Expression of Interest. Development Charges Rebate Program City of Kingston

Transcription

1 where history and innovation thrive Expression of Interest City of Kingston Please submit one original response and a digital copy on a CD/DVD or USB Drive in a sealed envelope clearly labeled with the following information: The Corporation of the City of Kingston Housing and Social Services Department Attention: Housing Programs 362 Montreal Street Kingston, Ontario K7K 3H5 On or before Monday, June 25, 2018, 3:00 P.M.

2 Expression of Interest Please Note: This document is a solicitation for information only and may not be construed as a commitment of any kind given on behalf of the City of Kingston to provide funding or purchase any goods or services now or in the future. The City does not obligate itself in any way as a result of this Expression of Interest. Only the execution of a signed agreement will obligate the City of Kingston in accordance with the terms and conditions of that agreement. Any expenditure experienced by the respondents in preparation and submission of the Expression of Interest shall not be reimbursed by the City of Kingston. Page 2 of 11

3 where history and innovation thrive Expression of Interest Table of Contents 1.0 Introduction Background Information Expression of Interest Schedule Program Overview Content of the Expression of Interest Submission Evaluation Process and Funding Level Submission Requirements 11 Page 3 of 11

4 1.0 Introduction The Service Manager for housing programs in the City of Kingston is soliciting submissions from developers of purpose-built rental housing to participate in the provincially funded (the Program ). As one of the measures introduced through the Fair Housing Plan, the Program is intended to increase the supply of purpose-built rental housing within communities that are most in need of additional rental housing opportunities. The Program will provide rebates for municipal development charges, impost fees, and education development charges with the aim of reducing the costs to construct purpose-built rental housing. As Service Manager, the City s Housing and Social Services Department, in conjunction with the Planning, Building, and Licensing Department, will accept and review submissions from interested proponents and recommend projects for rebate funding subject to approval by City Council and the Ministry of Housing (the Ministry ). The Service Manager has received a notional allocation of $3,650,000 to be committed over the five years of the program starting in and ending in In accordance with the Program Guidelines the Service Manager must provide the Ministry a Take-Up Plan each year detailing recommended projects that have been determined to be eligible by the Service Manager and approved by City Council. Service Managers are permitted to establish local eligibility criteria which must be consistent with the provincial Program Guidelines. This Expression of Interest (EOI) outlines the eligibility criteria and evaluation framework for the local implementation of the Program. It is the intent of this EOI process to solicit proposals only for the first year of funding which must be allocated to projects that will obtain a building permit and commence construction in The EOI will also be used to establish prioritization for program years two through five. Following the close of the EOI process additional proposals will be accepted and considered for waitlist eligibility. 2.0 Background Information Council Report Number discussed factors contributing to the 2017 vacancy rate reporting by the Canada Mortgage and Housing Corporation (CMHC) which demonstrated a drop from 2.6% in 2016 to 0.7% in A healthy vacancy rate for a community s rental housing market is considered to be around 3%. Through an EOI process administered by the Ministry, the Service Manager received a notional funding allocation to rebate development related fees for eligible purpose-built rental housing projects. The is one of the measures provided within the province s Fair Housing Plan and is intended to address rental housing supply challenges in communities across Ontario by reducing the cost of developing purposebuilt rental housing. Development charges and impost fees are fees paid by property developers to municipalities and local school boards to offset public costs associated with upgrading necessary public infrastructure to service the new development (e.g. roads, sewers, libraries, schools, etc.). The provincial program guidelines outline the following intended outcomes of the program: Page 4 of 11

