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The City of Montreal gives “a two-year break” to developers

Photo: Getty Images iStockphoto Developers have remitted $38.7 million since April 1, 2021 to the City rather than giving it land or including social and affordable housing in their projects.

Zacharie Goudreault

5:32 p.m.

  • Montreal

In order to give respite to real estate developers faced with rising interest rates and construction costs, the City of Montreal will suspend for two years the financial contribution for the development of affordable housing provided for in its Regulations for a mixed metropolis. A measure that will allow real estate developers to save $3,000 to $4,000 for each housing unit built in the metropolis.

This contribution will, however, continue to be required from developers in certain very specific areas of the metropolis where the City wishes to further stimulate the creation of affordable housing. These only represent a small percentage of Montreal’s territory.

“For two years, we will give a break, a moment of respite for developers” in order to stimulate an upward recovery in construction starts in the metropolis, summarized Thursday the head of housing on the executive committee, Benoit Dorais, during a press conference held in the Old Montreal.

At the same time, the municipal administration also limits to 5%, for two years, the annual increase in financial contributions required from developers who do not transfer land or buildings intended for social housing within the framework of this regulation.

“There is a significant window of opportunity. This is what we come to tell the promoters and they are aware of it,” declared Mr. Dorais. He hopes that these regulatory changes will have the effect of encouraging developers to “build more” and “more quickly”, at a time when construction starts fell by 37% in the Montreal region last year, according to reports. data from the Canada Mortgage and Housing Corporation.

The contributions required from developers will then increase at a more sustained rate in 2026 and 2027, in order to encourage developers to further develop social housing projects rather than remit an amount to the City. Since April 1, 2021, the vast majority of developers have taken the route of financial compensation rather than selling land or including social or affordable housing in their projects. The City thus raised $38.7 million, but only one social housing project resulting from this regulation is currently under construction in Montreal.

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Promoters satisfied

The City, which will adopt the modifications provided for in this regulation next week, will also restrict the number of real estate developments that are subject to it. It will now only be projects of 20 housing units or more that will have to contribute financially to the development of social and affordable housing in the metropolis, whereas this requirement currently applies to any development of five housing units or more.

The compensation given by the City to developers who transfer land to them has also been revised upwards to take into account the notable increase in land values ​​noted in recent years in Montreal. Thus, instead of receiving $5.8 million from the City for land that can accommodate 100 social housing units in the Griffintown district, a developer will instead collect $8.4 million, which represents a jump of nearly 45%, show data presented Thursday by the municipal administration.

“We can only welcome this new version of the Regulations for a mixed metropolis,” responded in an interview with Devoirthe director of public and government affairs at the Association of Construction and Housing Professionals of Quebec, Fabrice Fortin. “When we reduce the bill imposed on developers, it helps with affordability, so it contributes to diversity,” he said. Mr. Fortin therefore believes that these regulatory changes could help “reduce the housing crisis” by stimulating the construction of new homes in the metropolis.

The Urban Development Institute of Quebec (IDU), which was part of a series of actors from the business community who called a few months ago for a moratorium on the application of this regulation, in the current economic context, also said he was satisfied on Thursday with the changes announced to it. “The City of Montreal is making the right decision by postponing certain adjustments provided for in the Regulation for a mixed metropolis due to the current economic context,” responded in writing the President and CEO of the IDU, Isabelle Melançon.

The Popular Action Front in Urban Redevelopment deplores for its part that this regulation continues to allow developers “to pay a financial contribution instead of creating social housing”. “The group has difficulty understanding the choice of sparing developers from building social housing in large developments considering that the needs are so dire,” indicates the organization, in a press release issued Thursday.

“For Ensemble Montréal, the situation is very clear. The only option that is possible at the moment is a pure and simple suspension of the regulations,” said Ensemble Montréal's housing spokesperson, Julien Hénault, on the sidelines of this press conference. -Ratelle.

However, this regulation “is here to stay”, insisted Benoit Dorais. “It is producing positive results and we are confident that what we are announcing today is a step in the right direction. »

The City also emphasizes that seven agreements concluded to date with developers who have agreed to sell land or buildings will ultimately allow the creation of approximately 660 social housing units. However, Montrealers will have to be patient before seeing these come to fruition, once these projects have obtained the necessary financing.

Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116