City to look at new approach to creating affordable housing
The plan would offer interest-free loans to developers
As city politicians continue to look for ways to address the lack of affordable housing in London, a new approach to the problem has emerged.
Next week, the planning committee will debate the merits of a community improvement plan, a legal device that allows municipalities to provide grants and loans to developers to spur the development of more affordable housing options.
The municipal contribution would then unlock access to a large pool of federal funding for affordable housing.
"The idea is to use our money wisely through a loan process, leverage affordable housing units, leverage the federal dollars, and ultimately increase the supply of affordable housing in our community", said the city's director of planning, John Fleming.
He says the plan would encourage the development of housing options for people who don't qualify for public housing but can't afford the current housing market.
"It's another layer where we can get affordable housing for a variety of folks. For example, seniors in some cases, or people that are very junior in their careers."
Fleming cited the example of people starting out in the service sector. He said the type of housing they can afford has "really been shrinking."
"So this is going to help target that group and that sort of level, (whereas) other programs are getting into public housing, community housing and shelter spaces."
Statistics show more than 50 per cent of renters cannot afford an average one bedroom apartment in London, which costs over $1,000 a month.
Fleming says in order access the municipal money, a developer would have to enter into an agreement with the municipality to rent out the space at a specified rate, below the average market value.
"In other words, at an affordable rate, and those would lock in for an extended period of time. That's what assures that the housing is in fact affordable."
The proposal calls for interest-free loans to developers of $10,000 to $20,000 to be paid back over a 10-year period. A minimum of five affordable units would have to be created.
Fleming says the plan would add to the stock of affordable housing "that we need so desperately in the community."
The community improvement plan will be discussed by the planning committee on Monday night.