SPECIAL GENERAL COMMITTEE AGENDA Tuesday, Immediately following the Meeting Town Council Chambers Page 1 1. CALL TO ORDER 2. DECLARATIONS OF PECUNIARY INTEREST 3. PUBLIC MEETINGS Nil 4. DELEGATIONS AND PRESENTATIONS Nil. 5. MINUTES FROM ADVISORY COMMITTEES Nil. 6. NEW BUSINESS 6.1. Rental Housing Development Charges Rebate Program Expression of Interest (EOI) (PD009-18) 1. That the Director of Planning and Development be authorized to submit an Expression of Interest (EOI) on behalf of the Town of Bracebridge to the Province of Ontario under the Development Charges Rebate Program in accordance with the details generally outlined in Appendix A to Staff Report PD009-18. 2. That the Director of Planning and Development, in consultation with the Director of Finance/Treasurer and the District Municipality of Muskoka, be authorized to finalize program details of the Town of Bracebridge Rental Housing Development Charge Rebate Program. 3. That the District of Muskoka be appointed as the Service Manager for the purpose of administering the Town of Bracebridge Rental Housing Development Charges Rebate Program. 4. That the Director of Planning and Development and Director of Finance/Treasurer be authorized to approve the form and content of all required agreements under the Town of Bracebridge Rental Housing Development Charges Rebate Program. 5. That the Mayor and Director of Corporate Services/Clerk be authorized to execute all necessary agreements, including but not limited to the required Transfer Payment Agreement between the Province and the municipality, to facilitate implementation of the Town of Bracebridge Rental Housing Development Charges Rebate Program. 7. ONGOING BUSINESS 7.1. Health and Safety Update 8. CORRESPONDENCE Nil. 1
SPECIAL GENERAL COMMITTEE AGENDA Tuesday, Immediately following the Meeting Town Council Chambers Page 2 9. CLOSED SESSION Nil. 10. RESOLUTIONS ARISING FROM CLOSED SESSION 11. ADJOURNMENT That Committee adjourn until the next regular meeting or any special meeting called by the Chair. This meeting will be Webcast and Audio and Video recorded A copy of this agenda is available in alternative formats upon request. For your convenience, assistive listening devices are available from staff in the Council Chambers. 2
Page: 1 TO: FROM: Councillor D. Smith, Chair and Members of C. Kelley, Director of Planning and Development S. Rettie, Director of Finance/Treasurer SUBJECT: Rental Housing Development Charges Rebate Program Expression of Interest (EOI) RECOMMENDATION 1. That the Director of Planning and Development be authorized to submit an Expression of Interest (EOI) on behalf of the Town of Bracebridge to the Province of Ontario under the Development Charges Rebate Program in accordance with the details generally outlined in Appendix A to Staff Report PD009-18. 2. That the Director of Planning and Development, in consultation with the Director of Finance/Treasurer and the District Municipality of Muskoka, be authorized to finalize program details of the Town of Bracebridge Rental Housing Development Charge Rebate Program. 3. That the District of Muskoka be appointed as the Service Manager for the purpose of administering the Town of Bracebridge Rental Housing Development Charges Rebate Program. 4. That the Director of Planning and Development and Director of Finance/Treasurer be authorized to approve the form and content of all required agreements under the Town of Bracebridge Rental Housing Development Charges Rebate Program. 5. That the Mayor and Director of Corporate Services/Clerk be authorized to execute all necessary agreements, including but not limited to the required Transfer Payment Agreement between the Province and the municipality, to facilitate implementation of the Town of Bracebridge Rental Housing Development Charges Rebate Program. ORIGIN 6. On April 27, 2017, the Ontario government introduced, through the 2017 Provincial Budget, Ontario s Fair Housing Plan to help more people find affordable homes, increase housing supply, protect buyers and renters and bring greater stability to the real estate market. 7. On December 20, 2017, the Fair Housing Development Charges Rebate Program (Fair Housing- DCRP) was announced as one of the initiatives under the Province s Fair Housing Plan with the goal to increase the supply of housing, specifically purpose-built market rental housing. The Program has been introduced and is managed by the Ministry of Housing (MHO). 8. There are two types of rental housing in Ontario: 8.1. Purpose-built Rental Housing: which includes market rentals as well as social/affordable housing; and 8.2. Secondary Rental Market Housing: which includes individually-rented condominiums, singles/semis and secondary suites. 9. The Program is targeted at the purpose-built market, which is more stable and less impacted by factors such as prevailing economic and real estate conditions. 3
