The City of Waterloo is hoping to diversify the housing market in the city with a recent change to building development fees.
While previous development charges for two and three-bedroom units had been more expensive that development of single bedroom units, the city has decided to equalize the costs of building units with anything from one to three bedrooms as a means of incentivising developers to pursue more projects with multi-bedroom units.
“One thing that’s important to know by way of background is over the years, the planning we’ve been doing around the units has been to shift the development model from five-bedroom purpose-built housing into housing of a wider variety of sizes and types, from one, two and three bedroom units and tall, medium-sized townhouses and stacked-townhouse buildings,” said Ward 6 Councillor Jeff Henry. “So you’ve got a wider diversity of housing in Waterloo, particularly in our core areas and around the universities that can appeal to a wider variety of demographics.”
But while the housing market is more diverse in these central areas, across the city most new apartment developments coming in are exclusively one-bedroom units, which could pose a problem as demographics shift in the future.
“We’ve a very young city over all, we’ve got lots of folks who are university-aged or recently university-aged. And the experience we’ve seen in other places, downtown Toronto comes to mind, as those folks partner up, as they get married, as they have kids, they look in the neighbourhoods they’ve become accustomed to and can’t find housing that works for them,” Henry said.
“It’s really important for us to look to the future and make sure that as new housing is being built, it is being built not just for the demographics that are here today, but the demographics that you can expect in five, ten or fifteen years, so people can age in place and always find a place to live in Waterloo.”
By reducing the costs for developers to construct two and three-bedroom units, the city is hoping that developers will move towards pursuing more multi-bedroom units which are suitable for small families or aging couples, as opposed to the smaller units which seem to be the focus of most new Waterloo development.
“This was a small nudge to the industry in the right direction, but it was an easy nudge that we could do when that review came up; that’s why I pushed so hard for us to do this, because while I don’t expect that it will have a significant impact on what gets built, it might have some impact and it is an easy thing for us to do that doesn’t cost us anything,” Henry said.
Moving forward, the city will look at how the demographic evolves, which units are being built and how to move forward and act in the best interest of the cities residence in order to create a more versatile and accessible housing market.
“I think it’s important for us to see how this pans out and look at other opportunities and what gets built to see if there’s more that we need to do,” Henry said.
“It’s about making sure the housing stock that’s being built is flexible and can support what we know will be changes to demographics in the city as people age.”
“It’s important for us to always look at what’s being built and what nudges we can provide and what tools we can use to help the industry come back to balance, because the development industry often won’t do that by itself, it needs us to push it in the right direction.”