The regulation to promote social housing approved by the administration of Valérie Plante led to the approval of a single project with 86 housing units within two years. To encourage private developers to do better, Montreal will charge them more compensation.
Posted at 4:52 p.m.
From the results of the Mixed Metropolis Ordinance (RMM) presented on Monday, we learn that since April 1, 2021, 164 agreements have been signed between the city and developers for 8,860 private housing units built, under construction or planned in the area of Montreal.
The vast majority of developers chose to pay a penalty rather than build social housing or transfer land to the city: Montreal thus collected 17.4 million for future social housing projects (in addition to 8.2 million for affordable housing).
However, the city is not interested in collecting compensation, but rather in obtaining turnkey social housing projects or properties.
However, only one social housing project with 86 apartments will be implemented, while six others plan to sell land.
However, the report submitted by Montreal mentions “building commitments (land sales and turnkey projects) amounting to 660 social housing units” in more than two years. “When the RMM was passed, it was estimated that the agreements signed annually would represent a potential of 600 social homes. »
License fees are increasing
In order to encourage developers to build social housing as part of their private projects, the administration will therefore increase the required compensation, explains Benoit Dorais, responsible for housing on the board.
Mr Dorais was unable to specify the extent of the increase at this time and only indicated that a further announcement would be made later.
Although only one social housing project has been implemented under the RMM so far, Benoit Dorais believes that this is not a negative result.
“The regulation is not about creating housing, but about diversity, and it will have very long-term effects. We raised 26 million in two years, almost as much as the previous 15 years, so it’s still a success. »
He also notes that the MMR leads to the conclusion of a large number of agreements: 164 in just over two years, compared to 145 in more than 15 years under the previous inclusion strategy.
” Fail ”
The opposition in the town hall has a different opinion: its spokesman denounces a “failure” by the Plante government.
“Most of the few residential units touted in the report have not yet been built and will not be for a long time,” complains Julien Hénault-Ratelle, opposition spokesman for housing.
The decision to increase the fees charged to developers shows that “Projet Montréal has absolutely no understanding of the problems currently facing the real estate market.” We will not increase the number of affordable housing units in the metropolis by Ask property developers to make higher payments. With this logic, the Plante government will accelerate the exodus of real estate developers and sign the death warrant for construction starts,” continues Hénault-Ratelle.
According to the Ensemble Montréal party, the city must instead work to make life easier for developers by speeding up the issuance of building permits, cutting red tape and advocating for development on the land it owns.
The vice president and CEO of project developer Rachel Julien, Mélanie Robitaille, is also of the opinion that this is not the right time to “overwhelm private housing projects” due to the economic situation. “The majority of real estate projects are currently being postponed,” she says, as construction costs have risen 40% in the last four years and financing conditions have tightened.
She remains hopeful that the increase in royalties will not be too steep.
What is the Regulation for a Mixed Metropolis (RMM)?
All developers of residential projects larger than 450 m² (approximately 5 residential units) must enter into an agreement with the City of Montreal for the provision of social, affordable and family housing.
- They must include 20% social housing, either by building these housing units, which are then handed over to the city on a turnkey basis, or by offering vacant land, or by paying a monetary fee.
- They must also provide 10 to 20 percent affordable housing in certain areas designated as affordable housing zones. Outside the affordable zones, only projects larger than 4,500 m² are subject to the affordable housing requirements through a financial grant.
- Projects with 50 units or more must include 5% (city center) to 10% (outside city center) three-bedroom units with a minimum square footage.