The Province’s latest intrusion into municipal affairs with Bill 329 was the major item on our Council agenda. The bill is problematic as it will curtail HRM’s ability to charge fees to development and will further centre control over development in the hands of one person, the minister of municipal affairs. It is deeply undemocratic, will actually worsen the housing crisis by sharply curtailing HRM’s ability to fund non-profits, and will raise everyone’s taxes. The Province didn’t consult with the municipality at all about the bill and it has been a scramble over the last week to respond to legislation that was drafted completely without us.
One of the most problematic clauses in Bill 329 is Clause 4 which will prohibit HRM from collecting new development fees for at least two years. First, there is no proof whatsoever that HRM’s fees are curtailing housing. The Province hasn’t been able to point to any specifics. HRM’s fees are amongst the lowest in the country, and if you’re a non-profit building affordable housing, the charge is $0. The only fee a non-profit pays is the Halifax Water infrastructure charges, which HRM can’t legally waive because of the Province’s Public Utilities Act. A lack of skilled labour, interest rates, and the supply chain for materials are the real limits right now on what’s getting built, not fees or approval timelines.
The fees HRM collects from developers aren’t free money. They help offset the cost of new infrastructure and services to support growth. If HRM can’t charge them, than the result is infrastructure either won’t get built or everyone else will have to pay more instead. HRM’s rough estimate is that the Port Wallace development alone will be a 4% hit to the tax bill if the municipality can’t charge capital costs for road and water infrastructure. The Province wants everyone else in HRM to subsidize for profit development. From Dartmouth to Hubbards, to Sackville, to Ecum Secum, taxes will rise, potentially significantly, because of this government’s gift to developers.
Less Affordable Housing
Besides recouping infrastructure costs, HRM will also be blocked from funding non-profit housing. The market will never provide deeply affordable housing. With costs of over $400,000 per unit, it’s not a won’t, it’s a can’t. Only government can do that by treating affordable housing as a public good and paying for it, the way we pay for other public goods, with taxes. HRM doesn’t have direct responsibility for affordable housing, that responsibility falls to the Province, but we’ve been trying to help by assisting non-profits who build and operate affordable housing.
HRM provides tax reductions for non-profits and forgives permit fees, but the corner stone of our efforts has been density bonusing. Density bonusing is baked into the Centre Plan bylaw and the way it works is larger projects (over 2,000 m2) pay a fee. The bigger the project, the bigger the fee. It’s not unlike an income tax in a way: small projects don’t pay anything, larger projects do based on the rising capacity to pay. In the suburbs, where we’re working on an updated plan, density bonusing is charged on a project by project basis. Funds collected go towards public goods like public art and parks, but the lion’s share, a minimum of 60%, must be spent on affordable housing. This has resulted in the creation of an HRM grant program, which has provided just over $2,000,000 to non-profits over the last two years. Those funds have gone towards a variety of projects that will provide 281 affordable units, many of them deeply affordable. You can find a list of all of them here.
Unfortunately, Bill 329 will greatly limit HRM from continuing to invest in non-profits. The legislation will prevent the yearly inflationary increase in calculated rates in the Centre Plan area, resulting in an estimated loss of $1,000,000 over the next two years. Outside the Centre Plan in the suburbs, where density bonusing isn’t baked into a bylaw, the interim program will come to an end completely since HRM won’t be able to enter into new agreements with individual developers. The contribution towards affordable housing for new suburban developments will be $0. We’re not sure what the lost revenue in the suburbs will be as there isn’t as solid a baseline to estimate from, but it will be significant.
Let’s be clear about what’s happening here. The Province is choosing to curtail funding for non-profits building and operating truly affordable housing in the midst of a housing crisis to provide a small subsidy to developers that won’t make any real difference in whether for profit projects proceed or not. This is the very opposite of helpful. It is actively making things worse.
