHousing Hamilton. The other areas of the Housing Unit are Social Housing Administration, Tenant Support Services and Housing Operations. Tenant Support Services provides services to CityHousing Hamilton. This new structure was introduced earlier this year. Generally, new programs are recommended by the Program Manager. A proposal and budget are prepared and submitted to Council, who has final approval on all programs. The City of Hamilton does not have a Social Housing Reserve and cannot accrue a surplus. All requests are made to Council and go through the capital budget process. Two programs are funded directly by the municipality through its own resources- the Hamilton Affordable Housing Partnership Initiative (HAHPI) and the Hamilton Home Emergency Repair Program. Through HAHPI, the City established the Housing Partnership Fund, to which Council allocated $1.5 million. This distribution of this fund is determined through an RFP process. A key focus for the City of Hamilton at this time is creating new partnerships. One program that is very unique to the City is the Home Ownership Affordability Partnership program where the City is partnering with Habitat for Humanity to build affordable housing units. Other partners include bankers, homebuilders and realtors. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 7

16 Currently the City is working on a report entitled Key to the Home which will make recommendations on the City s future delivery of affordable housing City of London London s City Council adopted The Report of London s Affordable Housing Task Force in Within the report the City committed municipal resources for the development of affordable housing. Initiatives include capital grants of up to $15,000 per unit, equalizing the multi-residential property tax rate with the single family residential rate and waiving development charges. Affordable Housing Agreements were developed to ensure that this housing remains affordable for at least twenty years. The City of London has also passed a Capital Facilities By-law City of Peterborough At the centre of the delivery of affordable housing in the City and County of Peterborough is the Affordable Housing Action Committee (AHAC). This committee has the purpose of providing advice to local municipal officials on a diversity of housing issues facing the City and County. The Affordable Housing Action Committee is divided into four sub-committees - Policies and Issues; Services; Funding; and Supply. The Supply Committee is responsible for identifying strategies and preparing action steps to provide permanent affordable housing. The City is currently hiring a full time Housing Supply Facilitator to develop and coordinate the implementation plan for the recently completed Peterborough Affordable Housing Strategy. This individual will report to the Director of Planning and Development Services; however, the facilitator will work primarily in conjunction with the Housing Supply sub-committee. All members of AHAC are volunteers and include persons affected by housing insecurity as well as representatives from City and County planning, the private sector, builders, non-profit housing providers, a realtor and other interested members of the public. Membership on the committee includes two City Council appointees, two County Council Appointees, eight members from the other sub-committees and four members from the community at large. The following illustration describes the partnerships and relationships within the City and Council of Peterborough in its delivery of affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 8

17 The City of Peterborough has passed a Capital Facilities By-law which provides flexibility for the City to provide incentives such as capital grants, offsetting grants to equalize new the multi-residential property tax rate with that of the single family residential rate, grants to offset development charges as well as other municipal fees. The City of Peterborough has been allocated $2.5 million under CRHP. Half of this money is going to the 50-unit Woolen Mill project, while the rest will be awarded to three KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 9

18 proponents who were selected through an RFP process to develop 70 new units of affordable housing under CRHP Denver, Colorado While not an Ontario example, Denver Colorado serves as a further illustration of municipally-led affordable housing programs. At the recent Kingston Affordable Housing Forum, a former planner with the City of Denver, Mr. Don Elliott (now with Clarion Associates) presented a range of examples demonstrating how that municipality has used a variety of regulatory and financial tools to partner with private and non-profit sector organizations to deliver a wide variety of affordable housing projects in different areas of the municipality. While the specific tools and resources at the disposal of an American city such as Denver differ from those available to Ontario municipalities, there are a number of important lessons from the Denver example that can be applied directly to the Kingston situation, including: a pro-active approach by municipal staff is a key prerequisite to identifying and realizing potential affordable housing opportunities partnerships with private and non-profit organizations are the key to successfully bringing affordable housing projects to fruition the development of successful affordable housing projects requires multidisciplinary approaches involving local elected officials, community planners, social service agencies, legal expertise, municipal financial resources, senior government program support, private investment capital and other such resources every opportunity is different and presents different challenges. Each requires a unique solution. Municipal councils and staff must be prepared to take a flexible, open-minded and innovative approach to breaking down barriers and achieving results 2.2 Recent Affordable Housing Developments Despite the fact that most of the above municipally-led affordable housing programs are in their infancy, a number of developments have already been completed in these communities. These serve as ready examples of the potential to achieve meaningful results despite the many barriers and obstacles that are often faced in moving forward with active local development programs. Below we highlight some recent examples to demonstrate the types of results that are being achieved around Ontario. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 10

19 2.2.1 Toronto Projects The following section summarizes all Toronto area projects. Trellis Gardens, Toronto 1 Located on Lawrence Avenue West in the City of Toronto, Trellis Gardens is home to 44 women and their children. The building provides 24 affordable rental apartments, with 18 of them filled on a rent-geared-to-income basis by low-income households from Toronto s social housing waiting list and from local emergency shelters. The remaining units are rented at average market rent. This project was a result of a partnership between the Housing Committee of the Out of the Cold coalition of churches and synagogues and the Social Action Committee of Congregation Darchei Noam (a Toronto synagogue). Trellis Gardens (City of Toronto, 2003) Funding for this building was provided through the City of Toronto Let s Build Program. Because many of the residents of Trellis Gardens were at risk of becoming homeless, additional funding was obtained through the Federal Government Supporting Communities Partnership Initiative (SCPI). The Province has made rent supplements available for 18 of the units. Out of the Cold and Darchei Noam raised at least $360,000 in capital for the project through a public fundraising campaign. The total project cost is $4.3 million. 1 Information obtained from the Building Partnerships: Capital Investment in Affordable Housing and Transitional Housing in Toronto. Toronto Shelter, Housing and Support, November KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 11

20 Fort York Residence Transitional Shelter, Toronto 2 Fort York Residence is a mix of transitional housing and shelter space. The residence provides 74 dormitory-style shelter beds and 24 transitional bachelor units. Fort York Residence also provides employment programs, workshop and meeting space, a computer lab and a TV room. Residents in the transitional units pay a portion of their income to housing. Residents include homeless men who are referred by the Seaton House Men s Shelter or through community based agencies serving homeless men. Programming at Fort York focuses on finding employment, educational advancement, community involvement and financial planning. The goal for each client is to obtain meaningful employment and permanent housing. The total project cost is $6 million. Funding of just over $3 million came from SCPI. The Province provides operating subsidies through Hostel Per Diem funding. The City donated surplus land and capital funding from its Hostel Capital Program Fund. The balance of funds comes through an NHA-insured loan from a private lender. Amik, Toronto 3 Amik provides 74 units of new housing for low-income seniors, singles and families with children who are on Toronto s social housing waiting list. Half of the tenants are from waiting lists from aboriginal housing providers. Twelve of the units are built for disabled residents requiring a resident attendant. All the units are geared to the tenants household income through funding obtained under the Provincial Rent Supplement Program. The building included the conversion of a former industrial warehouse to residential apartments, as well as the construction of a new three-storey apartment building. Amik is a Frontiers Foundations 4 project, and is their first urban-based project. 2 Information obtained from the Building Partnerships: Capital Investment in Affordable Housing and Transitional Housing in Toronto. Toronto Shelter, Housing and Support, November Information obtained from the Building Partnerships: Capital Investment in Affordable Housing and Transitional Housing in Toronto. Toronto Shelter, Housing and Support, November The Frontiers Foundation was established in 1964 to work with aboriginal communities on projects to help improve poverty. Frontiers are active across Canada and other parts of the world. Amik is the first urban-based project for Frontiers Foundation. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 12

21 Source: City of Toronto 2004 The Let s Build program provided a surplus City site on a lease basis for $1, Capital Revolving Fund loans, start-up grants and technical support. In addition, the project benefits from equalization of the property tax rate to the single family residential rate. CMHC s RRAP-Conversion and RRAP Disabled Program provided $1 million in capital support and the project also received a $75,000 interest-free loan from CMHC through its PDF program. Fundraising by the Frontiers Foundation also generated close to $400,000 in additional funding. Volunteer labour was also used in some aspects of the project (such as painting the suites, landscaping and final site clean-up) in order to reduce construction costs. The Trillium Foundation also contributed $75,000 towards a community room which is available to both project residents and the surrounding community. The balance of funds came through an NHA-insured loan from a private lender. Eglinton-Northcliffe, Toronto 5 The Eglinton-Northcliffe building is an eight-storey building with 54 affordable rental apartments. The land provided by the City for $1 on a lease basis through the Toronto Public Library, as the library occupies a part of the site. This project was developed by the Toronto Community Housing Corporation (TCHC). Thirty-two of the units are rentgeared-to-income (RGI) and the remaining 22 are market rent. The units are one and two-bedroom units with some allocated for disabled residents requiring a resident caregiver. Ten of the units are aimed towards youth. 5 Information obtained from the Building Partnerships: Capital Investment in Affordable Housing and Transitional Housing in Toronto. Toronto Shelter, Housing and Support, November KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 13

22 The total cost for this project is $7.6 million. In addition to leasing the land to TCHC, the City provided a second mortgage worth $1.9 million. It also waived building permit fees, development charges, land lease charges and interest on the second mortgage through the Capital Revolving Fund. TCHC provided $1.5 million from its own equity reserves and acquired additional construction capital through a commercial lender. TCHC also received GST and PST rebates from both the federal and provincial governments Other Projects Across Ontario The following section summarizes other housing projects across Ontario. The Woolen Mill, Peterborough 6 The Peterborough Housing Corporation is currently in the process of building a 50-unit affordable housing project in an old wool factory which was once called the Woolen Mill. This project originally began by The Peterborough Community Housing Development Corporation (PCHDC) but was unable to secure funding. The mill, which is located in a built-up area near the centre of the City of Peterborough, had been used for classrooms and offices as part of Sir Sandford Fleming College but had been empty from The College agreed to donate it to the Peterborough Housing Corporation for the project. This was essential as the value of the land and building was able to be levered for Federal Funding. The PCHDC was also successful in securing a start-up grant from the City of Peterborough of $ This grant was used primarily to create a business plan and draw up architectural plans for the project. PCHDC also applied for and received funding under the federal Residential Rehabilitation Assistance Program (RRAP) and the Federal/Provincial Affordable Housing Program. The City of Peterborough has come up with the $ per unit needed to match the federal contribution, primarily through local incentives such as waiving development charges, building permit and tipping fees and a 10 year relief from paying municipal taxes, as well as through the contribution of the property itself. Rent supplements are available for the Woolen Mill project (approximately 20). The 50 unit building will consist of 24 one-bedroom, 16 two-bedroom, 5 three-bedroom and 5 accessible apartments. The Woolen Mill project also partnered with HRDC to provide labour for the project. This effort also provided value that was able to be put towards matching funds. Currently, the project is in the process of obtaining its building permits, financing and the mortgage have been approved. It is anticipated that construction will start soon into the New Year. 6 Information obtained from Source: ONPHA at KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 14

23 Nepean Housing Corporation, Ottawa 7 In 1999, when very little affordable housing was being built, there were over 4000 people on Nepean s waiting list for affordable housing. The Nepean Housing Corporation convinced the former City of Nepean Municipal Council of the severe need for new housing. Nepean City Council agreed to provide an interest free development loan, free municipally-owned land and road works and servicing. The former Regional Municipality of Ottawa-Carleton and the new City of Ottawa provided a Homeless Initiatives grant and the federal government donated SCPI funds. As a result Farnworth Manor Homes were built. This project includes 76 units of mixed housing. Forty-eight are RGI units, ten units are special priority units and there is also a small group home for 5-6 adults with disabilities. The Nepean Housing Corporation is now working on an additional 34 units of housing. Source: The Adelaide House, Oshawa 8 The Adelaide House is a YWCA initiative that provides emergency housing to women who have been or are at risk of being abused. The Oshawa home provides counselling and life skills training. The building was donated to the YWCA in 1945 and has been enhanced through CMHC funding. The CMHC Shelter Enhancement Program (SEP) provided $1.3 million and SCPI provided $118,574. Assistance is provided to women on both a short and long-term basis. 7 Information obtained from Source: ONPHA at 8 Information obtained from the CMHC website at, KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 15

24 While residing at the Adelaide House women work with an Interim Housing Worker to secure permanent housing. They also have an Outreach Worker assist with families locating affordable housing. Some of SEP money went towards a new kitchen, handicapped accessible washrooms, an elevator, new plumbing and electrical systems and an upgraded security system. Heartwood Place, Kitchener 9 Heartwood Place is a 33 unit building located in Kitchener. The building at one time was a button factory, a heating and plumbing shop, a textile shop and a sportswear store. It has now been transformed into 12 bachelor, 12 one-bedroom and 9 twobedroom apartments. Six apartments are reserved for persons from the Waterloo Regional Homes for Mental Health, twelve apartments were offered to persons on the regional waiting list for subsidized housing and fifteen are rented to seniors, small families and people from the community. Heartwood Place was started by Mary Bales and was a partnership of local professionals, business, municipal and regional government, local charities and individual volunteers to get Heartwood Place up and running. Through CMHC s RRAP program, Heartwood Place received $450,000 towards 25 of the units. CMHC also provided Mortgage Loan Insurance of $1,676,950. Source: CMHC Information obtained from the CMHC website at, KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 16

25 Bridgewater Court, Hamilton 10 Bridgewater Court is an affordable housing development currently in the planning stages in the City of Hamilton. This project is a partnership between the City of Hamilton and Habitat for Humanity Canada. Bridgewater Court land was donated by the Provincial Government for $1 to the City of Hamilton (the City is currently in the process of finalizing the transaction). The City has also recommended that Capital Reserve Funds from the Hamilton Housing Corporation be set aside for predevelopment activities. Habitat for Humanity and the City of Hamilton have developed a Memorandum of Understanding outlining the parameters of the partnership. Bridgewater Court will be the first municipal partnership for Habitat for Humanity Canada. The preliminary development concept consists of 60 plus townhouse dwellings which will respond to range of housing needs with an innovative push to the envelope design. A portion of the housing project will provide for affordable homeownership managed by Habitat for Humanity with the balance of the condominium utilizing a number of affordable rental options owned and controlled by the City of Hamilton through City Housing Hamilton. The City and Habitat for Humanity are currently launching a number of pre-development activities, which include conceptual site and unit design provided by Dr. Avi Friedman, world renowned architect and Director of the Affordable Housing Program at McGill University, in Montreal, QC. 2.3 Success Factors Following almost a decade of inactivity in the provision of affordable housing, largely due to cutbacks in senior government funding programs, the Ontario municipalities discussed above (and others) have been successful in generating a number of new development projects in the past two years, ranging from small supportive housing facilities to larger affordable rental complexes. The forms of housing have ranged from individual group homes to rental townhouses to major apartment complexes. Many (if not most) of the initial projects in each municipality were developed on surplus municipally-owned land provided at little or no cost. Denver Colorado has provided further evidence of the potential positive results of a municipally-led affordable housing program. From discussions with staff in each area, the factors responsible for success have included: 10 Information obtained from, Keith Extance (City of Hamilton), & Habitat for Humanity website at KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 17

26 Staffing creating a permanently-staffed Affordable Housing Supply Unit with a clear mandate and role within the municipal organization supplementing permanent staff with outside resources as required (such as legal experts, quantity surveyors, appraisers, development consultants, etc. taking a flexible approach to enable staff to use available tools as appropriate and to respond quickly to emerging opportunities Governance and Regulatory Mechanisms obtaining a clearly articulated mandate from Council to move forward with Affordable Housing initiatives making strong use of the provisions of capital facilities bylaws to provide meaningful incentives for Affordable Housing development enacting regulatory changes to reduce barriers to development of Affordable Housing playing a leadership role in advocacy to senior levels of government for more local support taking a results-oriented approach, especially through regular monitoring and reporting and preparing an annual report card Financial Support obtaining ongoing financial contributions from the municipality to cover the cost of day-to-day operations and to contribute to individual Affordable Housing projects municipal incentives that encourage private and non-profit housing providers to proceed with affordable housing developments pursuing sources of senior government funding on an ongoing basis, including administrative fees for operation of programs such as RRAP and the Federal- Provincial Affordable Housing Program establishing a capital revolving fund/reserve fund to help finance Affordable Housing projects making available surplus municipal lands at little or no cost to support Affordable Housing development and encouraging other levels of government to do likewise KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 18

27 making use of layered financing where several programs and sources of funds are used in one project (e.g. Lowry land trust, Capitol Heights and Denver Dry projects in Colorado) Partnerships recognizing the multi-disciplinary nature of affordable housing and the need to involve staff from CAO s Office, Planning, Finance, Public Works, Legal, Social Services and possibly other departments in order to achieve success making extensive use of partnerships with other levels of government, non-profit housing providers, support service agencies, private developers and investors Marketing and Communications communicating and promoting the results through literature, community outreach, etc. encouraging widespread community participation by means of websites, Affordable Housing Forums, community events, newsletters, and so on. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 19

28 3 THE KINGSTON AFFORDABLE HOUSING MODEL By applying the lessons learned from the above examples with input obtained through consultation with local stakeholders, the elements crucial to the success of the Kingston Model can be set in place to equip the City of Kingston and its community partners to move ahead with an effective Affordable Housing development program. These elements include: a strategic vision for housing community housing needs integrating the Kingston Model into the municipal housing business legislative, regulatory and financial tools to stimulate affordable housing supply community capacity partnerships advocacy public consultation monitoring The following diagram illustrates the relationships between these elements and how they come together to form the Kingston Affordable Housing Model. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 20

29 Kingston Model for Affordable Housing Supply Mission To provide adequate, affordable and accessible housing that responds to the diverse needs of all residents. Principles Adequate Housing: housing in suitable locations offering modest space, amenities and quality to meet the needs of all residents of the City of Kingston Affordable Housing: housing affordable within 30% of household income of all residents of the City of Kingston Accessible Housing: housing that is physically and economically accessible to all residents of the City of Kingston Strategic Vision The City of Kingston commits to building capacity for adequate, affordable and accessible housing through progressive professional services, leadership and lasting partnerships to enhance quality of life for all citizens. Key Elements to Generate Supply of Affordable Housing Legislative Tools Regulatory Tools Partnerships Municipal Leadership Community Housing Needs Emergency & Transitional Housing Housing for Youth Supportive Housing (i.e. persons with mental illness, intellectual disabilities, severe physical disabilities and frail elderly) Student Housing New Immigrants & Refugees Aboriginal Families & Individuals Accessible Housing Affordable Rental Housing Housing for Armed Forces Seniors Housing (Independent Living) Affordable Ownership Integration with Municipal Business Financial Tools Community Capacity Ongoing Public Consultation Monitoring Led by Affordable Housing Development Committee KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 21

30 Sections 4 to15 below discuss each of the elements comprising the Kingston Model and recommend approaches through which the Model can help meet needs across the housing continuum in the City of Kingston. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 22

31 4 A STRATEGIC VISION FOR HOUSING The Kingston Model is an integral part of the City s strategic vision. City Council has adopted the FOCUS Kingston Vision Statement, which sets out the community s intent to respect and protect its built and natural environment; to recognize, encourage and support the work of its citizens and community organizations; to support business growth and seek new opportunities; to protect its heritage and cultural and natural environments for future generations and to support the efforts of local government. The Community Strategic Plan identifies an Affordable Housing Strategy as an integral part of this Vision and one of the 12 key initiatives to be acted during the life of the Strategy (to 2010). In order to ensure the Kingston Model fully supports the Community Strategic Plan, it is important that a Strategic Vision for Housing be incorporated as the overall theme of the Model. The input from the housing stakeholder workshop and from the recent Kingston Affordable Housing Forum support a Vision aimed at meeting the full continuum of housing needs through a range of measures consistent with the overall Community Strategic Plan. Accordingly, we believe an appropriate Strategic Vision for Affordable Housing that reflects the overall Strategic Vision for the City would be as follows: Strategic Vision for Affordable Housing The City of Kingston commits to building capacity for adequate, affordable and accessible housing through progressive professional services, leadership, and developing lasting partnerships to enhance quality of life for all citizens. Housing Mission In order to pursue this Strategic Vision, a Housing Mission should be articulated, consistent with the overall Mission of the City of Kingston. The City s overall Mission Statement is: to enhance the quality of life for, present and future generations by providing progressive professional services and leadership that reflect the needs of all those who live, work, visit, or play in the City of Kingston. A suitable Housing Mission consistent with the above would be as follows: To provide adequate, affordable and accessible housing that responds to the diverse needs of all residents. Three underlying principles would support this Housing Mission: KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 23

32 Adequate Housing: housing in suitable locations offering modest space, amenities and quality to meet the needs of all residents of the City of Kingston Affordable Housing: housing affordable within 30% of household income of all residents of the City of Kingston Accessible Housing: housing that is physically and economically accessible to all residents of the City of Kingston RECOMMENDATION # 1 It is recommended that the City of Kingston adopt the following Housing Vision and Mission Statement: Strategic Vision for Affordable Housing The City of Kingston commits to building capacity for adequate, affordable and accessible housing through progressive professional services, leadership, and developing lasting partnerships to enhance quality of life for all citizens. Housing Mission To provide adequate, affordable and accessible housing that responds to the diverse needs of all residents. Underlying Principles Adequate Housing: housing in suitable locations offering modest space, amenities and quality to meet the needs of all residents of the City of Kingston Affordable Housing: housing affordable within 30% of household income of all residents of the City of Kingston Accessible Housing: housing that is physically and economically accessible to all residents of the City of Kingston KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 24

33 5 COMMUNITY HOUSING NEEDS The Kingston Model is being designed to respond to the housing needs of the community. Community housing needs represent a continuum stretching from highly vulnerable individuals with urgent immediate needs and little or no resources to those whose needs are fully met by the private housing market. The diagrams at the end of this section of the report illustrate the components of the continuum of community housing needs. Essentially, greater assistance is needed as the continuum moves from right to left. Appendix 10 of this Report (Continuum of Housing Needs) provides a brief overview of the range of needs currently facing the City. Some of the most urgent needs identified in Appendix 10 include: A social housing waiting list of approximately 1,000 applicants An average shelter cost-to-income ratio of 31% among renters the highest of any Census Metropolitan Area in Ontario An increasing incidence of homelessness among youth, persons with mental illness, persons released from prison, single mothers with children and other such groups A shortage of student housing A lack of housing options for the City s seniors population, which is expected to grow by 10,000 persons in the next 25 years Overall, Appendix 10 concludes that the Kingston Model should address the following needs in the Kingston housing market: Additional emergency and transitional housing for youth, persons with mental illness, ex-offenders, victims of domestic violence and other such individuals with urgent immediate needs and few resources Additional supportive housing, especially for persons with serious mental illness, persons with developmental delays, frail elderly individuals and persons with severe physical disabilities Expansion of the supply of student housing Housing for new immigrants and refugees Housing for Aboriginal families and individuals Housing accessible to persons with physical disabilities Affordable rental housing, especially for renters of low income in need of rentgeared-to-income accommodation Housing for members of the Armed Forces Housing suited to the needs of elderly persons capable of independent living Ownership housing affordable by households of modest income KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 25

34 In addition, the report points out that future growth will require not only filling current gaps, but continuing to expand the supply over time. For example, it is estimated that at least 320 new units of rental housing are required annually to keep pace with growth. This estimate is based on maintaining the current proportion of rental units over time as the City s population grows. When asked to suggest the appropriate percentage allocation of any funding support that might be forthcoming through the Kingston Model initiative to help meet such needs, delegates 11 at the recent Kingston Affordable Housing Forum responded as follows: Table 1: Response of Kingston Affordable Housing Conference Delegates Regarding Priorities for Affordable Housing Component 0-10% of Funds 11-20% of Funds 21-30% of Funds 31-40% of Funds 41-50% of Funds 51-60% of Funds Emergency Shelters 67% 25% 8% Supportive/Transitional Housing 8% 67% 25% Rent-Geared-to-Income Rental Housing - 36% 55% - 9% - Affordable Rental Housing 8% 25% 42% 8% - 17% Market Housing 65% 20% 10% 5% - - The above table demonstrates that delegates attending the conference felt that the greatest support should be provided for rental housing, both basic affordable rental housing and rent-geared-to-income rental housing. This latter aspect demonstrates the strong support for the concept of a portable rental subsidy as outlined in the City s Community Strategic Plan. The recommended annual affordable housing development program outlined in Section 14 of this report reflects these priorities. An important element of the Kingston Model will be to update the report on housing needs on an annual basis in order to identify any changing needs along the housing continuum and thereby help direct future affordable housing initiatives. An approach to monitoring is discussed in Section 13 of this report. 11 The questionnaire used in the Kingston Affordable Housing Conference is provided in Appendix 1. For a list of all attendees at this conference, please refer to Appendix 10. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 26

35 Affordable Housing Continuum Emergency Shelters Supportive/ Transitional Housing Social Housing Portfolio & Rent Supplement Units Affordable Rental Housing Affordable Homeownership Figure 1: Continuum Of Housing Needs Funding Programs and Other Government and Community Support Housing Providers Continuum Advocacy Groups - National Homelessness Initiative: Supporting Communities Partnership Initiative, Shelter Enhancement program) - Ministry of Community and Social Services and the City of Kingston: SDL, Community Partners, Off the Streets Into Shelter, Provincial Homelessness Initiative Fund (as per s.8 of the Kingston Model) - The City of Kingston Emergency Hostel(s) Services - Community support/services to Homeless: 6 Food Banks, Meal Programs, Drop-in Centres - Ryandale - Dawn House - Kingston Youth Shelter - Harbor Light Centre (Salvation Army Hostel) - In From the Cold - Kingston Interval House - National Homelessness Initiative/ Supporting Community Partnerships Initiative - Ministry of Community and Social Services - Ministry of Health and Long- Term Care - The City of Kingston - Ministry of Municipal Affairs and Housing - Home Base Housing - Kaye Healey Homes/Elizabeth Fry - Ongwanada - Frontenac Community Mental Health - PCCC Endymion Project - Migizi Wiigwaam - Community Living - Christian Horizons - Half Way House - Portsmouth Community - Correctional Centre - Bridge House - Almost Home - Geaganano Residence - Harbor Light Centre (R) - St. Lawrence Youth Assoc. - Social Planning Council, United Way, North Kingston Community health Centre - Community Homelessness and Housing Advisory Committee - Kingston Housing and Health Coalition - Closing the Distance, Room of One s Own - Kingston Coalition against Poverty - Homes are us Kingston - Kingston Coalition against Poverty - Kingston Not For Profit Housing Association Not For Profit Housing Advisory Group - Ministry of Municipal Affairs and Housing: Rent Geared to income, rent sup, Strong communities rent sup, Rent Bank - The City of Kingston: Tenant Support - The City of Kingston and the County of Frontenac: Rent Geared to income assistance - The City of Kingston: Portable Rent Supplement Program - Kingston & Frontenac Housing Corporation - The Social Housing Registry - Town Homes Kingston - Kingston Co-op - St. Andrew Thomas Res. - Lois Miller Co-op - Porto Village - Royal Canadian Legion Villa - Weller Arms - Phoenix Homes, - Tipi Moza - Loughborough Housing Corp. - Zion United Church (RS) - Marion Community Homes - Dutch Heritage Villa - North Frontenac Housing C. - Canada Mortgage and Housing Corporation: Affordable housing program, PDF loan, Seed funding, Residential Rehabilitation Assistance Program, ERP (as per s.8 of the Kingston Model) - Ministry of Municipal Affairs and Housing and Ministry of Public Infrastructure Renewal: Community Rental Housing Program - The City of Kingston: Community Rental Housing Program contributions - Community Rental Housing Program projects - Abbeyfield Houses Society - Cataraqui Co-op - Kingston Co-op (Federal Program) - Zion United Church (Federal Program) - Marion Community Homes (Federal Program) - Canada Mortgage and Housing Corporation - Ministry of Municipal Affairs and Housing and Ministry of Public Infrastructure Renewal: Community Rental Housing program - Habitat For Humanity KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 27

36 Table 2: Kingston Community Needs Along Housing Continuum Income Percentile Household Income Based on 2001 Incomes 10th 20th 30th 40th 50th 60th 70th + $12,276 $16,587 $28,663 $39,077 $49,403 $60,869 $72,943 Affordable Rental $307 $415 $717 $977 $1,235 $1,522 $1,824 Housing Costs Ownership $43,000 $58,000 $99,500 $136,000 $172,000 $210,000 $252,500 Housing Supply Emergency & Transitional Social Housing & Rent Supp Affordable Housing Program Private Rental Market Private Ownership Market Affordable with Rent Supplement Bachelor - $504 1 Bdrm - $627 Standard Condo $88,500 Standard Condo $88,500 Det. Bungalow $150,900 Stand 2 Storey $177,500 Luxury Condo $250,000 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 28

37 6 INTEGRATING THE KINGSTON MODEL INTO THE MUNICIPAL HOUSING BUSINESS Taking a pro-active role in meeting community housing needs requires integrating the Kingston Model into the municipal housing business. In 2001, with the transfer of social housing from the provincial to the municipal level, the City of Kingston, as Municipal Service Manager, took on a host of housing-related responsibilities and established an organizational structure to enable the City to carry out these responsibilities on an ongoing basis. Section 5 of the Social Housing Reform Act, 2000, in fact, enables municipalities designated as Municipal Service Managers to conduct housing business: acquire land, construct housing projects, operate and maintain them, sell or dispose land and housing projects, and establish, fund and administer housing programs for provision of residential accommodation. Pursuing the recommended Housing Vision and Mission Statement would require taking on additional responsibilities consistent with the above legislation and incorporating new organizational elements to the City of Kingston. These are discussed below. 6.1 Community Participation and Decision-Making The framework for successfully integrating the Kingston Model into the municipal housing business must ensure a full opportunity for community participation in affordable housing initiatives and a clear and transparent municipal decision-making process. Indeed, this report has been developed with significant input from community stakeholders and with the ongoing participation of community champions. The structure for incorporating the Kingston Model into the municipal housing business, therefore, must ensure that community stakeholders have an ongoing opportunity for interactive consultation throughout the municipal decision-making process. The sections below outlining the proposed structure for integrating the Kingston Model into the municipal housing business provide a strong and ongoing interactive role for community stakeholders in providing input for municipal decision making on affordable housing initiatives. At the same time, this structure also makes it quite clear that the ultimate decision-making responsibility for all initiatives, funding programs, incentives, etc. rests with the municipal council, which itself represents the full community. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 29

