Staff Report to Council: CMHC Housing Accelerator Fund – Round 2

Staff Report to Council

DATE

Tuesday, September 3, 2024

DEPARTMENT

Planning

SUBJECT

CMHC Housing Accelerator Fund – Round 2

EXECUTIVE SUMMARY

The purpose of this report is to provide Council with background information on the Federal Government’s Housing Accelerator Fund – Round 2 (HAF2) and to provide Council with a list of the 10 HAF Best Practices initiatives that shall be used to support an application for funding on behalf of the City of Langford.

As part of the application, Langford is required to submit an action plan that outlines a housing supply growth target and commit to a minimum of seven initiatives from CMHC’s 10 HAF Best Practices. CMHC will evaluate each application based on annual growth rate and growth percentage, implementation, supply impact, timeliness and system impact of each initiative and the completion of a housing needs assessment report. CMHC will accept a maximum of three of the initiatives that were submitted in the 2023 application.

BACKGROUND

The Housing Accelerator Fund (HAF) is an application-based program introduced in the 2022 Federal Budget. It had an initial funding allocation of $4 billion until 2026-2027 and one application window in 2023, for which the City of Langford was not successful.

The 2024 Federal Budget included an additional $400 million in funding until 2027-2028. This funding is only available to applicants who were not approved in the 2023 application window. The objectives of the program are to create more housing at an accelerated pace and enhance certainty in the approvals and building process, while also supporting the development of affordable, inclusive, climate resilient, and diverse communities.

COMMENTARY

Housing Supply Growth Target

The core of the HAF2 application is an Action Plan consisting of several required components. These include committing to seven initiatives from CMHC’s 10 HAF Best Practices which may assist in increasing the local housing supply. The Action Plan must demonstrate how the identified initiatives will increase the local housing supply, including growth targets tied to a 10%-unit increase by 2027.

Within the action plan submitted as part of the application for HAF2, the City is required to provide two projections to CMHC:

1. The total number of permitted housing units projected without HAF; and
2. The total number of permitted housing units projected with HAF.

The City is required to calculate the projections based on reasonable assumptions, data sources, and its own administrative data. There is no prescribed formula; however, projections should be based on a three-year period ending December 31, 2027. For the purposes of this calculation, staff utilized projection data from BC Statistics, 2021 Census data and Langford building permit data.

Action Plan Initiatives

HAF2 initiatives included within the action plan must be aligned with the 10 HAF Best Practices, and the majority of them should be ones that were not started prior to the Budget 2024 announcement in mid-April 2024. A maximum of three initiatives that are ongoing or completed will be considered. The City must pick a minimum of seven initiatives and will need to identify how each initiative will increase the supply of housing and associated timelines.

The following list is the 10 HAF Best Practices (initiatives) provided by CMHC:

1. End exclusionary zoning by increasing as-of-right permissions, including four units as-of-right in low-density neighbourhoods and greater density and height in urban cores, near transit and near post-secondary institutions. *CMHC has confirmed that Bill 44 (Small-Scale Multi-Unit Housing – SSMUH) meets this initiative.

2. Make municipally owned lands available for housing through strategies such as acquisition and/or pre-development. Examples include, complete an inventory and assessment of surplus and underused municipal land and create a land acquisition strategy.

3. Increase process efficiency by implementing new technologies or software to speed up development approvals, such as e-permitting.

4. Prioritize and enhance development approval processes for rental and affordable housing.

5. Comprehensive review of development charges and fee schedules including waivers for affordable housing.

6. Reduce or eliminate parking standards to increase project viability, density and reduce carbon footprint.

7. Eliminate restrictions and add flexibility related to height, setbacks, building floor area and other regulations to allow greater variety in housing types and density, including accessory dwellings.

8. Develop affordable housing strategies/plans for the rapid deployment of affordable housing.

9. Design and implement guidelines or pre-approved building plans for missing middle housing specific accessory dwellings such as laneway housing or garden suites.

10. Develop grant programs encouraging the development of housing types that align with HAF such as missing middle, row homes, purpose-built rentals and/or that promote innovative construction techniques.

Council has already endorsed some of the initiatives through the budget process and the strategic plan, including:

• Initiative 1 aligns with Strategic Plan objective 1o (Small-Scale, Multi-Unit Housing legislation) and was adopted by Council in June 2024. CMHC has confirmed that this initiative meets the requirement and can be used as one of three initiatives that are completed.

• Initiative 2 aligns with Strategic Plan objective 1m (Programs and Partnerships for Affordable Housing) and 1l (Strategic Land and Facility Acquisitions). This Initiative would allow the City to leverage funds through this grant to purchase land for affordable housing opportunities as well as create a strategy to utilize current City-owned lands for housing partnerships.

• Initiative 4 aligns with Strategic Plan objective 1m (Programs and Partnerships for Affordable Housing) as well as Collaborative Advocacy: Social and Non-Market Housing. This initiative could include pre-zoning for affordable housing in key locations such as the City Centre as well as prioritizing and further streamlining the approval process for affordable housing projects.