Page: 2 10. Under the Provincial Government s Development Charges Rebate Program, up to a total of $125 million is available to municipalities over five years, to support the development of new rental housing. 11. The program starts with $25 million in funding for 2018-19. The Ministry of Housing is not guaranteeing funding to all municipalities that submit an expressing interest or committing to the allocation all funding requested by municipalities through the EOI process. If approved, applicants are subject to the terms and conditions of a Transfer Payment Agreement between the Province and the municipality. The EOI submissions are due by 1:00 p.m. on Friday, March 2 nd, 2018. 12. Under the Program, lower tier municipalities may rebate both upper and lower tier development charges for purpose built market rental housing that is set at up to a maximum of 175% of the current Average Market Rent () set by the Ministry of Housing for the area. Funding for the rebates will be provided by the Province and up to five (5%) of the funding provided may be used to cover the costs of administering the Program. 13. Under the Program, eligible market rental housing developments would receive a rebate equal to the Development Charges imposed and collected by municipalities. The program would be administered by municipalities and would target priority projects in those communities that are most in need of new purpose-built rental housing. 14. The Town of Bracebridge has been invited to submit an expression of interest in the program because the Town charges multi-unit Development Charges and because we have been identified as being in need of new purpose-built market rental housing. This identification concluded that Bracebridge s Vacancy Rate is less than 3%; and 20% of the population are renters. 15. Other municipalities were invited to participate because they are within a 500-800 metre radius of a major transit station area (MTSA). The MTSA includes commuter rail (i.e. GO Transit, subway, light rail or bus rapid transit). 16. Key program requirements are: 16.1. Projects must be maintained as rentals for 20 years; 16.2. Projects cannot be single detached, semi-detached or tri-plex dwelling units; 16.3. Projects must not exceed 175% ; 16.4. 5% of the Program funding can be allocated to administration; 16.5. New programs cannot replace existing development charge rebate programs; and 16.6. Bi-annual Take Up Reporting to MHO is required. 17. The key timelines associated with the Program are as follows: Activity Date Invite select municipalities to EOI process December 20, 2017 Municipalities intending to submit an EOI must begin to draft their submission through the Grants Ontario System By 5 p.m. EST February 16, 2018 4
Page: 3 Activity Date EOI submissions due to MHO By 1 p.m. EST March 2, 2018 MHO reviews municipal submissions, selects municipalities, and develops allocation model MHO announces participating municipalities and their notional allocations March-April, 2018 Early-Spring 2018 MHO and municipalities sign Transfer Payment Agreements Early Spring 2018 Municipalities submit 2018-19 initial Spending Plan Late Spring or Summer 2018 18. The EOI will require applicants to provide details of proposed programs as follows: 18.1. Need and vision for market rental housing in their communities, and any alignment with municipality s land use planning and housing policies; 18.2. How the Development Charges Rebate Program will help increase rental housing in their communities and/or what public good will be created; 18.3. Capacity to administer the program, along with ongoing monitoring and reporting, and whether there is an intention to designate program administration to a housing Service Manager (District of Muskoka), to submit an EOI and administer the program on the municipality s behalf; 18.4. Any current incentives the municipality provides to encourage construction of market rental housing in their communities; 18.5. Incentives the municipality is willing to apply to market rental developments and units receiving provincial rebates under the program; 18.6. Examples of potential purpose-built market rental developments or units expected to qualify for funding over the five years, if possible; 18.7. Indicate if the municipality would be setting a lower threshold for non-luxury market rental units different from provincial threshold of 175% ; 18.8. Whether the municipality plans to use the funding to provide rebates covering the full amount of the development charges they collect or partial rebates, as well if these would vary on a on a site-by-site basis; 18.9. Current and proposed mechanisms (e.g., bylaws restricting conversions) that the municipality would use to ensure that a development receiving rebate funding under the program remains rental; and 18.10. How much funding municipalities anticipate would be needed for this program on an annual basis for each of the five fiscal years, starting in 2018-19 (municipalities can choose to identify funding requirements only for certain years). 19. The Town s existing Development Charge Deferral Program provides rebates/deferrals for affordable housing based on housing type and, dependent upon the value, offers a 50% rebate or 100% rebate. The values are determined by the Municipal Property Assessment Corporation assessments or by 3 rd party sale. The two schedules from the Town s Development Charges Bylaw are included in Appendix B for reference. 5