38 6.2 Building an Affordable Housing Team Below we outline the proposed structure for the City s Affordable Housing Team and the recommended relationships and responsibilities for all participants City of Kingston Council and Community Services Committee The ultimate decision-making responsibility for all municipal matters is the City of Kingston Municipal Council. In the proposed structure for delivery of the Kingston Model, the guiding principle should be to ensure that all decisions on municipal policy, programs, incentives, and other related matters are to be made by City Council. The City has recently established a Community Services Committee with the responsibility to examine such issues in depth and make recommendations to Council. All matters related to the delivery of the Kingston Model, therefore, should be brought before the Community Services Committee for discussion and recommendation to Council. RECOMMENDATION # 2 It is recommended that all decisions on municipal policy, programs, incentives, and other matters related to the delivery of the Kingston Model should be made by City Council and that all such matters should be brought before the Community Services Committee for discussion and recommendation to Council Establishing an Affordable Housing Development Committee As noted above, the ultimate decision on every new affordable housing program, initiative and development project must rest with City Council. The Community Services Committee and Council must be well informed in considering each decision and should have the benefit of both staff advice and input from experienced members of the community. The review of municipally-led affordable housing development programs elsewhere found that most municipalities have established Affordable Housing Development Committees responsible for recommending overall programs and individual projects to municipal committees and council. These Affordable Housing Development Committees are typically comprised of one or two council members to ensure a direct linkage to council, senior staff and community representatives. Housing program and project proposals are brought forward to the Committee by staff (usually the Director of Housing and/or the Housing Supply Co-ordinator) and then recommended to committee and council by the Affordable Housing Development Committee. We believe an Affordable Housing Development Committee of this nature would be a key vehicle to assist the Community Services Committee and Council in making well- KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 30

39 informed decisions on affordable housing development programs and projects. The Committee would critically review staff assessments of RFP s, lend their voice in advocating to senior levels of government, communicate with the public, and provide advice to the Community Services Committee and Council on suitable levels of municipal financial involvement in particular initiatives and projects. The Committee should maintain close linkages with other City committees to ensure full coordination of all initiatives. RECOMMENDATION # 3 It is recommended that the City of Kingston appoint an Affordable Housing Development Committee to provide advice to the Community Services Committee and Council on affordable housing matters. The composition of the Committee should include one Council member, the Housing Manager, two community champions, a private developer, a non-profit housing provider, a tenant, a landlord, a representative of a community-based service agency and a financial expert. The Committee should report through the Community Services Committee of Council. The Committee should maintain close linkages with other City committees to ensure full coordination of all initiatives Multi-Disciplinary Staff Team As noted earlier, a key success factor in municipal initiatives aimed at developing affordable housing is buy-in and ongoing support from the many municipal departments ultimately involved in such initiatives. Typically, these departments include the CAO s Office, Finance, Planning, Public Works, GIS, Legal and Social Services. Other municipal contributors have also included Economic Development Departments, Transportation Departments, Parks and Recreation Departments, and so on. In some areas, representatives of Federal and Provincial Ministries have also been invited to participate in order to ensure their full involvement and support. In order to ensure the full participation of all relevant staff departments, we would suggest that an ongoing multi-disciplinary Affordable Housing staff team be established comprised of staff from the Housing Division, CAO s Office, Finance, Department of Planning and Development Services, Public Works, GIS, Legal, Social Services and the Kingston Economic Development Corporation (KEDCO). Invitations should also be extended to CMHC and the Provincial Ministry of Infrastructure and Renewal to participate on the staff team. This team would be familiarized with the mandate of the Kingston Model and contribute in a variety of ways to the success of proposed initiatives. For example, it may be necessary to obtain concurrence of planning staff to support appropriate revised standards for a proposed project, while also obtaining the concurrence of the Finance Department to a menu of incentives for the program, while also obtaining the assistance of the Legal Department in developing the Affordable Housing Agreement for the program. By meeting with the members of the staff team on KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 31

40 a regular basis, close contact would be maintained and programs expedited. The staff team would report to the Affordable Housing Development Committee. Section 2.3 on success factors also noted that successful municipalities have made use of external professional resources as the need arises (eg. quantity surveyors, architects, development consultants, etc.). The City should develop a network of these individuals and incorporate them into the process as the need arises. RECOMMENDATION # 4 It is recommended that an ongoing multi-disciplinary Affordable Housing staff team be established comprised of staff from the Housing Division, CAO s Office, Finance, Department of Planning and Development Services, Public Works, GIS, Legal, Social Services, the Kingston Economic Development Corporation (KEDCO) and representatives of CMHC and the Provincial Ministry of Infrastructure and Renewal. This team would be familiarized with the mandate of the Kingston Model and contribute in a variety of ways to the success of proposed initiatives. The staff team would report to the Affordable Housing Development Committee Appointing an Affordable Housing Co-ordinator Section 2.3 identified the presence of staff responsible for undertaking an ongoing range of activities as a critical success factor in meeting the range of local affordable housing needs. It is clear that it is the efforts of these staff, supported by strong mandates from their municipal councils and closely linked with a host of committed community partners, that have produced meaningful results. Without the close attention required to overcome the many barriers often encountered in developing various forms of affordable housing, such initiatives have little chance to succeed. In virtually all cases, the staff team is led by a housing supply co-ordinator operating from within the Social Housing Department/Division. This individual undertakes a multitude of activities aimed at expanding the supply of affordable housing at all points of the housing continuum. These activities typically include: Identifying potential opportunities for affordable housing developments Identifying and accessing senior government affordable housing funding programs Facilitating partnerships Co-ordinating RFP s inviting proposals for affordable housing developments Co-ordinating the evaluation of proposals and applications for affordable housing development Leading negotiations for proposed affordable housing projects Facilitating public education sessions to gain support for affordable housing overall and to reduce barriers to affordable housing development KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 32

41 Co-ordinating public consultation on needs identification, affordable housing issues and specific affordable housing projects Co-ordinating training to building community capacity Identifying local regulatory barriers and working with municipal staff and Council to eliminate or reduce barriers Contributing to submissions to senior governments advocating for change in policies and programs Monitoring and reporting on the results of affordable housing initiatives Without assigning these responsibilities to an experienced individual, there is little likelihood that the work required to bring affordable housing developments to fruition could be achieved. We would strongly recommend, therefore, that the function of Affordable Housing Co-ordinator be incorporated into the City of Kingston Housing Division in order to ensure the above activities are carried out on an ongoing basis. The efforts of this individual should be overseen by the Housing Manager and supported by clerical/administrative assistance. RECOMMENDATION # 5 It is recommended that the function of Affordable Housing Co-ordinator be incorporated into the City of Kingston Housing Division. The efforts of this individual should be overseen by the Housing Manager and supported by the Housing Secretary. 6.3 Establishing the Kingston Affordable Housing Centre An important idea that came forward from several individuals who participated in the housing stakeholder workshop and the Kingston Affordable Housing Forum is the establishment of a Kingston Affordable Housing Centre as the focal point for affordable housing development in the City. Establishing the Kingston Affordable Housing Centre would both create a highly visible identity for the City s Affordable Housing Program and provide a centralized location offering a wide range of assistance and resources for affordable housing development. The Kingston Affordable Housing Centre would fulfill a number of key functions, including: Serving as the location for obtaining RFP s and applications for affordable housing programs Providing assistance to help proponents put together development proposals Providing information on affordable housing programs and initiatives Providing reports and research papers on best practices in affordable housing development Maintaining an inventory of government-owned lands KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 33

42 Serving as the location for the negotiation of affordable housing deals and agreements Serving as the location for community training and education programs Serving as the location for meetings of the Affordable Housing Development Committee and the Affordable Housing Staff Team Maintaining a website providing information on affordable housing The proposed Affordable Housing Coordinator could work out of this Centre, assisted as appropriate by other members of City staff and community partners. We recommend that the City establish the Kingston Affordable Housing Centre to facilitate affordable housing development and to act as a visible demonstration of the City s commitment to affordable housing. Given the central role being played by the Housing Division in all aspects of affordable housing, it would make sense for the Centre to initially be located within the Housing Division at City Hall. This is also a highly accessible location that would facilitate access by local users. This location could be re-examined over time as experience is gained and feedback is obtained. Secondary centres such as the offices of KEDCO could also be established to help distribute information. RECOMMENDATION # 6 It is recommended that the City establish the Kingston Affordable Housing Centre to facilitate affordable housing development and to act as a visible demonstration of the City s commitment to affordable housing. The Centre should be located within the Housing Division offices at City Hall. Secondary centres such as the offices of KEDCO should also be established to help distribute information. 6.4 Taking a Flexible Approach The recent Kingston Affordable Housing Forum included a number of speakers (especially the speaker from Denver Colorado) with the same message there is no such thing as a cookie cutter approach to the development of affordable housing. Every situation is different. Every opportunity involves new challenges. Innovation and flexibility are prerequisites for success. Discussions with other municipalities involved in active supply programs find the same theme repeated everywhere. The concept of a flexible approach was, in fact, listed as one of the key success factors identified in Section 2.3. Accordingly, the Kingston Model must be viewed as a flexible and innovative approach to stimulating affordable housing supply. The Affordable Housing Co-ordinator, the Affordable Housing Team, the Affordable Housing Development Committee and City Council itself must be prepared to consider a variety of new challenges with every potential opportunity and to maintain the flexibility to arrive at unique solutions to any KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 34

43 given case, providing, of course, that the solution supports the Housing Vision, represents value for the community and is consistent with the overall Strategic Plan. It is important to understand the range of tools and resources available and to apply them in the most appropriate fashion to achieve successful outcomes. In some cases, this might mean piggybacking (layering) several government programs into one affordable housing development. For example, in some cases this might mean contributing surplus City-owned land at little or no cost. In some cases this might mean providing waivers of development charges and permit fees, or offering favourable property tax treatment, or both. In some cases, this might mean applying RRAP funds for residential conversion, SCPI funds for transitional housing and relaxed development standards in order to support a new facility for persons with special needs. RECOMMENDATION # 7 It is recommended that all participants in the Kingston Model be prepared to take a flexible approach in order to enhance the opportunity for success. The Affordable Housing Co-ordinator, the Affordable Housing Team, the Affordable Housing Development Committee and City Council itself should be prepared to consider a variety of new challenges with every potential opportunity and to maintain the flexibility to arrive at unique solutions on a case-by-case basis; providing, of course, that the solution supports the Housing Vision, represents value for the community and is consistent with the overall Strategic Plan. Below we outline the range of tools and resources that can be used to move forward with affordable housing development initiatives in the City of Kingston. The challenge will be to use these in the most effective way depending on the nature of opportunities that arise. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 35

44 7 LEGISLATIVE AND REGULATORY TOOLS TO STIMULATE AFFORDABLE HOUSING SUPPLY As noted above, by applying available tools and resources in a flexible and innovative manner, much can be achieved by communities such as Kingston. One of the most important sets of tools available to support an active Affordable Housing development program is legislative and regulatory provisions that impact on such developments. The Affordable Housing Team will have the challenge of learning how to apply such tools in an appropriate manner in order to support a variety of initiatives aimed at meeting identified needs. A number of important legislative and regulatory tools can make important contributions to the Kingston Model. These include the National Housing Act, the Social Housing Reform Act, the Municipal Act, the Planning Act, the Environmental Assessment Act, the Development Charges Act, the Brownfield s Act, the municipal regulatory framework being defined by the Municipal Housing Facilities By-Law and other relevant legislation. Also important are federal taxation policies impacting on investment in rental housing, the recently-announced GST exemption for municipalities and charitable non-profit housing corporations delivering non-profit housing, etc. This section identifies the full range of relevant legislation and regulations affecting the delivery of affordable housing and suggests ways to build these into the Kingston Model. 7.1 The National Housing Act The National Housing Act is the enabling legislation that sets out the Federal Government roles, responsibilities and powers with respect to housing. It is defined in Federal legislation as: An Act to promote the construction of new houses, the repair and modernization of existing houses and the improvement of living conditions. The Act focuses primarily on enabling Canada Mortgage and Housing Corporation (the Federal crown corporation responsible for delivering the federal housing role) to undertake a range of initiatives in support of various affordable housing programs. It also sets out the provisions through which CMHC will provide mortgage insurance to approved lenders to help support the financing of all forms of housing. The Act is comprised of several Parts that outline the roles and responsibilities of CMHC with respect to various aspects of housing. These include: KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 36

45 Part I Part II Part III Part IV Part V I Part VII Part IX Part X Part XI Part XII Part XIII Part XIV Housing Loan Insurance Housing for Rental Purposes Land Assembly Land Acquisition and Leasing Repair, Rehabilitation, Improvement and Conversion of Buildings Facilitation of Home Ownership and Occupancy Housing Research, Community Planning and International Support Public Housing New Construction Loans for Student Housing Projects Community Services Housing Development (directly by CMHC itself) These Parts demonstrate clearly that the Federal government maintains a significant array of programs and supports which can help address local housing needs. They also show that there are opportunities to deal directly with the Federal government in pursuing support for specific projects (e.g. Part VI RRAP funding for conversion of nonresidential space to affordable rental housing). A thorough knowledge of the provisions of each Part of the Act would provide the Affordable Housing Co-ordinator with a full understanding of the range of Federal programs and initiatives through which funding and other forms of support are potentially available to address a wide range of housing needs. By establishing direct and ongoing networks with CMHC and monitoring changes to the Act, the Co-ordinator would be able to identify new and emerging opportunities to take advantage of Federal programs to further the Kingston Model initiative. 7.2 Creating the Environment to Provide Municipal Incentives The Province of Ontario recently passed new legislation (i.e. the Social Housing Reform Act) and made a number of changes to existing legislation (i.e. Municipal Act and Planning Act) and regulations to provide municipalities with many of the tools necessary to address local affordable housing needs. The Province has provided these new tools for municipalities designated as Service Managers to encourage affordable housing production Social Housing Reform Act, 2000 The Social Housing Reform Act 2000 transferred to municipalities the responsibility for affordable housing. This includes responsibility for administering the existing stock of social housing, and also permits Service Managers to establish, fund and administer programs for the provision of residential accommodation in their service areas. This Act, therefore, specifically gives Municipal Service Managers such as the City of Kingston the power to undertake programs aimed at supporting affordable housing development in their service areas. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 37

46 7.2.2 Municipal Act The Municipal Act sets out the responsibilities of municipalities in Ontario and the authorities through which these responsibilities can be carried out. Recent amendments to Section 210 of the Municipal Act allow designated municipalities (i.e. service managers) to add housing as a class of municipal facilities and complement the new municipal authority for housing under the Social Housing Reform Act. The amendments give Service Managers the authority to stimulate the production of new affordable housing by providing: affordable housing producers grants affordable housing loans exemptions from or grants in lieu of development fees and charges reducing or waiving property taxes or a grant in lieu of the reduction providing land at less than market value As well, Section 110 of the Municipal Act, 2001 states that a municipality may enter into agreements for the provision of municipal capital facilities. Under S.110 a municipality may provide financial or other assistance at less than fair market value or at no cost to any person who has entered into an agreement to provide facilities under this section and such assistance may include, (a) giving or lending money and charging interest; (b) giving, lending, leasing or selling property; (c) guaranteeing borrowing; and (d) providing the services of employees of the municipality Municipal Housing Facilities Bylaw In order for Councils to provide incentives to the private sector (the authority to offer such incentives to the non-profit sector already existed prior to these amendments), particularly in areas where community improvement plans are not in place, a "municipal housing facilities bylaw" needs to be enacted by the Service Manager. Such a bylaw allows municipalities to define public interests in ways which are not considered to be "bonusing" (i.e. would not give preferential treatment). The City of Kingston has approved such a bylaw, which enables it to stimulate the production of new affordable housing in the various ways noted above. This is a powerful tool that enables the City to set in place a range of incentives to encourage and support affordable housing development and would enable the Affordable Housing Team to negotiate innovative and flexible approaches to help achieve meaningful results. A copy of Kingston s bylaw is attached as Appendix 3. The bylaw actually gives the City the authority to enter into agreements with both private and non-profit sector interests to provide affordable housing, provided the agreements KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 38

47 conform to the provisions of the bylaw. The legislation also requires that, prior to executing an agreement, the municipality must enact an enabling bylaw authorizing the municipality to enter into such agreement. As a result, any agreement to convey benefits in exchange for affordable housing shall be clearly subject to Council scrutiny. Once executed, there would be an on-going requirement for the municipality to monitor and administer the conditions of the agreement. RECOMMENDATION # 8 It is recommended that the City continue to make active use of the provisions of the Capital Facilities Bylaw to provide incentives for the development of affordable housing Planning Act The Planning Act sets out the formal planning process in Ontario and the roles and responsibilities of municipalities in Ontario with respect to this process. Section 37 of the Planning Act allows municipalities to approve density bonusing and transfers of development rights, which can be important tools in supporting affordable housing development Density Bonusing and Transfer of Development Rights Density bonusing encourages developers of new and residential projects to provide for affordable housing and various public amenities on a voluntary basis in exchange for increased developable floor space. This initiative is usually associated with downtown and other intensively developed areas where additional revenue-generating space can be offered and also where increased building size will not impose on the surrounding environment or infrastructure. Section 37 of the Planning Act authorizes municipalities to provide for increases in height and/or density in exchange for public benefits, such as heritage preservation, day care facilities and affordable housing. It is a valuable mechanism for municipalities as it is a recognized planning tool to ensure that certain public benefits are provided at the development stage. Municipalities have used the practice of transferring development rights as a means of generating funds for the preservation and/or rehabilitation of low and moderate income housing in downtown areas. Transfer of development rights programs are based on the idea that ownership of real property is comprised of a bundle of rights, including a property s development rights, which can be separated, sold and transferred to another price of property. The City of Toronto, for example, is one municipality that created funds to create affordable housing by transferring development rights. Under Section 37 of the Planning Act, municipalities are required to have enabling policies set out in the Official Plan. In Kingston, there is not currently a consistent citywide policy at this time. The former City of Kingston Official Plan (Section ) KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 39

48 specifically forbids this policy at present. The recently-approved OPA 59 for the former Township of Pittsburgh includes enabling provisions governing increased densities, but requires a site-specific amendment to the Official Plan. The former Township of Kingston also provides for increased height or density, and one of the reasons given for this is provision of a wide range of housing types. The Inner Harbour Study carried out in the early 1980 s in the former City of Kingston prior to amalgamation identified only one existing site specific policy that refers to an increase in density, in part to encourage development of assisted housing. This individual policy (Section 4.8 d) is still in effect, but has not been implemented. In moving forward with the new Official Plan for the amalgamated City, a consistent policy across the municipality on this issue should be considered. RECOMMENDATION # 9 It is recommended that Planning Staff investigate the potential for incorporating density bonusing and transfer of development rights as policies in the new Official Plan to support the development of affordable housing. Given the urgent need for affordable housing across the City, it is important that Council move forward with reviewing planning provisions related to affordable housing in the short-term to accompany the adoption of the Kingston Model. 7.3 Environmental Assessment Act The Environmental Assessment Act encourages the promotion of sustainable development to maintain a healthy environment. Its processes require municipalities and those conducting the Environmental Assessment (EA) to identify possible impacts and evaluate how they might affect the overall environment. The Environmental Assessment Act attempts to ensure the sustainable use of resources. An EA may have an impact on the supply of housing when, for example, higher densities are encouraged to minimize the impact of urban sprawl on natural resources in the surrounding areas. An EA also provides many opportunities for public involvement and input into important issues and concerns. In a community where an EA is being conducted, for example a highway extension, a community commitment agreement may be negotiated which can provide a community with certain funds or other items which the community may need (i.e new park or arena). In the case where housing is being built in Brownfield areas, an environmental assessment may be required. This is an expensive process and it also requires a lot of time to be properly completed. (see below for further information on Brownfields initiatives. 7.4 Development Charges Act Development Charges may be levied on new developments and/or redevelopments that result in an increased need for municipal services. Municipalities use the funds KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 40

49 collected to assist in the financing of growth related to net capital costs incurred by the municipality such as education, fire protection, road maintenance or utilities. The City of Kingston Development Charges By-law, in fact, enables the City to incorporate charges for the purpose of affordable housing, although at present these charges are minimal (less than $10 per unit). Indeed, the next time a new Development Charges By-law is developed, the City should document the level of service required to meet affordable housing needs and make sure the By-law incorporates a strong rationale for an appropriate charge. Given the often-significant cost of financing growth, development charges can add considerably to the cost of housing development and thereby can discourage the development of affordable housing. Conversely, using the provisions of the Capital Facilities Bylaw, many municipalities have found that reducing or waiving such charges for specified forms of affordable housing can be a powerful incentive to attract affordable housing investment. Given the relatively modest number of units being developed under such programs, the financial impact on municipalities of waiving such charges has been quite modest. In fact, given that most of these developments also support municipal smart growth initiatives and are often located within mature areas already well serviced by municipal infrastructure, the need for costly expenditures to expand such infrastructure is usually well below the cost of servicing conventional greenfield suburban development. Through its Capital Facilities Bylaw, the City of Kingston is equipped to offer such incentives. The Affordable Housing Team should make this tool an important part of the Kingston Model. RECOMMENDATION # 10 It is recommended that the City continue to make the City continue to provide financial incentives by altering or reducing municipal fees and charges or give grants in lieu of development charges of municipal fees and charges/grants in lieu of development charges an important part of the Kingston Model. It is recommended that the City investigate the feasibility and impact of allocating part of the revenues collected through Development Charges Bylaw to the proposed Affordable Housing Revolving Fund. In addition, the next time a new Development Charges By-law is developed, the City should document the level of service required to meet affordable housing needs and make sure the By-law incorporates a strong rationale for an appropriate charge. 7.5 Brownfield s Act An active program of affordable housing development can go hand-in-hand with municipal objectives to support the clean-up of underutilized brownfield sites (i.e. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 41

50 derelict and/or underutilized industrial sites) and encourage their conversion to residential use. Below we discuss recent initiatives with respect to brownfields Brownfields Initiatives Some municipalities have started to look at linking their brownfields initiatives with available affordable housing funding. Incentives provided by municipalities under their brownfield strategy could be considered municipal contributions for the purposes of obtaining matching funding from the Canada/Ontario Affordable Housing Program, should affordable housing be built on a brownfield site Provincial Legislation The Province s Brownfields Policy Review Document recommends a number of actions the province could take in this regard, including: promote Brownfields remediation and redevelopment as a provincial interest with positive values for growth management; enhance Community Improvement Plans for results on Brownfields redevelopment; allow for criteria based Community Improvement Plans where municipalities outline the criteria that best meet their circumstances; remove the requirement of the Planning Act for Minister s approval of nonbonusing Community Improvement Plans; propose a development permit system to combine zoning, site planning and minor variance processes in to a single efficient approvals process. The Ontario Brownfields Statute Law Amendment Act, 2001 is new legislation which attempts to promote brownfield development projects throughout municipalities in Ontario. The legislation provides municipalities greater flexibility in community improvement projects. It also expands the definition of community improvement projects to include, as well as physical reasons, environmental, social and economic reasons as well. This new legislation will eliminate the need for minister s approval of community improvement plans that do not involve financing incentive programs, therefore speeding up the planning process. The Act also allows municipalities to offer loans and grants to landlords and tenants of brownfield properties Kingston s Brownfields Strategy In June 2002, the City of Kingston started a brownfield development task force known as the Environmental Remediation and Site Enhancement (ERASE) Task Force. The purpose of this task force is to develop a brownfields development strategy (Community Improvement Plan, CIP) to encourage further site development of specific lands within the City. {A Community Improvement Area designated in the Official Plan was determined, by the Task Force, to be adequate for the process of brownfield development. A goal of ERASE is to encompass a portion of the urban area so an application will be made to KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 42

51 amend the Official Plan to have the Community Improvement Area be a portion of the urban area.} The purpose of the CIP is to provide a framework to deliver redevelopment programs in community improvement project areas. The five major components of this Plan are: ERASE Redevelopment Grant Program (REDEVELOPMENT) - provides grants to offset the increase in municipal taxes that results from an increase in property assessment due to the improvement/redevelopment of brownfield properties; ERASE Study Grant Program (STUDY) - provides grants to offset part of the costs of environmental studies; ERASE Planning and Development Fees Program (PDFEES) - provides rebates of various municipal fees depending upon type of use/location within the project area; ERASE Redevelopment Opportunities Marketing and Data Base Program (ROMDB) - an education, marketing and data base program to provide information to developers on ERASE programs and development opportunities; and, ERASE Municipal Property Acquisition, Investment, and Partnership Program (MPAIP) - a more proactive approach on the part of the municipality to acquire, rehabilitate, and redevelop brownfield properties, both directly and in partnership with the private sector. (City of Kingston, 2004) The City of Kingston also has a Development Charge/Impost Fees Exemption Program that excuses certain types of development charges/impost fees within the Community Improvement Project Area. It is acknowledged that brownfield redevelopment legislation, strategies and funding are still in an emerging state. The City has approved Community Improvement Plans identifying brownfield areas. It is also well recognized that, given the environmental contamination often found at brownfield sites and the high cost of clean-up to residential standards, such sites may not always offer the most affordable solution for affordable housing development. Nevertheless, given the growing support for brownfield redevelopment, the benefits to the community in terms of replacing derelict industrial sites with new residential developments and the opportunity to provide sites for affordable housing that are often within mature communities with existing municipal services, brownfield redevelopment should form an important part of the Kingston Model. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 43

52 RECOMMENDATION # 11 It is recommended that the Kingston Model consider brownfield redevelopment as a source of sites for affordable housing. 7.6 Federal and Provincial Taxation Policies Overview Government fees and charges and taxation policy add significant cost to the development of both rental and ownership housing. Developers of rental housing, in particular, receive particularly unfavourable treatment from a tax standpoint. Such taxes drive up the costs further, creating disincentives for investment. The Provincial Housing Supply Working Group, a government/industry/labour working group that includes senior representatives of the rental/development industry, has commissioned two in-depth studies of the impact of senior government taxation policies and regulations on the development of new affordable rental supply. The first study, Affordable Rental Housing Supply: The Dynamics Of The Market And Recommendations For Encouraging New Supply 12 made recommendations relating to municipal, provincial and federal jurisdictions, many of which have now been implemented. The second study, Creating a Positive Climate for Rental Housing Development Through Tax and Mortgage Insurance Reform 13 focuses on financing and taxation of rental housing primarily at the federal level. The findings of these studies are summarized below Goods and Services Tax (GST) GST is a federal taxation practice that drives up the cost of producing affordable housing. Currently, GST is payable at an effective rate of 4.5 per cent on the development costs of new rental housing; no GST is paid on the sale of existing rental housing. 14 In addition, GST regulations require that the full amount of GST be paid on the construction of a new rental unit when the first unit is rented. This may cause cash flow problems for a new building and may present another barrier to creating rental housing. Finally, because rents are classified as GST-exempt, owners of rental buildings cannot claim input tax credits for their expenses in running such buildings. Owners could only claim these credits if rents were classified as zero-rated goods Housing Supply Working Group, Affordable Rental Housing Supply: The Dynamics Of The Market And Recommendations For Encouraging New Supply, May Housing Supply Working Group, Creating a Positive Climate for Rental Housing Development Through Tax and Mortgage Insurance Reform, November Housing Supply Working Group, Creating a Positive Climate for Rental Housing Development Through Tax and Mortgage Insurance Reform, November 2002, page City of Toronto, Unlocking the Opportunity for New Rental Housing: A Call to Action, June 2001 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 44

53 The Housing Supply Working Group concluded that fully rebating new rental housing for the purposes of GST would be one of the most effective, fair and practical ways to help reduce the cost new rental housing. This recommendation, in fact, has been recently enacted for municipal and related non-profit housing corporations and acts as a major incentive for affordable housing development by such organizations Treatment of Capital Gains Prior to 1972, capital gains on rental properties were not taxable. At that time, changes were introduced making 50% of such capital gains taxable. This was further increased to 75% in 1990, but has been subsequently reduced back to 50%. In 1985 a lifetime capital gains exemption for individuals was introduced. This exemption was capped at $100,000 in 1987 and subsequently eliminated in 1994, thereby further discouraging investment in rental housing. The Housing Supply Working Group recommended that the federal government should allow rental investors to defer capital gains tax and recaptured depreciation upon the sale of a rental project if the proceeds are reinvested in new rental housing. 16 The Working Group concluded that this measure would help to unlock the existing reluctance of investors to sell properties and invest in new rental housing Capital Cost Allowance (CCA) Both of the Housing Supply Working Group s reports found that a number of restrictions introduced in the 1970 s and 1980 s inhibited the ability of investors to benefit from CCA deductions. Two examples include restrictions on pooling of rental properties to avoid recapture of CCA at the sale of a building and prohibitions on individuals and non-real estate companies from using CCA losses to reduce taxable income. The report calls for the federal government to increase the rate (from 4 per cent to 5 per cent) for capital cost allowance on new rental housing. An increase in the CCA rate would increase after-tax returns and thus provide a potential stimulus to new rental investment Deductibility of Soft Costs Since 1992, all investors in rental properties have had to capitalize soft costs (e.g. legal fees, architect fees, engineering studies) incurred in the construction or renovation of rental housing. This increases the up-front financial burden on developers of rental housing and discourages investment. The Housing Supply Working Group report recommended that the federal government change the tax system to allow investors to deduct soft costs rather than capitalize them. Restoring soft cost deductibility would increase the negative income (i.e. tax 16 Ibid, page Ibid, page 14 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 45

