Housing Accelerator update, week 22
Charlottetown, Regina, Coquitlam, low-cost loans for student housing
Previously:
Federal plan: London, Calgary, GST on new rental housing
Housing Accelerator update, weeks 2-4: Halifax, Mississauga, Vaughan
Week 5: Hamilton, Mississauga, Halifax, Metro Vancouver
Week 6: Quebec, Kitchener, Guelph, Burlington, Ajax, Mississauga
Week 7: Mississauga, Brampton, Ajax, Moncton, Richmond Hill, Kelowna, Metro Vancouver, Edmonton
Week 8: Metro Vancouver, Waterloo, Charlottetown, Winnipeg
Week 9: Kitchener, Quebec
Week 10: Calgary, Winnipeg, Moncton
Week 11: Regina, Saskatoon, Winnipeg
Week 12: Richmond Hill, Toronto, Oakville
Week 14: Windsor, Toronto, Vancouver
Week 15: agreements with Mississauga, Burnaby, Winnipeg, and Toronto
Week 17: agreement with Iqaluit
Week 18: agreements with Summerside, Surrey, and Guelph
Week 19: agreements with Burlington, St. Catharines, Saint John, Kingston, Ajax
Week 20: agreements with Fredericton, Richmond, Milton, Whitby, Squamish
Week 21: agreement with Waterloo, vote in Oakville, Windsor rejected, Surrey details
Charlottetown, PEI
Kevin Yarr, CBC News: Ottawa and Charlottetown reach agreement to fast-track 100 new homes a year. In exchange for $10M, Charlottetown is committing to 300 additional homes over the next three years, 1000 over the next 10 years. $10M would pay for 20 homes at $500K each, so 300 homes is 15X as many, and 1000 homes is 50X as many.
Changes Charlottetown has agreed to include:
Allowing up to four units on existing residential lots.
Building heights will be increased from six to eight storeys near post-secondary institutions and in high-growth areas.
Regina, SK
Larissa Kurz, Regina Leader-Post: Regina lands $35M agreement from federal Housing Accelerator Fund.
News of the successful deal arrives just over a week after city council approved a trio of zoning bylaw amendments, allowing two or four units as-of-right inside specific neighbourhoods and increasing height limits. Parking minimums were also eliminated citywide.
The target is 1,000 additional homes over three years, and 3,000 over 10 years. $35M would pay for 70 additional homes at $500K each, so 1000 is 14X as many, and 3000 is 40X as many.
Though the agreement only contributes until 2026, the federal government anticipates the cumulative impact will result in a total 3,000 new housing permits greenlit in Regina over the next decade.
“The changes that cities are making in response to the Housing Accelerator Fund are permanent,” explained Fraser. “It permanently is changing the way that cities build homes.”
Vacancy rates are near zero in Regina. Mayor Sandra Masters:
Rental vacancy in Regina is currently at less than one per cent and the city is seeing “historic lows” in the available housing inventory, contributing to pressures on rental rates, said Masters.
She said these permit targets, if met, will double the on-average volume of housing stock that was expected to be put into the market in Regina over the next three years.
Coquitlam, BC
Patrick Penner, Tri-Cities Dispatch: Coquitlam to receive $25 million in federal funds to help cut 'red tape' around development.
A press release from CMHC stated the funding will ensure an additional 650 housing units are built in Coquitlam over the next three years, along with 2,800 more over the next decade.
$25M would pay for 50 homes at $500K each, so 650 is more than 12X as many, and 2,800 is more than 50X as many.
The city’s action plan lays out seven initiatives, required to be completed over the next two years as a condition of CMHC’s funding.
The city is aiming to streamline its development application procedures to improve processing times through digital upgrades, while undertaking reviews of its city’s zoning bylaws, minor variance permitting process, urban design guidelines and citywide parking requirements.
It also intends to expand its rental incentive program to induce developers to build more affordable and rental housing, and form partnerships with non-profit housing providers to foster projects on both city and private lands.
Lastly, the city wants to explore development opportunities in Southwest Coquitlam, specifically focusing on “missing-middle” such as townhomes and rowhouses, near transit.
Low-cost loans for student housing
From a couple weeks ago. Peter Zimonjic, CBC News: Liberals extend federal low-cost construction loan program to student residences.
One of the major components of the 2017 National Housing Strategy was low-interest, long-term loans to build new rental housing (called the Rental Construction Financing Initiative or RCFI), reducing the cost bottleneck. Student housing projects are now able to get financing through the RCFI as well.
How it works:
Under the program, developers can get a loan for a ten-year term at a fixed interest rate, with an amortization period of up to 50 years.
According to the terms of the program, developers and builders only have to pay the interest on the loan during the construction period and only have to start paying both the principal and interest "after twelve months of stabilized effective gross income" on the rental unit.
At the end of the ten-year term, the builder or post-secondary institution must then move their loan to a CMHC-approved lender.
Construction is risky (all sorts of things can go wrong), so banks want a correspondingly high interest rate on construction loans. Operating rental housing is much less risky, so switching to a commercial mortgage after 10 years shouldn’t require a high interest rate.
The total size of the RCFI (recently renamed the Apartment Construction Loan Program) is now $40B, or enough to finance the construction of 80,000 apartments at $500K each.