In the face of huge backlash from the development community, Victoria councillors Thursday eased off a proposal that would have immediately required all new condo projects to include between 10 and 15 per cent “affordable” units.

As an interim measure instead, they directed staff to negotiate an affordable component or cash-in-lieu feature in all future developments while working with stakeholders to develop an “inclusive” housing policy by March 31.

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The “placeholder” measure will ensure “no more buildings with exclusively expensive housing are built that don’t make any contribution to affordability,” Coun. Ben Isitt said.

Urban Development Institute executive director Kathy Hogan had warned that development would have ground to a stop had the proposed policy been adopted. She said she appreciated the changes but they don’t go far enough.

Hogan said the uncertainty now facing developers likely means many will hold off on new project applications until they know what the city’s requirements will be.

“It doesn’t create any more certainty for the industry whatsoever,” Hogan said.

“In fact, it creates less certainty because there’s still these negotiations that need to be had. And you never know what’s going to be the outcome of those negotiations.”

In September, the previous council postponed consideration of a proposed inclusive housing and density bonus policy — which some councillors didn’t think went far enough — pending further consultation with the institute and other stakeholders.

A motion brought forward to council’s committee of the whole on Thursday by Isitt and Coun. Jeremy Loveday sought to resurrect that policy. They wanted it used immediately as the foundation for negotiations with developers wanting to build in Victoria.

Loveday said everyone agrees Victoria is in the midst of a housing crisis. “That means anything less than a crisis-level response, in my opinion, is a dereliction of duty of duty.”

Isitt said pushback from the development community was to be expected because the proposal would affect the profitability of projects, “particularly projects building expensive strata housing.

“The easiest way to avoid being caught by this policy is to propose rental housing rather than expensive strata housing,” he said.

Hogan said the new developments don’t create the huge profits that some suggest. “We’re in a tough time for development right now. Costs have gone up everywhere, in every aspect of the development. So it’s a hard industry to be working in right now. The risks are higher,” she said. “It’s a tight market. Their margins are not huge.”

The interim policy states that the negotiated inclusionary housing component should not compromise the economic viability of a project.

At Mayor Lisa Helps’ suggestion, councillors agreed to the creation of a working group with representatives of the development community, community associations, non-profit housing providers and rental advocates on developing an inclusive housing policy.

“One of the problems with this whole situation we find ourselves in is there’s really this ‘us versus them,’ where people don’t understand the economics of development, where people don’t understand what it means to be a vulnerable renter, where people don’t understand each other’s perspectives,” Helps said. “So rather than just simply inviting public input, I really feel a working group is the appropriate way forward.”

Hogan said her institute looks forward in participating. “I would like to do some research on other cities that have had successful programs that have brought in inclusionary affordable housing, and I think that’s what the city should be looking at and not implementing these policies that are uncertain,” she said.

bcleverley@timescolonist.com