Affordable housing is currently an important issue in many of the world’s major cities. In the last few years, it has been the object of a growing number of regulations to attempt to make it more accessible to its target population. The City of Montréal is no exception. According to the reports reviewed, there were nearly 155,000 tenant households living below the low-income cut-off before the current pandemic, spending 30% or more of their income on housing.
After presenting a first draft bylaw addressing social and affordable housing and after holding several consultations on the subject, the City of Montréal published a revised version of its “Bylaw to improve the supply of social, affordable and family housing” on November 9, 2020.
Objectives of the Bylaw
What are the targeted objectives of the City of Montréal?
- to create and maintain the diverse character of the City’s neighbourhoods;
- to promote a balanced and quality residential offer throughout its territory; and
- to address the needs of low-income and special needs households that are not met by the current market offering.
Application of the Bylaw
The Bylaw applies to all residential projects above 450 square metres (approximately 5 or more dwellings), provided they include new residential units.
All the requirements of the Bylaw are based on residential projects, i.e. dwellings erected on a single location; under the Bylaw, “location” is defined as :
” being a complex composed of one or several lots meeting the following requirements:
- has been the object of the same resolution by a borough council to authorize a given project for the construction, modification or occupation of a building, or the same bylaw to authorize a project under subparagraph 3 of the first paragraph of article 89 of the Charter of Ville de Montréal, Metropolis of Québec (CQLR, c. C-11.4);
- is composed of contiguous lots or of lots which would be contiguous were they not separated by a road, including an alley, and which belong, in whole or in part, to a single owner or to a person related to this owner or which are acquired by these persons within a period of 2 years from the date of execution of the agreement required under article 4 of this bylaw.”
Should the residential project comprise several buildings, a separate construction permit must be obtained for each building. A master agreement will be executed for the project as a whole prior to the delivery of the permit for the first phase. It will remain in effect throughout the duration of the project.
Conditions to Obtain a Construction Permit
To obtain a construction permit, an agreement on the residential offer must be executed with the City of Montréal.
The Bylaw applies to applications for permits for the construction of residential units, i.e. projects providing for the addition of residential units. As such, a permit for the transformation of a commercial building to residential units is subject to the Bylaw, while a permit for the renovation of a building that does not propose to add residential units is not.
Additionally, the Bylaw will not apply to:
- a project for the construction of student housing belonging to a university, a CÉGEP or other teaching institution, or an NPO or a cooperative;
- a project for the development of social or community dwellings exclusively;
- a project in which 80% of the residential units are developed under an accredited program (such as Accès Condos);
- a project for the exclusive development of rental units benefiting from a subsidy program (the rent of at least 30% of the units must be maintained, over 20 years, at an amount under 80% of the median market rent).
Moreover, seniors and students residences will be exempted from family housing requirements.
Bylaw requirements Social housing requirements are 20% for all residential projects, in all sectors, over 450 square metres. Methods of contribution
Methods of contribution
There are three possible methods of contribution: (i) transfer to the City of an immovable, either in the form of vacant land or a turnkey project or (ii) financial contribution or (iii) a combination of both.
Only those immovables meeting either of the following conditions can be transferred to the City:
(i) a vacant land for residential use, meeting environmental standards for residential use, and backfilled, compacted and levelled; this land must be equal to 20% of the area of the private project if it is contiguous to the project, or 22% if it is not contiguous; in the latter case, the land must be located within a radius of 2 km of the project; however, for downtown projects, the 20% ratio applies at all times, and the transferred land may be located anywhere within this sector;
(ii) a land on which a turnkey social and community project is developed (either a new building or an existing building purchased and renovated under a social and community housing program); the building’s area erected on the immovable must be equal to 20% of the private project.
In addition to the social housing requirements, the Bylaw imposes affordable housing requirements of either 10% or 20%, according to zone 1 or 2, as identified in Schedule B to the Bylaw.
In a few words, “affordable housing” refers to dwellings whose rent or purchase price will be 10% or 20% (according to the zone in which they are located) below market. For instance, a $425,000 condominium will sell for $340,000 in the zone where the 20% ratio applies.
In an effort to avoid jeopardizing the viability of projects, the City of Montréal, has determined that the Bylaw will apply only to projects located within those sectors where an amendment to urban planning has increased the residential density.
Methods of contribution
The contribution may consist of (i) the development of affordable housing for tenants or owners or (ii) a financial contribution (10% in zone 1, 20% in zone 2).
If the contribution is made via the development of affordable housing, construction must take place, (i) if in zone 1, exclusively on the site of the private project or on a contiguous lot or (ii) if in zone 2, on the site of the private project or within a radius of 2 km thereof (and in the latter case, the requirement will increase from 20% to 22%).
The Bylaw provides no obligation to develop affordable housing outside these affordable housing zones. However, a basic financial contribution will be required for projects 4,500 square metres and over and will apply only to the area in excess of such limit.
Family housing is defined as a social unit, affordable or at market value, comprising at least three bedrooms and having a superficial area adequate for a family. Such area is set at 86 square metres in sectors 1, 2 and 3 and 96 square metres in all other sectors of the City.
The Bylaw applies to all projects containing at least 50 units. The target is 20%, except in sector 1 where it is 15%, and is allocated between social housing, affordable housing and other units.
Two promoters developing their respective project within a radius of 2 km of the other’s project or, in the case of sector 1, in the same sector, may conclude an agreement to have one meet the requirements imposed on the other
Effective Date of the Bylaw
The Bylaw will come into effect on April 1, 2021.
Prior to the coming into effect of the Bylaw, the current Inclusion Strategy continues to apply.
Projects for which inclusion undertakings have been made prior to June 17, 2019
These projects will be exempt from the application of the new Bylaw and will continue to be governed by the social housing inclusion undertakings previously signed.
Projects for which inclusion undertakings have been made between June 17, 2019, and the coming into effect of the Bylaw
These projects will minimally satisfy the affordable housing requirements applicable to new residential projects, comply with their conditions, and be subject to a written acceptance.
The above text is only a summary of the Bylaw, which we invite you to consult for further details. Please feel free to contact us directly should you require assistance in the interpretation of this Bylaw or its application.
By Jean Proulx