Peel Region launches affordable housing incentives pilot program incentivizing affordability

Peel Region is piloting new financial incentives meant to reduce the cost of building affordable housing in its municipalities.

On May 31, the Region launched its affordable housing incentives pilot program, which seeks to provide funding for new middle-income rental housing, especially larger family-sized units. In Peel Region, 'middle income' refers to individuals or families making a combined income of between $61,600 and $110,500 per year. Applicants for the incentives have until 5 p.m. on July 12 to apply for the pilot. The Region retained N. Barry Lyon Consultants to develop the pilot program with staff.

The affordable incentives program was first approved by regional council in July 2020 see 'Encouraging Affordability', NRU GTHA Edition, July 15, 2020. When the pilot program was approved in 2020, it had a budget of $2.5 million. It has since been allocated an additional $5 million.

"We understand that there are many approaches required to meaningfully address the housing affordability crisis, and we see the Pilot Program as one tool among many to address the housing needs of current and future Peel residents," Peel Region housing development office strategic policy and research specialist Madison Van Westand development systems and services manager Naheeda Jamal told NRU. "With its focus on middle-income rental housing, this program is intended to supplement the Region’s other housing programs and services that provide support for low-income households."

Providing affordable housing, especially affordable rental stock, is an important priority for the region. Peel has a rental vacancy rate of around 1.2 per cent, and only 800 purpose-built rental units were built between 2011 and 2019, representing a 2.1 per cent increase in regional rental housing stock over eight years. The region adopted a plan to address housing and homelessness challenges in April 2018, which includes a direction to develop new affordable housing incentives to developers.

West and Jamal say the pilot is meant to test the affordable housing incentives and to determine whether any changes are needed in the program. Some changes have already been made since the program was first approved in 2020, including the affordability thresholds and scoring criteria for applicants. West and Jamal note that staff will be reporting back to regional council with an evaluation of the pilot and recommended next steps before the end of the year.

For the pilot, the region is targeting development applicants with experience developing housing and operating rental housing. Due to limited funds, only the applicants with the most comprehensive projects will be selected. Applicants will be scored according to criteria such as depth and length of affordability above the minimum requirements, proximity to growth areas and access to amenities like public transit, fresh food vendors, and childcare facilities, and that feature energy efficiency attributes and accessibility features that go beyond the requirements of the building code. The applicants selected will enter into a contribution agreement with the region and will commit to maintaining and reporting on the developed units, including conducting income verification to ensure that the units are being occupied by people within the middle-income wage bracket.

"We are asking applicants to prepare an application package that includes information about their organization, [their] experience and project details," say West and Jamal. "There are required criteria that must be met related to the affordability threshold of units funded, a unit mix that provides primarily two and three+ bedroom units, and a commitment to maintain the rental units at affordable rates for a minimum of 25 years."

Prospective applicants can access the pilot program.

^{Posted with permission of the publisher of NRU Publishing Inc. Original article first appeared in Novae Res Urbis GTHA, Vol. 24, No. 22, Wednesday, June 2, 2021.}