Page: 4 20. Given the short timeline associated with the call for EOI and the requirement for a Council resolution to support the EOI submission, the purpose of this report is to approve the submission an EOI for the Fair Housing-DCRP. The report also seeks authority for staff to proceed with implementation of the Program in Bracebridge, including the execution of required agreements, should the Town s submission be approved. ANALYSIS 21. According to the Provincial guidelines, the Program cannot be used by municipalities to replace any existing housing programs and incentives that municipalities may already have with respect to affordable (below-market) rental housing. 22. The Town s current program related to creating affordable housing may have some shortcomings because of the values placed on eligibility of rates and the fact that construction and land values have increased significantly since the program was initiated in 2009 and adjusted in 2014. In the past 3 years, the Deferral Agreements and rebates have been provided as follows: Year Address Type of housing % of DC Rebate/Deferral 2017 66 Robert Street 2 apartments 100% 2016 200 Pine Street 8 semi-detached 100% 2015 200 Pine Street 6 semi-detached 100% 2015 Little Ryan s Way 3 townhouse units 50% 23. Of the applications above, only 2 apartments on Robert Street are believed to be a part of the rental housing stock in Bracebridge. There are no criteria within the Town s program for rental units. The proposed Town of Bracebridge Rental Housing Development Charge Rebate Program does not replace the Town s existing program as it will also be available to those who create housing within the eligible criteria. 24. As noted in Memo PD012-17 dated December 13, 2017 prepared by the Director of Planning and Development, there have been a limited number of rental apartments projects approved in Bracebridge since 2011. The inventory is below: Property/Location Number of Units Proposed Number of Units Constructed Year Approved If not constructed project status Moose Properties West/Coventry Lane 68 8 2016 1 building complete, Additional buildings planned/possible severance discussions Entrance Drive/Cedar Lane 24 24 2009 COMPLETED Stokburn Apartments/Wellington Street 14 14 2011 COMPLETED 6
Page: 5 Property/Location Number of Units Proposed Number of Units Constructed Year Approved If not constructed project status District-McVittie Place/Pine Street Moose Properties East/DR 118 West EcoEnergy Group/571 Manitoba Street 80 80 2014 54 0 2015 72 0 2015 COMPLETED No activity Site Plan Approval Granted/Site Plan Agreement Drafted/No new activity District-Cambrian Court/ 12 0 2017 (delegated) Site Plan Approval in process Entrance Drive/Alexandra 18 0 2018 Zoning only 25. Currently in the community, there are 162 apartment units that have zoning approval and/or site plan approval. Twelve (12) of the units are located at Cambrian Court are being developed by the District of Muskoka and funded through the Province s Social Infrastructure Fund (SIF). Of the proposed 162 apartment units, 102 of those units would be located on the route followed by the Town s Public Transit system. 26. Staff have reviewed the Actual Value/Cost to the developer for development charges and building permit fees for the projects on 671 Highway 118 West (Rumi/Conventry Lane) and 84 Wellington Street (Stokburn) and are shown below. By no means are these all of the costs of the development, however, this represents data that is easily obtained as these fees are paid at the Building Permit Stage. Other costs include site plan application fees, site securities, legal fees, etc. Date of Development # of Units Town Development Charge District Development Charges Building Permit Fees Total DC/Permit Fees Stokburn, 84 Wellington Street Completed in 2011 Rumi / 671 DR 118 West Completed in 2015 14 $25,844.00 $103,236.00 $6,300.00 $135,380.00 8 $19,408.00 $50,080.00 $11,315.00 $80,803.00 27. There have been no discussions with any of the other property owners with respect to timing on projects or rental rates. However, based on discussions with District staff, Town staff are recommending that the Town include a range of s in the Town s program as it will capture both the affordable and market rate rental units. Participation in the program will require developers to enter into agreements to maintain the units as rentals as well as to maintain the rental rates based on the appropriate. 7
Page: 6 28. As noted in the Memo PD012-17 dated December 13, 2017 prepared by the Director of Planning and Development, there have been a number of row dwellings created in Bracebridge since 2003; however, all have been ownership units. Staff undertook a quick review of rental row dwellings in Bracebridge and the only row dwelling rental units are owned by the District of Muskoka (Wellington Court and Cambrian Court). 29. While it is unlikely there will be new row dwellings/town houses created through the proposed Town of Bracebridge Rental Housing Development Charge Rebate Program, staff are including a provision that Townhouse/Row Dwellings could be considered provided there are more than 3 units per project and that they are maintained as rentals for 20 years. Participation in the program will require developers to enter into agreements to maintain the units as rentals as well as to maintain the rental rates based on the appropriate. 30. The Fair Housing-DCRP allows municipalities to set the rental rate thresholds in which the programs will apply. Although there is a need for additional affordable housing, staff believe that goal of the Town of Bracebridge s application should be to increase the overall supply of rental units in the community. 