In Winnipeg there is a need for more affordable housing, as 21 percent of households (64,065 households) are living in unaffordable housing – according to CMHC’s definition of spending more than 30 percent of income on shelter. Additionally, there are approximately 1,500 people experiencing homelessness in the city. While affordable housing has traditionally been provided by federal or provincial governments, municipalities have a range of tools to respond to need and are most connected to the local housing market. Inclusionary housing (IH) is a one tool available to cities and was recently enabled by the Province of Manitoba.
This research informs the potential for IH in Winnipeg. Through examining existing literature and case studies in two American cities, learnings from how the policy is used elsewhere are summarized. Interviews with IH experts and those involved in local development help contextualize these learnings from elsewhere and inform key considerations for the local context. As IH is used most commonly used in fast-growing municipalities, this research explores how inclusionary housing could be implemented in Winnipeg, a city long considered to be slow-growth with a stable housing market.
What is Inclusionary Housing?
Inclusionary housing (IH) mandates or incentivizes private developers to include a certain percentage (often 6-20 percent) of units in new residential developments as affordable housing. Cost-offsets or incentives are often provided to help fill the gap between the costs of providing the housing and what the market can bear. These can include density bonuses, zoning variances, fee waivers or reductions. Policies can apply to developments of a certain size, type, or geographic location.
IH policies are used in over 800 jurisdictions across the United States, and have been identified as “the most prevalent of the regulatory initiatives used by US municipalities to stimulate the creation of affordable housing.” They have also been used, to a certain extent, in some Canadian cities, though on a more voluntary or case-by-case basis. While often used in fast-growing municipalities, more and more cities with moderate and mixed markets are exploring inclusionary policies to respond to growing unaffordability.
Key Considerations for Winnipeg
This research explored IH literature, situated with case studies in two municipalities in the US (Baltimore, MD and Boulder, CO). After exploring both cities, consultations with IH experts, and input from the local development industry, a number of key considerations for Winnipeg have emerged and are outlined below. These take into account recommendations on implementing IH in slower growing cities, and specific considerations in the local Winnipeg context.
I. Engage Stakeholders – Early and Ongoing
This research has only scratched the surface in consulting local stakeholders, and further engagement will inform a consideration of IH in Winnipeg. Local developers have an intimate understanding of the development process, and while some may not be in favour of IH, they must be a part of the conversation, providing insight to why, or how, the program could – or could not – work in Winnipeg. Similarly, local affordable housing providers, developers, and advocates must be consulted to understand current needs and how an IH policy can effectively respond to them. With the City’s Housing Policy up for review, the time is ripe for engagement, and following the process for the recently implemented impact fees, ongoing dialogue is required. This also warrants developers willing to come to the table and share their expertise to inform a policy.
II. Conduct an Economic Feasibility Study
Once the City, developers, and affordable housing consultants are at the table, an economic feasibility study can help address the question of whether IH is possible in the local market, where it might work, and what kind of incentives or offsets might be needed.
This can explore what barriers and challenges exist to residential development in Winnipeg and help the City better understand development – with or without affordable housing. Additionally, the study can explore what affordable housing percentages, and at what level, might be feasible in the market. Finally, this must be informed by the City of Winnipeg’s Housing Needs Assessment which will hopefully identify what types of affordable housing are needed.
III. Explore a Phased-In or Geographic Application
Depending on the feasibility study, there is the potential for a phased-in policy, allowing Winnipeg to get ahead of growing unaffordability, and test a policy in the local market.
This could start with a low inclusion requirement, such as five percent, or apply only in certain geographic zones, such as neighbourhoods with stronger markets, tied to transit-oriented development, or certainly on government-owned lands or funded projects.
IV. Implement a Wider Municipal Housing Strategy
An IH policy will always just be one piece of a municipal response to housing, and may not be the best – or only – tool to respond to housing needs. Integrating this response with local tools, such as Tax-Increment Financing (TIF), partnerships with higher levels of government and non-profits, as well as exploring other tools can inform a Winnipeg policy. A committed housing strategy would outline what the City’s goals are when it comes to housing, look at all existing programs, and tools within municipal jurisdiction that can respond to them, along with dedicated resources. The Housing Needs Assessment being done by the Institute for Urban Studies will hopefully identify needs and help guide policy responses.