Depending on what the province ultimately decides to include in the Community Benefits Charges, an Affordable Housing CIP could include a grant program that also rebates the Community Benefit Charges for affordable housing projects.
No Interest Loans
Another option is for the City to offer no interest loans to developers that construct affordable housing units. The Olde Sandwich Towne Community Improvement Plan includes the Commercial/ Mixed Use Building Improvement Loan Program that provides a no interest loan equivalent to 70% of the cost of eligible improvements to commercial and mixed use buildings up to a maximum of $30,000, repayable over a 5 year period.
The specifics (e.g. eligible amount, maximum amount, etc.) for a no interest loan program would be changed to reflect the aim of providing more affordable housing units. For example, the City of London’s recently adopted Affordable Housing CIP offers the two following loan programs to assist with the development of new affordable units:
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Affordable Housing Development Loan Program is a municipally funded loan program that provides financial assistance to off-set the up-front costs associated with the development of new affordable housing units. The focus of the program is to encourage private and non-profit housing developers to create new affordable housing units. Qualifying developers would receive either a $10,000 loan, a $15,000 loan or a $20,000 loan. To be eligible, developer properties would need to have at least five affordable units that remain affordable for at least 20 years. The interest-free loans would be paid back over a 10-year. If a building has more than 10 units, developers must ensure that no more than two-thirds of the units are affordable, presumably to encourage a healthy mix of income levels and prevent the geographic concentration of affordable units.
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Additional Residential Unit Loan Program is a municipally funded loan program that provides financial assistance to off-set costs associated with creating new additional residential units and to improve the affordability of home ownership. The focus of the program is to encourage homeowners to create new additional housing units within their existing home/building. To qualify, homeowners would have to occupy the home with which they were applying for the loan. The homeowners must rent out an affordable space on a long-term basis, meaning short-term rentals such as those arranged through Airbnb would not qualify. Homeowners must obtain a residential rental unit licence. Loans are capped at $20,000 and would be interest-free for a period of 10 years. 25 per cent of the loan would be forgivable.
Feasibility Study Program
Like any project that a private sector developer will undertake, an affordable housing project must be a financially viable proposition in order for it to move forward.