54 losses) in the first year and allow investors to reduce their taxable income from other sources. Any measures that have a positive effect on the marginal returns usually experienced by rental developers in the early years of a project can have a significant impact on the decision to build or not to build Capital Taxes on Rental Properties Both the federal and provincial governments should eliminate their respective capital taxes on rental properties according to the Housing Supply Working Group report. This controversial tax is felt by many in the real estate industry to discourage investment since it is applied without regard to the economic cycle, and it discriminates unfairly against capital-intensive industries Other Tax Changes The Housing Supply Working Group has identified two other changes to the tax system which could encourage investment in residential development: Allowing small landlords to qualify as small businesses for the purposes of obtaining the small business corporate rate; Allowing all investors in rental housing to use CCA losses in determining income for tax purposes --- not just principal business corporations. 7.7 Financing New Rental Development The report by the Housing Supply Working Group calls for the improvement of financing options for new rental housing. Builders and investors in Canada interested in new rental development face a number of systematic barriers in securing financing for rental projects: They require a great deal more up front equity than builders of ownership housing; They have to commit more capital for the long term than builders of ownership housing; They must obtain mortgage insurance to secure financing for most new rental developments; CMHC, the only source for mortgage insurance, is seen to have an unnecessarily difficult and uncertain process for its loan valuation and associated negotiations. These problems need to be addressed in order to provide further incentive to encourage private sector participation in rental housing. The City of Kingston could play an important advocacy role by voicing its support for such changes. 18 Ibid, page Ibid, page 14 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 46

55 7.7.1 Recent Changes to CMHC Mortgage Insurance Practices Many municipalities and supporters of affordable housing have expressed concern to CMHC about the negative impact of their mortgage insurance practices on the provision of affordable housing. As a result, CMHC recently announced some changes to these practices. In its publication entitled "Partnership Courier", June 2002, CMHC outlines these changes in practice: CMHC is adopting a more flexible and market-oriented underwriting criteria which will result in greater access to lower cost financing for rental development thus improving the business climate for rental investors at no cost to Canadian taxpayers..the changes mean that the level of insured financing available to borrowers will be based on current market trends rather than pre-determined minimums. Previously CMHC applied standard, uniform minimum underwriting criteria to all loans, regardless of the state of the local housing market or other characteristics of the loan. The underwriting improvements permit: higher advances during construction and, in some markets, higher loan amounts. a revised insurance premium that creates a system of surcharges based on risk factors, and a new system of application fees that is more balanced and reflective of the costs of underwriting. In addition, in April 2003, CMHC announced that it plans to increase access to financing of affordable housing projects through lower mortgage and insurance premiums and more flexible underwriting criteria. These changes are an important first step and signal CMHC s willingness to adjust their pricing and underwriting policies. The Housing Supply Work Group calls for CMHC to monitor, assess and report publicly the pace and impact of the business practice changes implemented in 2002 by CMHC Additional Recommendations of the Housing Supply Working Group The Housing Supply Working Group made the following recommendations to address some of the other financing problems faced by those interested in building new rental housing: The province should continue bilateral discussions with the federal government on more flexible financing terms for rental development, with particular focus on 20 Ibid, page 40 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 47

56 the reinvestment of Mortgage Insurance Fund (MIF) surpluses, CMHC s package of risk mitigation measures and opportunities for enhancing flexibility of CMHC s mortgage insurance underwriting practices. More specifically, the federal government should dedicate CMHC surpluses to the MIF reserves in order to provide greater risk capacity and enable CMHC to adopt less stringent mortgage insurance requirements. CMHC should also develop mortgage insurance products particularly suited to affordability objectives such as projects serving those most in need (this latter suggestion has been implemented by CMHC through its recent changes to mortgage insurance practices). The province should urge the federal government to undertake a comprehensive review of the ways in which federal policies act to restrict competition in the area of housing financing. In particular, the federal government should be asked to review requirements for mortgage insurance on high ratio real estate loans in the Bank Act, and for additional capital reserves for lenders dealing with private mortgage insurers. As a contingency in the event the federal government is unwilling to consider changes to their mortgage insurance provisions, the province should hold discussions with private sector financial or underwriting institutions. Such discussions could focus on provision of mortgage insurance and/or expansion of the range of financing options available to rental developers. RECOMMENDATION # 12 It is recommended that the City support the recommendations of the Provincial Housing Supply Working Group as set out in Sections 7.6 and 7.7 of this report and further outlined on the website of the Ministry of Municipal Affairs and Housing. 7.8 GST Rebate For Affordable Housing The federal government has recently announced that non-profit housing providers with municipal status will be eligible for a 100% rebate of the GST. If a non-profit housing provider already has municipal status for the purpose of the GST rebate of 57.14%, the provider can claim a 100% GST rebate on goods and services for which taxes became payable after February 1, For all not-for-profit and private sector developers, the GST Rebate for Affordable Housing Program provides a partial rebate of GST on building costs for affordable rental housing. The program is funded and operated by the federal government, through Canada Customs and Revenue Agency. New rental projects, substantial renovations or conversions commenced after February 27, 2000 are eligible to apply for funding/rebates. The only affordability criterion is that the full rebate applies where the capital costs per unit are up to $350,000. A reduced rebate applies to per unit capital costs over $350,000 and up to the maximum of $450,000 per unit. The rebate is subject to a maximum of $8,750. The rebate is KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 48

57 calculated at the rate of 36% of the actual GST incurred during development costs. The GST is often reduced from 7.0% to 4.5%. New funding programs for affordable housing that lean heavily on up-front capital grants, free land and other one-time sources of funding, may find it difficult to meet the 40% test of annual revenues that qualify them for the municipal status. Therefore, in cases of non-eligibility or in the event of a partnership with the private sector, this 36% rebate for rental construction, rehabilitation or conversion for all rental developers may be a good alternative for some non-profit housing providers. 7.9 CMHC Mortgage Loan Insurance for Non-Profit Groups Mortgage loan insurance makes it easier for non-profit groups to obtain financial backing from lenders of affordable housing projects. CMHC has developed mortgage loan insurance requirements geared specifically for non-profit groups; however many supporters of affordable housing have expressed concern to CMHC about the negative impact of their mortgage insurance practices on the provision of affordable housing. As a result, CMHC has recently made key changes to mortgage insurance for rental projects that achieve rents below new affordable target thresholds. The thresholds are set at 65% or 80% of the existing market rent distribution. These key changes came into effect in June The main features and recent enhancements for projects qualifying as affordable housing are: Mortgage premiums have been reduced 20% lower Amortization periods have been extended up to 40 years, but for every five years beyond 25 years there is a surcharge on the premium Maximum loan amounts have increased from 85% to 95% of lending value Rental achievement holdbacks have been reduced or may be waived There is more flexibility on Debt Coverage Ratios (DCR) when rents are below the specified market benchmarks. At market rents and the base premiums, a minimum of 1.2 DCR is required. CMHC will reduce this to as low as 1.0 for affordable housing projects with rents below the qualifying rent benchmarks. CMHC has also introduced a mechanism to encourage public/private partnerships. If a developer makes a contribution to an affordable housing project, the developer can qualify for a credit on mortgage insurance premiums on a future project equal to 60% of the value of the contribution. This is also applicable to non-profit groups if they are not already registered charities. These recent changes to CMHC s mortgage insurance requirements follow other changes to CMHC s practices implemented in June 2002 and signal CMHC s willingness to adjust their pricing and underwriting policies. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 49

58 7.10 Municipal Planning Policies and Practices In formulating an effective model for the delivery of affordable housing, there are a number of important land use planning practices to take into account. First and foremost, there must be an adequate supply of serviced land available at reasonable cost on which to develop residential uses. Strong emphasis must be placed on locating affordable housing in close proximity to community services and infrastructure in order to minimize servicing and transportation costs and promote municipal Smart Growth and residential intensification policies. Therefore, affordable housing development must support the growth strategies of the municipality, which are identified in the recent Final Report, City of Kingston, Urban Growth Strategy. Affordable housing development should also take advantage of surplus federal, provincial and municipal lands that may be available at low cost in accordance with Housing First policies of all levels of government. The potential to build a land bank in accordance with one of the four affordable housing strategies adopted by Council needs to also be incorporated into the model. The recent Provincial Policy Statement on Housing is a further policy guideline that likely will impact on the model. In addition, Official Plan and zoning bylaw policies and regulations must enhance and facilitate the opportunity to locate various forms of affordable housing in suitable locations. Any potential barriers to affordable housing development contained in these documents need to be examined and eliminated where possible. This section of the report identifies municipal planning policies and practices that would form a key foundation for the development of affordable housing and reviews recent municipal initiatives such as the Urban Growth Strategy to ensure the Kingston Model is compatible with and supportive of such initiatives. This section also provides advice on how to establish and maintain a formal land banking system as part of a local Housing First policy. The three existing Official Plans and Zoning Bylaws have been reviewed and any potential barriers to the location of various forms of affordable housing have been identified, as well as suggested changes that could be carried out to support the Kingston Model Adequate Supply of Serviced Land The Planning Act requires that municipalities maintain an adequate supply of serviced land to meet the projected demand for housing. This provision is important to ensure that a shortage of such land does not contribute to driving up the cost of housing and thereby act as a further barrier to affordable housing development. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 50

59 Discussions with City of Kingston planning staff and comparison with growth forecasts indicates that more than sufficient lands have been designated in the City of Kingston for this purpose and sufficient serviced lands are available to meet growth requirements for the foreseeable future. In addition, a brief review of potential intensification sites (including brownfield sites) finds considerable residential development potential within the mature urban area through infill, redevelopment and conversion. Accordingly, it appears that there is an adequate supply of serviced land to support the efforts of the Kingston Model. Given that the affordable segment of the market represents only a relatively small component of the overall housing market, it is clear that ample opportunities are available to support an active affordable housing development program. The City should continue to work with private and non-profit housing developers to ensure this supply of lands continues to be available for affordable housing development. RECOMMENDATION # 13 It is recommended that the City work with private and non-profit housing developers to ensure a supply of designated lands close to services continues to be available for affordable housing development The Kingston Urban Growth Strategy The Final Report, City of Kingston Urban Growth Strategy (July 2004) provides direction for potential areas of growth as well as the sequence in which development should occur. It is of crucial importance that affordable housing development take place in accordance with this Growth Strategy in order to fully support municipal policies in this regard. At the same time, it is important that affordable housing be located in close proximity to community services and infrastructure in order to minimize servicing and transportation costs, maximize accessibility of residents to important community services and promote municipal smart growth and residential intensification policies. The Final Report, City of Kingston Urban Grown Strategy, which was adopted in principle by Council on July , makes several recommendations including: Identifying an urban boundary and possibly an outer boundary that includes lands that will be needed to accommodate growth to the year 2026 and beyond Implementing minimum density targets throughout the urban areas of the City with higher density in the Princess Street Corridor Amending zoning by-laws to allow for mixed dwelling types KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 51

60 Taking steps to minimize constraints and enhancing opportunities for infill and redevelopment Encouraging Official Plan policies that allow more mixed-uses in the Central Business System Princess Street Corridor Linking the Transportation Master Plan s recommendation for the establishment of high frequency transit in strategic corridors with an initial focus on Princess Street Full support of the Brownfields initiatives. The Strategy further emphasizes that the Urban Growth Strategy, together with the Financial Plan, Water Servicing Concept Plan, Sanitary Servicing Plan and the Draft Official Plan Amendments be used to guide all planning, financial and infrastructural related initiatives of the City. The Affordable Housing Team will need to support these recommendations when undertaking new affordable housing development. The City s growth strategy also outlines where new areas of development should occur. The strategy outlines that in addition to the Committed Development Area that Growth Alternative 2 is preferred. This alternative encourages growth to the immediate west and east, of the Committed Development Area. The Affordable Housing Team will need to support these directions when locating any affordable developments in new growth areas. RECOMMENDATION # 14 It is recommended that the City ensure that new affordable housing development supports the policies contained in the City s Urban Growth Strategy Provincial Policy Statement on Housing The recent Provincial Policy Statement on Housing is a draft policy directive that likely will impact on the Kingston Model. If approved, it will likely set in place a number of broad policies to which the Kingston Model will have to comply. The draft document is currently in circulation around the province for public consultation and comment and is expected to be enacted into legislation early in The Policy Statement (if approved as is) would require that: All planning authorities will provide for a full range of housing types and densities to meet projected demographic, market and special needs requirements, including dedicated facilities, of current and future residents of the regional market area by: a) identifying minimum targets for the provision of housing which is affordable to low and moderate income households; KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 52

61 a) permitting and facilitating: i) all forms of housing required to meet the social, health and well-being requirements, including special needs, of current and future residents; ii) all forms of residential intensification and redevelopment in parts of built-up areas that have sufficient existing or planned infrastructure to create a potential supply of new housing units; c) directing the development of new housing towards locations where appropriate levels of infrastructure and public service facilities are, or will be, available to support current and future needs; and d) establishing development standards for residential intensification, redevelopment and new residential development, which minimize the cost of housing and facilitate compact form, while maintaining appropriate levels of public health and safety. The Draft Provincial Policy Statement also states that preference will be given to residential intensification and redevelopment. Land in designated growth areas will be used only when intensification and redevelopment are not adequate. The main differences between the current Draft Provincial Policy Statement and the 1996 Policy Statement approved by the previous government is the draft PPS would establish a requirement for municipalities to set minimum targets for the provision of affordable housing for low and moderate income households. Another change is the inclusion of special needs under permitting and facilitating all forms of housing. The Draft Provincial Policy Statement also defines affordable housing whereas the 1996 Statement did not include such a definition, but instead left it up to the individual municipality. The Draft Provincial Policy Statement proposes the following definition of affordable housing : in the case of ownership housing, the least expensive of: o housing for which the purchase price results in annual accommodation costs which do not exceed 30 percent of gross annual household income for low and moderate income households; or o housing for which the purchase price is at least 10 percent below the average purchase price of a resale unit in the regional market area; in the case of rental housing, the least expensive of: o a unit for which the rent does not exceed 30 percent of gross annual household income for low and moderate income households; or KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 53

62 o a unit for which the rent is at or below the average market rent of a unit in the regional market area. The Kingston Model will need to ensure that the provisions of the Provincial Policy Statement are fully incorporated at such time as they are adopted. They will provide further direction and support for an active affordable housing development program in the City of Kingston. RECOMMENDATION # 15 It is recommended that the City ensure that the Kingston Model incorporates the policies set out in the Provincial Policy Statement on Housing when it is finalized and adopted by the Province of Ontario Surplus Government Lands Housing First Policy The current real estate boom has driven up the price of lands designated for medium and high-density forms of housing in most parts of Ontario. This has resulted in a shortage of affordable sites suitable for development of modest forms of housing. One possible source of affordable sites comes from surplus lands owned by all levels of government. The Province has declared a Housing First policy for surplus provincial lands. The Service Manager should work with the Province to identify potential surplus Provincial sites that may be suitable for affordable housing developments and advocate for them to be made available at low cost for such purposes. The federal government, as part of its National Homelessness Initiative, also offers to make surplus federal lands available at favourable cost, primarily through the Canada Lands Corporation. It is our understanding, in fact, that the federal government maintains considerable land holdings throughout the City of Kingston, particularly in relation to the many correctional institutes located in the City. The Department of National Defence lands may also offer some opportunities to acquire surplus parcels at favourable rates at some point in the future, should portions of these lands be declared surplus. In establishing close linkages with the federal and provincial governments, the Affordable Housing Team should ensure it develops an inventory of potentially available federal and provincial lands and works with federal and provincial partners to make available suitable parcels at low cost for affordable housing development. RECOMMENDATION # 16 It is recommended that the City work with the federal and provincial governments to prepare an inventory of federal and provincial lands and investigate the availability of any surplus parcels for affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 54

63 7.11 Municipal Housing First Policy Some municipalities, such as the Cities of Ottawa and Toronto, have adopted housing first policies calling for surplus municipal lands to be used for housing purposes first. These municipalities have made many such sites available on a lease basis for $1 in return for the provision of various forms of affordable housing. Indeed, the examples of recent housing projects have largely been developed on such properties. The City of Kingston should consider a similar type of policy or one whereby all municipal properties declared surplus would be given consideration for affordable housing purposes prior to making a decision to sell the property. The City should create a comprehensive inventory of surplus municipal lands and identify which sites may be suitable for affordable housing purposes. The Memorial Arena site, 17.5 acres owned by the City, is one such example that may have some potential for affordable housing and also supports the City s Urban Growth Strategy. Local school board sites are also declared surplus from time to time; however, the City of Kingston Housing Department may not always be made aware of the availability of these sites. The City should work with local school boards to ensure that it is made aware of potential surplus school properties and that they are considered for affordable housing purposes prior to being placed for sale. RECOMMENDATION # 17 It is recommended that the City prepare an inventory of municipally-owned lands with potential for affordable housing and also adopt a Housing First policy where any surplus municipal lands are considered for affordable housing first before being placed for sale Land Banking/Land Trust Land Banking is one of the four initiatives identified through the Community Strategic Plan as a priority of Council in supporting the development of affordable housing. This program would go hand-in-hand with a municipal housing first policy for surplus municipal, provincial and federal lands. As noted earlier, most of the recent affordable housing developments in Ontario cities have taken place on lands provided by municipalities at little or no cost Staff of the City of Kingston have undertaken considerable research on this subject. The fundamental approach would be to set up a separate corporation, or Land Trust, which would acquire (usually for little or no cost) and hold such lands until they were ready for affordable housing development. Such lands could be obtained through transfers of ownership of surplus municipal, provincial and federal lands, bequests from institutions and private individuals, donations and so on. Peterborough is a ready example of a municipality that has established a Land Trust of this nature. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 55

64 The lands would then be allocated through an appropriate process (typically an RFP process such as that conducted in other municipalities offering government-owned sites for affordable housing development) for the purposes of an affordable housing development, typically in co-ordination with other funding and incentives aimed at generating various forms of affordable housing. In this way, a steady flow of lands in suitable locations would be made available at little or no cost to support an ongoing program of affordable housing development. A particular effort would be made to ensure such lands were located in areas consistent with identified needs and with the direction of the Urban Growth Strategy. A Land Trust of this nature would be a powerful resource that would form a key tool for the Kingston Model. In the report of the Manager of the Housing Division to Council in July, 2004, an overview of the purpose and options for a Municipal Land Banking Program were provided for information. The report noted that land banking can serve many purposes, ranging from building an inventory of potential sites for affordable housing developments to enabling a municipality to control the entire pace and direction of urban growth (providing they owned the majority of development lands in the entire area). A significant land banking program would also enable the municipality to capture capital gains from increases in land value over time, or at least reduce the cost of land acquisition to meet future needs. The report pointed out that a form of land banking is already carried out by most municipalities to acquire lands for future public needs such as roads and industrial parks and that a land banking program for affordable housing would simply be an extension of this practice. The report pointed out that various pieces of legislation give the City the authority to undertake a land banking program, including The Planning Act, the Housing Development Act, the Municipal Act and the Social Housing Reform Act. It then went on to discuss active land banking programs underway in various Canadian, European and American jurisdictions and the organizational structures utilized to acquire, hold and dispose of lands. The report also noted that land banking could be used to support the redevelopment of brownfield sites for affordable housing. The report went on to discuss financial implications and noted that the three main financial concerns were: availability of sufficient funds during the initial start-up phase need to balance objectives and financial resources need for a large scale funding resource The report pointed out that potential sources of revenue for a land banking program might include: Federal loans and grants transfer fees on real estate transactions KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 56

65 allocation of capital gains taxes in connection with land transactions allocation of incremental increases in property taxes resulting from increased assessments in land values The report concluded by noting that a number of steps would be carried out to explore this concept in more detail and that staff would come back with a further report on organizational, financial and policy issues related to an active land banking program. From the standpoint of the Kingston Model, it is clear that an active land banking program would be a powerful tool available to the City to provide potential sites for affordable housing development. Administering the land bank would be a suitable function for the Affordable Housing Coordinator, working in close cooperation with City Legal, Finance, Planning and Real Estate staff. RECOMMENDATION # 18 It is recommended that Council confirm its support for a Land Banking program as part of the Kingston Model initiative, to be established and operated through a Land Trust. Council should request staff to recommend the organizational, financial and policy elements comprising the program in its upcoming Land Banking Report. This program would go hand-in-hand with the recommended Housing First policy Official Plan Housing Policies Official Plans set out a community s approach to management of growth and development and for meeting identified community goals and objectives. Official Plans can provide strong support for action plans aimed at meeting community needs, particularly with respect to housing. At the same time, however, Official Plans can sometimes represent a barrier in meeting needs, should they contain policies that act to discourage needed types of housing or act to raise housing costs. It is important, therefore, to understand any barriers presented by existing Official Plans and to eliminate or reduce these barriers where possible. In view of the recent amalgamation of the former City of Kingston, Kingston Township and Pittsburgh Township to form the new City of Kingston, the development of a new Official Plan for the new City is currently underway. Until the new Official Plan is completed and approved, the provisions of the three existing Official Plans covering the three former municipalities remain in force. A brief review of the existing Official Plans of the three former municipalities now comprising the amalgamated City of Kingston enables identification of any existing barriers to the provision of affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 57

66 The Former City of Kingston Official Plan The Official Plan for the former City of Kingston contains an extensive set of housing policies demonstrating the commitment of the former City to meeting the range of housing needs facing the community. These policies are best summarized by the General Statement contained at the outset of the Housing Policy Section of the Official Plan: The City of Kingston recognizes the importance of providing adequate, affordable housing for all its citizens, and recognizes also that all housing concerns cannot be fully addressed through the designation, servicing and regulation of residential land. The City also recognizes its obligation to promote and facilitate the availability of adequate housing for those persons and households whose needs are not appropriately served by market supply. The Plan then goes on to outline a comprehensive range of policies under the headings of: General Policies Housing Stock Tenure Implementation Policies While too numerous to repeat in this report, these policies demonstrate a high level of commitment by the former City of Kingston to policies and programs aimed at meeting the full range of local housing needs. Some of the more important specific policies included: support for maintaining an appropriate supply of rental housing; supplementing, where it is deemed appropriate, the private production and maintenance of housing by providing public initiative and support and public program assistance; ensuring that housing needs are identified and met for specialized segments of the population including persons with disabilities; encouraging and facilitating private and public resources to develop not only permanent housing but also temporary shelter where specialized needs are identified; and so on. The Plan promotes partnerships with the private and non-profit sectors and working with all levels of government to address housing needs. It also supports intensification and infill as preferred strategies for residential development and encourages the provision of an appropriate supply of rent supplement and rent-geared-to-income units. It supports an active program of conversion and renewal of the City s aging housing stock and encourages all forms of housing tenure. The Implementation Policies contained in the Plan support the continued existence of a municipal non-profit housing corporation, as well as encouraging the formation of other community based non-profit and co-operative housing corporations. They enable the municipality to consider provision of financial assistance for emergency housing and give Council the authority to acquire, assemble or dispose of lands for housing KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 58

67 purposes. They support a policy of conversion of vacant commercial space on upper floors of existing buildings in the Lower Princess Street Commercial Core to residential units and enable Council to consider investigating the feasibility and potential of portable Garden Suites and accessory apartment units. Overall, these policies represent an extremely comprehensive program in support of affordable housing and demonstrate the clear commitment of the Council of the former City of Kingston to this program. They provide further support for the Kingston Model and act as an important tool to support an active program of affordable housing development. In developing the new Official Plan, a similar basic commitment should be made to such policies, updated to reflect current practices and strategic visions The Former Township of Kingston Official Plan As a more suburban municipality, the former Township of Kingston did not face the same range and diversity of affordable housing needs as the former City of Kingston. Nevertheless, its Official Plan contained a Housing Policy section which represents a strong commitment of the former municipality to support an active affordable housing program. Similar to the former City of Kingston, the Official Plan of the former Township of Kingston sets out an overall General Statement on Housing, as follows: This Plan encourages suitable, affordable housing opportunities in appropriate neighbourhood settings for all residents of the Township, consistent with the principles outlined in the Provincial Land Use Planning for Housing Policy Statement. This Statement shows clearly the commitment of the Township to affordable housing, although its reference to the former Provincial Land Use Planning for Housing Policy Statement is outdated in light of the repeal of that Statement by the former Provincial Government. Some of the most significant housing policies of the former Township promote the provision of a variety of housing opportunities, including affordable housing, throughout the Township to meet the housing requirements of a changing population; promote the efficient use of land and buildings in accordance with the general character of established, stable neighbourhoods; promote opportunities for residential intensification consistent with and sensitive to the character of existing neighbourhoods and encourage housing forms and densities designed to be affordable to moderate and low income households. The Plan also contains a specific section on Affordable Housing which conforms to the former Provincial Policy Statement. It calls for 25% of all new residential units approved in the Township to be affordable in accordance with Provincial affordability criteria and supports the development of small scale non-profit housing projects in appropriate locations, while also discouraging concentrations of non-profit housing projects. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 59

68 In preparing a new Official Plan for the amalgamated City, these policies should be taken into account, although again they need to be updated to reflect current practice. The basic message, however, is that Official Plan of the former Kingston Township also supports an active affordable housing development program and therefore is an important tool for the Kingston Model The Former Township of Pittsburgh Official Plan The Official Plan of the former Pittsburgh Planning Area did not contain a General Statement of Housing Policy, but did contain a Statement on Special Needs: Council recognizes the benefit of community-based housing for residents with a need for specialized living arrangements. The Pittsburgh Plan then went on to identify a variety of policies defining and regulating group homes and special care facilities. As a more rural area with a modest range of housing needs and limited community services, the former Township of Pittsburgh did not place strong priority on an affordable housing program. Given the Urban Growth Strategy to promote inner city intensification and infill and the importance of locating affordable housing in close proximity to a wide range of community services, the Kingston Model should target a modest level of affordable housing development in this area. RECOMMENDATION # 19 It is recommended that the City ensure that the new Official Plan under preparation for the amalgamated City reflects a comprehensive program in support of affordable housing in a similar fashion to the Official Plan policies currently contained in the Official Plan of the former City of Kingston, updated to reflect current practices and strategic visions and consistent with the new Provincial Policy Statement on Housing. These policies should apply throughout the entire area as appropriate Zoning By-Laws Much like its Official Plan, the City of Kingston is in the process of consolidating the zoning bylaws from the three former municipalities now comprising the amalgamated City of Kingston. We reviewed the residential zoning sections of the existing zoning bylaws of each of the former municipalities to determine whether they present any significant barriers to the development of affordable housing. Our comments are provided below for each former municipality. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 60

69 Former City of Kingston The zoning bylaw for the former City of Kingston (now referred to as the Kingston Central Zoning Bylaw ) permits a wide range of types of residential use. Definitions are included in the bylaw for not only conventional single, semi, row and apartment dwellings, but also for several types of special needs facilities, including senior citizen apartments, community homes, community support houses, crisis care shelters, corrections residences, recovery homes, detoxification centres and residential care facilities. There is also provision for converted houses, which permits houses erected prior to December 1, 1941 to be converted to contain up to two dwelling units in designated zones. Thus, the bylaw recognizes the diversity of needs in the City and provides opportunities for them to be located in a variety of areas. In reviewing some of the key standards regarding these uses, it is apparent that there are very few barriers to the development of affordable housing. In areas permitting apartment units (the most common form of affordable housing), minimum floor areas are: Bachelor 28 sq. metres 301 sq. ft. One Bedroom 42 sq. metres 452 sq. ft Two Bedroom 56 sq. metres 603 sq. ft Three Bedroom 70 sq. metres 754 sq. ft From our experience, these are appropriate minimum apartment sizes and would support the development of modest and affordable apartment units. Other forms of low and medium density housing (singles, semis, row dwellings) generally follow a floor space ratio system, where the maximum gross floor area permitted is one times the lot area. Here again, this does not present any barriers to the development of modest and affordable housing units. Minimum lot areas are in place in various zones and range from sq. metres (3,444 sq. ft to 7,158 sq. ft )for single family dwellings to sq. metres (2,906 sq. ft to 4,499 sq. ft ) for semis and two family dwellings. These again do not present any significant barriers to the production of modest and affordable dwellings. Parking standards in the various zones also appear quite reasonable, ranging from 1 off-street space per unit for singles, semis and most multiples to a reduced standard for seniors apartments of 1 space for each of the first two units, plus 1 space for each additional 4 units. Given that special standards have been adopted for seniors apartments, it would appear reasonable that some flexibility could be forthcoming for apartments for lower income groups that generally possess fewer cars than the average household. Some forms of residential development are also permitted within Commercial zones. These tend to recognize the character of these areas and the access to public transit and therefore are somewhat lower than in other zones. This approach supports KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 61

70 initiatives aimed at directing affordable housing to inner city locations in close proximity to community services. One area that may need to be re-examined is the minimum separation distance requirement for the various forms of special needs facilities. The zoning bylaw requires that all such facilities must be at least 250 metres (approximately 3,000 ft.) from any other such facility. This provision may represent a barrier in some areas to the development of special needs facilities. Some flexibility may be advisable in order to support the development of such facilities. The zoning bylaw also does not specifically permit accessory apartments in residential zones as-of-right. This may be presenting a barrier to the provision of more affordable housing within residential areas. It is acknowledged that the presence of a large student population and the resulting impacts on stable residential neighbourhoods contributes to concerns about permitting accessory apartments in such areas. The City needs to examine further the advantages and disadvantages to permitting such uses in order to expand the supply of affordable housing Former Township of Kingston The zoning bylaw for the former Township of Kingston (now referred to as the Kingston West Zoning Bylaw ) does not permits as wide a range of types of residential use as the former City of Kingston. Definitions are included in the bylaw for conventional single, semi, row and apartment dwellings, as well as for-profit boarding/lodging houses, group houses and accessory units. Group houses are defined as two or more separate dwelling houses located on the same lot. Accessory units are defined as dwelling units that are part of and accessory to non-residential uses and occupied by the owner or an employee of the business located on the lot. There is also a definition for a converted house similar to that contained in the Kingston Central bylaw. There do not appear to be any definitions of special needs facilities or other forms of accessory apartments. The lack of definitions for special needs facilities and accessory apartments would act as a barrier to locating such developments in this area. In consolidating the zoning bylaws, consideration should be given for expanding the range of permitted types of residential use similar to those permitted in Kingston Central. In reviewing some of the key standards regarding permitted uses, there do appear to be some potential barriers to the development of affordable housing. In areas permitting apartment units (the most common form of affordable housing), minimum floor areas are: Bachelor 37 sq. meters 400 sq. ft. One Bedroom 56 sq. meters 600 sq. ft. Two Bedroom 65 sq. meters 700 sq. ft. Three Bedroom 83 sq. meters 900 sq. ft. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 62