31. The District of Muskoka s Housing Manager and other staff have been very helpful in reviewing what types of program and what values the Town should select as targets for the program. Average Market Rents in Muskoka are shown below. Based on Approved Market Rents, Ministry of Housing Type 80% 100% 115% 125% 150% 175% 1 Bedroom $650 $812 $934 $1,015 $1,218 $1,421 2 Bedroom $754 $943 $1,084 $1,179 $1,414 $1,650 3 Bedroom $858 $1,073 $1,234 $1,341 $1,609 $1,878 32. Staff are proposing that rental housing units under the proposed program be available for those projects offering rents from 80% to 150% and that the project be limited to only row housing projects that are creating more than 4 units and for apartment projects of any number of units of any type including bachelor and up to 3 bedrooms. 33. Staff are proposing that Development Charge Deferral Agreements be utilized in an effort to support the approved projects. This will allow developers to utilize the funds in the project s construction rather than wait for a rebate. 34. Although the Development Charge Rebate Program is meant to encourage purpose built market rental in general and at 175% of the local, the Province is also working with Service Managers service managers (i.e. municipalities and regional social services administration boards designated under the Social Housing Reform Act, 2000) to promote development of affordable units. 35. Developments that include affordable units will be eligible for the rebates as well as consideration for capital incentives under the Muskoka Affordable Housing Initiatives Program (MAHIP) through the District. These are capital incentives in the amount of $15,000 per unit with an affordability period of 7 years. Units under the MAHIP program must be at or below 100%. Affordable units will be eligible for both the rebates and the incentives. 8
Page: 7 36. While staff have not proposed that the Town offer any additional incentives to the proposed Town of Bracebridge Rental Housing Development Charge Rebate Program, there is the potential to include 2.5% of the allowable 5% administration allocation as an added incentive. This could be allocated as some type of rebate on Building Permit Fees or agreement costs. The remaining 2.5% would be given to the District of Muskoka to offset program management costs. 37. Staff have included an estimate of 100 units over a 5 year period. There are a number of challenges with estimating project values for the EOI as follows: 37.1. The program spans over a 5 year period and both the Town and District Development Charges will change in mid-2019; 37.2. There is no guarantee as to whether or not there will be uptake on the program; and 37.3. There is no guarantee that those developments that have some approvals in place will actually move forward, nor can staff guarantee when they will move forward. 38. Staff have considered whether or not additional incentives could be offered in the form of reducing the requirements for securities; however, they are an effective tool to ensure that projects are completed in accordance with Site Plan Requirements. Recently, Council approved the use of a Surety Bond as a method of posting security. This method should provide some relief to developers. 39. Despite all of the unknowns with respect to future costs and developer-appetite for the proposed Town of Bracebridge Rental Housing Rebate Program, staff believe that, if there is uptake, the benefits to the community will be significant. LINKAGE TO COMMUNITY BASED STRATEGIC PLAN 40. The proposed Town of Bracebridge Development Charge Rebate Program is well aligned with the community-based strategic plan objectives: A Vibrant, Prosperous and Economically Sustainable Community A Green, Mindful and Environmentally Sustainable Community An Engaged, Healthy and Socially Sustainable Community 41. The proposed Rental Housing Development Charge Rebate Program will assist residents and employers in the community by increasing the available supply of rental housing and thereby is directly linked to the strategic plan objective to create a vibrant, prosperous and economically sustainable community. 42. The proposed Rental Housing Development Charge Rebate Program will support increased intensification in the existing service area and therefore is directly linked to the strategic plan objective of creating a green, mindful and environmentally sustainable community by encouraging rental housing construction in the urban, serviced area of Bracebridge. 43. The proposed Rental Housing Development Charge Rebate Program will support creating a diversified range of housing in the community and is therefore directly linked to the strategic plan objective to create an engaged, health and socially sustainable community. The Program will work with community partners to create a diversified range of housing that fall within affordable rental rates and market rental rates. 9
