The regulation adopted by Valérie Plante’s administration to encourage the construction of social housing led to the approval of a single project of 86 units in two years. To encourage private developers to do more, the City of Montreal will demand greater compensation from them.
In the balance sheet of Regulations for a mixed metropolis (RMM), presented Monday, we learn that 164 agreements have been signed between the City and developers since 1er April 2021, for 8,860 private housing units, built, under construction or planned, on the territory 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).
But what the City prefers is not to collect compensation, but rather to receive turnkey social housing projects or land.
However, only one social housing project of 86 apartments is being implemented, while six others plan to sell land.
The report presented by Montreal, however, mentions “commitments in buildings (disposals of land and turnkey projects) amounting to 660 social housing units” in more than two years. “When the RMM was adopted, it was estimated that the agreements signed annually would represent a potential of 600 social housing units. »
Royalties on the rise
To encourage developers to build social housing as part of their private projects, the administration will therefore increase the compensation required, explains Benoit Dorais, responsible for housing on the executive committee.
Mr. Dorais could not specify the extent of the increase at the moment, only indicating that another announcement would come later.
PHOTO MARCO CAMPANOZZI, LA PRESSE ARCHIVES
Benoit Dorais, responsible for housing on the executive committee of the City of Montreal
Although only one social housing project has been implemented so far within the framework of the RMM, Benoit Dorais believes that this is not a negative outcome.
“The regulation does not aim to create housing, it aims for diversity, and it will have very long-term effects. We raised 26 million in two years, almost as much as in 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 for the Inclusion Strategy, which previously applied.
” Failure ”
The opposition at city hall is not of the same opinion: its spokesperson denounces a “failure” of the Plante administration.
“Most of the few housing units touted in the report are not yet developed and will not be for a long time,” laments Julien Hénault-Ratelle, opposition housing spokesperson.
As for the decision to increase the fees required from developers, it “shows that Projet Montréal understands absolutely nothing about the issues that the real estate market is currently experiencing. It is not by asking developers to pay more that we will increase the number of affordable housing units in the metropolis. With this logic, the Plante administration will accelerate the exodus of real estate developers and sign the death warrant for construction starts,” continues Mr. Hénault-Ratelle.
According to the Ensemble Montréal party, the City must instead work to make life easier for builders, by speeding up the issuance of building permits, by reducing bureaucracy and by working to develop the land it owns.
Vice-president and general manager of developer Rachel Julien, Mélanie Robitaille also believes that this is not the time to “overtax private housing projects”, due to the economic context. “The majority of real estate projects are currently being postponed,” she says, due to the 40% increase in construction costs over the past four years and tightening financing conditions.
She still hopes that the increase in royalties will not be too steep.
What is the Regulations for a mixed metropolis ?
All builders of residential projects of more than 450 m² (approximately 5 housing units) must conclude an agreement with the City of Montreal on the supply of social, affordable and family housing.
- They must include 20% social housing, either by building these housing units, which will then be transferred 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% affordable housing in certain areas called affordable housing zones. Outside of affordable zones, only projects larger than 4,500 m² are subject to affordable housing requirements, through a financial contribution.
- Projects with 50 housing units or more must provide for 5% (in the city center) to 10% (outside the city center) of units with three bedrooms and a minimum surface area.