I had hoped that the implications for HRM’s density bonusing program was a mistake born out of making this legislation in a vacuum with no consultation with any of the municipal folks who work in planning everyday. Unfortunately, in questioning this morning, the Minister happily said density bonusing is just a tax and he wasn’t aware of what HRM does with the money. Really? This is how they’re going to govern? HRM’s reports are public and the Province has been briefed, but the Minister can’t be bothered to consult or even inform himself of basic facts and seems completely uninterested in knowing more. It really is the height of arrogance. How can you work with someone who has that as their starting place?
The prohibition on new fees will also have implications for HRM’s inclusionary zoning efforts. Inclusionary zoning is similar to density bonusing. The idea of inclusionary zoning is to require a set number of units of affordable housing in new projects. Inclusionary zoning helps create mixed communities and is something that has been in place elsewhere in the country. Inclusionary zoning, however, isn’t free. The cost of providing affordable units is born by the rest of the units in a development, which means there are real limits at to how far you can push it: we don’t want to create a few affordable units by making everything else really unaffordable. It’s not a silver bullet that will solve all our affordable housing woes, but it is a tool that can help.
Where inclusionary zoning has been implemented elsewhere, there is typically the option to provide cash rather than units. This flexibility exists since taking units in small project often isn’t doable and there are sometimes legitimate reasons why a particular development isn’t a good fit (maybe it’s far from transit or employment etc). Banning HRM from charging new fees means that if HRM implements inclusionary zoning, we would have the most inflexible program in the country since ours would be units only with no option for cash in lieu. This will greatly curtail inclusionary zoning’s potential effectiveness and might render the whole thing nonviable.
The big irony is that it’s this government that finally acted on HRM’s long-standing request and allowed inclusionary zoning in the first place. They amended the Charter in late fall 2021. Our staff have spent the better part of a year and half working on making inclusionary zoning real and consulting with industry and were before Council for direction just a few months ago (report here). That all was evidently a colossal waste of everyone’s time now since the Province is flip-flopping and blocking the creation of affordable housing in favour of subsidizing for profit development. Very few of the people living in our parks are going to be helped by subsidizing developers, they need truly affordable housing, the kind the market can’t and will never provide and that this bill is going to curtail HRM from helping to create.
The other major problem with Bill 329 is that it will allow the minister alone to approve development. Allowing one person to make decisions, behind closed doors, with no public explanation, no requirement for input from anyone else, and with millions of dollars on the line is deeply problematic. An MLA from the Annapolis Valley will make decisions that will affect communities that he doesn’t represent, doesn’t know, and has no ties too. No one should have that much arbitrary power. John Lohr and Tim Houston aren’t kings.
Centralizing power in the minister’s office isn’t just an issue of democratic transparency and accountability, it also has the potential for corruption. I have no reason to believe that current government is corrupt, but the changes that this bill is bringing in will likely be here long-term. It wasn’t so long ago in Nova Scotia politics that votes were bought with rum and to win government contracts, you needed to fill the party in powers bank account. From liquor store commissions to toilet seats, we’ve had our share of petty corruption.
Corruption isn’t a uniquely Nova Scotia failing, these are universal human weaknesses common the world over and, to some degree, they will always be with us. It would be the height of naivety to think that we’re now somehow immune to a problem that has dogged humanity forever and we should, therefore, be designing systems to minimize those risks. The changes in Bill 329 to centralize control in one person, with no transparency, and with potentially millions of dollars on the line, doesn’t minimize the risk of corruption, it sets the table for it. This sets the stages for scandals like the Ontario Greenbelt. If developers can bypass whatever rules they want to build whatever they want by simply visiting the Minister of Municipal Affairs we’re asking for trouble. This is an open invitation for wrong doing.
The Province should scrap much of Bill 329 and come talk to the municipality. HRM is a willing partner here. We’ve demonstrated that with the federal government where a constructive back and forth with the feds over our Housing Accelerator application produced an outcome that was acceptable to both sides and better than what the feds had initially asked for. It takes two to tango, unfortunately, and with the Province we’re perpetually without a dance partner. The Province’s habit of proceeding by decree and without any consultation isn’t going to produce the best outcome for the public whose interest we’re all supposed to have in mind.