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Can Delta, Metro develop a feasible plan for inclusionary housing?

Metro Vancouver says it will engage with member jurisdictions and the province on the regional model inclusionary housing policy framework
Financial analysis would be required prior to developing inclusionary zoning bylaws to ensure that the costs associated with constructing affordable and special needs housing are offset by sufficient density incentives, according to Delta planning staff. Sandor Gyarmati photo

One much talked about potential tool to create even more affordable rental housing units in cities is inclusionary zoning, something the City of Delta has begun to explore as it is also finalizing a major Official Community Plan (OCP) update.

Inclusionary housing is a broad term that refers to municipal initiatives to engage private developers to provide a percentage of affordable housing in otherwise market-rate housing developments.

Metro Vancouver explains that the terms “inclusionary housing” and “inclusionary zoning” are often used interchangeably, however, the current regulations in B.C. do not allow inclusionary zoning, which would allow local governments to require a certain percentage of affordable housing units be provided as part of a market-rate development.

A recent Delta staff report on the new provincial housing legislation notes proposed changes would allow local governments to require affordable and special needs housing in new developments without the need to rely on a discretionary rezoning approval processes.

Financial analysis would be required prior to developing inclusionary zoning bylaws to ensure that the costs associated with constructing affordable and special needs housing are offset by sufficient density incentives.

The report also notes that, should Delta implement inclusionary zoning, the city would be required to submit annual monitoring reports to the province.

The report also notes that updates to how a density bonusing tool can be used will be required in order to align with a new inclusionary zoning change, as well as how the density bonus tool can be used in Transit-Oriented Areas. Any density bonus bylaws currently in place will be required to be updated as early as mid-2025.

A recent Metro Vancouver report on an inclusionary housing policy review and proposed regional model policy and framework notes inclusionary housing has been an important tool, contributing approximately 9,200 new below-market units to date.

However, recent changes to provincial legislation, changing market conditions and experience in implementing current policies suggest opportunities to better use inclusionary housing tools in the region.

“The regional model policy framework is intended to help member jurisdictions seeking to adopt or update inclusionary housing policies and encourage policy consistency across the region, while recognizing the varied housing markets in Metro Vancouver and impacts of inclusionary housing on development feasibility,” the regional district explains.

The Metro report notes that a well-designed inclusionary housing policy can generate a significant number of new affordable homes in the region but must be carefully considered to ensure it is in line with market conditions, implementable and efficient.

In terms of the viability of inclusionary housing, a study found that the higher priced markets in Metro Vancouver appear to strongly support up to 10 or 20 per cent inclusionary housing under current conditions, while the moderate markets may be able to support some inclusionary housing.

The lower priced markets may be currently challenged to support any viable amount of inclusionary housing at this time, primarily due to the current high construction costs that are creating a difficult environment for housing development overall, the report explains, adding it is anticipated that with improved market conditions and phased implementation over time, inclusionary housing will be supportable in all markets.

A Delta staff response notes that the city’s Housing Action Plan identifies the development of an inclusionary housing pilot as a strategy for implementation over the longer term.

“Delta does address inclusionary housing on a case-by-case manner on larger development sites where non-market housing could be a component considered as a community benefit. In the updated OCP, Delta added a statement formalizing this approach by requiring significant amenity contributions for projects above six storeys in Urban Centres and along the Scott Road corridor. Rental/non-market housing is encouraged as part of contributions for projects between 7 and 18 storeys, and expected for projects above 18 storeys,” the memo noted.

“Staff are also developing a work plan to review the value of higher densities enabled through the proposed new OCP and provide a framework to help guide Council when determining appropriate contribution levels for projects over six storeys and will consider Metro Vancouver’s findings in this work.”