Forcing builders to include low-income units not a solution, say developers

Two Fredericton developers question the wisdom of implementing inclusionary zoning, a policythat forces developers to include affordable units in their projects.

Social Development Minister Dorothy Shephardhas said it would be "interesting" to explore a proposed Montreal bylaw that would make developers either set aside a certain number of units in their buildings as affordable units or pay into a fund for social housing.

"Ithink with the help of our municipalities that it's worthy of looking at," Shephard said.

But Jeff Yerxa, the president and CEO of Ross Ventures Ltd., said while the idea is worth looking at, any development would still have to make money, and mandating units could make that difficult for certain projects.

Sees problem with some developments

"I think that every development has got its own place in the market," Yerxa said.

"If you're doing a big waterfront development, I think it's tough to include affordable housing I don't think it's reasonable for the province to subsidize rent for affordable housing for people in, you know, developments such as that."

Willy Scholten, the president of the NB Apartment Owners Association, said he opposes any new "hurdles."

"The problem with doing this ... inclusionary zoning is [it's] another hurdle for development," said Scholten.

"If we start doing more and more of putting more and more hurdles we have less development. If we have less development, we have less units."

Scholten said the province could do more to increase development by ending the so-called "double tax" on rental properties.

No exemption

"We need to fix that, and that'll make affordability easier and make the whole development easier," said Scholten.

"We'll get more development. More development will mean the vacancy rates will go up. Rental rates will go down."

The province's practice of taxing non-owner-occupied properties differently fromowner-occupied properties has long been a complaint among landlords and developers.

The tax sees landlords pay both municipal and provincial property taxes on their rental properties and aren't eligible for a break on those.

While owner-occupied properties also are assessed taxes by both the province and municipality, the owners can receive tax credits that largely eliminate the provincial portion.

Scholten said the province is bringing in enough revenue to offset what it would lose in revenue if it ended the "double tax." If that happened, landlords would be willing to freeze rental rates for a period, he said.