Community Amenity Contributions (CACs) are one of the contributions developers are required to make in Vancouver to support affordable housing, community resources such as schools and libraries, and parks. Developers, in return, are often allowed to build at higher densities. Vancouver’s unique legislation, the Vancouver Charter, gives it the ability to levy a negotiable tax such as the CACs. In the rest of the province, municipalities can only charge Development Cost Charges (DCCs), non-negotiable fees based solely on the number of units or square feet of the development. Similarly, Ontario municipalities may use Section 37 of the Planning Act to obtain community benefits in exchange for higher densities.
Penny Gurstein, Director of the School of Community and Regional Planning at UBC, leads a project on housing justice in BC. She has just released an analysis of the use of CACs between 2010 and 2012, which produced just 170 affordable housing units. By contrast, BC Housing’s waitlist for affordable units averaged 3,425 over this period.
Developers also have the option of making cash contributions in lieu of building units—a total of $61.07 million was raised just from 2010-2012. This is the preferred option, as most developers want to build luxury condos to maximize their profits and get their investment back immediately–rather than invest in market-rate rental or mix in affordable units with their fancy condo owners. Unfortunately, cash contributions just go into a reserve fund, and the City is not very open about how much of it goes towards the housing budget or how it’s used. But it says it has approved over 1,000 affordable units since 2010. Gurstein’s analysis was based on staff reports, which are unclear on the use of cash contributions for affordable units. Read the article in the Vancouver Sun here.
Rental housing is also an issue in many Canadian cities, since incentives to build them (at least at the federal and provincial levels) disappeared long ago and changes to the Income Tax Act have made rental housing much less profitable to develop since the 1970s. Some analysts believe that a shortage of market rate rental units and the loss of units to condo conversion have contributed to very low vacancy rates across the country, pushing people into homeownership before they may be financially ready. Since 2010, Vancouver has also run the STIR (Short Term Incentives for Rental Housing) program and Secure Market Housing Policy, which have added 3,000 rental units at market rates.
