Political push to redirect millions in incentives from downtown developers to affordable housing

London, Ont.’s soaring skyline has come with a substantial price tag for local taxpayers.

A municipal financial incentive intended to encourage residential construction in downtown London has reimbursed developers millions of dollars to offset development charges in recent years.

Between 2018 and February 2023, the developers of just seven downtown buildings were approved development charge grants totalling $25.2 million, about a quarter of all city spending on incentive programs ($104.7 million).

Coun. Skylar Franke thinks it’s time to pause the grant for the next four years.

“Things have changed over the past five years,” said Franke, who sits on the Planning and Environment Committee (PEC). “The market is so hot, I think it makes sense for people to build wherever it makes sense for them.”

She told CTV News London that the funding should be redirected to incentives focused on other development priorities at city hall like affordable housing and the climate emergency.

“I don’t think we should be using that $25 million to subsidize regular market rate development, and [instead] allocate it towards affordable units which is what we really need,” Franke explained.

A comprehensive review of city hall’s 12 Community Improvement Programs (CIPs) is underway at city hall.

In January, the London Development Institute (LDI) submitted a letter on behalf of local developers.

It noted that CIP programs are not a significant driver of development decisions.

It added, “Going forward we believe that any CIP program needs to be robust enough to be considered to be a ‘driver’ of development and not just ‘incentives’ for our industry to be an active partner.”

“In other words it’s a nice to have, rather than absolutely they’re going to build because they’re going to get some money,” said Franke. “So that says to me we need to make better incentives for developers. In the last six months I’ve seen one building come in [for planning approval] with two affordable units.”

The Planning and Environment Committee will consider updates to Community Improvement Plan incentives at its meeting on Monday.