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Montreal's 20-20-20 housing development bylaw comes into effect

Developers unhappy with new legislation, which may also hinge on results of November election

Montreal's 20-20-20 housing development bylaw comes into effect

A new “20-20-20” bylaw came into force in Montreal on April 1, which requires real estate developers to construct social, affordable, and family housing in the city. The bylaw has met with some opposition, as it requires large, new residential developments to contain 20 per cent social housing, 20 per cent affordable housing and 20 per cent “family housing” with a minimum of three bedrooms.

The new regulation was promoted by Montreal mayor Valérie Plante, who made a 2017 campaign promise to increase affordable housing in the city. The bylaw will replace the ‘strategy for inclusion of affordable housing in new residential projects’ adopted in 2005 and revised in 2015, which aimed to secure 15 per cent social housing and 15 per cent affordable housing per development project.

In announcing the amended legislation in November, Mayor Plante noted that in the previous five years the price of condo apartments and buildings with two or more residential units had risen by 43 per cent in Montreal, while in the central core it had doubled.

Whether the bylaw remains in place past the fall remains to be seen, though. Montrealers will return to the polls in November, and former mayor Denis Coderre, who is considered more supportive of the business community and has announced his intention to run for office again, has already promised to review the legislation.

Although developers have not favoured the new bylaw, which will increase the cost of construction and, some say, encourage developers to build elsewhere, advocates for social housing have said the bylaw doesn’t go far enough, says Chantal Sylvestre, Montreal lead of the real estate practice at Dentons Canada LLP. As in other large cities, “it’s becoming very expensive for people to live and have families in Montreal.

“It will be very interesting to see if the bylaw will continue if Valérie Plante is not re-elected as mayor,” she says.

The bylaw will apply in all City boroughs and to all residential projects of 450 square metres (4,843 square feet) or more, with some exceptions.

There was much debate of the bylaw before it came into force and several groups made presentations to the City to modify it, says Sylvestre. With a population of about 1.8 million people, the City of Montreal comprises 19 constituent boroughs “and they are not treated the same way,” she adds, meaning that requirements to build the three types of housing will vary throughout Montreal.

Developers must determine “within which zone [the] project is located, and this will govern the rules applicable to [the] specific project,” she says. “All of this will be integrated into an agreement that you must enter into before obtaining your construction permit.”

Social housing

This type of housing qualifies for or receives a subsidy under a municipal or provincial social, co-operative or community-based housing subsidy program. Social housing requirements are 20 per cent for all residential projects, in all sectors, that are 450 square metres or more.

There are three possible methods of developer contribution: transfer to the City of an immovable, either in the form of vacant land or a turnkey project, or make a financial contribution, or a combination of both.

Affordable Housing

This is housing whose value -- either the rent charged, or the sales price of the home – falls below the market value by at least 10 per cent. In addition to the social housing requirements, the bylaw requires affordable housing of either 10 per cent or 20 per cent, according to the zone in which they are located: so, dwellings whose rent or purchase price will be 10 per cent (in Sector 1, Downtown) or 20 per cent (in Sector 2) below market value, as determined by a city appraiser.

The developer’s contribution may be the development of affordable housing for tenants or owners, or a financial contribution of 10 per cent or 20 per cent.

Family housing

This is defined as a residential unit, affordable or at market value, including at least three bedrooms. The home must be at least 86 square metres (925.7 square feet) in Sectors 1, 2 and 3, and at least 96 square metres (1,033.33 square feet) in all other sectors of Montreal.

The family housing requirement applies to all real estate projects containing at least 50 units, which must now include 5 per cent (in Sector 1, Downtown) or 10 per cent (in other sectors) of family housing without price controls. No financial contribution may be substituted for the requirement to construct family housing.

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