The city is short on rental housing, and Mayor Paul Lefebvre wants to tackle the issue with a carrot, by offering tax incentives to spur developers toward multi-unit residential builds..
During today’s city council meeting, Lefebvre tabled a successful motion tasking administrators with drafting a new tax increment equivalent grant program affecting core areas of the municipality.
“We know that on our housing supply, the issue we have is that we need more multi-residential,” he told his colleagues.
“We need to make sure these are built on our corridors to create that density we need, and make sure the buses and infrastructure are already there.
“We cannot add more cost to city taxpayers. What we need to do is focus on maximizing the infrastructure we have now.”
The incentive would build on both the city’s Strategic Core Areas Community Improvement Plan and the forward momentum gained by adopting the Employment Land Community Improvement Plan earlier this year. The Employment Land Community Improvement Plan aims to spur industrial development, and allows the city to forgive a portion of taxes for up to 10 years through a tax increment equivalent grant.
Typically, when there’s a new construction or building expansion, the property will be reassessed once the building permit is completed, at which time property taxes are levied according to the new assessment.
Under a tax increment equivalent grant, the difference between the taxes levied using pre- and post-development assessed value are rebated to the property owner by the city for a set number of years.
Under the multi-residential unit tax increment equivalent grants program proposed by Lefebvre, the partial tax forgiveness would apply for five years for developments of between 30 and 100 multiple residential units, and 10 years for developments with greater than 100 units.
New tax increment equivalent grants would be awarded for five years, “to encourage the rapid creation of rental housing in the city,” according to Lefebvre’s motion. It would also only apply to strategic core areas of the city already serviced by municipal infrastructure.
During today’s meeting, a report on the city’s housing supply and demand analysis, presented by city senior planner Melissa Riou, provided greater context for Lefebvre’s motion.
Riou described the mayor’s motion as “very timely, and coincides with the findings from these studies,” during her presentation to city council.
“These studies” include a population projections report tabled last month, and the housing supply and demand analysis report Riou presented during today’s meeting.
The report, by N. Barry Lyon Consultants Ltd., concludes that Greater Sudbury needs 470 more rental units today and an additional 66 per year moving forward, in order to meet a desired five-per-cent vacancy rate (it’s currently 1.6 per cent).
“A vacancy rate below five per cent usually means that market conditions are tight and that available supply is not keeping pace with demand,” according to the report, which also shines a light on Greater Sudbury affordable housing stock falling well short of demand.
An even greater number of affordable units are needed than general rentals, with many people reportedly “either living in unaffordable conditions, are homeless, are living in a temporary arrangement, or some other problematic solution.”
As of September 2022, the City of Greater Sudbury’s subsidized housing waitlist included 845 households, approximately 12 per cent of which were priority and urgent applicants.
According to the report, Greater Sudbury has a deficit of 655 rent-geared-to-income units, and of at least 301 low-end of market rental units (as of 2017, as a wait-list is no longer maintained).
Although Lefebvre’s proposed tax incentive plan will need to be ratified by city council at a future meeting, today’s unanimous support points to a likelihood it will pass.
Tyler Clarke covers city hall and political affairs for Sudbury.com.
