Affordable housing agreements jeopardized by recent property sales

It may be a tough lesson in not counting your chickens until they’re hatched.

A loophole could jeopardize several affordable housing agreements between city hall and developers if properties are sold prior to construction. 

On Tuesday, Deputy Mayor Shawn Lewis warned the Community and Protective Services Committee against counting those units towards council’s goal of 3,000 new affordable housing units over five years.

“We’re counting those ‘bonused units’ as planned, when in fact, in some cases the application is dead”, Lewis said.

Through the use of ‘bonusing’ council would negotiate an agreement with developers, allowing a larger building than existing zoning permits in exchange for public benefits like some affordable units, an aesthetic design, or public art.

However, provincial policies that permitted bonus zoning expired in September 2022, so if the new owner of a property wishes to rezone it again, a similar bonusing agreement cannot be made.

“That is the risk that we run,” director of municipal housing development Matt Feldberg told the committee. “We are relying on the developer or the applicant to come forward with a project.”

The deputy mayor has identified three bonus-zoned properties that were listed for sale in 2022, with agreements in place for a total of 45 affordable units.

“None of those affordable units have come into existence yet,” Lewis tells CTV News. “Now the new owner is going to decide what, if anything, they are going to do with the property— and it may look completely different.”

In 2018, council agreed to rezone 147-149 Wellington Street and three smaller properties on Grey Street for an 18-storey residential building.

Six of the storeys were granted through a bonus zoning agreement to include 10 units of affordable housing and other concessions.

Lewis worries the recent sale of the property puts the future of those affordable units in doubt.

Meanwhile, Lewis awaits more details about the province’s plan for ‘inclusionary zoning’— that will require a percentage of affordable units in certain developments.

“Without those directions from the province, we are really in a grey zone right now.”

Civic administration will provide a fulsome review of London’s Roadmap to 3,000 affordable units this spring.