• Initiative 5 aligns with Strategic Plan objective 1b (Update Amenity Contribution Policy) and could also include a review of development application fees and charges for affordable housing projects.

• Initiative 6 aligns with the amended Strategic Plan objective 1i (Review of off-street vehicle and bicycle parking requirements). A Request for Proposals for this work was posted on July 31st 2024, and work will commence once the contract has been awarded.

• Initiative 8 aligns with Strategic Plan objective 1m (Programs and Partnerships for Affordable Housing) and 1k (Update the Housing Needs Report) as well as Collaborative Advocacy: Social and Non-Market Housing. This would involve completing the updated Housing Needs Report and developing a strategy to facilitate the construction of the needed housing types, including affordable housing, which could include formalizing the rental stream of the Attainable Housing Program and restructuring the ownership stream of the Attainable Housing Program.

• Initiative 9 aligns with Strategic Plan objective 1d (Update Design Guidelines) to clarify design expectations for new housing (in particular missing middle housing types) and potentially adopt some/all of the pre-approved designs under development by the Province.

The scope and details associated with all of the final initiatives would have to be further developed as part of the implementation of the Action Plan. Any initiatives requiring bylaw or policy changes would also be subject to a public process.

Staff recommend moving forward with the above-noted initiatives, as many of these projects are already within the short- and medium-term workplan, or in the case of initiative 1, already complete.

Eligible Use of Funds

There are three components of the funding framework: (1) base funding, (2) top-up funding and (3) an affordable housing bonus. Base funding is designed to incentivize all types of supply across the housing spectrum with a maximum grant estimated at $20,000 per HAF unit. Top-up funding is designed to incentivize certain types of housing supply. Funding will depend on the type of housing and the associated projected increase in the number of permitted units. There is no top up funding available for single detached homes. Affordable housing bonus is designed to reward an applicant that can increase its share of affordable housing units relative to the total projected permitted units with the support afforded by HAF.

The HAF grant funding is designed to support the costs associated with the initiatives within the action plan, as well as any other permitted use of funds to accelerate the supply of housing. If the City is awarded funding, there will be flexibility in how the funding is used provided it is for a permitted use. The permitted uses of HAF funding are:

1. Investments in Housing Accelerator Fund Action Plans
2. Investments in Affordable Housing
3. Investments in Housing-Related Infrastructure
4. Investments in Community-related Infrastructure that supports housing

FINANCIAL IMPLICATIONS

Any initiative that alters the land use or policies could include a requirement to provide or exempt an applicant from providing amenity contributions in accordance with Council’s Amenity Contribution Policy. A successful HAF application will provide the City with funding to undertake initiatives identified in the Action Plan, among other eligible projects.

LEGAL IMPLICATIONS

If the City’s HAF2 application is approved, the City would be required to enter into a funding agreement with CMHC. This would include but not be limited to a timeline for implementing the initiatives, and a schedule for receiving the eligible funds. Applications can be submitted for HAF2 until September 13, 2024.

STRATEGIC PLAN ALIGNMENT

• 1b: Update Amenity Contribution Policy
• 1d: Update Design Guidelines and Consider an Advisory Design Panel
• 1i: Review the Zoning Bylaw Parking Requirements in the City Centre (amended to include a fulsome review of all off-street vehicle and bicycle parking requirements)
• 1k: Update the Housing Needs Report
• 1l: Continue to make Strategic Land and Facility Acquisitions
• 1m: Pursue Program and Partnerships for Affordable Housing
• 1o: Update the Zoning Bylaw to Reflect the New Small-Scale, Multi-Unit Housing and Transit-Oriented Development Legislation
• Collaborative Advocacy: Social and Non-Market Housing

OPTIONS

Option 1

THAT Council endorse CMHC’s Best Practices 1, 2, 4, 5, 6, 8, and 9 as described in this report for the Housing Accelerator Fund 2 application.

OR

Option 2

THAT Council amend the list of proposed initiatives as presented by staff for the Housing Accelerator Fund 2 application as follows: ________________________

OR

Option 3

THAT Council direct staff to not pursue a Housing Accelerator Fund 2 application.

SUBMITTED BY

Matt Notley, Planner II, Community Planning and Climate Change

Concurrence:
Melisa Miles, Manager of Legislative Services

Concurrence:
Donna Petrie, Senior Manager of Communications & Economic Development

Concurrence:
Yari Nielsen, Director of Parks, Recreation and Facilities

Concurrence:
Matthew Baldwin, RPP, MCIP, Director of Development Services

Concurrence:
Leah Stohmann, RPP, MCIP, Director of Community Planning and Climate Change

Concurrence:
Katelyn Balzer, P.Eng., Director of Engineering and Public Works

Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence:
Marie Watmough, Director of Legislative & Protective Services

Concurrence:
Darren Kiedyk, Chief Administrative Officer