71 While generally reasonable as minimum floor areas, it is possible to develop affordable apartments of smaller floor areas that are still quite suitable. Indeed, the minimums in the Kingston Central bylaw are considerably lower. Therefore, in consolidating the zoning bylaws into one document, the City should consider adopting the Kingston Central minimum floor areas for apartments. Indeed, the Kingston West bylaw allows minimum floor area of 460 sq. ft. (43 sq. meters) for a one bedroom seniors unit, so there should be a strong rationale for similar minimums for affordable apartment developments. Minimum floor areas for singles, semis, converted dwellings and row dwellings are also generally reasonable but do leave some room for flexibility. The basic minimums are 1,000 sq. ft. (93 sq. meters) for a single, 900 sq. ft (83 sq. meters) for a semi and 700 sq. ft (65 sq. meters) for converted dwellings and duplexes. Here again there may be some opportunities for flexibility in these standards to permit more modest, affordable dwellings of this nature. Low and medium density housing (singles, semis, row dwellings) require minimum lot areas ranging from a low of 2,500 sq. ft. per unit (232 sq. meters) for row dwellings to a high of 5,000 sq. ft. (466 sq. meters) for single detached dwellings in the R1 zone. Here again, there may be some forms of affordable housing that could be built on smaller lots, as permitted in Kingston Central. The City should examine permitting flexibility in these standards for affordable housing developments. Parking standards in the various zones appear generally reasonable, especially given the more suburban location of Kingston West vs. Kingston Central. These range from 2 spaces per unit for singles and semis to 1.5 for maisonettes and 1.25 for apartments. Seniors apartments have a special provision of 0.5 spaces per unit. Here again, it may be possible to support slight reductions in standards similar to seniors apartments in some cases, especially for affordable apartments Former Township of Pittsburgh The zoning bylaw for the former Township of Pittsburgh permits a similar range of residential uses to those permitted in Kingston West. Definitions are included in the bylaw for conventional single, semi, duplex and apartment dwellings, as well as forprofit boarding/lodging houses, group houses and accessory units. Group houses are defined as two or more separate dwelling houses located on the same lot. Accessory units are defined as dwelling units that are part of and accessory to non-residential uses and occupied by the owner or an employee of the business located on the lot. There is also a definition for a converted house similar to that contained in the Kingston Central bylaw. Much like Kingston West, there do not appear to be any definitions of special needs facilities or other forms of accessory apartments. The lack of definitions for special needs facilities and accessory apartments would act as a barrier to locating such developments in this area. In consolidating the zoning bylaws, consideration should be KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 63

72 given for expanding the range of permitted types of residential use similar to those permitted in Kingston Central. In reviewing some of the key standards regarding permitted uses, there do appear to be some potential barriers to the development of affordable housing. In areas permitting apartment units (the most common form of affordable housing), minimum floor areas are: Bachelor 58.5 sq.m. 630 sq. ft One Bedroom 75 sq. m 807 sq. ft Two Bedroom 88 sq. m 947 sq. ft Three Bedroom+ 93 sq. m + 14 sq. m. for every bedroom over two 1,001 sq. ft sq. ft for every bedroom over two These represent extremely large minimums which would definitely contribute to significant difficulty in developing modest and affordable apartments. Therefore, in consolidating the zoning bylaws into one document, the City should consider adopting the Kingston Central minimum floor areas for apartments. Minimum floor areas for singles and semis are generally reasonable but do leave some room for flexibility. The basic minimums are 93 sq. meters. (1,001 sq. ft. ) for a single and 80.0 sq. meters (861 sq. ft ) for a semi (with some variations in special areas). Here again there may be some opportunities for flexibility in these standards to permit more modest, affordable dwellings of this nature. Low and medium density housing (singles, semis, row dwellings) require minimum lot areas ranging from a low of 325 sq. m. per unit (3,498 sq. ft ) for semis to a high of 550 sq. m. (5,920 sq. ft) for single detached dwellings in the R1 zone (with some variations in special areas). Here again, there may be some forms of affordable housing that could be built on smaller lots, as permitted in Kingston Central. The City should examine permitting flexibility in these standards for affordable housing developments. Parking standards in the various zones appear generally reasonable, especially given the more suburban location of the former Pittsburgh Township. These range from 1 space per unit for singles and semis to 1.5 for row dwellings and 1.25 for apartments. Here again, it may be possible to support slight reductions in standards for apartments in affordable developments, recognizing the lack of access to public transit in most areas. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 64

73 RECOMMENDATION # 20 It is recommended that the City ensure that the new consolidated Zoning Bylaw under preparation for the amalgamated City harmonizes regulations regarding residential development in a manner that reduces barriers to the development of affordable housing. The bylaw should attempt to reduce potential barriers caused by minimum separation distances for some forms of housing in some areas, the lack of various permitted residential uses in some areas (especially for special needs housing), and large minimum floor areas in some areas. The new Bylaw should provide the opportunity to support reduced parking standards in some cases, in accordance with demonstrated evidence of reduced parking requirements for uses such as senior citizen housing, housing for physically disabled individuals, and so on Second Suites A growing body of literature is demonstrating that second suites (also known as accessory apartments) can play and are playing a growing role in providing affordable accommodation to meet a wide range of housing needs. A recent study jointly funded by CMHC and the Ontario Ministry of Municipal Affairs and Housing (The Secondary Rental Market in Ontario, 2001) demonstrated that second suites are often among the most affordable forms of housing in a community, are particularly well suited to accommodating the growing number of lower income single person households (including students) in many cities, take advantage of existing municipal infrastructure and can provide highly affordable accommodation without need of government subsidy. Supporting accessory suites also supports important municipal smart growth strategies. Numerous municipalities now permit second suites as-of-right in all residential areas, subject to appropriate planning provisions (eg. adequate parking, access, design, etc.) and in compliance with building codes and health and safety regulations. The City of Kingston to date has resisted permitting second suites as-of-right. Given the extensive need for such accommodation (especially for the City s large student population), this policy may be acting as a barrier to meeting many of the City s affordable housing needs. At the same time, however, considerable concern has been expressed by local residents about the impact on stable neighbourhoods of expanding the supply of such units and attracting high concentrations of students to these areas. Planning staff, in fact, have devoted considerable study to the issue of minimizing the impact of student populations on stable residential neighbourhoods. Nevertheless, given the growing range of such needs, the City should examine approaches to reducing this planning barrier and supporting the expansion of this form of affordable housing. This should form an important area of study for potential inclusion as part of the Kingston Model. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 65

74 RECOMMENDATION # 21 It is recommended that the City review its policy on second suites in consultation with the broader community with a view to expanding the areas where they are permitted as of right, providing they comply with identified planning criteria, building codes and health and safety regulations Development Standards Changing existing development standards and taking a more flexible approach in applying these standards may reduce the cost to construct housing. There are various examples that have been cited in recent literature concerning affordable housing development, particularly reductions in parking requirements when affordable housing is located in inner city areas in close proximity to public transportation. Parking standards can have a significant impact on housing project affordability and development density. Depending on transit-oriented location, parking requirements may be reduced. Parking requirements may be reduced for special needs tenants, students, and senior citizens. Considering certain housing types, such as mixed-use development, parking standards may be adjusted accordingly. Thus, there may be situations which would support relaxation of some standards in order to help create affordable housing. Second, creative new design solutions could reduce the cost of housing and provide additional affordable units within developments. These new designs usually require reductions in standards such as on-site landscaped open space and parking. Zoning bylaws typically contain standards for parking, minimum lot areas, setbacks, minimum frontages and other such measures. By reviewing these on a case-by-case basis in conjunction with applications for providing affordable housing, barriers to lowering housing development costs could be reduced. RECOMMENDATION # 22 It is recommended that the City review its development standards with a view to identifying standards which could potentially be relaxed in support of affordable housing developments. It should adopt a policy of identifying criteria which would have to be met in order to qualify for such relaxed standards Housing Intensification and Downtown Revitalization Making greater use of existing infrastructure, supporting compact forms of urban settlement and discouraging urban sprawl into green areas of Kingston all support the objective of housing intensification as a way to meet a number of goals, including the creation of affordable housing. The discussion on potentially legalizing and encouraging second suites is a prime example of an action that can contribute strongly to meeting this objective. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 66

75 A further major element of an effective housing intensification strategy is promoting residential uses within downtown cores throughout Kingston. Most communities have placed priority on maintaining strong downtown cores, as they are usually considered the heart of the community and portray a clear image of that community. Including residential uses within the core contributes extensively to a strong downtown by expanding markets for local merchants, making greater use of underutilized buildings, second floor spaces and other infrastructure and adding diversity to the area. Expanding residential uses within a core area is also an important smart growth policy, as it reduces the distance between place of residence and place of employment, thereby reducing commuting and relieving the pressure for urban sprawl. Adapting second floor space to residential use and converting underutilized commercial and institutional buildings in core areas to residential use can also give rise to highly affordable forms of housing, often well-suited to meeting the growing need for nonfamily accommodation. The Official Plan of the former City of Kingston strongly supports this type of activity, both in its Housing Policy section (as previously discussed) and in Section 4.10 on the Central Business System. This latter section contains a variety of policies supporting such activity, including: It is the intent of this Plan: To encourage growth in the resident population of the Central Business System and peripheral areas to support and reinforce the community focus of the area; To permit residential growth through higher density new development and redevelopment, allowing the residential use of existing upper storeys in commercial buildings and the residential renovation and conversion of the upper floors of existing buildings. The Plan states that permitted uses in the Central Business System shall also include: such specialized residential uses as senior citizens apartments, rooming and boarding houses, crisis care facilities, hostels and recovery homes. The Kingston Model should make particularly strong use of these planning policies in order to both facilitate affordable housing development and to support downtown revitalization. RECOMMENDATION # 23 It is recommended that the Affordable Housing Team place a particular priority on encouraging affordable housing developments that support downtown revitalization and related City of Kingston intensification policies and initiatives. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 67

76 7.17 Control of Demolition and Conversion of Affordable Rental Housing The demolition of older affordable housing stock and/or conversion of existing rental housing to condominiums can play a major role in reducing the availability of affordable rental housing. Kingston has a significant demand for affordable rental housing as demonstrated in the housing demand and supply analysis; therefore, the preservation of existing affordable rental stock is as important as building new supply. The ability of municipalities to enforce policies which discourage demolition and conversion of rental housing was reduced when the previous Provincial government repealed the Rental Housing Protection Act shortly after taking office. Some municipalities, such as the City of Toronto, have taken other measures through their Official Plan, to enforce such policies. The OMB recently upheld the City of Toronto s approach of including policies in their Official Plan to regulate the demolition of existing affordable rental housing in accordance with housing needs. Locally, the conversion of rental stock to condominium ownership is restricted in some areas of the City. The Official Plan of the former Township of Kingston states: Conversion of existing rental units only be considered if the rental vacancy rate as determined by CMHC or the Township is above 3% or if 75% of existing tenants intend to purchase their units. The Official Plan of the former City of Kingston allows Council to consider applications to convert rental housing to condominium tenure. Despite the reduction in municipal power to regulate the conversion and demolition of rental housing following the repeal of the former Rental Housing Protection Act, the City of Kingston should be encouraged to examine how they can retain their existing rental stock through adopting harmonized policies across the amalgamated municipality aimed at discouraging this type of activity. The Province is also re-examining its position on the control of the demolition and conversion of rental housing as part of its review of the Tenant Protection Act. This review is currently ongoing. Throughout the spring/summer of 2004 the Province has been conducting a public consultation process on rent reform including a questionnaire. In its background documents to the consultation process the government states that it wants to ensure that municipalities with low vacancy rates have the right to protect existing rental housing from unreasonable demolition or conversion to condominiums. The questionnaire lists three strategic options for addressing this and asks the public to choose the option they feel is best. The options are: Bring in laws requiring cities and towns to have an approval process for demolition or conversion, based on rules set out by the provincial government. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 68

77 Bring in laws allowing each city or town to decide whether to have an approval process for demolition or conversion, based on rules set out by the provincial government Bring in laws allowing each city or town to decide whether to have an approval process for demolition or conversion, based on their own rules. The second question pertaining to conversion and demolition is should there be a temporary freeze on conversions and demolitions, protecting all rental properties until the government decides on a permanent solution? The results of the questionnaire and consultation process are currently being reviewed and new legislation is expected sometime within fall session. The City should monitor the Province s position on this issue as part of its development of a local policy on control of demolition and conversion of affordable rental housing. There are some instances where conversions of rental properties to condominium apartments may result in the creation of new affordable ownership units. As this is also an identified gap in the housing supply, the City may also want to consider permitting such conversions in instances where affordable ownership housing is created. The Affordable Housing Team should have the flexibility to determine whether such a proposal would be suitable for meeting affordable housing needs and how the proponent will ensure there are no negative impacts on existing tenants. RECOMMENDATION # 24 It is recommended that the City monitor the Province s consultation process on controlling conversion and demolition of existing affordable rental housing and adopt a harmonized local policy in this regard across the amalgamated City following finalization and approval of the Provincial policy Inclusionary Policy Inclusionary policy typically requires private developers to construct some proportion of new residential development for affordable housing. Fees-in-lieu, land and other contributions of an equivalent value are also sometimes accepted by local municipalities. The initial price or rent of the affordable units is set by terms of the program and first occupancy is limited to income-eligible households. Restrictions are also placed on subsequent occupants, and on rent increases and resale prices, but these vary widely by municipality. Many municipalities across Ontario had a requirement that 25% of all new housing in new subdivisions had to be affordable to households in the 60 th income percentile. These inclusionary policy requirements were removed when the Provincial Land Use Policy Statement was repealed in the mid-1990 s. The City of Ottawa re-affirmed its KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 69

78 commitment to affordable housing with provisions in its Official Plan which require 25% of all new housing to be affordable to 40th income percentile. As noted in the review of Official Plans of the former municipalities, the Official Plan of the former Township of Kingston did include a provision requiring 25% of all new housing to be affordable according to the former Provincial definition. The new draft Provincial Policy Statement is considering a form of inclusionary policy as well. A policy of this nature would represent an important regulatory tool to support an expansion of the supply of affordable housing across the City. Further study of this provision should be undertaken to determine the impacts and the feasibility of its implementation as well as further investigation into the legal authority under current legislation to adopt an inclusionary zoning policy. Should positive results of such study be identified, the City should consider incorporation of such policies in its new Official Plan and Zoning Bylaw in order to further support the Kingston Model. The City might consider waiting until the draft Provincial Policy Statement is finalized to determine whether it will include the type of requirement. RECOMMENDATION # 25 It is recommended that Planning Staff undertake further study of an inclusionary zoning policy to require a portion of all new housing to be affordable. The study should determine the impacts and feasibility of its implementation and include further investigation into the legal authority under current legislation to adopt an inclusionary zoning policy. Should positive results be identified, the City should consider incorporation of such policies in its new Official Plan and Zoning Bylaw in order to further support the Kingston Model. The City might consider waiting until the draft Provincial Policy Statement on Housing is finalized to determine whether it will include this type of requirement Kingston Transportation Master Plan The Kingston Transportation Master Plan describes the City s direction for all transportation development over the next twenty-five years. The location of roads, walkways, cycle paths and public transit nodes are critical in the shaping of a city. Their availability are influencing factors when choosing a place to live. The KTMP places an emphasis on increasing public transit usage as well as the enhancement of existing roadways. By focusing on existing infrastructure, less land will be taken up by new roads which often reduce the supply of land available for housing. Enhancing existing roadways opens up opportunities for further revitalization of some areas and may encourage residential redevelopment in underutilized areas. By locating affordable housing near public transportation the City can enhance its strategic investment in transportation and can also enhance the quality of living for individuals residing in that community. The City will need to promote and support these initiatives in its development of new affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 70

79 RECOMMENDATION # 26 It is recommended that the Kingston Model promote and support the initiatives set out in the Kingston Transportation Master Plan by encouraging affordable housing development in close proximity to public transportation and promoting affordable housing development in inner city locations and underutilized areas Cycling and Pathways Study The Kingston Cycling and Pathways Study puts a great emphasis on walking, cycling and public transit and challenges the notion that motorists should have priority in transportation planning. The study further emphasizes the need for different travelling modes to complement each other. The study also recommends that new development and redevelopment should be evaluated through site plan approval in terms of its accommodation of pedestrians and cyclists. The Cycling and Pathways study supports the City s goals of infilling and redevelopment by improving access within existing areas. Affordable housing should be located in close proximity to transit routes, bicycle paths and walkways to support this important City initiative. RECOMMENDATION # 27 It is recommended that the Kingston Model promote and support the initiatives set out in the Kingston Cycling and Pathways Study by encouraging affordable housing development in inner city and redevelopment areas that would facilitate pedestrian, bicycle and other forms of non-vehicular transportation. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 71

80 8 FINANCIAL TOOLS TO STIMULATE AFFORDABLE HOUSING SUPPLY An important factor in the delivery of affordable housing is financial support and incentives. Our research into the lack of various forms of affordable housing in many communities across Ontario finds that financial considerations are usually the greatest barrier to meeting identified gaps in most segments of the housing market. Put simply, the capital and operating cost of most forms of housing are beyond the financial capacity of many households of limited income leaving them with few options in the housing market and resulting in many households living in inadequate accommodation or in homeless situations. To be fully effective, the Kingston Model needs to incorporate as many sources of financial assistance as possible to reduce financial barriers to the development and operation of affordable housing. It also needs to offer sufficiently attractive financial incentives to attract a heightened level of investment by the private and non-profit sectors in new affordable housing supply. Below we summarize the range of available programs currently providing various levels of financial assistance for affordable housing. The Affordable Housing Team would have the challenge of ensuring the City takes advantage of as many of these sources of funds as possible to support an active affordable housing development program and to monitor federal, provincial and other funding sources to identify emerging opportunities. 8.1 Federal Funding Programs The federal government has introduced a number of programs to assist private and notfor-profit developers to create new affordable housing, as well as to maintain existing housing and provide funding to address homelessness. These are described below Canada-Ontario Affordable Housing Program This program is a joint initiative of the federal and provincial governments; however, at this time, it also requires extensive local contributions. The Canada-Ontario Affordable Housing Program represents the greatest potential available source of senior government funding contributions toward the development of new affordable housing. Average overall federal government funding under this program will not exceed $25,000 per unit. The province, municipalities and other private and non-profit partners must match this funding. Matching contributions may include capital grants for affordable housing, tax incentives, fee reductions and in-kind contributions (e.g. land). The federal and provincial funding provided under this program is an up-front capital grant --- ongoing subsidization of households is not a component of this program. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 72

81 There are three components that could be funded under this agreement: An affordable urban rental housing program to stimulate the production of new affordable rental housing by private and not-for-profit corporations; An affordable urban homeownership program to ease the demand for rental housing by assisting rental households to purchase newly built, affordable homes in urban neighbourhood revitalization areas; An affordable remote housing program to create or rehabilitate through major renovation, affordable rental or ownership housing in remote areas. The Ontario Ministry of Municipal Affairs and Housing (MMAH) administers the program. Under the current regulations, the MMAH is responsible for the allocation of units to each part of Ontario and for the ultimate approval of projects. Service Managers such as the City of Kingston are responsible for establishing Council-approved program requirements for the service area that are consistent with the federal and provincial requirements of the agreement. Service Managers also receive administrative fees for operating the program. Community Rental Housing funding is a major component of the Affordable Housing Program under the Canada-Ontario Affordable Housing Agreement. The aim of Community Rental Housing funding is to reduce the capital costs for newly constructed rental buildings, making it economically feasible for landlords to charge affordable rents. The following are some highlights of the program as it currently stands. The funding formula is currently under review by the new Provincial Government and may be altered in the near future: The Federal government will contribute grants averaging $25,000 per unit. The Province and local municipalities must match the federal government contribution. The Province will contribute $2,000 per unit in matching funding, representing a PST rebate. The new Provincial Government has committed to matching the federal contributions; however the details of this new funding arrangement have not yet been released. Municipal property tax concessions (mandatory for municipalities to participate in the program) and other municipal contributions, along with contributions from nonprofit and charitable groups will make up the balance of the federal matching requirement. Maximum rents for affordable housing units must be set at or below the average market rent as determined by the annual CMHC rental market survey 21. Service Managers may establish lower maximum rent requirements; however, this will require more contributions or concessions from the municipality. 21 Please refer to Appendix 2 for the most recent CMHC Rental Market Survey KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 73

82 Service Managers may establish maximum size requirements for units funded under the program. The Province has established maximum size requirements which will be used if the Service Manager does not identify size requirements. Private sector companies, service clubs, religious groups and non-profit housing, including co-operative and charitable organizations are eligible for funding under the program. The required affordability period for projects receiving Community Rental Housing funding will be 15 years plus a five-year phase-out. Service Managers may extend the period to a 20 years plus a five-year phase-out. The program allows for the use of a head lease whereby private non-profit housing groups enter into a head-lease as a tenant and sub-lease units through partnership arrangements with private sector developers. The lease could be for all or part of the building. The individual affordable units that are leased would be rented to tenants and the private sector owner would otherwise manage the building. The Province has put in place very detailed tendering procedures through which funding will be awarded in each service area. Kingston received an initial allocation of up to 113 housing units under the Community Rental Housing program. This represents potential federal and provincial funding of almost $2.2 million, should the community fully match the federal contribution of $25,000. The proposed municipal contribution, based on proposals currently under consideration, is $600,000, which will come primarily in the form of waivers of development fees and charges (or grants in lieu thereof) and equalization of the multiresidential property tax rate to the residential rate. As noted above, the Province of Ontario is currently reviewing its level of contributions to the Program. At the recent Kingston Affordable Housing Conference, the Minister of Housing confirmed that it is the intention of this government to match the federal contribution of $25,000 per unit to create federal and provincial funding of $50,000 per unit towards affordable housing developed under this Program. While the Minister was unable to indicate when this commitment would commence, the Ministry has been conducting consultation sessions around the Province regarding the funding levels, allocation model and administrative process for the Program and has indicated that an announcement regarding the Program will be forthcoming early in Based on the statements from the Minister at the Kingston Conference, it is anticipated that the increased level of Provincial funding should be forthcoming in 2005, which would further enhance the capacity of the City to support affordable housing developments. Recently, the Federal Government announced some modifications to permit more flexibility to the Program. New program modifications on eligibility for funding as announced in December 2004 include: Homeownership projects KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 74

83 The acquisition and repair of existing buildings for re-use as affordable housing The Community Rental Housing funding presents Kingston with an opportunity to increase the supply of affordable rental housing in the service area and should be utilized by the community to its maximum potential CMHC Proposal Development Fund (PDF) Loan CMHC provides Proposal Development Fund Loans to encourage the development of projects that provide affordable housing for seniors, the disabled or low-income Canadian households through partnership arrangements. The upset limit of each loan is $100,000. This is an annual program and it is restricted to private non-profit groups (municipal non-profit groups do not qualify). This fund is not available with CRHP funding. The funds are partially forgivable (up to 35% if rents are below the level 2 limits in the majority of the units,) and are repaid when construction of the project commences CMHC SEED Funding Seed Funding offers financial assistance to housing proponents who are in the very early stages of developing a housing project proposal that will be affordable or innovative or community-based, or any combination of these characteristics. Seed Funding is offered in conjunction with CMHC's capacity development initiative. The maximum amount of Seed Funding is $20,000 per housing project proposal. Of this amount, the first $10,000 is a grant and the second $10,000 is an interest-free loan. The second $10,000 is to be repaid when the affordable housing project commences construction. Seed Funding may be used to pay for a variety of activities in the early stages of developing a housing project proposal. These activities must be directly related to the development of the housing project proposal. All approved activities and training will normally be expected to be completed within 12 months of the date of the Contribution Agreement with CMHC. CMHC affordability criteria apply to Seed funding projects. Eligible items include: housing market studies to evaluate need and demand for the proposed project development of a business plan evaluation of procurement options inspections of existing properties preparation of specifications for renovations preliminary architectural drawings Where the housing project proponent is not yet an established organization, Seed Funding may also be used for group development activities. CMHC announces Seed Funding on annual basis. The deadline for current applications is January 10 th, KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 75

84 This Program provides a useful level of support to assist housing providers in developing business plans for new developments and should be strongly pursued by such groups in the City Residential Rehabilitation Assistance Program (RRAP) Canada Mortgage and Housing Corporation (CMHC) oversees the Residential Rehabilitation Assistance Program (RRAP) with current funding nation-wide of $50 million a year. RRAP helps low-income Canadians, people with disabilities and Aboriginals live in decent, affordable homes. There are six different program options for RRAP as described below. RRAP helps: fix up owner-occupied or private rental properties modify homes for occupancy by people with disabilities repair and rehabilitate community shelters; convert buildings from other uses to low-cost housing; facilitate neighbourhood revitalization projects; maximize the impact of funds from other sources. Below is a brief description of the six RRAP options: Rental RRAP- provides assistance to landlords of affordable housing to pay for mandatory repairs to self-contained rental units to be occupied by tenants with low incomes. Funding of up to $24,000 per unit is available for projects eligible for Rental RRAP funding. Rooming Housing RRAP provides assistance to owners of rooming houses to pay for mandatory repairs to housing intended for permanent accommodation at rents which are affordable to low-income individuals. Funding of up to $16,000 per bed is available for Rooming House RRAP. RRAP for Non-Residential Conversion provides assistance to owners of nonresidential buildings to convert their structure for use as permanent rental accommodation at rents that will continue to be affordable. Funding of up to $16,000 per bed or $24,000 per unit is available for RRAP Conversion. Homeowner RRAP provides assistance to low-income homeowners to bring their properties up to minimum health and safety standards. RRAP for Persons with Disabilities provides assistance to households occupied by low-income persons with disabilities who require special modifications to their residence to improve access. RRAP for Reserves provides assistance to low-income homeowners on reserves to bring their properties up to minimum health and safety levels. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 76

85 RRAP has emerged as an extremely effective form of support for the expansion of the supply of affordable housing, especially through the RRAP Non-Residential Conversion Program. Several municipalities, in fact, have taken on the administration of RRAP on behalf of CMHC, largely to give them the ability to strategically direct these funds into new municipally-supported affordable housing development projects. The AMIK project in the City of Toronto (as shown earlier in this report) is one such example. Discussions with staff at the City of Kingston found that the City previously did administer RRAP with good success, but that the administration had been turned over to an outside agency a few years ago. Staff indicated that they felt that returning the program to municipal administration as part of the Kingston Model initiative would bring many benefits; not only the ability to direct the funds in support of strategic priorities, but also the ability to earn administrative fees available through the Program that would enhance the City s ability to deliver affordable housing programs. Initial discussions with CMHC also found an interest in returning administration of the Program to the City. The timing is appropriate, as CMHC sets its Program budget in March. Accordingly, it would appear to be in the City s best interest to consider requesting CMHC to return the administration of the Program to the City. RECOMMENDATION # 28 It is recommended that the City approach CMHC with a view to taking over administration of the RRAP Program. The City should review the most appropriate internal organizational structure to deliver the program and the financial impacts of undertaking program administration Emergency Repair Program (ERP) The Emergency Repair Program assists low-income homeowners or occupants in rural areas to make emergency repairs required for the continued safe occupancy of their houses. Only those repairs urgently required to make the homeowners or occupants house safe are eligible for assistance. Included are repairs to heating systems, chimneys, doors and windows, foundations, roofs, walls, floors, ceilings, vents, louvers, plumbing and electrical systems. Financial assistance from CMHC is in the form of a contribution, which does not have to be repaid. The total contribution depends on the cost of the repairs and area. The maximum amount available to a resident of the Kingston area is $6,000/unit. This program could also be administered by the City in much the same fashion as RRAP. RECOMMENDATION # 29 It is recommended that the City approach CMHC with a view to taking over administration of the Emergency Repair Program. The City should review the most appropriate internal organizational structure to deliver the program and the financial impacts of undertaking program administration. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 77

86 8.1.6 Shelter Enhancement Program (SEP) The Shelter Enhancement Program (SEP) is a program found under the National Homelessness Initiative. SEP offers financial assistance for the repair, rehabilitation and improvement of existing shelters for women, children and youth who are victims of family violence as well as the acquisition or construction of new shelters and second stage housing where needed. Assistance is in the form of a fully forgivable loan and is available in all areas including First Nations Supporting Communities Partnership Initiative (SCPI) Supporting Communities Partnership Initiative (SCPI) is a community-based partnership initiative that helps communities develop a continuum of supports planned to address the issue of homelessness, identify the supports already in place to address homelessness and highlight where additional supports are needed. The continuum of supports is based on the idea of developing a seamless web of services and supports that people need to make a successful transition from the street to a more stable and secure life. SCPI requires that communities match funds for this initiative. Kingston has been identified as a community with significant absolute homelessness problems and as a result, received approximately $503,477 in funding to cover the three year period April 1, 2003 to March 31, This funding is one of the main opportunities for addressing the need for additional emergency and transitional housing in Kingston, as well as services for homeless individuals or those at risk of homelessness. As such, it is an important funding source for the community and should be incorporated into the Kingston Model. The City should also advocate strongly to the federal government to continue SCPI funding past the announced deadline of March 31, 2006 in view of the growing need for emergency and transitional housing in Kingston. The City of Kingston has identified five priority areas for the SCPI funding as follows: 1. transition to permanent housing 2. shelters and support to chronically homeless 3. day services --- counselling, peer support and mentoring for shelter clients and residents 4. discharge planning, meal services. Coordinating through community planning and coordinating bodies 5. coordination of research, services and information. Six submissions in Kingston were recommended for funding for the delivery of services to individuals and families who are homeless or at-risk of homelessness. Proposals recommended under the second wave of SCPI funding will address the first three priority areas under the Community Plan, specifically transition to permanent housing with supports, transitional housing, shelters and support to chronically homeless, as well as day services in the form of counseling, information and support. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 78

