CBRM approves grants, tax breaks for developers of affordable housing
Money to come from $11.4M in federal funding announced earlier this year
Cape Breton Regional Municipality is offering developers new grants and tax breaks to increase affordable housing in the area.
The incentives are available under two new policies approved this week to spend $11.4 million in funding from the federal housing accelerator fund.
"Since I've been on council, one of our first objectives when we all sat down together was talking about removing some red tape and incentivizing building and this is exactly what's happened," CBRM Coun. Glenn Paruch said Tuesday.
Under the first policy, CBRM will grant developers up to $20,000 to build new affordable units or convert existing ones for that purpose, assuming rents charged do not exceed 30 per cent of gross annual household income.
Grants of up to $18,000 will be available for units rented at 80 per cent of the market average.
Additional grants are also available depending on provincial funding.
Under the second policy, developers of four or more units will get major property tax breaks, starting at a 90 per cent discount in the first year, dropping annually until the full tax rate is reached after 10 years.
Coun. Steve Gillespie questioned the definition of what is affordable, saying the Canada Mortgage and Housing Corporation's numbers have been inaccurate in the past.
For example, planner Karen Neville said CMHC's estimate of the average rate for a bachelor apartment last year was $697 a month.
"Five years ago, average market rent for a basement apartment was $500," Gillespie said. "Now it's $1,250 and there's none available."
He also wondered how CBRM would benefit from the funding if developers were being given large tax breaks for up to 10 years.
Neville said the policies will expand the volume of housing and eventually lead to more tax revenue, especially from developers who build fewer than four units and have to pay the full property tax. And tax rates return to normal for all buildings after 10 years.
Neville said that's the same type of graduated tax phase-in that CBRM offers to attract commercial operations to its downtown cores.
Councillors approved the new policies unanimously.
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