Ontario's new rules to help affordable housing shortage won't work in Hamilton, city says

Local decision makers say new Liberal legislation that's supposed to help Hamilton's affordable housing crisis isn't going to work here after all.

The province is drafting new legislation around inclusionary zoning, a promise the Liberals made in 2016 to help make urban housing more affordable. Under the new rules, municipalities can demand that a certain percentage of a new development is affordable housing.

But it won't apply to apartments, which is what Hamilton needs, said Chad Collins, Ward 5 councillor and president of CityHousing Hamilton. And the city doesn't have robust enough development to fit the condo criteria.

"On the surface, it looks like it was tailored for the city of Toronto," he said.

The problem? Hamilton's development boom just isn't big enough.

Under the draft version of the new legislation, inclusionary zoning will only apply to developments with 20 condos or more. And the city would have to use development incentives to get developers to create affordable units.

But in Hamilton, the city is already offering those, Collins said. In Toronto, developers build large condo developments on their own.

Here, "every single crane you see in the downtown, they're all taking advantage of our incentive programs," Collins said.

Plus, he said, Hamilton just can't afford it.

Under the plan, the city would have to make up 40 per cent of the difference between a unit's affordable rate and market rate. It would also have to hire staff to keep track of the units, and the equity of each of them, which would transfer steadily from the municipality to the homeowner over a period of 20 years.

City taxpayers would have to cover those expenses, Collins said.

Peter Milczyn, Ontario minister of housing, says his government wants to get it right. That's why it's consulting with municipalities and housing activists.

"We need to take the time and effort to get inclusionary zoning right to help create affordable, mixed-income cities that work for everyone," he said in an email. 

"The current proposal is only a draft for discussion. We will be looking at all options in the final proposal, including increasing the number of affordable units developers are required to set-aside and the required municipal contribution."

Housing crunch

Still, the version so far is disappointing for a city in dire need of some solutions.

Hamilton housing advocates have wanted new inclusionary zoning rules for years. The city is in a multi-year real estate boom, sending rents upward and gentrifying neighbourhoods that used to be affordable. About 6,000 households are waiting for subsidized housing.

Ted McMeekin, MPP for Ancaster-Dundas-Flamborough-Westdale, said in 2016 that his party would pass inclusionary zoning legislation. Some councillors rejoiced, thinking relief was on the way.

The reality, Collins said, has been "a lot different from what we anticipated."

"Inclusionary zoning is a good thing," he said. "At some point in time, it will work in Hamilton. But our real estate situation is such that it's just not here now."

McMeekin said the province will listen to Hamilton's input. "We always listen."

Someone has to pay

The proposed legislation, he said, is "a modest start." As for the money, the city should expect to have some costs.

"You can't do it without costing somebody money, and if you want to put it on the development sector, not very much is going to happen," he said.

"Any time you make this kind of commitment, there's a cost."

Peter Tabuns, an NDP MPP, said the draft legislation mainly benefits developers.

The province should raise the percentage of affordable units required, he said, and municipalities shouldn't have to pay for it.

"What was brought forward in detail just before Christmas was very different from what people expected."