'Flood the market' with condos? Or play developer hardball? Plante and Coderre war over housing

Montreal -

In the English-language debate last weekend, things got especially testy when a certain topic came up: housing developers.

“In cities like Toronto and Vancouver, where they just decided to let the market go, like you’re planning on doing, then they lost control,” incumbent Valerie Plante fired at her main opponent, former mayor Denis Coderre.

The city’s own attempts to build haven’t been going so great, Coderre lobbed back.

“The more I hear Madame Plante, she sounds like a great leader of the opposition, because nothing happened for four years,” he said, listing off some planned residential projects—Blue Bonnets, or the former Voyageur bus station downtown—that haven’t gotten off the ground.

His party does want to rely on the private sector, he shrugged, to make sure “when we provide a number, that we are able to fulfill it.”

That exchange pretty much summed up the two major parties’ positions on new housing, though as with anything real-estate-related, details are key.

Put simply, faced with a housing market suddenly out of reach for most Montrealers, Coderre is counting mostly on the laws of supply and demand to fix it.

He says that if 50,000 new units go up in Montreal in the next four years—as he promises—prices will automatically be brought down, even if most of them wouldn’t be subject to any price controls.

Plante, meanwhile, is focusing on building, or forcing developers to build, affordable and social housing, neither of which is easy to get done. (And, many ask, what does this mean in the first place?)

Many housing experts say that an obvious solution is just keeping landlords in check and existing apartments affordable.

• Read more: Rent hikes and renoviction: a tenant's guide to Montreal election platforms

But that aside, one of those jargony-sounding phrases really could be a holy grail for Montreal’s affordability problems, they say: social housing, which can be owned by co-ops, nonprofits or the city, or really anyone other than for-profit developers.

Both candidates say they’ll create this, often on plots of underused public land, but their overall approach couldn’t be more different.

‘QUICKLY FLOOD THE MARKET’

Coderre has been clear: he wants to build. Or at least to remove impediments that slow developers who want to build.

“To stem the housing crisis, we must quickly flood the market with new housing units,” Ensemble Montreal wrote in its platform document.

There are caveats—for example, Coderre has frequently said it’s key to prevent urban sprawl and to encourage tall, dense building in the existing urban core.

He also says he wants to preserve heritage and not to exceed Mont-Royal’s height.

Otherwise, his platform has many perks to smooth the way for developers, from a process to “accelerate and simplify” building and renovation permits, to creating a “density bonus” that would reward them for adding a mix of housing types.

Ensemble Montreal wants to help companies convert older, less occupied downtown towers to housing, and might even apply the residential tax rate as soon as a renovation permit is in place.

Penalties are few, but the party would increase taxes on parking lots and vacant land to limit property speculation and spur home-building, they said.

TRYING SOME HARDBALL

The current administration, and Plante’s platform, is heavier on sticks than carrots when it comes to private development, as it tries to mandate lower-cost housing into almost every new building in the city.

The current bylaw for developers, often called the 20-20-20 bylaw, came into effect just in April after years of legal and bureaucratic wrangling.

In a nutshell, it allows developers of every brand-new private building in Montreal—any that’s about five units or bigger—to have full veto over just 40 per cent of the building.

Another 20 per cent of it is supposed to be made into units big enough for families.

Another 20 per cent is affordable housing, sold at 90 per cent below market rate (the city kicks in another 10 per cent to homebuyers).

Another 20 per cent is social housing that is more permanently lower-cost and run by a nonprofit or public agency.

In reality, by the time it passed, the bylaw had gotten more complicated and varied by neighbourhood.

The family housing requirement stayed in place across all of Montreal, for example, though the percentage could change according to where the building was.

For the social housing requirement, developers had the option to keep it offsite: they could pay an equivalent amount, or give the city land of equal value, or build a separate building.

Instead of a fine if they break their promises, the new law has a bigger built-in penalty.

In other moves not likely to be popular with developers, Projet Montreal has begun to lean on its right-of-first-refusal power to buy coveted sites mid-deal, such as one across from Parc metro. It said in its platform it will use that power on behalf of co-ops and other types of nonprofit owners, too.

In other words, the party won’t necessarily create the same build-a-thon that Coderre envisions.

(Coderre has said he will undo the bylaw if elected, instead creating a much more relaxed requirement to create 15 per cent social housing, and only in bigger projects with at least 25 units).

Plante is, in fact, planning less building overall. Coderre’s plan works out to 12,500 new units per year, more than half of them seemingly for-profit and market-rate.

Plante promises 60,000 units over 10 years, or about 6,000 per year, and she said all will all be below market rate, using different mechanisms.

MISSING THE POINT

Most housing advocates cheered the 20-20-20 bylaw when it was passed and say that undoing it would be a step backwards in managing the current crisis.

But it’s also a bit beside the point, they say.

The problem is that it’s still tied to new private builds, which they say is just not the answer right now, no matter how you do it.