87 The last two priorities under the Community Plan, coordination of discharge planning, meal services, food needs, coordination of research, services, and information were not addressed in the application process CMHC Homeownership Education and Training Program Some initiatives are currently underway at CMHC to help provide specific education on home ownership for renters who might be capable of moving to home ownership. CMHC has developed a Home Ownership Education and Training Program aimed at renters who are considering becoming homeowners. Helping renters to move into homeownership through education and training is one way to free up some rental units in the area and to provide the opportunity to households of modest income to achieve greater stability in their housing and to start building equity. Kingston should consider hosting such a training program to meet the identified need of making home ownership an option for more residents. The City may want to consider co-hosting the training program with CMHC and the local real estate board. 8.2 Provincial Funding Programs The Provincial Government has recently announced a number of program initiatives aimed at low income and special needs households. These include the Rent Bank and Energy Emergency Fund, as well as changes to the rent supplement program, including a provision to set aside a share of subsidies for victims of domestic violence and other special needs clients. In addition, there are a number of other provincial programs that have been in place for a few years which are aimed at addressing homelessness and special need. While not all programs may be applicable at this stage, the City should be aware of these funding techniques as options. These programs are described below Provincial Homelessness Initiatives Fund (PHIF) The Provincial Homelessness Initiatives Fund (PHIF) was established to assist Service Managers with their new role as local service system manager for homelessness. PHIF is a $10.4 million annual program available to municipalities to fund innovative projects that provide direct services to homeless people or those at risk of homelessness. PHIF projects are intended to help get people off the street, help people get out of hostels and into permanent housing, and help people at risk of losing permanent housing. Municipal programs funded by PHIF include rent banks, street outreach, housing registries, and landlord-tenant mediation. The City of Kingston receives annual funding of $91,800 from PHIF. This funding helps pay for the administration of rent bank programs and contributions to Housing Help Centre costs. This funding source is also an important element of the Kingston Model. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 79

88 8.2.2 Off the Street, Into Shelter Fund (OSIS) Since January 1, 2001 a new provincial fund, the Off the Street, Into Shelter Fund, has been available to municipalities to help people get off the street and into shelter. The fund will be available during the fiscal year to address the most severe weather conditions. Depending on municipal response, this new fund could provide money to hire new street outreach workers. These new workers would get to know homeless people as individuals, help them to understand that improvements are being made to hostels, and encourage them to come into shelter. The fund is available to all municipalities. The maximum amount available to a municipality is equal to 5 per cent of its 1999 gross spending on emergency hostels. It is up to municipalities to request the money. For the first year, the province provided 100 per cent funding; however, in subsequent years, the province will pay 80 per cent and municipalities will pay 20 per cent, in the same way that annual emergency hostels costs are cost-shared. The City of Kingston currently does not receive funding under this provincial program. The City may want to consider requesting funding under OSIS, if an interest is expressed by community agencies dealing with homelessness Redirection of Emergency Hostel Funding Initiative (REHF) On March 23, 1999, the Province announced the Redirection of Emergency Hostel Funding Initiative. The objectives of this initiative are to: Change the culture and practice of service delivery to the homeless from shortterm emergency use to more effective responses of prevention and early identification which will help people find and keep stable living situations; and To develop an opportunity for creative and innovative approaches to service delivery. The initiative allows municipalities providing emergency shelter service to use up to 15% of their emergency shelter funding on programs. Municipalities submit detailed business plans for each program that demonstrates that this funding will ultimately reduce current or anticipated hostel use and costs. Kingston does not currently receive funding from the Redirection of Emergency Hostel Funding Initiative. If appropriate, the City may want to consider submitting a business plan for funding under REHF. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 80

89 8.2.4 Rent Bank The new program will help tenants with short-term arrears to avoid eviction. The program will provide $10 million to municipalities that currently operate or wish to establish a rent bank. A rent bank is a short-term funding mechanism through which low income tenants receive assistance to address arrears. Currently, about half of the 47 Service Managers have a rent bank in their area, disbursing approximately $1 million annually. The average amount received by applicants is approximately $1,500. These programs may either be administered directly by the Service Manager or by a community agency. The municipalities will also be given some flexibility in establishing eligibility criteria to reflect local needs. Tenants can only apply for assistance once every two years, to a maximum of two month s rent. Once approved, these funds will be paid directly to the landlord. Up to 10% of the funding can be used to cover administrative costs. Service Managers will receive funding based on their share of the Ontario population. Kingston, along with its community partners, Central Frontenac Community Services and the Salvation Army Community and Family Services, operated a rent bank prior to the provincial funding announcement. Kingston has received one-time funding under this program totalling $121,477 and will use these funds to enhance its current rent bank program Energy Emergencies This fund will provide $2 million for one-time emergency assistance to assist low-income households (including those on social assistance) across Ontario to deal with payment of energy utility arrears (including hydro, gas, oil and others), security deposits and reconnection fees. The maximum amount of assistance will be equal to two months energy arrears, and security and reconnection fees. Eligibility will be based on longterm ability to manage energy costs. Households will only be able to receive assistance once, except under exceptional circumstances. The City of Kingston received one-time funding of $23,770 under the Energy Emergencies Program Strong Communities Rent Supplement This program assists municipalities to provide affordable housing, based on local needs. When fully implemented, the program could provide up to $50 million annually to households across Ontario. In many areas, Service Managers have been unable or unwilling to take up their full allotment of units under the current rent supplement program. Lack of interested landlords, along with uncertainty over long-term provincial funding has contributed to this problem. However, this has not been the case in Kingston, where most of the funding is fully utilized. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 81

90 Under the new initiative, the process by which the municipalities invoice the Province based on subsidy flow will be eliminated in favour of a fixed funding approach. Once the Service Managers have developed their plans to disburse these funds, the money will be distributed to them. The fixed funding formula will mean that, as local rents rise, the number of households that can be assisted will decline. Essentially, the program should provide greater flexibility than existed under the previous provincial rent supplement program. This includes the ability to provide subsidy directly to tenants, as compared to the landlord, as is the case under current guidelines. Additionally, Service Managers will be able to enter into rent supplement agreements in-situ, which would allow tenants to remain in their units by signing agreements with their existing landlords. This provision is made possible by allowing greater flexibility around tenant selection. Municipalities are no longer tied to waiting lists and provincially designated special priority provisions. Finally, there is increased flexibility over location. Basically, tenants in most rental units are now eligible for assistance. Approved expenditures under this program for the City of Kingston total $466,805. Given the funding limits under this program, the City of Kingston Housing Division is proposing the option for a municipally-financed portable subsidy program to enable more households to receive rent-geared-to-income subsidy. This is discussed later in this report. Given the effectiveness of rent supplements in enabling households of lower income to afford rental housing, the Province should be encouraged to expand this funding where possible. The demonstration projects described in Section 15 of this report demonstrate the importance of including rent supplement units in new developments in order to help them both meet important housing needs and to provide a stronger revenue base for project rents. The City should try and tie new rent supplement units to new affordable development projects wherever possible in order to contribute to the financial feasibility of these developments Supportive Housing/Special Needs The new rent supplement program will reserve approximately 20% of funding for supportive housing. This will include second-stage housing for victims of domestic violence, and other special needs individuals including: the developmentally disabled; mental health clients (substance abuse); and those requiring long term care. This is consistent with the previous rent supplement program. Essentially, 20% of units have been designated for these special needs. This funding is divided evenly between the Ministries of Health/Long Term Care, and Community and Social Services. These Ministries have subsequently targeted their funding toward the previously-mentioned groups. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 82

91 These Ministries and their agencies will continue to be able to select clients from their own lists for rent supplements, as was the case under the previous program. Now, they will also benefit from the greater flexibility around subsidy model and unit location described earlier New Places to Live Initiative This program is aimed at creating new accommodation for persons with developmental delays. In May 2001, the Government of Ontario invested in a five-year plan of $197 million to enhance service and supports for people with developmental delays. The funding includes $67 million in capital invested over five years to create new places to live in the community. Funding for the program is allocated by the Ministry of Community and Social Services. In the first two years, $104 million from the multi-year budget was allocated for the creation and provision of the following: - More than 380 new places to live; - More than 2,340 more families received Special Services at Home; - Out-of-home respite for more than 700 new families; - Day programming for more than 370 additional people; - Funding to all developmental services agencies to hire and retain quality caregivers. Since the program was launched in May 2000, more than 1,500 individuals have been served in more than 60 projects across Ontario. In July of 2003 the Government of Ontario announced the creation of another 205 new living places for persons with developmental delays. The Ministry will be providing $15.4 million in capital and $10.3 million in operating funding to develop a variety of accommodation options for people with developmental disabilities in various communities across Ontario. In order to ensure that the funds are maximized, the Ministry developed a new capital selection process, which requires municipal service providers to submit proposals in relation to the provision of accommodation services to persons with developmental disabilities. The request for proposals was established in order to ensure the highest quality of services and the most efficient use of resources. Community agencies in the City of Kingston did not receive any funding allocations under the New Places to Live Initiative. Given the limited funds available for supportive housing initiatives, the City of Kingston may want to advocate to the Province on behalf of community agencies for some funding to be allocated to the Kingston area, as appropriate. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 83

92 8.2.9 Ministry of Health and Long-Term Care The Ministry of Health and Long-Term Care (MOH-LTC) has the provincial mandate to provide services to those aged 16 or older through such programs as care for the mentally ill, long-term care and home care. MOH-LTC provides supportive housing funding for frail and/or cognitively impaired elderly persons, people with physical disabilities or acquired brain injuries and those living with HIV/AIDS, when their requirements justify the need for the availability of 24-hour, on-site assistance. MOH- LTC provides funding to support service providers through a number of programs, including the Supportive Housing Program, Acquired Brain Injury Program, Attendant Care Program and HIV (AIDS) Program. The District Health Council determines the need for supportive housing in a community. Funding from the Ministry of Health and Long-Term Care is provided on an equity site system. Each of the 38 regions is assessed to determine per capita funding, current funding levels, demographics, project need, and utilization of home care. Areas are ranked by need for additional funding. Community agencies in the City of Kingston have not been allocated any new funding from MOH-LTC. Kingston may want to lend its support to community agencies interested in pursuing funding from MOH-LTC to address the identified local needs for special needs housing (i.e. persons with mental illness, severe physical disabilities and frail elderly) since this is one of the few funding sources available for special needs housing. RECOMMENDATION # 30 It is recommended that the Affordable Housing Team ensure that the City takes advantage of as many of sources of federal and provincial funds as possible to support an active affordable housing development program and regularly monitors federal, provincial and other funding sources to identify emerging opportunities. The City should continue to advocate strongly for increased levels of ongoing federal and provincial financial support to assist in the provision of all forms of housing and support along the housing continuum. RECOMMENDATION # 31 It is recommended that the City try and tie new rent supplement units to new affordable development projects wherever possible in order to contribute to the financial feasibility of these developments and continue to request expanded funding for additional units under this Provincial Program. 8.3 Additional Forms of Affordable Housing The following initiatives are additional examples of affordable housing which may be encouraged by the Kingston Model. While it is not expected that large numbers of units would be produced through these approaches, the City should explore the potential to KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 84

93 work with local groups that may be interested in using these approaches, especially Self-Help groups such as Habitat for Humanity, which has actively been producing small numbers of affordable homeownership units in the City and should be supported wherever possible to expand its output Self-Help Housing Model Growing interest has been expressed in the Self-Help Housing model. This model involves the extensive use of volunteer labour (including the future occupant) and donated supplies and materials to produce affordable housing. A growing number of non-profit agencies, such as Habitat for Humanity and the Frontiers Foundation, are active across Canada in co-ordinating the production of both ownership and rental housing using the Self-Help model. Frontiers, in fact, has assisted in the development of some 3,000 home ownership units across Canada in this fashion and recently also completed an affordable rental housing project in the City of Toronto which incorporated volunteer labour as well as donated supplies to help reduce costs. Habitat for Humanity maintains an active local chapter in Kingston and has expressed a keen interest to partner with the City to help expand opportunities for affordable home ownership using the Self-Help Model. The Affordable Housing Team should pursue a partnership of this nature and explore innovative approaches to providing lands at low cost and other supports to Habitat to assist in such efforts Rent-To-Own Model Rent-to-own housing means housing where families pay monthly rental payments to a not-for-profit organization which owns their home, with the intent that the families would eventually purchase the home from the organization. Each month, the not-for-profit organization keeps a portion of the rental payments to cover its costs and the balance goes towards a down payment for the future purchase of the home. Much like the Self- Help model, there is growing interest in this approach to affordable home ownership. The City should identify opportunities to partner with local non-profit housing corporations to put together some initiatives of this nature as part of the Kingston Model Life Lease Housing For Seniors This type of housing is owned and managed by a community-based, not-for-profit group. Life lease housing provides residents with the right to occupy the unit for the rest of their life in exchange for a lump sum upfront payment and small monthly maintenance fees. When residents move out, they receive a return on their investment and the organization resells the unit to another older adult Home Ownership Co-operatives This is housing where a homeowner must make a five year minimum commitment to be part of a co-operative in exchange for an equity loan from a community based co- KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 85

94 operative. During the five year period, the co-op is the owner of the homes which make up the co-operative, but individual families pay mortgages on their homes, and they are the owners. The co-op provides group resources and security to help families make the transition to home ownership. At the end of the five year period, the equity loan is forgiven, and families have the option of assuming their mortgage and taking title of their home. RECOMMENDATION # 32 It is recommended that the Affordable Housing Team explore partnership opportunities with local organizations pursuing innovative forms of affordable housing, such as affordable home ownership initiatives being undertaken by the Kingston Chapter of Habitat for Humanity, to expand the range of housing alternatives available at all ends of the housing continuum. 8.4 Portable Rent Subsidy As noted earlier, the Provincial Rent Supplement Program caps the available funds for rent supplement subsidies to municipal service managers. The City of Kingston has identified a locally-funded portable subsidy program as one of the four affordable housing strategies adopted as part of the Community Strategic Plan. In view of the limits on the Provincial Program and the significant need to expand the supply of rentgeared-to-income units in Kingston, this program would represents a critically-important initiative. Data from the City s Housing Division indicates that the current average household rentgeared-to-income subsidy is about $400 per month, or $4,800 per year. Discussions with staff indicate an expectation that a portable subsidy program would require slightly higher levels of subsidy due to such aspects as utilities and the difference in the nature of the apartments that would be encountered. Therefore, they suggest using an estimate of approximately $500 per month, or $6,000 per year for each unit being subsidized. The Co-ordinated Access Waiting List for the City currently contains just over 1,000 applicants seeking RGI housing. Given the limited financial resources available to the municipality, it would be unrealistic to suggest a municipally-financed program of this scale. However, working towards meeting 10% of the current waiting list (i.e. 100 units) through this program would appear to be financially viable and would indicate a serious municipal commitment to housing those in need. Utilizing this figure as a guideline, establishing a program of 100 units would have an estimated annual subsidy cost of approximately $600,000 (excluding program administration costs). In order to enable the City to carefully move forward with the program and ensure the appropriate administrative systems are set in place to operate it in a cost-effective manner, we would suggest that a pilot program that would start with 25 units in the first year and add a further 25 units per year for the following three years would be an appropriate approach for establishing this important new program. This KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 86

95 would cost the municipality approximately $150,000 in subsidies in the first year of operations, escalating to $600,000 by the end of year four. At that time, an evaluation should be undertaken to determine whether the program was meeting its goals and objectives and should be continued, expanded or terminated. The portable subsidy program would play an instrumental role in not only assisting those in need, but also providing support for the development of new affordable housing projects by incorporating tenants receiving these subsidies into such developments. The Ontario Ministry of Housing recently indicated that it was considering expanding Provincial funding available to Service Managers for rent supplement purposes. Were this initiative to proceed, it might provide sufficient support to enable the City of Kingston to reduce its own local contribution to a Portable Rent Subsidy Program. The City should monitor carefully Provincial announcements in this regard and adjust the scale of its municipally-financed program accordingly. RECOMMENDATION # 33 It is recommended that the City commence a pilot Portable Rent Subsidy program that would start with 25 units in the first year and add a further 25 units per year for the following three years. At that time, an evaluation should be undertaken to determine whether the program is meeting its goals and objectives and should be continued, expanded or terminated. The Portable Subsidy Program should also be used to provide support for the development of new affordable housing projects by incorporating tenants receiving these subsidies into such developments. The City should also monitor Provincial announcements regarding Provincial Rent Supplement Program funding for Service Managers and adjust the scale of its municipally-financed program accordingly. 8.5 Other Municipal Financial Incentives Development Charges, Fees and Levies As noted earlier, development charges and fees have been cited by many studies on affordable housing barriers, including the recent Ontario Government Housing Supply Working Group report, Affordable Rental Housing Supply: The Dynamics of the Market and Recommendations to Encourage New Supply (May 2001). On the other hand, development charge revenues are used to fund municipal capital expenditures for service requirements relating to growth. Conversely, the reduction or elimination of such fees and charges can act as a strong incentive to the development of affordable housing. As noted earlier, the City of Kingston has approved a Capital Facilities Bylaw enabling the reduction of such fees and charges or grants in lieu of such charges. The Bylaw also permits the City to collect charges to go towards the provision of affordable housing. The list of fees and KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 87

96 charges to be reduced or eliminated for affordable housing projects is included in Appendix 4. It should use this tool actively to support affordable housing developments Municipal Taxation Policies Another major contributor driving up rents in many areas is the local property tax on multiple rental housing. This is a problem common to many municipalities in Ontario and has been well documented in several studies, most recently the Ontario Government Housing Supply Working Group. Multi-residential rental housing in most Ontario communities is taxed at a much higher rate than ownership housing and acts as a barrier to offering affordable rental housing. Different taxation rates in a number of Ontario municipalities are shown below. Table 3: Ratio of Multi-Residential to Residential Tax Rates, 2000 Municipality Ratio of Multi-Residential to Residential Tax Rate Toronto Hamilton London Ottawa Sudbury Kingston Source: Affordable Rental Housing Supply, May 2001 and Municipal Finance Departments This Table illustrates the current multi-residential and residential tax rates and the ratio of the multi-residential rate to the residential rate in several municipalities. As shown, there is an opportunity to make rental housing more affordable by equalizing the multiresidential tax rate to that of the residential tax rate. The City of Kingston has already passed a bylaw (Bylaw ) which establishes a new 35-year multi-residential property tax rate that is set equivalent to the residential/farm tax ratio. The Table below illustrates the potential impact of reducing property taxes for multiresidential units. Applying the City of Kingston equalized rate to a sample 20 unit building and a sample 100 unit building shows that annual tax savings of $300 per unit on a 20 unit building would have a net present value of $92,200 over a 35 year period at an interest rate of 6%. The tax savings for this hypothetical project is roughly the equivalent of a $92,200 capital contribution for the construction of the rental apartment building. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 88

97 Table 4: Value for City of Kingston Tax Equalization Based on Present Value Per Unit Sample 20 Unit Sample 100 Unit 35 Year Present Annual Tax Savings Building Building 6% p.a. $ 300 $ 4,610 $ 92,200 $461,000 $ 900 $ 13,831 $276,620 $1,383,100 $ 1,500 $23,052 $461,040 $2,305,200 $ 2,100 $32,273 $645,460 $3,227,300 Source: Community Rental Housing Program Guidelines The Community Rental Housing component of the Canada-Ontario Affordable Housing Program currently requires that, in order to qualify for funding, municipalities must bring the taxation rate for multi-residential rental housing projects built under this program to a level equal to the single family residential rate. There are a few ways that municipalities can meet this requirement. It must also be noted that the new Provincial Government is currently reviewing this program and may introduce changes to this requirement. Under the Assessment Act, a new 35-year multi-residential property tax class may be adopted by municipalities (by October 31 in any given year for the ensuing year) and the rate set lower than the existing multi-residential rate. In this case all new multiresidential buildings, including those under the Community Rental Housing program, would benefit. Alternatively, municipalities, through a municipal housing facilities by-law, may provide grants in lieu of property tax reduction on specific properties. This would enable the municipality to reduce the effective property tax only for those buildings receiving incentives specified in the by-law. Recent construction activity in the city shows an upswing in rental housing starts. Local developers have indicated that part of the reason for this upswing is the equalization of property tax rates for new rental housing; clearly this policy is starting to have a positive impact on the supply of rental housing. Earlier recommendations in this report call for the City to continue to make active use of these provisions to support affordable housing development Establishing a Municipal Affordable Housing Revolving Fund As noted earlier, various forms of support and incentives are needed to help meet the high cost of developing new forms of housing so that they become affordable to low and moderate income families and individuals. This report has identified a number of such municipal sources of assistance that can play a role in meeting this objective. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 89

98 The intent of a municipal affordable housing revolving fund would be to provide the supports and incentives to help the private sector and community housing providers develop affordable housing that would not require direct City operating subsidies on an ongoing basis. The fund is intended to supplement funding or in-kind supports provided by senior levels of government, community organizations, and the private sector. Typical uses might include placing downpayments on lands for affordable housing; conducting environmental testing on properties; preparing feasibility studies and business plans for potential affordable housing projects; preparing initial design concepts for potential affordable housing projects; preparing applications for senior government funding programs; and so on. The revolving aspect of the fund would enable the funds to be replenished over time for future use. Some municipalities, such as the City of Toronto, have established such revolving funds where funds are loaned at favourable interest rates and repaid in order to replenish the fund. This approach helps to expand the amount of funding available to devote towards affordable housing. Others, such as the City of Stratford and the City of Peterborough, are making annual municipal contributions to an affordable housing reserve fund and using these funds as noted above. The amounts being contributed annually by these smaller municipalities are $100,000 each. Municipalities across Ontario have established affordable housing funds using a number of sources including: a portion of the federal funds associated with various social housing programs transferred from the Province to the City; interest income from federal funds transferred to the City at the time of transfer of responsibility; surpluses generated from administrative efficiencies fees obtained through administration of affordable housing programs; annual contributions through the municipal budgeting process; sale of surplus former public housing lands. While the revolving nature of the fund would help maintain its availability, it is anticipated that an annual contribution will be necessary to replenish the fund in order to assist the private and not-for-profit sector to meet the identified affordable housing targets. An annual amount of $100,000 would represent an appropriate contribution consistent with other municipalities of similar size to enable the municipality to help support the types of activities noted above and to build a long-term revolving fund that would enable ongoing contributions to ensure the effectiveness of the Kingston Model in helping meet local housing needs. Funds should be loaned on a low interest basis (e.g. the City of Toronto Capital Revolving Fund lends money at 1% below prime) and repaid as part of the financing package when projects are developed. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 90

99 RECOMMENDATION # 34 It is recommended that the City establish and maintain a Municipal Affordable Housing Revolving Fund by means of an annual contribution of $100,000. These funds should be allocated by the Affordable Housing Team to support a variety of activities related to affordable housing developments in the City. Funds should be provided on a loan basis at 1% below prime with repayment commencing upon the development of the project. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 91

100 9 BUILDING COMMUNITY CAPACITY Another important element of the Kingston Model is to build community capacity to deliver affordable housing developments. Kingston is actually home to a number of non-profit housing corporations with previous experience in affordable housing development. However, given the cutbacks in funding for affordable housing supply programs over the past decade and the changing approaches in use today, much of this experience has been lost or is no longer relevant. In addition, as highlighted during the presentation on Denver Colorado at the Kingston Affordable Housing Forum, private sector developers can become key partners in the development of various forms of affordable housing but also lack experience with this form of development and with the differing financial and legal arrangements often encountered. At the same time, building community capacity encompasses more than training private and non-profit developers about the techniques of affordable housing development. Building community capacity involves such functions as familiarizing all segments of the community with the range of local housing needs; gaining support and acceptance for the Kingston Model initiative; overcoming neighbourhood resistance to affordable housing (often known as NIMBY Not in My Backyard ); training support agencies about how to work more closely with housing providers in the delivery of supportive and transitional housing projects; familiarizing City Council with the tools and resources available for affordable housing and with the types of innovative approaches needed to succeed; familiarizing staff of relevant City departments with such instruments as Affordable Housing Agreements, CMHC mortgage insurance requirements and the operations of land banks and land trusts; expanding the information available to City planners on alternative development standards, second suites and other innovative planning measures that can help contribute to affordable housing; educating tenants about the requirements to become homeowners; and so on. In order to make sure the Kingston Model fully reflects the Community Strategic Plan, it is important to identify approaches to building community capacity for the delivery of affordable housing. 9.1 Key Stakeholders As noted above, there are a wide range of stakeholders that would participate in the delivery of affordable housing. These include: City Council Non-profit housing corporations Private sector developers, builders and investors Local lending institutions Community service agencies KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 92

101 Local service clubs Supportive housing providers City staff (especially Legal, Finance and Planning) Neighbourhood and ratepayer associations Persons in need of affordable housing and their advocates In order to build community capacity for the development of affordable housing, it is important that each understand their role in the process and obtain training and information to help them fulfill this role. Building community capacity would also involve creation of networks among these stakeholders to facilitate sharing of information and exchanges of ideas and opportunities. The Affordable Housing Co-ordinator would take responsibility for putting together training programs through the Kingston Affordable Housing Centre for these stakeholder groups. The Co-ordinator could rely on information and training packages available from appropriate sources such as CMHC and Sector Associations such as the Ontario Non-Profit Housing Association, the Canadian Homebuilders Association, the Canadian Real Estate Association, the Canadian Housing and Renewal Association, the Cooperative Housing Federation of Canada and the Ontario Professional Planners Institute. RECOMMENDATION # 35 It is recommended that the Affordable Housing Co-ordinator develop and conduct training programs for local affordable housing stakeholders to assist in building local capacity for affordable housing development. The Co-ordinator should seek the assistance of organizations currently making available appropriate training packages, such as CMHC, the Ontario Non-Profit Housing Association, the Canadian Homebuilders Association, the Canadian Real Estate Association, the Canadian Housing and Renewal Association, the Co-operative Housing Federation of Canada and the Ontario Professional Planners Institute. 9.2 Education and Training Topics As noted above, training programs for these stakeholders need to cover a wide range of topics and disciplines important to the delivery of affordable housing, such as land use planning, finance, landlord-tenant law, construction, delivery of social supports, etc. Given the lengthy list of topics that require attention, it would be important for the Affordable Housing Co-ordinator to focus initial attention on familiarizing existing nonprofit and private sector housing providers with the Kingston Model, including the range of incentives potentially available to support affordable housing development, the process for accessing these incentives and the roles and responsibilities of the Affordable Housing Team and the Kingston Affordable Housing Centre. City Council and City staff who will be participating actively in affordable housing development should also be provided in-depth training, education and information about all aspects of the Kingston Model and with support in developing legal, financial, planning and other KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 93

102 instruments that will become important components of affordable housing developments. Over time, a full program could be put together covering topics of importance to all of the above stakeholder groups and training sessions held through the Resource Centre. An ongoing flow of information on best practices, new policy and program initiatives and other such subjects would be provided by the Resource Centre to all stakeholders. As noted earlier, some excellent training packages and courses have been prepared by organizations such as CMHC and ONPHA on various affordable housing subjects. Some examples include: 1. Overcoming Community Opposition: A significant barrier to the creation of new affordable housing unit is the lack of community support that has been encountered from time-to-time for various forms of affordable housing. CMHC, with the assistance of the National Secretariat on Homelessness, recently put together a training program on techniques and approaches for Overcoming Community Opposition. The City could sponsor workshops utilizing this material in order to help break down such potential opposition and facilitate affordable housing development. 2. The Homelessness Maze: This is a role-playing game developed by a coalition of homelessness agencies in Durham Region, including a number of homeless individuals themselves. The game involves placing participants in the role of homeless individuals trying to navigate their way through the bureaucratic maze encountered in trying to find affordable housing. It helps members of the community develop a greater appreciation for the needs of homeless individuals and the barriers they often encounter. 3. The CMHC Homeownership Training and Education Program: This is a new initiative aimed at familiarizing renters with the process and responsibilities involved in becoming a homeowner. The intent is to build capacity and confidence among renters in moving toward homeownership and to ensure they are well prepared for taking this major step. The Affordable Housing Co-ordinator should search out available training and education programs and make use of them wherever possible to facilitate community capacity building of this nature. An initial survey of local housing stakeholders should be undertaken to identify topics of greatest interest and importance with which to initiate these programs. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 94

103 RECOMMENDATION # 36 It is recommended that the Affordable Housing Co-ordinator conduct a survey among housing stakeholders to identify the topics of greatest interest and importance with which to initiate capacity building training and education in affordable housing. 9.3 Gathering Resources The Kingston Affordable Housing Centre should not only be the central hub of training and education on affordable housing; it should become the repository of information and resource materials on all key aspects pertaining to affordable housing. Further, it should operate a website where much of this information can be made widely available and to help facilitate networking and perhaps even online training programs. The Affordable Housing Co-ordinator should work towards establishing an ongoing process of securing and making available information sources on affordable housing, putting together an affordable housing website and facilitating networking among stakeholders. Sources of information such as the CMHC Canadian Housing Information Centre can supply a host of timely information of use to individuals and organizations interested in affordable housing. The Resource Centre would also make available all application forms, RFP documents and other such materials to assist organizations to access various affordable housing programs and would establish communication protocols to ensure any information on new initiatives and opportunities is widely communicated across the area. RECOMMENDATION # 37 It is recommended that the Affordable Housing Co-ordinator commence gathering materials and resources for the Kingston Affordable Housing Resource Centre and should commence the establishment of the Kingston Model website. This website should be linked to the City of Kingston website and to other relevant websites. A network of stakeholders should be established for the circulation of new materials, RFP s, applications forms, newsletters and other key information on affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 95

104 10 PARTNERSHIPS As emphasized throughout this report, partnerships are a necessity in order to bring together the resources and expertise needed to pull together affordable housing developments in the current environment. The days when senior government departments provided 100% capital funding and annual subsidies to cover the full cost of developing and operating new affordable housing projects are long gone. Partnerships for affordable housing can take many forms, such as: Joint ventures involving non-profit and private sector housing providers participating in a new affordable housing development Agreements between different levels of government to make available suitable publicly-owned lands at low cost Partnerships between housing providers, support agencies and Provincial Ministries to provide supportive housing within new affordable housing developments Partnerships between volunteer workers, donor organizations and sponsor agencies to develop self-help housing projects Piggybacking of a multitude of funding programs and fundraising initiatives to raise the funds required to develop and operate an affordable housing project The range of potential partnerships and roles and responsibilities of each is virtually endless, depending on the nature and requirements of each project; yet the principle remains the same. That is, by combining the unique skills and resources of several contributors, the opportunities to successfully develop affordable housing increase dramatically. Here is another key function for the Affordable Housing Co-ordinator and the Kingston Affordable Housing Centre. Given the need to bring partners together, the Resource Centre can actively identify and encourage potential partnerships for various types of affordable housing projects. It can also assist partners in understanding their potential roles and responsibilities and perhaps even maintain precedents to help develop partnership agreements between parties. One successful model in this regard is the CMHC Centres for Public-Private Partnerships. CMHC offices across the country play an instrumental role in helping bring together partners to take advantage of opportunities for affordable housing development. The Kingston Affordable Housing Centre should work closely with CMHC KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 96

