Montreal's social housing bylaw to get update after failing to produce a single unit in 2 years

The city of Montreal is reviewing the financial structure of its social housing bylaw in hopes of encouraging developers to actually build such units. 

The Bylaw for a Diverse Metropolis, implemented in April 2021, forces developers to include social, family and, in some places, affordable housing units to any new projects larger than 4,843 square feet.

If they don't, they must pay a fine, sell land to the city below market cost, or turn over buildings or individual units for the city to turn into affordable or social housing.

Mayor Valérie Plante's administration had said the bylaw would lead to the construction of 600 new social housing units per year. 

But in August, CBC reviewed data released by Ensemble Montréal, the city's Official Opposition, that found that of the 7,100 housing units created since the bylaw came into effect two years ago, none had yet been made into social housing. 

The data showed almost all the developers of those projects opted instead to give Montreal financial compensation. 

On Monday, the city released its own data. It said the bylaw has led to 164 deals struck with developers, representing a total of 8,860 housing units built, under construction or planned since Aug. 31.

Of that number, no social housing units have been delivered and only 86 are close to being finished. The city says 660 social housing units are planned across five large condo developments. 

"It's under what we expected," said Benoit Dorais, vice-chair of Montreal's executive committee and the member responsible for housing, in an interview. 

He confirmed the vast majority of developers decided to pay the fines instead of building social housing.

"That's why we are adjusting the [bylaw's] parameters," Dorais said. 

Tougher fines, higher sum for land

To close that gap, the city says it's planning to increase the amounts it pays to developers for land earmarked for social housing. 

"As land prices have risen sharply over the past five years, the amounts offered by the city will better reflect this new reality, while remaining below market value," a city news release reads. 

The city also wants to better define social and affordable housing in its bylaw so that developers can take advantage of new financing options, such as provincial and federal affordable housing programs, as well as private investments. 

The city also plans to gradually increase the fines for developers who do not include social housing in their projects. 

"We have to make sure that the promoter is choosing to give the land or to build the social housing, so to make sure that this is the choice … we have to make sure that the amount of the contribution is going higher," Dorais said. 

Cédric Dussault, a spokesperson for the coalition of housing committees and tenants' associations of Quebec (RCLALQ), says the updates to the bylaw won't necessarily lead to more social housing units as there are "no clear targets" or even a monitoring system for the construction of such units. 

"It's going to be more and more replaced by affordable housing units, which are really not necessarily affordable," he said. 

Unlike social housing, the rent for affordable housing is not calculated depending on household income, but instead on the building, its location, the size of the unit and the services offered. 

As for the higher penalties for developers, Dussault says they are not enough. He wants all those who receive a permit for a housing project to be required by law to include social housing. 

"When you just give the chance to promoters to pay a fine and then not build social housing units … of course they will choose to pay the fine because they're going to have more money in their pockets at the end of the process," he said. 

The Plante administration will propose the updates to the bylaw at the next city council meeting.

WATCH | Montreal developers opt to pay fines rather than build social housing: 

Montreal bylaw was supposed to boost affordable housing. It didn't work.

1 year ago

Duration 1:53

A Montreal bylaw that requires developers to dedicate 20 per cent of their project to social housing has resulted in zero new affordable units. Instead, every developer has opted to pay a fine.

Plan could backfire, says urban planning expert

Richard Shearmur, a professor with the McGill school of urban planning, says it's tough to know whether the bylaw has been even moderately successful because the city has not been transparent about its impact. 

For example, he said, the Esplanade Cartier condos were being developed well before the bylaw came into effect. He added that an agreement with a developer is not the same as the start of construction. 

"They are announcing new social or affordable housing units … but even then, it's very difficult to work out whether these units are actually built," said Shearmur. 

As for the updates to the bylaw, even if some of the changes are steps in the right direction, Shearmur said, gradually increasing the penalties for developers "could backfire." If costs are pushed up too high, the city could reduce the overall development of housing in Montreal. 

"Developers are going to look at the overall cost of developing in Montreal and … if the finances don't work out, they simply won't carry on developing," said Shearmur. 

He said the city also needs to be careful about expanding the definition of social and affordable housing as it could "take the fangs" out of the regulation. 

"If we define affordable, social housing wide enough, then all housing is affordable to someone," he said. 

Shearmur said he'd like to see incentives for developers to build social housing, such as, for instance, allowing them to build slightly higher or denser in exchange for such units. 

"In the end, there will be more housing built and more social housing if there were more incentives for developers rather than asking them to pay for it all the time," he said.