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UDI News

Draft By-law for a Diverse Metropolis: UDI raises a yellow flag

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Montréal, October 18, 2019 – The Urban Development Institute of Quebec (UDI) has released a brief, which it will present to the Office de consultation publique de Montréal (OCPM) on Thursday. The document, which is the result of exhaustive research and numerous discussions, focuses on the importance of diversity in housing to our industry. Its substance would have been quite different had members of our Economic Development and Urban Affairs Committee not been involved; they were especially generous, and most of them also made the decision to share their views with the OCPM. This was no surprise! Why? Because diversity is not a new topic for UDI.

We have been working on this issue for a long time. First, on a large scale, the market compels us to offer rich and varied new housing options. Second, since 2005, our members have significantly contributed to the success of the City’s inclusion strategy by developing best practices projects that are a tremendous source of pride. Did you know that in 2018, 47% of housing under construction in Montréal was part of projects with commitments based on the inclusion strategy or local strategies?1 No wonder Montréal remains one of the most affordable metropolises in North America.

The numerous and sometimes urgent needs, the Québec government’s recent delegation of new responsibilities to the City, and the election of Projet Montréal have all driven the municipal government to rethink its diversity policies, hence the current debate. In the past few months, we have shared our studies and opinions with the municipal government, and had a seat at the housing partners table chaired by the mayor.

However, the City, which wants to do more and offer our industry more predictability, which we welcome, is taking advantage of the opportunity to shift some of the responsibility for diversity funding to private markets. This has always been the responsibility of higher levels of government, which have the required authority to avoid externalities related to overly local intervention, and the necessary tax bases to respond effectively.

Indeed, if you acknowledge that access to housing is at the very heart of our social safety net, you likely believe, as we do, that diversity should remain a public responsibility, and will oppose the proposed shift.

By the same token, if you accept that in exchange for an amendment to the urban plan that would increase the tax value of a property, the City earmarks a portion of that value and imposes obligations on developers with respect to social or affordable housing, as is our contention, then you will stand if it acts in the same way for projects that respect this plan. And yet, this is what Montréal is putting forward, which largely explains why UDI is raising a yellow flag today. Let us be clear: we believe the City is wrong to subject projects in their own right to the proposed diversity plan without compensation. In its current form, the City’s draft by-law will accelerate, to an increasingly greater degree, the rise in prices for new housing.

Given that Montréal is acting on its own, without coordinating its efforts with the governments of Quebec or Canada (which are currently negotiating an agreement that could provide Quebec with $1.5 billion in federal funding over the next 10 years), the cities of the metropolitan community or even its agglomeration neighbours, our objection is all the more justified.

Those of you who closely follow the market have surely noted that Westmount, the Town of Mount Royal, Brossard and Laval, to name but a few, are not considering this kind of intervention. They are probably already gauging the competitive advantage they just gained (all the more so on the south shore with the impending light rail network). Need we point out that more than three-quarters—77.8%—of AccèsLogis housing is in Greater Montréal, compared with 6.9% in the Longueuil agglomeration, 6.5% on the north shore, 6.2% on the south shore and 2.6% in Laval (2013)?2

In our opinion, with the significant increases in the price of land and construction costs, and the new dues that are upending our models, the City should aspire to a neutral financial impact for our industry. It would thus prevent any shift in responsibilities. This would be possible without any additional cost if, for example, the City were to reinstate density bonuses in exchange for diversity, a proven approach. UDI also notes that capital markets are contending with increasing social responsibility pressures. It’s not a stretch to think that, with a little effort, new investment vehicles that foster diversity could emerge.

By acting differently, Montréal will most certainly become the Canadian city with the most stringent diversity requirements. However, it will have made a choice to fuel like no other the very upward pressure on prices it’s grumbling about.

Important discussions will take place in the days to come. We hope they will be productive for everyone.

Should the clash of ideas lead to enlightenment, the OCPM’s report could gain traction. Until then, let’s hope that the Quebec government, which is paying careful attention, speaks up and takes stock of the magnitude of the precedent Montréal is about to set and agrees to do its part as well.

Click here to read our analysis and recommendations.

Analysis conducted using Outil Condo, 2nd quarter of 2018, a compilation of data published by Altus Group, in Strategy for the Inclusion of Affordable Housing – Progress Report 2005-2018, City of Montréal (2019) (French only).

Cahiers métropolitains, Communauté métropolitaine de Montréal, décembre 2013.


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