An Aurora councillor criticized a plan to give a developer incentives for building affordable rental housing units, pointing to the monthly rent, which could be more than $2,600, according to town staff.
Councillor Wendy Gaertner was critical of the proposal to allow developers for two rental building development proposals, totalling more than 1,100 units at 101-103 Mosley St., 120 Metcalfe St. and 26-38 Berczy St., respectively, access to York Region’s rental housing incentives.
The incentives would allow the developer to defer payment of the region’s development charges, instead paying them interest-free over a 20-year period.
But to access the program, the region requires municipalities to match its own incentives; thus town staff recommended Aurora offer those same incentives to the developers, during a committee of the whole meeting on Tuesday, Feb. 11.
In exchange, the region requires the development to include at least 200 units, 50 per cent of which have to be two or more bedrooms, be within a regional centre or mass transit area, and meet the region’s definition of affordable rent.
York Region defines affordable rent as no more than 175 per cent of the average market rent within the region, meaning an affordable one-bedroom unit would rent for $2,644 a month, according to the town staff report.
That’s higher than the affordable price in the town’s official plan, which is $1,889 a month, and almost double the affordable rent benchmark set out in the province’s Development Charges Act, of $1,371 a month.
“This makes no sense to me. Nobody should be calling this affordable,” Gaertner said during the meeting. “I know affordable because I live in affordable, and there’s no way the majority of people who need to find rental housing could afford a rent of more than $2,500 a month.”
She said the town should be focusing on its own affordable housing action plan.
“I think this is a terrible plan,” said Gaertner.
But other councillors were more positive about the plan. While Councillor Rachel Gilliland acknowledged the $2,644-a-month figure was high, she said it is important to be encouraging developers to get shovels in the ground.
“It is a lot less than a $1.2-million mortgage. I look at this at least as a positive step forward to allow some sort of rental units within our community,” she said.
Protection against bankruptcy
Should both of these developments proceed as planned, Aurora will defer about $15.6 million in development charges, which will be repaid in 20 equal instalments over a period of 20 years interest-free, according to a staff report.
Councillor Harold Kim said he backed the idea, but asked what the town could do to ensure it was protected if the developer were to go bankrupt.
Rachel Wainwright-van Kessel, the town’s finance director, said the region ties its incentives to the property itself, similar to a mortgage.
“So, there is some recourse in case there is bankruptcy. The property would have to be sold and then we can recoup that way,” she said.
Town solicitor Patricia De Serio added the Development Charges Act stipulates that uncollected fees can be collected as taxes.
“If we have capital projects that we need to move forward with, we have the ability to go ahead and debt finance those projects because we have certainty on the payments coming on an annual basis, that we can then use to fund the debt,” she said.
Ultimately council, sitting as a committee of the whole, recommended the proposal be approved. Council will have a final vote at a future meeting.