“It’s the same with all private developments,” one housing advocate, Catherine Lussier of the group FRAPRU, flatly told CTV. “Modest- and low-income tenants cannot pay the rents asked.”

Policy-wise, the term “affordable housing” does mean exactly that: it refers to brand-new, private units that are sold or rented at, or near, market rate.

At least the definitions are clear under the current bylaw, but beware of vague claims around affordable housing, experts say.

“Affordable housing is an elastic concept that means nothing,” Lussier said.

“Micro-units,” for example, make up some of Montreal’s affordable housing by some definitions, said Avi Friedman, a McGill professor and housing expert.

These are tiny bachelor condos, so small they’re naturally low-cost.

“In some locations, not really central Montreal but on the edges, you can find these types of units that are sold for 300,000, maybe 250,000, and they'll be considered affordable,” said Friedman.

Also, while the current bylaw guarantees 40 years below market rates, affordable housing isn’t always locked in past the initial sale.

Ensemble Montreal also promised 6,000 affordable housing units over four years but didn’t explain the details.

Their platform had a proposal for a five-year pricing scheme for those units, but it wasn’t clear, and the party didn’t respond to requests for comment.

Still, in the big picture, both parties got less than perfect marks for getting off-topic.

“Projet Montréal places great emphasis on the construction of affordable housing, but in our opinion the concept of affordable housing is dangerous,” said Maxime Roy-Allard of the group RCLALQ.

At the same time, “Ensemble Montréal is mainly focusing on the creation of new housing to solve the housing problem,” he wrote.

“In our opinion, this is very naive, because the vast majority of new housing is overpriced” and out of reach of most Montreal tenants.

“In our opinion, therefore, we must first and foremost build social housing units.”

BIG NONPROFIT DREAMS, DIFFERENT EXECUTIONS

All the experts and advocates who spoke to CTV agreed that there is one solid approach: go back to making housing that isn’t meant for profit, whether it’s owned by co-ops, nonprofit groups or taxpayers.

“We need to have a lot more housing that is built by a group of people who will inhabit the building,” said Universite de Montreal architecture professor Anne Cormier.

Just as the starting point for “affordable housing” is that it’s private, “social housing” is public or nonprofit.

It can be owned by co-ops or community organizations, or it can be long-term, city-owned subsidized rentals for vulnerable groups like the elderly.

It can also be bought, built or renovated with taxpayer money and then sold or rented at break-even rates, rather than for profit.

The idea isn’t so radical in some other major cities, said Friedman.

“In Singapore, 80 per cent of the population live in social housing, 80 per cent, and this is a very, very wealthy place,” he said.

“In Sweden, the government keeps investing in building… they made it a priority.”

Austria, meanwhile, has gone for a lot of co-op housing, said Cormier.

The same hasn’t happened in Canada, and a single city can’t change that, said Friedman.

However, both Plante and Coderre have laid out fairly aggressive plans to build a lot more social housing, often utilizing underused public land, but sometimes by taking over existing buildings.

Again, however, their strategies differ, with Coderre appearing to hope developers will take the lead in exchange for using much of each site as for-profit housing.

A well-known local example is the Blue Bonnets plan, which would have 5,000 units on the old racetrack site in NDG—a plan Coderre first proposed, and which Plante overhauled to make low-carbon—and which hasn’t started yet.

That slowness is a frequent pattern. The current administration has bought 22 sites across the city for social housing, though building is going very slowly, if at all; that part relies largely on funding from other levels of government.

Coderre has promised 10,000 social housing units in four years.

Plante is promising 8,000 in the same time, but she appears to mean publicly owned or built housing. She has also said that some other portion of the 60,000 units she’s promised will be developed by nonprofits rather than developers or the city—but hasn’t said how many.

When asked, former Projet Montreal councillor Craig Sauvé said it’s too early to set benchmarks, especially considering it’s a 10-year plan.

“Those are project-to-project to get developed,” he said.

Sauvé was still with the party when he spoke with CTV News Thursday morning.

The party platform says that on top of the right of first refusal for properties, it would use interest-free loans and other “financial tools” to put properties in nonprofits’ hands.

For building on major new sites, Projet Montreal said it would reserve $800 million, “drawing inspiration from the land trust model.”

In that model, a big community entity owns the land in the long term while selling or renting the units to families.

Ensemble Montreal, meanwhile, says that “underutilized” land could be “leveraged” to build 15,000 new units, “including a minimum of 30 per cent social, student and family housing.”

They don’t make clear what would become of the other 70 per cent.

In the debate, things continued to get personal. Plante accused Coderre of running a candidate in Verdun who's a professional house-flipper.

"Please, this is not serious," she said.

Coderre said at least he wasn't sending people to the suburbs because they weren't allowed to renovate under 20-20-20.

In a more pensive tone, later, he said something that probably everyone can agree on: he knows people are frustrated with the housing crisis.

“The reality is that we talk a lot, but…people are cynical."