105 to obtain their assistance in the establishment of affordable housing partnerships in the Kingston area. RECOMMENDATION # 38 It is recommended that the Affordable Housing Co-ordinator place a strong emphasis on bringing together potential partners to enhance capacity for affordable housing developments. Typical examples could include private and non-profit housing providers; non-profit housing providers and service agencies; government departments at different levels; volunteer agencies and self-help housing groups; and so on. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 97

106 11 MUNICIPAL LEADERSHIP AND COMMUNICATION The success of the Kingston Model will depend heavily on the availability of legislative and financial tools to help support various types of affordable housing development. As noted in the discussion of these tools, there are often areas of concern among service managers and other community stakeholders about the adequacy of these measures or the lack of additional supports. In order to ensure that every effort is made to obtain the greatest possible level of resources for affordable housing, the City and its community partners must continually make their voices heard on matters related to affordable housing development. This can be done through ongoing advocacy, primarily through City Council to senior levels of government. It was advocacy of this nature that led to the recent positive changes in CMHC mortgage insurance provisions for affordable housing. The Affordable Housing Team should continually monitor policies and programs of senior levels of government and recommend to Council areas in need of change and improvement. The Affordable Housing Co-ordinator should also participate actively in associations such as the Association of Municipalities of Ontario, the Ontario Municipal Social Services Association, the Canadian Housing and Renewal Association and the Ontario Non-Profit Housing Association in order to facilitate exchanges of information and to help develop support for advocating change in senior government policies and programs. RECOMMENDATION # 39 It is recommended that the Affordable Housing Team monitor policies and programs of senior levels of government and recommend to Council areas where they might advocate for change and improvement to more effectively meet affordable housing needs. The Affordable Housing Co-ordinator should participate actively in associations such as the Association of Municipalities of Ontario, the Ontario Municipal Social Services Association, the Canadian Housing and Renewal Association and the Ontario Non-Profit Housing Association in order to facilitate exchanges of information and to help develop support for advocating change in senior government policies and programs. Typical resolutions which may be considered by Council are included in Appendix 5. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 98

107 12 PUBLIC CONSULTATION While it is important that an aggressive approach be taken to the development of affordable housing in Kingston, it is equally important that the public be fully informed of affordable housing initiatives and that stakeholders be consulted in the design and implementation of such initiatives. The Affordable Housing Co-ordinator should ensure that members of Council and local ratepayers in areas where new affordable housing developments are being considered be consulted and involved from the earliest stages of such developments in order to provide the opportunity for constructive input and community buy-in. Such consultation should go hand-in-hand with training and education programs aimed at breaking down barriers to community acceptance and developing a greater understanding of local housing needs. At the same time, when new affordable housing initiatives are being considered, stakeholders should be widely consulted for input regarding the design and delivery of such initiatives. Here again, the consultation process would be critical in spreading awareness about such initiatives and ensuring a full opportunity for meaningful input by housing stakeholders. A particular effort should be made to involve potential occupants of such developments in the consultation process. RECOMMENDATION # 40 It is recommended that the Affordable Housing Team ensure that members of Council and local ratepayers in areas where new affordable housing developments are being considered are consulted and involved from the earliest stages of such developments. Further, when new affordable housing initiatives are being considered, stakeholders should be widely consulted for input regarding the design and delivery of such initiatives. A particular effort should be made to involve potential occupants of such developments in the consultation process. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 99

108 13 MONITORING When an initiative of the magnitude and importance of the Kingston Model is undertaken, it is crucial to evaluate its success in achieving its objectives. This can be achieved through ongoing monitoring of the activities undertaken as a result of the Kingston Model and by regular reporting of the results. Each year, the Affordable Housing Co-ordinator should put together a report card identifying the activities and results achieved under the Kingston Model. This report card would: Update the housing needs at each point in the continuum Document the range of activities of the Kingston Affordable Housing Centre Identify the affordable housing developments undertaken, the client groups being served and the status of each project Outline the number and type of training, education and consultation sessions held Provide information on the programs accessed and assistance received Provide information on any new policies and programs of senior levels of government available to support affordable housing development Provide information on any reports prepared to advocate for change in government policies and programs and the outcomes Identify the range and type of partnerships achieved Provide a full breakdown of all monies spent by the Kingston Affordable Housing Centre and the sources of these funds RECOMMENDATION # 41 It is recommended that the Affordable Housing Co-ordinator monitor the success of the Kingston Model in achieving its objectives, update the analysis of housing needs on a regular basis and prepare an annual report card documenting activities and achievements of the Kingston Model each year and identifying needs, goals and objectives for the following year. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 100

109 14 FINANCING THE KINGSTON MODEL Moving ahead with the range of activities suggested for the Kingston Model will require two types of funding funds to cover day-to-day operations and funds to contribute to individual affordable housing projects and programs. These are discussed below Day-to-Day Operations This report suggests that the most effective approach to operating the Kingston Model would be to establish the Kingston Affordable Housing Centre and to appoint an Affordable Housing Co-ordinator to play the lead role in facilitating the various activities required to operate an active affordable housing development program. An Affordable Housing Team with participation from a number of City Departments is also recommended. There will be two main costs involved in carrying out the day-to-day operations of the program. These include: Staff time to carry out the range of recommended activities Costs related to equipment, supplies, communications and space These are discussed below Staffing Costs The recommendations contained in this report, if adopted, will require staff to undertake a range of day-to-day activities aimed at expanding the supply of housing along the continuum of housing needs. These activities will include: issuing RFP s under various housing programs reviewing submissions and selecting proponents working with proponents to implement new developments helping to establish partnerships monitoring federal and provincial housing policies and programs liaising with federal and provincial officials to help access funding programs networking with local community partners coordinating training and education sessions for housing stakeholders preparing reports and recommendations to Council on issues related to affordable housing recommending positions Council should take in advocating for changes to housing-related policies and programs co-ordinating public consultation on affordable housing initiatives undertaking an ongoing program of public communications KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 101

110 monitoring the performance of the Kingston Model and preparing annual report cards ensuring funds are spent in an effective fashion in accordance with Council policies and procedures and program guidelines operating the Kingston Affordable Housing Resource Centre In reviewing the staffing structure of municipalities already involved in initiatives of this nature, it is clear that the Housing Divisions that were established to administer municipal housing responsibilities under the Social Housing Reform Act in virtually all cases have taken on the responsibility of delivering affordable housing supply programs. They possess the experience and expertise to undertake virtually all of the above activities and the network of housing providers and federal and provincial contacts to support such programs. Accordingly, lead staff for the day-to-day operations of the Kingston Model should come from the Housing Division Indeed, it is clear that a considerable portion of the time of several existing staff within the Housing Division is already being devoted to many of the above activities in an effort to assist in meeting gaps in the continuum of housing needs. These efforts should be formalized as follows: 10% of the time of the Housing Division Manager should be allocated to work related to the Kingston Model 25% of the time of the Housing Division Policy Co-ordinator should be allocated to work related to the Kingston Model 10% of the time of the Housing Division Secretary should be allocated to work related to the Kingston Model The estimated staffing cost associated with the above time allocations are $35-40,000 per year. It is also recommended that an Affordable Housing Team comprised of staff from various municipal departments (Housing, Planning, GIS, Legal, Finance, CAO s office, Real Estate) and other affiliated agencies be established and meet on a regular basis to review potential initiatives and provide assistance where appropriate. This time involvement would be modest in nature and is largely already being spent in the range of initiatives currently underway. In addition, adoption of the recommendations of this report would require administration of 3-4 local programs: Portable Rent Subsidies Land Banking/Land Trust Affordable Housing Revolving Fund Residential Rehabilitation Assistance Program (RRAP) KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 102

111 Discussions with staff previously involved in administration of the RRAP Program find that the administrative fees provided by CMHC are sufficient to cover all costs involved in administration of the Program and that it would likely best be administered through the Buildings Department. The other three programs would require an allocation of time from existing staff within the Housing Division. Discussions with staff indicate that 25% of the time of an administrative staff person would likely be sufficient to carry out the work required to administer these programs. This would represent an amount of approximately $10,000 annually Cost of Equipment, Supplies, Communications and Space This report recommends establishing the Kingston Affordable Housing Centre from which the Kingston Model will operate. Given the key role of the Housing Division in operating the Kingston Model and the centralized location and ease of access for the public, it would be appropriate to locate the Housing Centre within the Division s space at City Hall. Space would be required for establishing a resource centre (i.e. library) and for various meetings around housing initiatives. Larger community meetings could take place at locations outside the Division. Given that no additional staff would be brought on, it would appear that these activities could be accommodated within the existing space budget, other than any occasional external meeting. Funds would be needed to cover various costs associated with the activities of the Kingston Model. These would include: printing of materials postage maintenance of website newsletters telephone advertising of RFP s and consultation meetings occasional external space rental refreshments at meetings acquiring books and materials for resource centre These costs are estimated at $25-30,000 per year Sources of Funds As noted above, the staff required to operate the Kingston Model are already in place and are already undertaking many of the activities that would be formalized through the Kingston Model. These costs are already being covered under the City s annual budget. Therefore, no real increase would be required in staff costs to go forward with the program. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 103

112 Two main sources of additional funds are available to cover the remainder of the costs. As noted earlier, CMHC pays administrative fees for administration of the RRAP Program. Discussions with staff find that these have proven sufficient to cover all costs associated with operations of that program. Further, the Provincial Government provides administrative fees to the municipality for administration of the Federal-Provincial Affordable Housing Program. These fees average approximately $750 per unit. Delivering 100 units annually, therefore, would return to the municipality fees of approximately $75,000 per year. Indeed, the allocation received under the first wave of projects already underway in Kingston provides municipal fees of $81,000. These funds, in fact, are sufficient to cover all staff costs and all equipment/space costs identified in Sections and and would leave the City with a net gain in annual operating funds in relation to current revenues and expenses. Therefore, the entire operation of the Kingston Model can be undertaken in a fiscally responsible fashion for the municipality, particularly by means of active utilization of programs such as the Federal-Provincial Affordable Housing Program and RRAP. RECOMMENDATION # 42 It is recommended that the City of Kingston place responsibility for day-to-day operations of the Kingston Model with the Housing Division. Day-to-day operations should be carried out by existing staff of the Housing Division with the following time allocation: 10% of the time of the Housing Manager 25% of the time of the Housing Policy Co-ordinator 10% of the time of the Housing Secretary A maximum of $30,000 should be set aside annually for equipment, supplies, communications and space rental for activities related to the Kingston Model Should the Portable Rent Subsidy, Land Banking/Land Trust and Affordable Housing Revolving Fund Programs be established, 25% of the time of one existing program administrator should be allocated to operations of these programs. Should the City be successful in obtaining agreement from CMHC to act as its agent in the delivery of the RRAP Program, it should ensure that program administration costs do not exceed the amount of funds received from CMHC for administration of the Program. The City should actively pursue administrative funds available through RRAP, the Federal-Provincial Affordable Housing Program and any other affordable housing programs to help cover the costs of operating the Kingston Model. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 104

113 14.2 Contributions to Housing Programs The discussion put forward in this report outlines a variety of potential programs to which the City may contribute in order to support affordable housing development. These include: Waivers of development charges and municipal fees Equalizing multi-residential and residential tax rates for new affordable housing developments Contributing surplus municipally-owned land Establishing a portable rent subsidy program Establishing a housing first/land banking program (including setting up a land trust) Establishing a municipal affordable housing revolving fund These are discussed below Waivers of Fees and Charges/Property Tax Reductions/Donation Of Surplus Municipal Land The four projects identified in Section 15 of this report represent a typical year s development program of approximately 100 units. These examples show that the contributions that would be made by the municipality in terms of waivers of municipal fees and charges (or grants in lieu thereof), reduced property tax rates and donations of surplus municipal land would be approximately as follows: Table 5: Potential Municipal Subsidy Costs for Demonstration Projects Property Tax Waivers of Fees Project Reduction (Net Donated Land Total and Charges Present Value) Kingston-Frontenac $241,000 $198,000 n/a $4393,000 Byron St. Parking Lot Elizabeth Fry Habitat for Humanity Total * estimated value at $7,500 per unit ** assuming project were built on municipally-donated land $505,000 $374,311 $467,000* $1,346,311 $34,000 $29,000 n/a $63,000 $10,500 n/a $43,000** $53,500 $790,500 $601,311 $510,000 $1,901,811 The above table shows that total costs to the municipality would be in the order of $1,901,811. These would represent opportunity costs, as none of these costs would represent actual outlays of funds. In the case of property tax reductions, these would not actually be net declines in municipal revenues, as the tax reductions from these projects would be recouped through adjustments to other tax classes. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 105

114 Section 15 of this report shows that all of the above projects, with the exception of the Habitat for Humanity project, would receive Federal funding grants of $25,000/unit through the Federal-Provincial Affordable Housing Program. These projects would also generate an administrative fee of approximately $750 per unit earned by the municipality. These amounts exclude any additional Provincial contributions which may be forthcoming in accordance with recent announcements by the Minister of Housing. Such additional contributions could add as much as a further $25,000 per unit to the revenues coming in to the community from senior levels of government through this program. These projects would also generate considerable returns to the housing providers of GST and PST which would come through Federal and Provincial sources, as well as funds from the Federal SCPI Program in the case of Elizabeth Fry. In addition, each project would generate annual property taxes that would not be received by the municipality if the projects were not built. The total of these revenue gains by the municipality and housing providers are as follows: Table 6: Potential Revenues Generated for Municipality and Housing Providers by Demonstration Projects Federal Project Grants Municipal Property GST/PST Received by Administrati Taxes Refunded to Housing ve Fees Received by Housing Provider Received Municipality* Provider ($25,000 Total per unit) Kingston-Frontenac $30,750 $495,000 $1,025,000 $720,000 $2,270,750 Byron St. Parking Lot Elizabeth Fry Habitat for Humanity Total $39,000 $675,000*** $1,300,000 $818,000 $2,832,000 $4,500 $72,000 $205,000** $70,000 $351,500 n/a $33,000 n/a $9,000 $42,000 $74,250 $1,275,000 $2,530,000 $1,617,000 $5,496,250 * estimated in 2005 dollars over the 15-year term of the Federal-Provincial agreement **includes $110,000 through Federal-Provincial Program and $95,000 through SCPI Program ***residential component only This table shows that the overall revenues received by the municipality and housing providers would be in the order of $5,500,000 over the fifteen year life of the affordable housing agreements that would be set in place for these projects. This represents a surplus coming into the City and participating housing providers of approximately $3,500,000 over the amount being expended in waivers, property tax reductions and donations of land. The larger benefit, of course, would be the opportunity for 100 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 106

115 households in need to secure adequate and affordable housing over this period of time. The process would also contribute to the economic development of the city. It is clear that, by investing in waivers of municipal fees and charges, reductions in property taxes and donation of surplus municipally-owned lands sufficient to support affordable housing developments totalling 100 units per year (primarily developed through the Federal-Provincial Affordable Housing Program), the municipality and the community at large would benefit financially, economically and socially. Therefore, this level of investment should be supported by the municipality Portable Rent Subsidy Program This report has recommended a Portable Rent Subsidy Program of 25 units per year over the next four years, bringing the total number of rent subsidies to 100 by the end of this period. The estimated subsidy cost involved would be as follows (in 2005 dollars): Year one: $150,000 Year two: $300,000 Year three: $450,000 Year four: $600,000 There would also be an annual administrative staff cost of approximately $10-15,000 annually. Following year four, the annual subsidy amount would remain at approximately $600,000, providing the program continued to operate at the same level. As noted earlier, given the presence of over 1,000 applicants on the RGI waiting list, these units are urgently needed, especially to support households of low income with little or no choice in the housing market. The municipality should support this level of subsidy and also continue to press the Provincial government to expand the level of Provincial funding for rent supplement units Land Banking/Land Trust This report has recommended that the City adopt a Housing First policy for surplus municipal lands in support of the Kingston Model initiative and set in place a land banking program through which the municipality can help provide lands for the development of affordable housing. The mechanism through which this would operate would be a land trust, which would be a separate corporation established for this purpose. The financial aspects of this program will be addressed in a staff report to be provided in the spring of Our initial review, however, did identify a number of municipallyowned sites with potential for affordable housing that could be part of this land bank at no additional cost to the municipality. These should be investigated as the starting point in the establishment of the land bank. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 107

116 Kingston Affordable Housing Revolving Fund This report has recommended that the City establish an Affordable Housing Revolving Fund to assist proponents in putting together affordable housing developments (eg. by providing funds for deposits on lands, feasibility studies, preparation of business plans, etc.). Additional funds for some of these activities are available through the CMHC SEED Funding Program. Given the suggested range of activity, it is recommended that an amount of $100,000 be contributed annually to this fund by the municipality. The funds should be loaned out at 1% below prime to proponents, with repayment commencing when affordable housing projects are developed. This would enable the fund to be replenished for use in future projects. RECOMMENDATION # 43 It is recommended that the City of Kingston financially support the following affordable housing development/subsidy program: 100 units per year developed primarily under the Federal-Provincial Affordable Housing Program. These units would be financially assisted locally through providing municipal incentives (reducing or altering municipal fees and charges), equalization of property taxes to the residential rate and the donation of surplus municipal lands where possible. 25 RGI units per year over four years funded through a municipal Portable Rent Subsidy program at an estimated cost of $150,000 in year one, $300,000 in year two, $450,000 in year three and $600,000 in year four. An active land banking program (costs to be reported on later in 2005 by staff) An annual municipal contribution of $100,000 to an Affordable Housing Revolving Fund, to be loaned out at 1% below prime to assist proponents in the start-up stages of affordable housing developments, with repayment commencing when projects are developed. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 108

117 15 ADVICE ON DEMONSTRATION AFFORDABLE HOUSING PROJECTS The most effective way to demonstrate the potential achievements of the Kingston Model is to provide examples of projects that could be undertaken to help meet needs along the housing continuum. With the co-operation of a number of housing stakeholders and City staff, we have identified four potential projects that represent a variety of solutions to meeting needs along the housing continuum. Each of these projects is under serious consideration or has recently commenced planning and design activities. One project, in fact, (Elizabeth Fry) has already successfully obtained funding under SCPI and the Federal-Provincial Affordable Housing Program. The four projects combined could represent a typical year s development program under the Kingston Model and would create: 41 units of affordable rental housing for low and moderate income senior citizens 52 units of affordable rental housing in the downtown for low and moderate income singles and families 2 affordable homeownership units for families of modest income 6 units of supportive/transitional housing for homeless persons or persons at risk of homelessness Below we describe each of these projects, indicate the level of assistance that would be provided and demonstrate the target households that would benefit. The descriptions include detailed capital and operating cost estimates to demonstrate the financial feasibility of each project. These capital and operating budget estimates are provided in full detail in Appendices 6 to 9. Affordable housing projects for the Kingston Model are to be considered Demonstration Projects for illustration purposes only and are intended to show municipal partnerships under the Federal-Provincial Affordable Housing Program. Building parameters and associated project costs are hypothetical and subject to change and the appropriate municipal approval process Kingston & Frontenac Housing Corporation - 41 Unit Seniors Apartment The Kingston & Frontenac Housing Corporation is the descendant of the former Kingston & Frontenac Housing Authority. The Corporation inherited the former Ontario Housing Corporation properties in the Kingston area, most of which are occupied on a rent-geared-to-income basis. The City of Kingston is the sole shareholder of the Corporation. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 109

118 One of the properties in the portfolio is located at 125 Van Order Drive. The Housing Corporation has determined that this property has the potential to accommodate 41 one-bedroom senior citizen apartment units in a four storey apartment building. Below, we provide an illustration of the proposed site plan for the project. Sufficient space could also be provided to accommodate the offices of the Corporation, thereby enabling them to realize savings in their annual office rent. Sewer and water services are readily available. The project would largely comply with the existing zoning bylaw with the exception of some minor variances which could be handled at the Committee of Adjustment level. There is also sufficient land to enable parking to be provided at grade, thereby avoiding the high cost of an underground parking structure. This project would make a highly suitable addition to the supply of affordable housing in the City of Kingston. The Corporation has indicated that it is prepared to donate the land at no cost as its contribution to the project and to sell a few of its scattered units to raise capital to help meet project costs. These contributions represent important components of the financial feasibility of the project. Appendix 6 provides an estimate of the typical capital and operating costs for the project. These estimates demonstrate that, providing assistance is obtained through the Federal-Provincial Affordable Housing Program and the City of Kingston contributes waivers of municipal fees and charges and reduced annual property taxes, the project is financially feasible. Rents would be at or below CMHC average market rent of $646 per month 22, enabling seniors with incomes of $25,840 to afford the units. Seniors of lower income could also be accommodated through allocation of some of the proposed Portable Rent Subsidy units to the project. The Housing Corporation would also have the option of transferring some existing seniors from its portfolio to this building and replacing them with others on the waiting list. We wish to point out that the Corporation had hoped to occupy the proposed 9,800 sq. ft. of office space at zero annual rent. However, our calculations show that the Corporation would have to pay approximately $5/sq. ft. in net rent for this space in order for the project to be financially viable. This would still represent an annual savings of almost $50,000 in office space costs. 22 Rental Market Survey, Canada Mortgage and Housing Corporation, December KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 110

119 Figure Van Order Drive, 41 Senior Citizen Apartment Units Kingston and Frontenac Housing Corporation The following Figures are actual photographs of the 125 Van Order Drive site. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 111

120 Figure 3: 125 Van Order Drive Site Photographed January KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 112

121 15.2 Byron Parking Lot - 52 Unit Singles/Family Apartment The City of Kingston owns the Byron Parking Lot in downtown Kingston. The site is just over half an acre in area and is currently used for surface parking in the downtown. It is located in close proximity to a public elementary school and to a wide range of amenities and services. In the early 1990 s, plans were prepared to develop this property for an affordable housing project under the former Non-Profit Housing Program. However, the Program was terminated before development could proceed. The site remains highly suited to a development of this nature, which would not only help meet affordable housing needs, but support the Urban Growth Strategy and downtown revitalization initiatives. It is our understanding that sewer and water services are available, the zoning is suitable and soils tests have already been undertaken which show the soils can support the development and there are no environmental issues. While initial plans in the early 1990 s called for the project to be devoted almost exclusively to family housing, the current needs analysis shows a more urgent need for units for low and moderate income singles. The downtown location is also most suited to a singles population. The proximity of the local school, however, would still support some units for families. Accordingly, the most appropriate mix for the project would be a majority of one bedroom units for singles, with a smaller number of two bedroom units for small families. We have suggested a mix, therefore, of 38 one bedroom units and 14 two bedroom units. This mix would occupy the same amount of site area and floor space as the previous scheme. Ground floor office/retail space has also been incorporated to help maintain the downtown streetscape and to generate revenues to help support the project financially. This project would make a highly suitable addition to the supply of affordable housing in the City of Kingston. The City of Kingston also maintains a policy whereby existing municipal parking spaces that are lost due to redevelopment of this nature must be replaced. Therefore, we have included a financial analysis of the cost of replacing the existing 73 municipal parking spaces by means of an above-ground parking structure. Rents would be at or below CMHC average rent levels 23 of $646 per month for one bedroom units, enabling singles with incomes of $25,840 to afford the units. Rents for the two bedroom units would be at or below CMHC market rent levels of $785 per month, enabling families with incomes of $31,400 to afford the units. Some singles and families of lower income could also be accommodated through allocation of some of the proposed Portable Rent Subsidy units to the project. The site could be offered through an RFP process to housing providers who could demonstrate their ability to develop and 23 Rental Market Survey, Canada Mortgage and Housing Corporation, December KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 113

122 operate the project and to perhaps provide further financial contributions to further reduce costs and rents. The detailed analysis for the Byron Parking Lot Project is provided in Appendix 7. The Byron Parking lot housing project assumes replacement of the existing 73 parking spaces. The following options may be considered: (1) City Council approve an additional municipal contribution to compensate for replacement of the existing parking lot (proposed demonstration project costs to replace and provide parking were calculated in the amount of $1,086,514). (2) City Council contribute the municipal parking lot land and transfer property rights to a private company that maintains and operates a new parking facility replacing existing public parking, plus parking for the affordable housing project. The calculations demonstrate that, under current regulations for the Federal-Provincial Affordable Housing Program, the residential component of the project is financially feasible, providing the City of Kingston waives all residential fees and charges, contributes the land value for the project and equalizes the property tax rate to the single family residential rate. We have also assumed that the City would permit a reduced parking standard of approximately 0.6 spaces per residential unit in view of the low income of most residents and the inner city location. The project would provide 52 affordable rental apartments and generate approximately $40,000 annually in municipal property taxes. It would also provide approximately 8,000 sq. ft. of ground floor commercial/retail space to help support the revitalization of the downtown. As noted earlier, we have also incorporated a financial analysis for replacement of the existing 73 municipal parking spaces. These spaces would be in addition to the 30 residential spaces proposed for the project (25 in the parking structure and 5 at grade). Parking spaces would include disabled parking in accordance with municipal requirements. This analysis assumes the existing municipal parking spaces would be replaced by an above-ground parking structure of 73 spaces. We have utilized estimates provided by City staff for capital and operating costs and revenues. Staff have estimated that the typical capital cost of an above-ground parking structure is about $15,000 per space, less any economies of scale that can be realized by building the structure together with the proposed housing project (e.g. servicing, elevators, stairs, etc.). Accordingly, we have reduced the estimated cost per space by 10% to adjust for these economies of scale, with the result being a revised capital cost of $13,500 per space. We have also included soft costs associated with construction of the structure, such as architect s fees, municipal fees and charges, and so on. Operating costs for the parking structure include such items as property tax, maintenance, insurance, administration and capital reserve and are estimated at $400 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 114

123 per space per year. Of this amount, $300 per space is the estimated property tax that would be paid to the City, or about $22,000 per year. Parking revenues are estimated at $69 per space per month, consistent with charges for premium space elsewhere in the downtown. Current City of Kingston debenture rates have been used to calculate the annual financing costs. The results of the analysis show an estimated annual deficit of approximately $55,000 - $60,000. To summarize the above, proceeding with this project under the current Federal- Provincial Affordable Housing Program regulations would require the following contributions from the City: Contributing the land value for the property (estimated at $467,000) Waiving municipal fees and charges for the residential component (estimated at $407,000) Equalizing the property tax rate to the single family residential rate (estimated at a net present value of $374,000) Permitting reduced parking standards Contributing approximately $55,000 60,000 annually to cover the deficit in the parking structure until retirement of the municipal debenture in twenty years. In return, the City of Kingston and the community at large would receive the following benefits: Creation of 52 affordable rental housing units in a location fully supportive of the City s growth strategy Addition of more permanent population downtown to help support downtown merchants and reduce urban sprawl Approximately $40,000 per year in residential property taxes Approximately $20,000 per year in parking garage property taxes Administrative fees of $39,000 from the Federal-Provincial Affordable Housing Program Capital grants of $1,300,000 from the Federal Government towards development of the residential component GST and PST rebates of approximately $993,000 Ownership of a new parking structure which would upgrade municipal capital assets An alternative approach could be considered by expanding public-private partnerships for the affordable housing project development. In exchange of the municipal land contribution, a private parking company may become a project partner to replace the existing 73 surface parking spaces and provide a new parking structure for the public and tenants of the affordable housing project. New parking may be owned, maintained and operated by a private parking company. This approach may provide the following benefits: KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 115

124 Land at "no cost" as a contribution from municipality Upgraded parking facility in the downtown area Reduction of the overall cost of the housing project due to shared parking arrangements between the owner of the parking structure and the owner of the housing project. Below we provide a preliminary illustration of the proposed project. Figure 4 Byron Housing Project, 52 Unit Singles/Family Apartment, Queen Street, Kingston The following Figures are actual photographs of the Byron site. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 116

125 Figure 5: The Byron Project Site Photographed January KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 117

126 15.3 Habitat for Humanity 2 Semi-Detached Affordable Homeownership Units Habitat for Humanity operates a Kingston Chapter that has been actively developing affordable homeownership units for families of low and moderate income. The organization is widely recognized for its contributions to affordable housing worldwide. It achieves affordability by building modest, no-frills units with extensive contributions of volunteer labour and donated materials. Habitat has also developed the financial resources to make the units available to low and moderate income families with zero down payments and interest-free mortgages that are repaid over 20 years. While volunteer labour and donated materials help reduce costs, Habitat still finds it necessary to employ some paid professional labour for complex aspects of the developments (eg. electrical wiring) and to pay for required materials that are not donated. Habitat recently undertook the development of two semi-detached units in Kingston and found that its out-of-pocket costs for labour and materials were approximately $30,000 per unit for 1,000 sq. ft. dwellings. This is well below the current average cost of $90-100,000 for labour and materials in such dwellings and represents a major contribution by the community to affordable housing. At the same time, however, Habitat also paid full cost for land, municipal fees and charges and servicing hook-ups to the site. These came to a total of approximately $30,000 per unit, effectively doubling the cost of these dwellings. Habitat is planning to develop a further two semi-detached units on Montreal Street. They have acquired a property suitable for the two units at a cost of $43,000 and are anticipating that the cost of labour and materials will be similar to their previous project (i.e. approximately $30,000 per unit). Using these figures, we have estimated the total capital cost for the two units under three different scenarios: Scenario One: Habitat pays full municipal fees and charges, full land costs and full servicing hook-up charges Scenario Two: The City of Kingston waives municipal fees and charges Scenario Three: The City of Kingston provides free land from its land bank and waives municipal fees and charges Under the first scenario, monthly mortgage, tax and utility payments would total $629 per unit. Using 30% of income as a guideline (and including utility costs in the calculation), the required annual family income would be $25,160. Under scenario two, monthly payments would be $607 and the required annual family income would be $24,280. Under scenario three, monthly payments would be $518 and the required annual family income would be $20,720. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 118

