Halifax drops policy requiring new housing developments to include affordable units

Halifax is shelving a requirement for developers to have a certain number of affordable units in buildings.

Halifax city council is shelving a plan that would require developers to make portions of their new housing builds include affordable or below-market units.

The plan by city council to adopt the inclusionary zoning policy has been years in the works, but according to a new report, the policy doesn’t make financial sense and, in some cases, may actually impede housing development and drive up rents in new builds.

Councillor Shawn Cleary had hoped that implementing an inclusionary zoning policy would give council power to increase the affordable housing stock, but the evidence in the report forced them to abandon that direction.

“It was a gut punch,” said Cleary. “Given the price of land, labour, materials, there’s just no room for us to mandate affordable units.

“Essentially, you’d either be jacking up rents so high in those buildings to subsidize those affordable rents that no one could afford the apartments, which we’re getting close to anyway, or none of those developers could make money, which means they all go out of business and then you don’t build any housing.”

Michael Kabalen, executive director of the Affordable Housing Association of Nova Scotia (AHANS), says the inclusionary zoning policy in principle makes great sense but the economics on the ground don’t support it right now.

“You’re asking private developers who are operating in a financialized housing market to do something that they’re not experts at,” said Kabalen. “And you’re trying to create a market method where they collaborate with a sector that doesn’t want to collaborate with them either.”

Kabalen says government is better to collaborate with not-for-profits who specialize in building affordable housing rather than asking the private sector.

“I would much rather government double, triple, quadruple down on these (affordable housing) programs,” said Kabalen. “And allow us to do the good work we’re already doing.”

Cleary says council may revisit inclusionary zoning down the road if the economics makes sense.

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