Known as the mixed metropolis regulation, it came into effect on April 1. This forces developers to include social, family and, in some places, affordable housing in all new projects over 4,843 square feet (about five units) – or else they have to pay hefty fines. And critics say they are likely to pass the extra costs on to buyers.
The regulation is one of the tools on which the Plante administration relies to face a serious housing crisis and skyrocketing rents.
The city estimates that the new rules will result in the construction of 600 new social housing units per year.
Originally dubbed Regulation 20-20-20, it originally sought to include 20% affordable housing in new developments, but it was changed significantly during the consultation process. Affordable housing is now only a requirement in a few areas of the city.
Despite this, the new by-law is “probably the most powerful in North America,” says Craig Sauvé, municipal councilor for the Sud-Ouest borough and associate councilor for housing on the executive committee.
The developers say it will increase the cost of housing for ordinary Montrealers.
“Basically, all the pressure is on the manufacturer’s shoulder to finance these goals. The only way that can happen is that the owners of the condominiums will have to pay more, ”said François Bernier, vice-president of public sector affairs at the Association des Professionnels de la construction et de l’Habitation du Québec. Quebec.
Housing groups like the The face popular action in urban redevelopment (FRAPRU) call the settlement a victory, saying they have been calling for similar legislation for years.
“When the city of Montreal announced the implementation of this by-law, we were delighted,” said spokesperson Catherine Lussier.
It is also likely to be the subject of debate in the municipal elections this fall.
On the Radio-Canada talk show Everybody talks about it, Hopeful mayor Denis Coderre said if he was elected in the fall he would revise the bylaw.
So what’s at stake?
How development worked before the settlement
Until April 2021, the city’s main bargaining tool to encourage developers to build social, family and affordable housing offered them incentives, called derogations or exemptions.
Montreal’s urban plan included constraints on new construction. If a developer wanted to build something that didn’t fit with the plan, then they could apply for a waiver.
A borough might agree – by saying yes, the developer can build several stories higher than the rule, but must include green spaces in the plan or family housing.
If the developers indicated that they would build social, family or affordable housing, then gave up, they often had to pay a fine that went into the coffers of the borough.
Often it was cheaper to pay the fine than to build the promised home.
All of that is supposed to change in the new plan.
Now, all new construction projects over 4,843 square feet (approximately five units) will have a built-in penalty fee if they fail to meet their social housing plan.
Lussier says that one of the main weaknesses of the regulations is that developers still have the option of paying penalty fees.
“For us, this is not acceptable,” she said. “We must force developers to develop social housing as much as possible within the project.
But Sauvé says the penalty fees are much higher now than they were before.
“A developer has no incentive to pay,” he said. “This will generate a lot more money so that we in turn can buy land and then create new social housing opportunities. “
What happened to affordable housing?
The first version of the mixed metropolis regulation included a provision stating that 20 percent of new construction should be considered affordable.
During the consultation, the city learned that the requirement was too demanding for developers. He also learned that there was a lack of control over who received affordable housing.
In the final version of the by-law, only certain sectors of the city require affordable housing: Nuns’ Island and in Saint-Laurent, around the REM stations, as well as a location in Outremont.
Sauvé says the city plans to add more areas soon where affordable housing will be mandatory.
Elsewhere in Montreal, any promoter of construction projects of more than 48,437 square feet (approximately 50 units) must contribute to a fund used to create affordable housing by the city.
It won’t help people find housing in the meantime, Lussier says.
“We are seeing it now in Montreal, the market value is good there and the increase in rents has exploded over the last year,” she said.
In the new version of the regulation, the definition of affordable housing has also changed. To qualify, units must be rented or sold for 10 percent less than the neighborhood’s average cost.
The goal is to protect the unit’s affordability over the long term, Sauvé says.
“We were considered one of the most affordable metropolises in North America and we’re losing fast. That’s why we have to fight very hard, ”said Sauvé.
Will the cost of housing increase?
During the consultations, groups representing developers expressed concerns that the cost of private housing will increase because developers are forced to build social and family housing at their own expense.
A city analysis found that the cost of housing in Montreal could increase by 2%.
“There is this impact that we cannot shake. He is with us, ”said Bernier.
“We have no problem with the goal. The goal of providing social housing is a good goal. But when we’re stuck funding the problem, that’s where you run into trouble. “
Sauvé rejects this, saying developers have made huge profits in Montreal’s booming housing market.
“I understand their concerns,” he said. “But we ask them to contribute more. “