127 These scenarios demonstrate the effectiveness of the Habitat concept overall and also the heightened ability of Habitat to reach families of lower income through assistance from the City, particularly in the form of property that could be provided through a City of Kingston land banking program. Appendix 8 provides an estimate of the typical capital budget for the project. The following Figures are actual photographs of the proposed Habitat for Humanity semi-detached homeownership units site. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 119

128 Figure 6: Proposed Habitat for Humanity, Semi-detached Affordable Homeownership Site Photographed January KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 120

129 15.4 Elizabeth Fry Society of Kingston - 6 Unit Transitional Housing Project The Elizabeth Fry Society of Kingston has been providing programs to women and their children in the community for 55 years. Social and economic barriers often disadvantage women in the community, which may put them at conflict with the law. Throughout the history of the agency, it has been identified that safe, affordable accommodations have often been a stepping stone to stability and crime prevention. Accordingly, Elizabeth Fry is planning the development of a 6-unit transitional housing project for this target group. The project is intended to provide housing for homeless and at risk women and children who need supported, transitional housing to enable them to access affordable, permanent housing in the community. These residents will have access to the existing support and counseling services available through the Elizabeth Fry Society of Kingston. The services will include individual resident counseling, resident advocacy for accessing permanent housing, educational support and the development of household skills. Elizabeth Fry has applied for and received approval of funding assistance under both the SCPI Program and the Federal-Provincial Affordable Housing Program totaling $205,000 in capital grants. The project is also eligible for waivers of municipal fees and charges, reduced property taxes and refunds of GST and PST. Given the limited financial resources of these individuals, the project will require rent supplement subsidies to make the units affordable to this target group. This project serves as a ready example of how the Kingston Model can accommodate individuals at the most urgent end of the housing continuum by providing both accommodation and supports to enable these individuals to meet the challenges of dayto-day living. Given the complexity of introducing both housing development and support service elements to the project, the operating budget is a particularly complex aspect of the project. Elizabeth Fry has just started developing this budget, but requires considerable analysis to firm up the data. Accordingly, we were able to provide only capital budget estimates. It is strongly recommended that the Affordable Housing Co-ordinator at the City work closely with Elizabeth Fry to ensure that operating budgets are developed as fully as possible before project construction commences. Appendix 9 provides an estimate of the capital budget for the project. The following Figures are actual photographs of the proposed Elizabeth Fry Society Transitional housing Project site. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 121

130 Figure 7: Proposed Elizabeth Fry Society Transitional Housing Project Photographed January KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 122

131 RECOMMENDATION # 44 It is recommended that the proposed Affordable Housing Team work together with local housing providers to bring the suggested demonstration projects to reality. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 123

132 APPENDICES KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 124

133 APPENDIX 1: KINGSTON AFFORDABLE HOUSING FORUM QUESTIONNAIRE Services Emergency Hostel(s) Services RGI assistance Planning and Development Services Continuum Supports to Daily Living Rent Bank Community Partners Program The Social Housing Registry PHIF Tenant Support OSIS 1) Prioritize the various components in the continuum of Housing Needs with regard to where the City should invest its resources? Emergency Shelters % Community Services to Homeless 6 Food Banks, Meal programs, Drop in Centres Housing Emergency Shelters Continuum Supportive/ Transitional Housing Social Housing Portfolio, Rent Supplement Units Affordable Rental Housing Market Housing Supportive Transitional/Housing % Social Housing Portfolio, Rent Supplement Units % Affordable Rental Housing % Market Housing % Providers 6 Shelter Supportive Social 105 Units Community Habitat Continuum providers Housing Housing Rental Housing for Providers Providers Program (TBD) Humanity Abbeyfield House (TBD) Advocate Social Planning Council, The United Way, CHHAC Kingston Housing and Health Coalition KNFPHA Room of One s Own, Closing the Distance NFPHA Homes are us Kingston Groups Kingston Coalition against Poverty PLEASE RETURN COMPLETED FORM TO THE HOUSING DIVISION BOOTH or Fax (613) Housing Division City of Kingston 216 Ontario Street Kingston, On K7L 2Z3 2) What role do you think the City of Kingston should play in helping to meet the needs in the continuum of housing needs? 3) General Comments or Suggestions on strategies for meeting needs identified in the continuum of housing needs KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 125

134 APPENDIX 2: CMHC OCTOBER 2004 RENTAL MARKET SURVEY For immediate release AVERAGE RENTAL VACANCY RATE ROSE TO 2.7 PER CENT OTTAWA - December 21, The average rental apartment vacancy rate in Canada's 28 major centres 1 rose to 2.7 per cent in October 2004 from 2.2 per cent a year ago, according to the Rental Market Survey released today by Canada Mortgage and Housing Corporation (CMHC). This is the third consecutive annual increase in the vacancy rate, but it remains below the 3.3 per cent average vacancy rate that occurred over the 1992 to 2003 period. "The rising vacancy rate over the past year is due to various factors, said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. Low mortgage rates have kept mortgage carrying costs low and lessened demand for rental housing by bringing home ownership within the reach of many renter households. Vacancy rates have also risen because of modest rental apartment completions, which have added new rental supply in some centres." "Despite the higher vacancy rates in many centres, there are many households that pay more than 30 per cent of their income for rent. These households either need to move to less expensive units or require some help in order to make their monthly shelter costs more affordable. In some cases, however, there are not enough vacant units to meet the needs of all households in core housing need; for example households living in crowded conditions. Therefore, additional affordable housing units continue to be required, said Bob Dugan. Vacancy rates were higher than one year ago in 21 of Canada's 28 major centres, but fell in seven. Windsor (8.8 per cent), Saskatoon, Saint John (NB), Edmonton, Saguenay, and Thunder Bay had the highest vacancy rates, while Victoria (0.6 per cent), Sherbrooke, Québec, Winnipeg, Trois-Rivières, and Vancouver were among the cities with the lowest vacancy rates. In Ontario, vacancy rates were higher in nine of 11 major centres. Rates increased by at least one percentage point in Windsor (4.5 percentage points to 8.8 per cent), Thunder Bay, London and Ottawa. The vacancy rate in Toronto increased by half a percentage point to 4.3 per cent. In Quebec, five of six major centres had higher vacancy rates than in The greatest increase occurred in Gatineau (from 1.2 per cent to 2.1 per cent), while the vacancy rate in Québec more than doubled from 0.5 per cent to 1.1 per cent. The vacancy rate in Montreal recorded a half percentage point increase to 1.5 per cent. The vacancy rate in Trois-Rivières declined 0.3 percentage point to 1.2 per cent. Vacancy rates went up in three of five metropolitan areas in the Prairies. The largest increases were in Edmonton where the vacancy rate rose by 1.9 percentage points to 5.3 per cent and in Saskatoon where the vacancy rate increased by 1.8 percentage points to 6.3 percent. There were marginal declines in Winnipeg and Calgary with vacancy rates of 1.1 and 4.3 per cent respectively. British Columbia is home to the tightest metropolitan rental market in Canada as the Victoria vacancy rate fell by 0.5 percentage point to 0.6 per cent. In Vancouver, the vacancy rate declined by 0.7 percentage point to 1.3 per cent, while the Abbotsford vacancy rate increased slightly to 2.8 per cent. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 126

135 All three metropolitan centres in Atlantic Canada recorded vacancy rate hikes with the rate in St. John's (NFLD) rising by 1.1 percentage points to 3.1 per cent. Average rents for two-bedroom apartments increased in all major centres, except Windsor where rents were unchanged. The greatest increase occurred in both Sherbrooke and Québec where rents were up 5.1 per cent, and in Trois-Rivières where rents were up 4.8 per cent. Average rents in Trois-Rivières, Halifax, Gatineau, Montréal, Saint John (NB), and London were all up by three per cent or more. The highest average monthly rents for two-bedroom apartments were in Toronto ($1,052), Vancouver ($984), and Ottawa ($940). The lowest average rents were in Trois-Rivières ($457) and Saguenay ($459). A new measure called the availability rate has been introduced on a pilot basis this year in all 28 major centres across Canada. A rental unit is considered available if the unit is vacant (physically unoccupied and available for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. CMHC's Rental Market Survey found that the average rental apartment availability rate in Canada's 28 metropolitan areas was 3.9 per cent in October CMHC's Rental Market Survey is conducted yearly in October, to provide vacancy rate and rent information on privately initiated apartment structures containing at least three rental units. For further information contact: Bob Dugan CMHC (613) bdugan@cmhc-schl.gc.ca The full text of this press release is available on the internet at 1 Major centres are based on Statistics Canada Census Metropolitan Areas (CMAs) with the exception of the Ottawa-Gatineau CMA which is treated as two centres for Rental Market Survey purposes. Note: Tables of vacancy rates and rents are attached. For local rental market information, please contact your local CMHC branch. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 127

136 VACANCY RATES IN PRIVATELY INITIATED APARTMENT STRUCTURES OF THREE UNITS AND OVER IN METROPOLITAN AREAS October 2000 October 2001 October 2002 October 2003 October 2004 Atlantic Region St.John's Halifax Saint John Quebec Region Gatineau Montréal Québec Saguenay Sherbrooke Trois-Rivières Ontario Region Hamilton Kingston* Kitchener London Oshawa Ottawa St.Catharines-Niagara Greater Sudbury Thunder Bay Toronto Windsor Prairie Region Calgary Edmonton Regina Saskatoon Winnipeg British Columbia Region Abbotsford* Vancouver Victoria Total (1) (1) Weighted average of metropolitan areas surveyed does not include the newly created Abbotsford and Kingston CMAs prior to * Data prior to 2002 is based on the census agglomeration definition; 2002, 2003 and 2004 data is based on the census metropolitan area definition. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 128

137 AVERAGE RENTS IN PRIVATELY INITIATED APARTMENT STRUCTURES OF THREE UNITS AND OVER IN METROPOLITAN AREAS One-Bedroom Two-Bedroom Oct Oct Oct Oct Atlantic Region $ $ $ $ St.John's Halifax Saint John Quebec Region Gatineau Montréal Québec Saguenay Sherbrooke Trois-Rivières Ontario Region Hamilton Kingston Kitchener London Oshawa Ottawa St.Catharines-Niagara Greater Sudbury Thunder Bay Toronto ,040 1,052 Windsor Prairie Region Calgary Edmonton Regina Saskatoon Winnipeg British Columbia Region Abbotsford Vancouver Victoria KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 129

138 VACANCY AND AVAILABILITY RATES IN PRIVATELY INITIATED APARTMENT STRUCTURES OF THREE UNITS AND OVER IN METROPOLITAN AREAS Atlantic Region Vacancy Rate October 2004 Availability Rate October 2004 St.John's Halifax Saint John Quebec Region Gatineau Montréal Québec Saguenay 5.3 NA Sherbrooke Trois-Rivières Ontario Region Hamilton Kingston Kitchener London Oshawa Ottawa St.Catharines-Niagara Greater Sudbury Thunder Bay Toronto Windsor Prairie Region Calgary Edmonton Regina Saskatoon Winnipeg British Columbia Region Abbotsford Vancouver Victoria Total (1) (1) Weighted average of metropolitan areas surveyed KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 130

139 APPENDIX 3: MUNICIPAL HOUSING FACILITIES BYLAW BY-LAW NO A BY-LAW TO PERMIT COUNCIL TO ENTER INTO AGREEMENTS FOR THE PROVISION OF AFFORDABLE HOUSING PASSED: February 18, 2003 The Council of the Corporation of the City of Kingston enacts as follows: 1. In this by-law Act means the Municipal Act, 2001, S.O. 2001, c. 25 and its corresponding regulations; Affordable housing unit means housing unit with monthly occupancy costs at or below average rents in Kingston and area as defined annually by Canada Mortgage and Housing Corporation (CMHC); Affordability period means time when rents for the units are maintained at or lower than the CMHC average rates for a minimum of 15 years; "Average rents" means average monthly rents by type of unit for that calendar year as determined and published annually by CMHC; Housing project means a project or part of a project designed to provide or facilitate the provision of residential accommodation, with or without any public space, recreational facilities and commercial space or buildings appropriate therto; Household income means the gross annual income from all sources of all persons who reside in a housing unit, or who will reside in a housing unit if such housing unit were rented to them; Municipal Housing Facility Agreement means an agreement as set out in section 2; Central waiting list means the list of applicants for affordable housing managed by the Central Waiting List Manager, known as Kingston & Frontenac Housing Corporation (KFHC). Phase-out period means a five-year period during which current tenants are protected by retention of affordable units and corresponding rents and vacant units may be rented at the market level. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 131

140 2. Council may pass by-laws permitting the City to enter into agreements for the provision of municipal housing facilities, pursuant to subsection 110 (1) of the Act. 3. Upon passing of an agreement by-law referred to in Section 2, the Clerk of the municipality shall give written notice of the by-law to the Minister of Education. 4. The agreement may allow the lease, operation, or maintenance of the housing capital facilities. 5. The City shall not enter into an agreement for the provision of the municipal housing facilities mentioned in Section 2 unless all the housing units to be provided as a part of the municipal housing project meet the definition of the affordable housing unit. 6. All affordable housing units must be rented to households with incomes below a maximum income limits established by type of unit as local standards under the Social Housing Reform Act; 7. Housing units targeted to the low-income households under the rent supplement program shall be made available only to individuals and families on the centralized waiting list. 8. The municipal housing facility agreement shall contain the following: (a) Subject of the Agreement (limited to the provision, lease, operation or maintenance); (b) Terms of the agreement with determined affordability period and phase-out period; (c) Housing capital facility particulars; (d) Operating framework with responsibilities in provision of affordable housing units; (e) Provisions reflecting those matters set out in Section 4,5,6 and 7 listed above; (f) Proposed rent schedule; (g) A list of the assistance provided by the municipality to the housing provider under the agreement; (h) Exemptions (tax, development charges); (i) Breach of Agreement details and remedies; (j) Registration provisions on title; (k) Communication protocol with the municipality with respect of services provided under the agreement for the purpose of project monitoring and enforcement; (l) Such other contractual provisions, which are required to be inserted, based on fundamental contractual drafting principles. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 132

141 9. The municipal housing facility agreement may specify financial or other assistance at less than market value rent or at no cost to the party which enters into this agreement with respect of the provision, lease, operation or maintenance of the housing facilities. 10. Municipal assistance specified under section 9 may include: (i) (ii) (iii) (iv) Giving or lending money and sharing interest; Giving, lending, leasing or selling property; Guaranteeing borrowing; and Providing the services of employees of the City; 11. Subject to subsection 110 (6) of the Act, the Council of municipality may exempt from taxation for municipal and school purposes land or a portion of it on which the housing capital facility is or will be located, if the housing capital facility: a) is the subject to the housing capital facility agreement; b) is owned or leased by the person who has entered into the housing capital facility agreement; and c) is entirely occupied and used or intended for use for affordable housing 12. The municipal housing facilities agreement containing the provisions for development charges exemptions may provide for a full or partial exemption for the facilities from the payment of development charges imposed by the City under the Development Charges Act, 1997, S.O. 1997, c If the municipal housing facilities agreement contains the exemption provisions set out in s. 11 and 12, a by-law distinct from the by-law referred to in Section 2 shall be passed, and the information set out under s. 11 and s 12 shall be inserted into that by-law. 14. The by=law referred to in Section 13 shall specify an effective date, which shall be the date of passing of the by-law or a later date. 15. Upon the passing of the by-law referred to in Section 13, the clerk shall give written notice of its contents to: (a) the local assessment corporation; (b) the clerk of any other municipality that would, but for the by-law, have the authority to levy rates on the assessment for the land exempted by the bylaw; (c) secretary of any school Board if the area of jurisdiction of the Board includes the land exempted by the by-law. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 133

142 16. The Council of municipality may establish a reserve fund for the purpose of renovating, repairing, and maintaining the housing facilities defined under the municipal housing facility agreement. This by-law may be cited as the Municipal Housing Facilities By-Law. GIVEN FIRST AND SECOND READING February 11, 2003 GIVEN THIRD READING AND PASSED February 18, 2003 CITY CLERK MAYOR KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 134

143 APPENDIX 4: 2003 MUNICIPAL FEES AND CHARGES FOR A TYPICAL 40 UNIT RENTAL APARTMENT PROJECT TYPE OF MUNICIPAL CHARGES AND FEES Exemption from Building Permit Fees Residential $900 per unit (for a project with construction value in $3 mln) Impost fees 1, Exemption from Municipal Development Charges Exemption from additional fees under development charges for Kingston Central Exemption from Planning Application Fees $1,496 per unit per residential unit $87.5 per unit Total $5, (total $3,500 for 40 units) Exemption from fees in case of an Official Plan Amendment and/or Rezoning $66.5 per unit (total $2,660 per building) Total $5, In case of a Zone change $101.5 per unit (total $4,060 per building) Total $5, In case of a Zone change is filed concurrently with an official plan amendment $35.25 per unit (total $1,410 per building) Total $5, In case of development with minor zoning variations or consents to conveyance that requires Committee of Adjustment approval $21.5 per unit ($860 per project) Total $5, In case of development with technical variance or technical consent or if a consent application is filed concurrently with a minor variance application $11.5 per unit ($460 per project) Total $5, Utilities fees: Sewer nil Plumbing - $6 per fixture KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 135

144 APPENDIX 5: SUGGESTED RESOLUTIONS FOR COUNCIL TO CONSIDER RELATED TO AFFORDABLE HOUSING ADVOCACY The following represent examples of potential municipal advocacy positions on current housing issues. Many of these were suggested by community stakeholders and housing advocates during consultation for development of the Kingston Model. General Housing Supply and Infrastructure Assistance That the City of Kingston request that the Federal Government adopt a National Housing Strategy which would include the 1% of budget solution for financing affordable housing That the City of Kingston request that the right to housing be included in the Charter of Rights and Freedoms That the City of Kingston request that CMHC provide 100% capital financing for new and rehabilitation projects to increase affordable housing supply That the City of Kingston request that CMHC provide 100% capital financing for the rehabilitation of existing affordable housing projects through RRAP grants or direct mortgage assistance to reduce the financial capital maintenance costs to either housing providers or municipalities Household Income Support That the City of Kingston request that the Federal Government reduce Employment Insurance (EI) requirements and increase assistance to make funding more readily available to individuals in light of the current multi-billion surplus in this fund That the City of Kingston request that the Provincial Government increase Provincial shelter allowances to a minimum of $500/month or local market rates, whichever is greater That the City of Kingston request that the Provincial Government provide for a household housing subsidy (RGI supplement) program to keep new and existing project rents affordable Skills Development 136

145 That the City of Kingston request that Human Resources Skills Development Canada (HRSDC) provide specific housing supportive funding for the development of individual work skills and for transitional support through community organizations. Federal Responsibility for Urban Native Housing That the City of Kingston request that the Federal Government resume its direct historical responsibility for both urban and on reserve Aboriginal housing. Such a resolution would encourage the Federal Government to recognize its responsibility in this area as well as remove the cost of the urban native housing program from local government. (Municipalities across Ontario are being asked by urban native housing providers to adopt such resolutions in recognition of the direct responsibility of Her Majesty the Queen in Right of Canada for Aboriginal matters. For example, The Corporation of the City of Thunder Bay has adopted such a resolution and The Corporation of the City of Toronto is now considering a similar resolution.) Bank of Canada Financing That the City of Kingston urge the Provincial Government to guarantee municipal securities so that municipalities can get financing from the Bank of Canada for affordable housing. KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 137

146 APPENDIX 6: CAPITAL AND OPERATING BUDGET, KINGSTON & FRONTENAC SENIORS PROJECT Capital Budget, Kingston & Frontenac Seniors Project AREAS AND ASSUMPTIONS General Project Name: Kingston Frontenac Housing Corporation Project Address: 125 Van Order Drive Affordable Housing Units to Be Provided Number Rent $ Rm or Unit Size (ft 2 /m 2 ) Bachelor units 0 1 Bedroom units 41 $ sq. ft./ sq. m. Total Rooms and Units 41 sq. ft m 2 Site Area (sq. ft./m 2 ) 237,451 22,059 Dwelling Units (self contained) 24,518 2,277.7 Non-Residential floor area (office space) 9, Circulation, common indoor amenity space 4, Total Floor Area (sq. ft./m 2 ) 39,260 3,647.3 Surface Parking spaces (11 for office, 32 for residents) 43 Enclosed Parking spaces 0 Base Construction Cost/sq.ft/m , KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 138

147 HARD COSTS Construction Costs Total Cost Per Unit 1 Base Construction Cost 4,318, ,332 2 Site Preparation and Landscaping (included in line 1) n/a 0 3 Appliances 42,000 1,024 4 Furniture and Equipment 15, Environmental remediation n/a 0 6 Other n/a 0 Construction Costs 4,375, ,722 7 Construction Bond (included in line 1) n/a 0 8 Contract Management Fee (included in line 1) n/a 0 9 Contingency and Escalation (5% of line 1) 215,930 5, PST on lines 1, 3, 4, 9 367,322 8, GST 7% 321,407 7,839 A Construction Costs Sub-total 5,280, ,787 Land Cost Total Cost Per Unit 12 Land purchase price (estimated value of owned land) 307,500 7, Land Transfer Tax (not applicable) Legal fees and disbursements (not applicable) Other GST on land purchase (if applicable) 0 0 B Land Cost Sub-total 307,500 7,500 Hard Costs Summary Total Cost Per Unit C Hard Costs Total (A+B) 5,587, ,287 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 139

148 SOFT COSTS Building Total Cost Per Unit Consultants: 17 Architectural (includes Structural, Mechanical, Electrical, Landscape, 5% of line 1 plus line 9) 226,727 5, Quantity Surveyor 25, Development Consultant ($3,000/unit) 123,000 3, Printing and Disbursements 6, GST 7% 26, D Building Sub-total 407,378 9,936 Site Total Cost Per Unit 22 Building and Property Appraisal n/a 0 23 Survey 4, Geotechnical Assessment 8, Environmental Assessment 7, Other Studies (parking, noise) 8, Stormwater Management Study 8, GST 7% 2, E Site Sub-total 37, Legal and Organizational Total Cost Per Unit 29 Legal Fees Development Approvals (e.g. Committee of Adjustment) 2, Legal Fees OMB (if applicable) n/a 0 31 Legal Fees contracts and agreements 13, Organizational Expenses 8, Insurance and Audit 4, GST 7% 1, F Legal & Organizational Sub-total 28, Financing Costs Total Cost Per Unit 35 Construction Financing 76,150 1, CMHC Fees 137,070 3, PST on CMHC Fees: 10, G Financing Costs Sub-total 224,186 5,467 Fees and Permits Total Cost Per Unit 38 Building Permit Fees ($12/$1000 of construction fees, plumbing fees $6/fixture) 55,398 1, Planning Application Fees 3, Development Charges 4,316, using rate up to August 31, 2005) 176,956 4, Parkland Dedication 5, School Board Levy Hydro Connection Fee 15, Sewer and Water Connection Fee Property Taxes During Construction 0 0 H Fees and Permits Sub-total 256,398 6,253 Soft Costs Summary Total Cost Per Unit Soft Costs Subtotal (D+E+F+G+H) 954,302 23, Contingency (3% of soft costs excluding financing costs) 21, J Soft Costs Total (total above 3 lines) 976,205 23,810 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 140

149 Total Cost Per Unit Hard Cost Total ( C ) 5,587, ,287 Soft Cost Total ( J ) 976,205 23,810 Total Project Cost (total above 2 lines) 6,563, ,097 PST included in Total Project Cost 378,288 9,226 GST included in Total Project Cost 352,398 8,595 CONTRIBUTIONS Contributions Total Cost Per Unit 47 Fees and Permits Waived 241,398 5, Equity contribution from sale of units (net) 1,000,000 24, Land Value Donated 307,500 7, Federal-Provincial Affordable Housing Program 1,025,000 25, Mortgage Financing 3,270,346 79, PST Rebate for registered charities (100% on hard costs) 367,322 8, GST Rebate (100% rebate) 352,398 8,595 Total Contributions 6,563, ,097 Total Contributions Less Total Project Costs 0 0 Explanatory Notes to Capital Budget Line Description Notes # 1 Construction cost Base construction cost of $110/sq. ft., excluding PST 2 Site preparation and landscaping Included in line 1 3 Appliances Based on $1,000/pair (refrigerator and range) per unit plus 1 pair for community space. Coin-operated laundry appliances will be rented under a contract 4 Furniture and equipment Office furniture such as tables, chairs, desks for housing staff and common areas for use by residents 5 Environmental remediation Site will not require remediation 6 Other N/A 7 Construction bond Included in line 1 8 Contract management fee Included in line 1 9 Contingency and escalation Based at 5% of line 1 10 PST on base construction Cost, appliances, furniture and equipment, contingency and escalation PST on base construction cost, appliances, furniture and equipment, contingency and escalation, at 8% 11 GST 7% on construction costs 12 Land purchase price Value of land estimated by consultant 13 Land transfer tax Not applicable, land already owned 14 Legal fees and disbursements Not applicable, land already owned 15 Other N/A 16 GST on land purchase Not applicable, land already owned 17 Architectural consultant Based on 5% of lines 1 and 9, includes structural, mechanical, electrical engineers and landscape architect s fees 18 Quantity surveyor Based on similar projects 19 Development consultant Based on fee of $3,000/unit, based on similar projects 20 Printing and disbursements Charges for architect s printing and disbursement expenses, based on similar projects KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 141

150 21 GST 7% on consulting costs 22 Building and property appraisal Not required, land already owned 23 Survey Estimated costs for site survey, based on similar projects 24 Geotechnical assessment Estimated costs for soil assessment, based on similar projects 25 Environmental assessment Estimated costs for Phase I Environmental Report, based on similar projects 26 Other studies Estimated costs for parking and noise studies, based on similar projects 27 Stormwater management study Estimated costs for stormwater management study, based on similar projects 28 GST 7% on site costs 29 Legal fees-development approvals Estimated fees for preparation of committee of adjustment submission 30 Legal fees-omb hearing N/A, not required Legal fees-contracts and Estimated fees for solicitor s preparation and review of 31 agreements contracts and agreements 32 Organizational expenses Estimated charges for mileage, printing, marketing costs Insurance and audit Board of directors liability insurance coverage during project 33 and capital cost audit once project is completed 34 GST 7% on legal and organization costs 35 Construction financing Funds required to construct project, once other contributions are deducted, estimated at 5% interest 36 CMHC fees Estimated at 4.5% of financing costs 37 PST on CMHC fees 8% on CMHC fees 38 Building permit fees Based on municipal rates of $12 per $1,000 of construction fee, plus plumbing fees at $6 per fixture 39 Planning application fees Based on municipal rates Development charges Based on municipal rates of $4,316 per unit, valid up to August 40 31, 2005 Parkland dedication Calculated at 22,059 sq. m. of land, valued at $307,500 for 41 units, with first 2 units at no cost and remaining 39 units at sq. m. of parkland required = 390 sq. m. required. 390/22059 X =$5, School board levy N/A not charged by school boards in community 43 Hydro connection fee Estimated cost based on similar projects 44 Sewer and water connection fee Included in municipal charges above Property taxes during construction N/A land already owned, with current owner responsible for 45 property taxes 46 Contingency on soft costs Calculated at 3% of soft costs, excluding financing costs Fees and permits waived Equity contribution sale of units Waiver of municipal charges: building permit fees, planning application fees, development charges Net proceeds from sale of 10 scattered units, based on estimate from local realtor 49 Land value Estimated value of land to be donated 50 Federal-Provincial Affordable $25,000/unit maximum contribution Housing Program 51 Mortgage financing Funding required to construct project once other contributions are considered 52 PST rebate 100% of PST charged on construction, as housing corporation is a registered charity 53 GST rebate 100% of GST charged on capital costs, as housing corporation is providing affordable housing KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 142

151 Operating Budget, Kingston & Frontenac Seniors Project Increases to revenue and expenses are based on a 2% inflation rate per year. Category Year 1 Year 2 Year 3 Year 4 Year 5 Total Gross Annual Rental Revenue 317, , , , ,032 Laundry and Parking Income 6,600 6,732 6,867 7,004 7,144 Income from Office Space 49,075 50,057 51,058 52,079 53,120 Total Project Revenue 373, , , , ,296 Minus Vacancy Allowance (4%) -12,713-12,968-13,227-13,491-13,761 Net Annual Revenue 360, , , , ,535 Category Year 1 Year 2 Year 3 Year 4 Year 5 Insurance 8,000 8,160 8,323 8,490 8,659 Janitor and maintenance 30,000 30,600 31,212 31,836 32,473 Mortgage Payments 228, , , , ,246 Heat, hydro and water 41,000 41,820 42,656 43,510 44,380 Property management and administration 15,000 15,300 15,606 15,918 16,236 Property tax ($2,000,000 30,390 30,998 31,618 32,250 32,895 Replacement reserve fund (5%) 6,219 6,344 6,471 6,600 6,732 TOTAL 358, , , , ,621 Operating Surplus (Deficit) 1,939 6,542 11,238 16,027 20,914 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 143

