The City of Victoria is considering expanding its incentive programs to get more rental housing built.
When it meets today, council’s committee of the whole will look at creating a revitalization tax exemption to spur more affordable units in new market-priced rental projects, and encourage investment in non-market rental housing.
The city will weigh cutting in half the development cost charges for non-market rental housing and altering its rules around the amount of money it can grant through the city’s housing reserve fund.
A staff report said current incentives encouraged construction of a “significant” amount of rental housing over the past six years, but rising construction costs and interest rates are making it more challenging to deliver new rental projects, especially those with lower-priced units.
The city’s existing incentives for non-market rental projects include fast-tracking the permit process, waivers for development application and building permit application fees, grants from the housing reserve fund and land partnerships.
The report said despite a brisk building pace and approval of several projects by current and previous councils, the rental vacancy rate continues to be about one per cent, and average rents are still in excess of 30 per cent of household income.
About 60 per cent of Victoria’s residents rent their homes.
A revitalization tax exemption would see base property taxes remain the same, but the owners would get a tax holiday for 10 years on assessed improvements.
The staff report recommends non-market rental projects that are owned and operated by public housing bodies be given a 100 per cent revitalization tax exemption and a 50 per cent reduction in development cost charges.
Other incentives that can also be accessed by market rental projects include exemptions from the community amenity policy, lower parking requirements and bonus density.
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