Consultants say Fredericton needs own 'housing entity' to create more affordable units

Consultants for the City of Fredericton are recommending it establish a "mission-driven housing entity" with the goal of creating more affordable units in the city.

The housing entity would be supported by the city in conjunction with other funding partners to focus on "developing a sustainable affordable housing stock that addresses current needs" while also growing it to adapt to demographic changes, according to a newly released draft version of the city's Affordable Housing Strategy.

"This would include a range of activities such as purchasing existing housing, new development, conversion, and rehabilitation," states the document now up for public review from Turner Drake & Partners Ltd.

The proposed creation of a housing entity is one of 13 recommendations laid out in the draft affordable housing strategy, which the city released on Monday.

The release of the draft strategy is the latest development in a plan by the city to tackle housing affordability and growing concerns around homelessness.

Last fall, the city released results of its housing needs assessment, which showed Fredericton  needed about 2,500 affordable housing units, 1,500 subsidized units and at least 50 emergency shelter spaces,

The draft Affordable strategy was developed by a consulting team working in collaboration with city staff, and is informed by the findings of that assessment.

This strategy lays out a new vision for the municipality's role, one that is more interventionist and based on a stronger leadership position.- Fredericton draft Affordable Housing Strategy

The strategy points to the city's record-low rental vacancy rate of 1.3 per cent, which has driven "rapid" increases in the cost of rent.

It also states that a solution to those issues can't be fixed by the free market alone, and requires a ramped-up level of involvement on the part of the municipal government.

"This strategy lays out a new vision for the municipality's role, one that is more interventionist and based on a stronger leadership position.

"This means Fredericton is venturing into unfamiliar territory and needs to be focused on setting up the conditions for long-term success to the same degree it is focused on achieving short-term progress."

Fredericton Mayor Kate Rogers was unavailable Thursday for an interview about her thoughts on the draft strategy.

Acquiring low-cost housing stock

The draft strategy details the various forms that a housing entity could take, including an example in Moncton, where city councillors in 2020 voted to allocate $6 million over three years to Rising Tide Community Initiative for the creation of 125 affordable units.

Other examples cited in the report include the creation of the Non-Profit Housing Division within the City of St. John's, as well as the more arm's-length model used by the City of Ottawa with the creation of the Ottawa Community Housing Corporation.

Ultimately, the Fredericton strategy says the entity would give special consideration to acquiring existing affordable housing units in the private market rather than constructing new ones.

The strategy states that the private acquisition of older existing properties typically owned by small landlords is a "reoccurring threat" to the availability of low-cost housing.

"As market value increases, smaller landlords are likely to sell to capitalize on the profit.

"Investors make capital improvements to the building and gradually increase rents to improve the cash flow and rate of return."

The strategy says affordable units are typically lost in those transactions when a purchaser renovates units and increases rents or demolishes the building altogether.

Those buildings play a "vital purpose" in providing low-cost housing to residents, but are also vulnerable to market conditions, the document says.

"Most cities do not have a public or non-profit housing sector that is positioned to absorb hundreds of households that are displaced from the private sector, so it is imperative this housing stock in the low-cost end of the private market is maintained."

Skepticism over ambitious strategy

Warren Maddox, executive director of the Fredericton Homeless Shelters Inc., said the document makes some good recommendations, such as updating bylaw regulations to allow for the construction of diverse housing styles

But at the same time, he said, he's skeptical that council will have the appetite to implement many of the  recommendations.

"I think it's a very, very big document," Maddox said. "I don't see where the city has the current capacity to even remotely deliver on that.

"But I think that it's a really good start. It's a great discussion piece, and, you know, overall, I'm happy that the city is starting to get its hands around the fact that they can't just ignore the issue and hope it goes away. It just doesn't work that way."

The other recommendations include:

• Adding dedicated capacity within the municipality for housing matters. 
• Revising inflexible or outdated Zoning Bylaw definitions.
• Reviewing and amend Zoning Bylaw regulations to enable more and faster housing. 
• Developing a co-ordinated approach to density bonusing and Inclusionary zoning. 
• Helping seed and support community housing organizations. 
• Incubating and accelerating community housing projects. 
• Kickstarting projects through provision of land.  
• Advocating property tax reform and tax-related policy tools. 
• Requesting financial support from the province. 
• Requesting legislative changes to enable affordability agreements with private parties. 
• Advocating enhanced renter protections. 
• Collaborating with other municipalities on shared priorities.  

The City of Fredericton says it's taking public feedback on the draft strategy until May 18 at midnight.

The city is also hosting an online presentation on the strategy next Wednesday from noon to 1 p.m. via Zoom.

The city says the strategy will be finalized pending public review, and is expected to go before council for adoption early this summer.