152 Category Year 6 Year 7 Year 8 Year 9 Year 10 Total Gross Annual Rental Revenue 350, , , , ,839 Laundry and Parking Income 7,287 7,433 7,581 7,733 7,888 Income from Office Space 54,183 55,266 56,372 57,499 58,649 Total Project Revenue 412, , , , ,375 Minus Vacancy Allowance (4%) -14,036-14,317-14,604-14,896-15,194 Net Annual Revenue 398, , , , ,182 Category Year 6 Year 7 Year 8 Year 9 Year 10 Insurance 8,833 9,009 9,189 9,373 9,561 Janitor and maintenance 33,122 33,785 34,461 35,150 35,853 Mortgage Payments 228, , , , ,246 Heat, hydro and water 45,267 46,173 47,096 48,038 48,999 Property management and administration 16,561 16,892 17,230 17,575 17,926 Property tax ($2,000,000 33,553 34,224 34,908 35,606 36,319 Replacement reserve fund (5%) 6,867 7,004 7,144 7,287 7,433 TOTAL 372, , , , ,337 Operating Surplus (Deficit) 25,896 30,979 36,165 41,452 46,845 Endnotes to First Year Operating Budget First year rents are set at the maximum monthly amount of $646 for 41 one-bedroom units based on CMHC s average rents in privately initiated apartment structures of three units and over in metropolitan areas for October 2004 Parking and laundry revenue is based on 30 spots at $15.00 month surface parking and net revenue from laundry equipment of $1,200 Income from office space rental is calculated at $5 per square foot per year, based on 9,815 square feet Vacancy allowance is calculated at 4% of total gross annual rental revenue from units Insurance cost is based on similar projects Janitor and maintenance costs are based on.5 FTE janitor plus expenses Mortgage payments are based on a mortgage of $3,270,346 at 5% over 25 years Hydro, heat and water costs are based on $1,000 per unit per year Property management and administration costs are based on similar projects Property tax is estimated on an assessed value of $2,000,000 at the single family residential rate Replacement reserve fund is calculated at 5% of operating costs, excluding mortgage KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 144

153 APPENDIX 7: CAPITAL AND OPERATING BUDGET, BYRON PARKING LOT PROJECT Capital Budget, Bryon Parking Lot Project AREAS AND ASSUMPTIONS General Project Name: Byron Parking Lot Project Address: Kingston Affordable Housing Units to Be Provided Number Rent $ Rm or Unit Size (ft 2 /m 2 ) Bachelor units 0 1 Bedroom units 38 $ sq. ft./ sq. m. 2 Bedroom units 14 $ sq. ft./ sq. m. Total Rooms and Units 52 sq. ft m 2 Site Area (sq. ft./m2) 25,545 2, Residential Portion: Dwelling Units (self contained) 27,200 2, Non-Residential floor area (office space) 8, Circulation, common indoor amenity space 5, Total Floor Area (sq. ft./m 2 ) 40,806 3, Surface Parking spaces 5 Enclosed Parking spaces 25 Base Construction Cost/sq.ft/m , Non-Residential Portion: 73 parking spaces, multi-level structure, aboveground, $15,000 per space less 10% for economies of scale 25,000 2,322.5 HARD COSTS Construction Costs Total Cost Per Unit Base Construction Cost - Housing project, including residential parking 1 costs 4,896,720 94,168 2 Site Preparation and Landscaping (demolition) 10, Appliances 53,000 1,019 4 Furniture and Equipment 15, Environmental remediation Parking garage construction 985,500 18,952 Construction Costs 5,960, ,620 7 Construction Bond (included in line 1) Contract Management Fee (included in line 1) 0 0 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 145

154 9 Contingency and Escalation (5% of line 1, 6) 294,111 5, PST on lines 1, 2, 3, 4, 6, 9 500,346 9, GST 7% 437,803 8,419 A Construction Costs Sub-total 7,192, ,317 Land Cost Total Cost Per Unit 12 Land purchase price (estimated value of owned land) 467,000 8, Land Transfer Tax (not applicable) Legal fees and disbursements (not applicable) Other GST on land purchase (if applicable) 0 0 B Land Cost Sub-total 467,000 8,981 Hard Costs Summary Total Cost Per Unit C Hard Costs Total (A+B) 7,659, ,298 SOFT COSTS Building Total Cost Per Unit Consultants: 17 Architectural (includes Structural, Mechanical, Electrical, Landscape, 5% of lines 1 and 6 plus line 9) 308,817 5, Quantity Surveyor 25, Development Consultant ($3,000/unit) 156,000 3, Printing and Disbursements 6, GST 7% 34, D Building Sub-total 530,524 10,202 Site Total Cost Per Unit 22 Building and Property Appraisal n/a 0 23 Survey 4, Geotechnical Assessment 8, Studies (Environmental Assessment, Parking, Noise, Urban Design if required) 15, Stormwater Management Study 8, GST 7% 2, E Site Sub-total 37, Legal and Organizational Total Cost Per Unit 28 Legal Fees Development Approvals (e.g. Committee of Adjustment) 2, Legal Fees OMB (if applicable)* n/a 0 30 Legal Fees contracts and agreements 13, Organizational Expenses 10, Insurance and Audit 5, GST 7% 2, F Legal & Organizational Sub-total 32, Financing Costs Total Cost Per Unit 34 Construction Financing 111,858 2, CMHC Fees 201,344 3, PST on CMHC Fees: 16, G Financing Costs Sub-total 329,309 6,333 Fees and Permits Total Cost Per Unit 37 Building Permit Fees ($12/$1000 of construction fees, plumbing fees 71,883 1,382 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 146

155 $6/fixture) 38 Planning Application Fees 3, Development Charges 4,316, 5,551 + $3.61/25,000 sq. ft. parking structure) 331,972 6, Parkland Dedication 98,398 1, School Board Levy Hydro Connection Fee 15, Sewer and Water Connection Fee Property Taxes During Construction 0 0 H Fees and Permits Sub-total 520,853 10,015 Soft Costs Summary Total Cost Per Unit Soft Costs Subtotal (D+E+F+G+H) 1,450,236 27, Contingency (3% of soft costs excluding financing costs) 43, J Soft Costs Total (total above 3 lines) 1,493,743 28,726 Total Cost Per Unit Hard Cost Total ( C ) 7,659, ,298 Soft Cost Total ( J ) 1,493,743 28,726 Total Project Cost (total above 2 lines) 9,153, ,024 PST included in Total Project Cost 516,454 9,932 GST included in Total Project Cost 477,060 9,174 CONTRIBUTIONS Contributions Total Cost Per Unit 46 Fees and Permits Waived 505,853 9, Property Tax Rate Adjustment* * 374,000 7, Land Value 467,000 8, Federal-Provincial Affordable Housing Program 1,300,000 25, Mortgage Financing 4,800,343 92, Municipal Debenture for Parking Structure 1,086,514 20, PST Rebate for registered charities (100% on hard costs) 516,454 9, GST Rebate (100% rebate) 477,060 9,174 Total Contributions 9,153, ,024 Total Contributions Less Total Project Costs 0 0 * It has been assumed that no OMB hearing would be required, but if it were, then there would be an additional cost ** Does not count as a cash contribution, but is included in the matching funds from the province, municipality and group KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 147

156 Explanatory Notes to Capital Budget: The Byron Parking lot housing project assumes replacement of the existing 73 parking spaces. The following options may be considered: (1) City Council approve an additional municipal contribution to compensate for replacement of the existing parking lot (proposed demonstration project costs to replace and provide parking were calculated in the amount of $1,086,514). (2) City Council contribute the municipal parking lot land and transfer property rights to a private company that maintains and operates a new parking facility replacing existing public parking, plus parking for the affordable housing project. Line # Description Notes 1 Construction cost Base construction cost of $120/sq. ft., excluding PST, including cost to construct parking spaces for residents 2 Site preparation and landscaping Estimated cost to demolish parking lot 3 Appliances Based on $1,000/pair (refrigerator and range) per unit plus 1 pair for community space. Coin-operated laundry appliances will be rented under a contract 4 Furniture and equipment Office furniture such as tables, chairs, desks for housing staff and common areas for use by residents 5 Environmental remediation Site will not require remediation 6 Other: parking structure Based on capital cost of $15,000 per spot for 73 spots, less 10% economies of scale (elevators, stairs) 7 Construction bond Included in line 1 8 Contract management fee Included in line 1 9 Contingency and escalation Based at 5% of line 1 10 PST on base construction Cost, appliances, furniture and equipment, contingency and escalation PST on base construction cost, appliances, furniture and equipment, contingency and escalation, at 8% 11 GST 7% on construction costs 12 Land purchase price Value of land estimated by consultant 13 Land transfer tax Not applicable, land will be leased 14 Legal fees and disbursements Not applicable, land will be leased 15 Other N/A 16 GST on land purchase Not applicable, land will be leased 17 Architectural consultant Based on 5.0% of lines 1, 2 and 9, includes structural, mechanical, electrical engineers and landscape architect s fees 18 Quantity surveyor Based on similar projects 19 Development consultant Based on fee of $3,000/unit, based on similar projects 20 Printing and disbursements Charges for architect s printing and disbursement expenses, based on similar projects 21 GST 7% on consulting costs 22 Building and property appraisal Not applicable, land will be leased 23 Survey Estimated costs for site survey, based on similar projects 24 Geotechnical assessment Estimated costs for soil assessment, based on similar projects Studies Stormwater management study Estimated costs for Phase I Environmental Report, parking study, noise study, urban design study if required, based on similar projects Estimated costs for stormwater management study, based on similar projects 27 GST 7% on site costs 28 Legal fees-development Estimated fees for preparation of committee of adjustment KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 148

157 approvals submission Legal fees-omb hearing It has been assumed that no OMB hearing would be required, 29 but if a hearing was required, and additional cost would be incurred 30 Legal fees-contracts and Estimated fees for solicitor s preparation and review of contracts agreements and agreements including lease for property 31 Organizational expenses Estimated charges for mileage, printing, marketing costs 32 Insurance and audit Board of directors liability insurance coverage during project and capital cost audit once project is completed 33 GST 7% on legal and organization costs 34 Construction financing Funds required to construct project, once other contributions are deducted, estimated at 5% interest 35 CMHC fees Estimated at 4.5% of financing costs 36 PST on CMHC fees 8% on CMHC fees 37 Building permit fees Based on municipal rates of $12 per $1,000 of construction fee on lines 1 and 6, plus plumbing fees at $6 per fixture, 52 units with 4 fixtures each plus 3 washers plus 4 public washroom fixtures plus 1 community room sink = 216 fixtures X $6 = $1, Planning application fees Based on municipal rates 39 Development charges Based on municipal rates of $4,316 per unit for 1-bedroom unit, $5,551 for 2-bedroom unit, plus $3.61 per square foot for 25,000 square foot parking structure 40 Parkland dedication Calculated at 2, sq. m. of land, valued at $467,000 for 52 units, with first 2 units at no cost and remaining 50 units at 10 sq. m. of parkland required = 500 sq. m. required. 500/2373 X 467,000 =$98, School board levy N/A not charged by school boards in community 42 Hydro connection fee Estimated cost based on similar projects 43 Sewer and water connection fee Included in municipal charges above 44 Property taxes during N/A land will be leased, municipally-owned land construction 45 Contingency on soft costs Calculated at 3% of soft costs, excluding financing costs 46 Fees and permits waived Waiver of municipal charges: building permit fees, planning application fees, development charges Property tax rate adjustment Value of difference between existing multi-residential and new 47 multi-residential tax rate, considered a local contribution to match up to $25,000 federal contribution 48 Land value Estimated value of land to be donated 49 Federal-Provincial Affordable $25,000/unit maximum contribution 50 Housing Program Mortgage financing Funding required to construct project once other contributions are considered 51 Municipal debenture Value of construction of parking structure 52 PST rebate 100% of PST charged on construction, as housing corporation is a registered charity 53 GST rebate 100% of GST charged on capital costs, as housing corporation is providing affordable housing KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 149

158 Operating Budget, Byron Parking Lot Project Increases to revenue and expenses are based on a 2% inflation rate per year. Residential Structure Category Year 1 Year 2 Year 3 Year 4 Year 5 Total Gross Annual Rental Revenue 426, , , , ,610 Laundry and Parking Income 16,700 17,034 17,375 17,722 18,077 Income from Office Space 97,992 99, , , ,070 Total Project Revenue 541, , , , ,756 Minus Vacancy Allowance (4%) -17,058-17,399-17,747-18,102-18,464 Net Annual Revenue 524, , , , ,292 Category Year 1 Year 2 Year 3 Year 4 Year 5 Insurance 10,000 10,200 10,404 10,612 10,824 Janitor and maintenance 40,000 40,800 41,616 42,448 43,297 Mortgage Payments 335, , , , ,028 Heat, hydro and water 52,000 53,040 54,101 55,183 56,286 Property management and administration 20,000 20,400 20,808 21,224 21,649 Property tax ($2,900,000 44,065 44,947 45,845 46,762 47,698 Replacement reserve fund (5%) 8,303 8,469 8,639 8,811 8,988 TOTAL 509, , , , ,770 Operating Surplus (Deficit) 14,694 21,688 28,822 36,100 43,522 Parking Structure Category Year 1 Year 2 Year 3 Year 4 Year 5 Revenue (73 $69/month) 60,444 61,653 62,886 64,144 65,427 Expenses: Property tax, insurance, administration, reserve 29,200 29,784 30,380 30,987 31,607 Municipal debenture payments 90,269 90,269 90,269 90,269 90,269 Net Loss from Parking Structure -59,025-58,400-57,763-57,113-56,449 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 150

159 Residential Structure Category Year 6 Year 7 Year 8 Year 9 Year 10 Total Gross Annual Rental Revenue 470, , , , ,654 Laundry and Parking Income 18,438 18,807 19,183 19,567 19,958 Income from Office Space 108, , , , ,110 Total Project Revenue 597, , , , ,722 Minus Vacancy Allowance (4%) -18,834-19,210-19,595-19,986-20,386 Net Annual Revenue 578, , , , ,336 Category Year 6 Year 7 Year 8 Year 9 Year 10 Insurance 11,041 11,262 11,487 11,717 11,951 Janitor and maintenance 44,163 45,046 45,947 46,866 47,804 Mortgage Payments 335, , , , ,028 Heat, hydro and water 57,412 58,560 59,732 60,926 62,145 Property management and administration 22,082 22,523 22,974 23,433 23,902 Property tax ($2,900,000 48,652 49,625 50,617 51,629 52,662 Replacement reserve fund (5%) 9,167 9,351 9,538 9,729 9,923 TOTAL 527, , , , ,415 Operating Surplus (Deficit) 51,092 58,815 66,691 74,727 82,921 Parking Structure Category Year 6 Year 7 Year 8 Year 9 Year 10 Revenue (73 $69/month) 66,735 68,070 69,431 70,820 72,236 Expenses: Property tax, insurance, administration, reserve 32,239 32,884 33,542 34,212 34,897 Municipal debenture payments 90,269 90,269 90,269 90,269 90,269 Net Loss from Parking Structure -55,773-55,083-54,379-53,662-52,929 Endnotes to First Year Operating Budget First year rents are set at the maximum monthly amount for units based on CMHC s average rents in privately initiated apartment structures of three units and over in metropolitan areas for October These rents are $646 for a one-bedroom apartment and $785 for a two-bedroom apartment Parking and laundry revenue is based on 35 spots at $35.00 month above-ground parking structure and net revenue from laundry equipment of $2,000 Income from office space is calculated at $12 annually for 8,166 square feet Vacancy allowance is calculated at 4% of total gross annual rental revenue from units Insurance cost is based on similar projects Janitor and maintenance costs are based on.75 FTE janitor plus expenses Mortgage payments are based on a mortgage of $4,800,343 at 5% over 25 years Hydro, heat and water costs are based on $1,000 per unit per year Property management and administration costs are based on similar projects Property tax is estimated on an assessed value of $2,900,000 at the single family residential rate Replacement reserve fund is calculated at 5% of operating costs, excluding mortgage KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 151

160 Parking structure revenue calculated at $69/month per 73 spaces based on similar charges for premium spaces in other parking lots operated by City of Kingston Operating expenses for parking structure (73 spaces) based on property tax, insurance, maintenance, administration, reserve Municipal debenture payments based on 20 year debenture at 5.644% KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 152

161 APPENDIX 8: CAPITAL AND OPERATING BUDGET, HABITAT FOR HUMANITY PROJECT AREAS AND ASSUMPTIONS General Project Name: Habitat for Humanity, Kingston Project Address: Montreal Street, Kingston Affordable Housing Units to Be Provided 3 Bedroom units Total Units 2 Unit Number Size (ft 2 /m 2 ) sq. ft./ 92.9 sq. m. sq. ft m 2 Dwelling Units (self contained) 2, Total Floor Area (sq. ft./m 2 ) 2, HARD COSTS Construction and Land Costs Total Cost Per Unit 1 Land 43,000 21,500 2 Construction costs (after donations of labour and materials) 62,500 31,250 3 Incidental fees related to land purchase Land transfer tax Total Hard Costs 106,590 53,295 SOFT COSTS Total Cost Per Unit 5 Servicing costs 15,000 7,500 6 Permit fees, development charges 10,500 5,250 Total Soft Costs 25,500 12,750 Total Cost Per Unit Hard Cost Total 106,590 53,295 Soft Cost Total 25,500 12,750 Total Project Cost (total above 2 lines) 132,090 66,045 Scenario One No Municipal Contributions CONTRIBUTIONS Contributions Total Cost Per Unit 1 Mortgage Financing through Habitat 132,090 66,045 4 Monthly Mortgage Payments Monthly Property Tax Payments Monthly Utility Costs Total Monthly Housing Costs 1, KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 153

162 Scenario Two Fees and Permits Waived CONTRIBUTIONS Contributions Total Cost Per Unit 1 Mortgage Financing through Habitat 121,590 60,795 2 Municipal Fees and Charges Waived 10,500 5,250 Total Contributions Required 132,090 66,045 4 Monthly Mortgage Payments Monthly Property Tax Payments Monthly Utility Costs Total Monthly Housing Costs 1, Scenario Three Fees and Permits Waived, Donated Land CONTRIBUTIONS Contributions Total Cost Per Unit 1 Mortgage Financing through Habitat 78,375 39,188 2 Municipal Fees and Charges Waived 10,500 5,250 3 Donated Land 43,000 21,500 4 Land Transfer Tax (not required) Total Contributions Required 132,090 66,045 5 Monthly Mortgage Payments Monthly Property Tax Payments Monthly Utility Costs Total Monthly Housing Costs 1, Line # Explanatory Notes to Capital Budget 1 Land 2 Description Construction costs (after donations of labour and materials) Notes Based on cost to purchase site for 2 semi-detached homes on Montreal Street Net cost, based on Concession Street build 3 Incidental fees related to land purchase Based on Concession Street build, less Land Transfer Tax of 125 included in $1,000 total incidental fees 4 Land transfer tax Based on published fee schedule for land at $43,000 5 Servicing costs Based on Concession Street build, adjusted to reflect lower anticipated servicing costs due to less complex site 6 Permit fees, development charges Based on Concession Street build KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 154

163 Explanatory Notes to Contributions and Monthly Housing Costs Line Description Notes # 1 Mortgage Financing through Habitat Total cost of project less contributions 2 Municipal Fees and Charges Waived Value of building permit fees and development charges waived by municipality 3 Donated Land Value of site 4 Land Transfer Tax (not required) Not applicable if site is donated 5 Monthly Mortgage Payments Based on 20-year interest-free mortgage held by Habitat for Humanity 6 Monthly Property Tax Payments Based on current costs for similar existing unit 7 Monthly Utility Costs Based on current costs for similar existing unit KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 155

164 APPENDIX 9: CAPITAL BUDGET, ELIZABETH FRY TRANSITIONAL HOUSING PROJECT Capital Budget, Elizabeth Fry Transitional Housing Project AREAS AND ASSUMPTIONS General Project Name: Elizabeth Fry Society of Kingston, Transitional Units Project Address: 39 Russell Street, Kingston Transitional Housing Maximum Rm or Unit Number Units to Be Provided Rent $ Size (ft 2 /m 2 ) 1 Bedroom units 5 $ sq. ft./ sq. m. 2 Bedroom units 1 $ sq. ft./ sq. m. Total Rooms and Units 6 sq. ft m2 Dwelling Units (self contained) 3, Non-Residential floor area (office space) 0 0 Circulation, common indoor amenity space 0 0 Total Floor Area (sq. ft./m 2 ) 3, Surface Parking spaces 6 Enclosed Parking spaces 0 Base Construction Cost/sq.ft/m , HARD COSTS Construction Costs Total Cost Per Unit 1 Base Construction Cost 412,500 68,750 2 Site Preparation and Landscaping 2, Appliances 7,150 1,192 4 Furniture and Equipment n/a n/a 5 Environmental remediation n/a n/a 6 Other n/a n/a Construction Costs (incl. PST) 422,390 70,399 7 Construction Bond (included in line 1) Contract Management Fee (included in line 1) Contingency and Escalation (6%) 25,343 4, PST on lines 1, 2, 3, 4, 9 35,819 5, GST 7% 31,341 5,224 A Construction Costs Sub-total 514,893 85,817 Land Cost Total Cost Per Unit 12 Land purchase price 45,000 7, Title Fees/Transfer (includes Land Transfer Tax of $225) 1, Legal fees and disbursements 1, Imposts and levies 6,750 1, GST on land purchase (if applicable) KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 156

165 B Land Cost Sub-total 54,515 9,087 Hard Costs Summary Total Cost Per Unit C Hard Costs Total (A+B) 569,408 94,901 SOFT COSTS Building Total Cost Per Unit Consultants: 17 Architectural (includes Structural, Mechanical, Electrical, Landscape, fees included in line 28) Quantity Surveyor (in line 28) Development Consultant (in line 28) Printing and Disbursements 5, GST 7% D Building Sub-total 6, Site Total Cost Per Unit 22 Building and Property Appraisal 2, Surveys 2, Geotechnical Assessment 5, Environmental Assessment (in line 24) Other Studies (parking, noise, stormwater management) GST 7% E Site Sub-total 11, Legal and Organizational Total Cost Per Unit 28 Administration and Legal Services (donated by agency in kind) 75,000 12, Capital Cost Audit Mortgage Broker Fees Legal Fees contracts and agreements Organizational Expenses 8,025 1, Insurance GST 7% (on lines 29-32) F Legal & Organizational Sub-total 85,058 14,177 Financing Costs Total Cost Per Unit 35 Construction Financing 4, CMHC Fees (4.5%) 14,909 2, PST on CMHC Fees (8% of fees) 1, G Financing Costs Sub-total 20,925 3,487 Fees and Permits Total Cost Per Unit 38 Building permit fees ($12.00/$1,000 construction value plus $6 per plumbing fixture) 4, Planning Application Fees (not applicable) Development Charges 4,316, 5,551) 27,131 4, Parkland Dedication 2, School Board Levy Hydro Connection Fee (in line 1) Sewer and Water Connection Fee (not applicable) Property Taxes During Construction H Fees and Permits Sub-total 34,855 5,809 Soft Costs Summary Total Cost Per Unit Soft cost sub-total 158,060 26, Contingency (6% of soft costs) 9,484 1,581 J Soft Costs Total 167,544 27,924 KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 157

166 Total Cost Per Unit Hard Cost Total ( C ) 569,408 94,901 Soft Cost Total ( J ) 167,544 27,924 Total Project Cost (total above 2 lines) 736, ,825 PST included in Total Project Cost 37,004 6,167 GST included in Total Project Cost 33,441 5,574 CONTRIBUTIONS Contributions Total Cost Per Unit 47 Fees and Permits Waived 34,355 5, Equity Contribution in kind for administration and legal costs 75,000 12, SCPI 95,536 15, Affordable Housing Program-Community Rental Housing Funding 110,045 18, Mortgage Financing 352,756 58, PST Rebate for registered charities (100% on hard costs) 35,819 5, GST Rebate (100% rebate) 33,441 5,574 Total Contributions 736, ,825 Total Contributions Less Total Project Costs 0 0 Line # Explanatory Notes to Capital Budget Description Notes 1 Construction cost Base construction cost of $110/sq. ft., excluding PST, based on current costs 2 Site preparation and landscaping Estimated cost for landscaping per agency 3 Appliances Based on costs estimated by agency for 1 refrigerator and 1 range per unit. Coin operated laundry equipment will be rented under a contract. 4 Furniture and equipment Not required. 5 Environmental remediation Site will not require remediation 6 Other N/A 7 Construction bond Included in line 1 8 Contract management fee Included in line 1 9 Contingency and escalation Based at 6% of lines 1. 2, 3 10 PST on base construction Cost, appliances, furniture and equipment, contingency and escalation PST on base construction cost, appliances, furniture and equipment, contingency and escalation, at 8% 11 GST 7% on construction costs 12 Land purchase price Value of land provided by agency 13 Title fees/transfer Includes land transfer tax of $225, other fees of $ Legal fees and disbursements Estimated cost provided by agency 15 Other N/A 16 GST on land purchase Based on 7% of land value 17 Architectural consultant Estimated cost of 5% of construction value included in line Quantity surveyor Estimated cost of $5,000 included in line Development consultant Estimated cost of $20,000 included in line Printing and disbursements Charges for architect s printing and disbursement expenses, estimated by agency KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 158

167 21 GST 7% on consulting costs 22 Building and property appraisal Estimated cost provided by agency 23 Survey Estimated cost provided by agency 24 Geotechnical assessment Estimated cost provided by agency 25 Environmental assessment Estimated costs included in line 24 above 26 Other studies No additional studies required 27 GST 7% on site costs 28 Administration and legal services Fees for architect (5% of construction contract) $20,625, development consultant $20,000, legal fees $15,000, quantity surveyor $5,000, administrative costs $14, Capital cost audit Estimated fees provided by agency for capital cost audit once project is completed 30 Mortgage broker fees Estimated fees provided by agency 31 Legal fees Estimated disbursements provided by agency 32 Organizational expenses Estimated costs for marketing, mileage, printing disbursements provided by agency 33 Insurance Estimated insurance costs provided by agency 34 GST 7% on legal and organizational costs 35 Construction financing Funds required to construct project, once other contributions are deducted, estimated at 5% interest for 7 months of construction 36 CMHC fees Estimated at 4.5% of financing costs 37 PST on CMHC fees 8% on CMHC fees 38 Building permit fees 39 Planning application fees Not applicable Based on municipal rates of $12 per $1,000 of construction fee, plus plumbing fees at $6 per fixture 40 Development charges Based on municipal rates of $4,316 per unit for 1-bedroom unit, $5,551 for 2-bedroom unit, valid up to August 31, Parkland dedication Based on 5% of land cost 42 School board levy N/A not charged by school boards in community 43 Hydro connection fee Included in line 1 44 Sewer and water connection fee Included in municipal charges above 45 Property taxes during construction Estimated cost provided by agency 46 Contingency on soft costs Calculated at 6% of soft costs 47 Fees and permits waived Waiver of municipal charges: building permit fees, planning application fees, development charges 48 Equity contribution In kind contribution for administration and legal costs on line SCPI Amount of SCPI funding approved for project 50 Affordable Housing Program Amount of Community Rental Housing Funding approved Community Rental Housing Funding for project 51 Mortgage financing Funding required to construct project once other contributions are considered 52 PST rebate 100% of PST charged on construction, as agency is a registered charity 53 GST rebate 100% of GST charged on capital costs, as agency is providing affordable housing KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 159

168 APPENDIX 10: CONTINUUM OF HOUSING NEEDS IN THE CITY OF KINGSTON 160

169 The Kingston Model For Affordable Housing Development Continuum of Housing Needs September 2004 Report KINGSTON MODEL FOR ACTION - AFFORDABLE HOUSING SUPPLY 161

170 Appendix 10: The Kingston Model for Affordable Housing Development Continuum of Housing Needs TABLE OF CONTENTS 1 INTRODUCTION IDENTIFYING THE MARKET SEGMENTS COMPRISING THE CONTINUUM OF HOUSING NEEDS Emergency and Transitional Housing Housing for Youth Supportive Housing Persons with Serious Mental Illness Persons with Developmental Delays Frail Elderly (Long Term Care) Persons with Severe Physical Disabilities Other Supportive Housing Needs Student Housing Housing for New Canadians Housing for Aboriginal Families and Individuals Accessible Housing Affordable Rental Housing Housing for the Armed Forces Seniors Housing (Independent Living) Ownership Housing Housing Needs Due to Future Growth CONCLUSION TABLES Table 1: Total Social Housing Portfolio Administered by the City of Kingston FIGURES Figure 1: Kingston Model Continuum Of Housing Needs Figure 2: Service Delivery In Kingston And The County Of Frontenac Types Of Households Residing In Rent-Geared-To-Income Units Figure 3: Households By Social Housing Program Type Figure 4: RGI And High Need Households In Non-Profit Housing Figure 5: Types Of RGI Households Figure 6: Total Market Units In Non-Profit Housing Figure 7: Number Of RGI And High Need Households By Program

171 Appendix 10: The Kingston Model for Affordable Housing Development Continuum of Housing Needs 1 INTRODUCTION The Kingston Model for Affordable Housing Development is an innovative approach to utilizing all available resources/tools to meet the current and future housing needs of the City of Kingston. These resources and tools will incorporate legislative, regulatory, financial and other elements to provide innovative approaches for the development of housing aimed at meeting these needs. In order to develop an effective Model, it is critical that a clear understanding be provided of the range of housing needs facing the Kingston market. This range of needs can be considered a continuum ; that is, a series of needs ranging from those households with very few housing options to those with a wide range of choices and alternatives. Given that considerable study has already been undertaken on identifying the housing needs of the Kingston market, it was decided that the most effective means of developing the Kingston Model would be to concentrate the resources for the project almost entirely on the development of innovative housing supply solutions, rather than spending significant time and funding conducting further research on housing needs. At the same time, it was recognized that the starting point in the process must be to achieve consensus among stakeholders about the housing needs to be addressed by the Kingston Model. Accordingly, the consulting team has used existing sources of information previously developed by various Kingston-area organizations to summarize these needs. This summary is provided below by market segment. The intent is to obtain the input of a cross-section of stakeholders familiar with each of these segments in order to achieve consensus about these needs. 163

172 Appendix 10: The Kingston Model for Affordable Housing Development Continuum of Housing Needs 2 IDENTIFYING THE MARKET SEGMENTS COMPRISING THE CONTINUUM OF HOUSING NEEDS As noted above, housing needs can be described as a continuum ranging from the needs of those with very few housing options to those with a wide range of choices and alternatives. For those with very few housing options, barriers can be a result of various factors such as severe income limitations, support service needs, lack of physical accessibility, the need for special design features, etc. For others, concerns may simply be a lack of availability or lack of understanding about the requirements of becoming a homeowner. We have organized the housing market into eight market segments reflecting an increasing range of choice on the continuum of housing needs. Below we summarize the needs that have been identified in various reports and studies provided at the outset of the study. The attached chart illustrates this continuum. 164

173 Appendix 10: The Kingston Model for Affordable Housing Development Continuum of Housing Needs FIGURE 1: Kingston Model Continuum of Housing Needs 165