Page: 8 LINKAGE TO COUNCIL PRIORITIES 44. The proposed Rental Housing Development Charge Rebate Program supports Affordable Housing which has been identified by Council as a 2014-2018 priority area. This initiative will encourage the development of new rental housing units that fall within affordable rental rates and market rental rates. ALTERNATIVE(S) 45. The following alternative is available for Committee consideration: Alternative #1 The Committee could recommend that the Town not submit an EOI to participate in the Development Charges Rebate Program. This alternative is not recommended as staff believe that this is a no cost opportunity for the municipality to encourage the construction of purpose-built rental housing. Alternative #2 The Committee could recommend that the target be reduced to affordable housing targets (80% or 100% ). This alternative is not recommended as staff believe the Town s goal is to increase the overall supply of rental housing in Bracebridge. EXISTING POLICY 46. Town of Bracebridge Official Plan. 47. Town of Bracebridge Development Charges Rebate Program (By-law 2014-051 and Bylaw 2014-074). FINANCIAL IMPLICATIONS 48. The Development Charges Rebate Program will not impact the Town s collection of Development Charges in accordance with the existing by-laws 2014-051 and 2014-051 or future Development Charge By-laws. A rebate would be provided to the developer in accordance with terms of the contribution agreements established and utilizing funding provided by the MHO. COMMUNICATIONS 49. This staff report was distributed to Council, Media, and all Town staff and was published on the Town s website in accordance with the Town s Procedural By-law. 50. Several discussions have taken place with the District of Muskoka s Housing Manager and staff as part of the development of this report. The report has been provided to District staff. Prepared & Approved By: Prepared & Approved By: Approved for Submission to By: C. Kelley, MCIP, RPP S. Rettie, CPA, CMA J. Sisson Director of Planning & Development Director of Finance/Treasurer Chief Administrative Officer Ext. 253 Ext. 262 Ext. 229 10
Page: 9 Appendix A Town of Bracebridge Rental Housing Development Charge Program EOI application 1. Projects eligible for the Town of Bracebridge Rental Housing Rebate Program are as follows: 1.1. Row Housing projects that create a minimum of 4 rental units; 1.2. Apartment building projects that create a minimum 4 of rental units; 1.3. Projects that are undertaken within the Existing Urban Service Area in accordance with Schedule D of the Town of Bracebridge Official Plan, 2013; 1.4. Projects that will result in rental rates that range from 80% of the Average Market Rent () to 150% of the Average Market Rent () as highlighted below: Type 80% 100% 115% 125% 150% 175% 1 Bedroom $650 $812 $934 $1,015 $1,218 $1,421 2 Bedroom $754 $943 $1,084 $1,179 $1,414 $1,650 3 Bedroom $858 $1,073 $1,234 $1,341 $1,609 $1,878 2. The Town will request the permitted 5% administration cost; with 2.5% to be allocated to administration by the District of Muskoka as the Service Manager with the remaining 2.5% to be allocated to the provision of additional (partial) rebates for Building Permit Fees. 3. The Town s goal over 5 years will be to create 100 rental units, with a preference on the following: 3.1. 1 Bedroom or less (bachelor) apartments 60 units 3.2. 2 Bedroom apartments 30 units 3.3. 3 Bedroom units (apartments or row houses) 10 units. 11
Page: 10 4. The estimated budget value of the proposed Program to be funded by the Province is shown below: Unit Type 2018 Values Total 1 Bedroom or Less - Goal - 60 Units Town Development Charges 60 $1,881.00 $112,860.00 District Development Charges 60 $4,296.00 $257,760.00 2 Bedrooms - Goal - 30 Units Town Development Charges 30 $2,426.00 $72,780.00 District Development Charges 30 $6,446.00 $193,380.00 3 Bedrooms - Goal - 10 units Town Development Charges 10 $2,426.00 $24,260.00 District Development Charges 10 $6,446.00 $64,460.00 Total Units 100 $725,500.00 Inflation Adjustment (2%) $14,510.00 5% Administration Allocation $37,000.00 Total Proposed EOI Budget $770,010.00 12
Page: 11 APPENDIX B Development Charge Deferral/Rebate Schedule C, By-law 2014-055 as amended by 2014-074 Eligibility Limits for Affordable Housing Singles/Semis/Duplexes i. Building, together with lot, would not have an assessed value greater than that $235,000 per unit. ii. The premises are for permanent residential occupancy. Low Density Multiples i. Building, together with lot, would not have an assessed value of greater than $215,000 per unit. ii. The premises are for permanent residential occupancy. High Density Residential (more than 2 sleeping areas) High Density Residential (less than 2 sleeping areas) i. Building, together with lot, would not have an assessed value of greater than $180,000 per unit. ii. The premises are for permanent residential occupancy. i. Building, together with lot, would not have an assessed value of greater than $170,000 per unit. ii. The premises are for permanent residential occupancy. Percentages of Development Charges to be Deferred for Affordable Housing Units Housing Form Value Percentage of amount otherwise payable and permitted to be deferred $180,000 or less 100% Singles/Semi/Duplex $180,000 to $235,000 50% over $235,000 0% $180,000 or less 100% Low Density Multiples $180,000 to $215,000 50% High Density Residential (2 or more sleeping areas) over $215,000 0% $170,000 or less 100% $170,000 to $180,000 50% over $180,000 0% High Density Residential $170,000 or less 100% (less than 2 sleeping areas) over $170,000 0% 13