To combat rising rental rates while encouraging new rental projects, the City of Victoria will consider a new approach next week to offer rental subsidies to certain tenants.
Based on a proposal from Mayor Lisa Helps and councilors Ben Isitt, Jeremy Loveday and Sharmarke Dubow, the city will consider turning some of the property taxes it collects on new rental properties into rental subsidies.
The motion also calls for a property tax exemption for five to 10 years for rental property renovations and a demand that Ottawa remove the GST on purpose-built rental properties.
The idea is to encourage redevelopment of tired buildings to create more housing options, while helping tenants displaced by new construction.
“In a deep housing crisis with not enough rental housing and not enough affordable rental housing, the disappearance of low-end units to be redeveloped puts pressure on both tenants, the existing rental stock and all levels of government to build more social housing to fill the void,” the draft motion reads.
He says that since new private market rental buildings with more units and density will generate more property taxes for the city, the city should consider using the extra money to fund rent supplements so that tenants displaced pay the same rents in a new building, and to supplement their rents to live elsewhere during construction.
Currently, when developers propose to replace an old rental building with a new, larger project, the city asks them to help out displaced tenants. This can take the form of a right of first refusal on newly built units – which many cannot afford at market rates – paying for moving costs and helping with relocation.
The new proposal may cost the city property tax revenue, but the mayor and councilors point out that the city is likely still ahead, given that the only way to replace low-cost units at the same rental rate is to turn to non-government funded housing. – for-profit buildings, which do not pay property taxes and require taxpayer subsidies to build.
Details of the rent subsidy proposal have yet to be worked out, including who would administer the supplements and how tenants would qualify, how long the subsidy would last and where returning tenants would live during the construction phase.
Landlord BC, the Urban Development Institute and Together Against Poverty Society have all said they support the proposals, which will be considered by the full committee on Thursday.
David Hutniak, general manager of Landlord BC, called them “an easy deliverable” for the city.
Noting that the current tax climate has already led to a slowdown in new rental housing construction, he said the group “strongly endorses” the idea of a five to 10-year tax holiday for building renovations and improvements. as an incentive.
Kathy Whitcher, executive director of UDI Capital Region, said the development industry appreciates that the city is using carrots instead of sticks to encourage new rental projects.
Douglas King, executive director of the Together Against Poverty Society, said the organization supports the idea of using property tax exemptions for rent supplements to promote tenants’ right of return.
“We saw an acute need for new solutions to what have now become affordability issues in our housing market, and an urgent need to protect low-income tenants in Victoria who reside in aging housing stock,” did he declare.