5 Addressing the need for a stable rental housing market and providing long-term rental housing opportunities. Providing housing for older demographics looking to downsize and age in place. Alignment with provincial and municipal goals for growth planning and intensification. Retaining and attracting skilled workers to Ontario s growth areas. Increasing the province s economic competitiveness and increased mobility options for residents, both in terms of geography and within the housing market. The City of Kingston is the designated Service Manager for housing programs. As Service Manager the Housing and Social Services Department administers the delivery of various municipal and federal/provincial housing initiatives including the Development Charges Rebate Program. 3.0 Expression of Interest Schedule EOI released: Monday, May 28, 2018 Deadline for submitting questions: Friday, June 8, 2018 Response to questions issued: Friday, June 15, 2018 Deadline for EOI submission: Monday, June 25, 2018, 3:00 p.m. Council Approval of Project Priority List: August, 2018 Questions should be sent by the deadline to housing@cityofkingston.ca. An addendum will be posted on the program webpage with responses to the submitted questions according to the EOI schedule. Although every attempt will be made to meet the dates outlined above, the City of Kingston reserves the right to modify any or all dates at its sole discretion. 4.0 Program Overview General Eligibility Criteria The provincial guidelines outline the following general program criteria which must be incorporated in Service Managers delivery of the program: Only purpose-built rental housing units are eligible for development charge rebate funding (i.e. ownership dwellings, including multi-unit condominiums, are ineligible). Secondary market rental housing projects are ineligible (e.g. individually rented singles, semis, duplexes, basement apartments, etc.). Page 5 of 11

6 Funded projects must align with other provincial priorities and support additional public benefit (e.g. provision of rental housing in communities with a low vacancy rate, unit sizes targeted to the community need, senior supportive, accessibility value beyond Building Code minimums, transit supportive, etc.). Units receiving development charge rebates must remain rental for a minimum twenty-year period; if funded units are converted to ownership or a nonresidential use during the twenty-year period repayment provisions apply. Forgiveness in the full amount of the rebate will be provided upon expiry of the twenty-year rental housing period. There are no long-term affordability requirements beyond the threshold for starting rents and subject to the rent increase provisions of the Residential Tenancies Act, Only non-luxury units can be funded, municipalities have the ability to establish the level of funding as a percentage of the local average market rent (AMR) as reported by CMHC. Developers must enter into a rebate agreement with the municipality for the purpose of establishing program objectives and obligations and securing the twenty-year rental housing period. Units within rental housing projects receiving affordable housing funding under the Investment in Affordable Housing (IAH) program of Social Infrastructure Fund (SIF) are not eligible for the rebate; however, non IAF/SIF units within the project are eligible. Rebate funding will be subject to defined timelines, if a proponent fails to meet the program timelines the province retains the right to revoke the funding allocation and reallocate to another project or municipality. Proponents will be required to disclose pertinent project information, including some financial details, in addition to providing initial and annual occupancy reporting information. Only new projects are eligible for rebate funding, projects that have previously paid development charges and are currently under construction are ineligible. The provincial guidelines further define the following ineligible project: Single and semi-detached homes, duplexes, triplexes and retirement homes. Luxury rental units with rents exceeding 175% of the AMR or a lower level as determined by the municipality. Page 6 of 11

7 Units receiving a payment deferral or exemption of development charges. Units to be created through a municipal inclusionary zoning by-law. Starting Rents and On-Going Rental Requirement Initial rents for funded units must be set in accordance with the rental rate agreed to with the Service Manager and established within the rebate agreement. In no case will a unit with the initial rent set above 125% of the CMHC AMR be eligible for rebate funding. AMRs are adjusted annually based on CMHC annual reporting and are adopted in January of each year. Rebates will be calculated based on the year in which the fees are paid by the proponent to the City. The following table outlines the most recent AMR reporting and the eligible rent thresholds by unit size. Most Recent AMR Reporting (Fall 2017) 125% AMR (maximum rent under program) Bachelor One- Bedroom Two- Bedroom $730 $975 $1,157 $913 $1,219 $1,446 Note: Rents are inclusive of utilities; if any utilities are proposed to be charged separately an appropriate utility deduction must be applied to the initial monthly rent. Initial rents will be established relative to the AMR in the year of occupancy. Following initial rent-up there are no ongoing affordability requirements. The ongoing requirement as secured by the rebate agreement will be to maintain the participating units as rental housing units for a minimum twenty-year period. During this term the units cannot be converted to ownership housing (i.e. condominium ownership) nor converted to a nonresidential rental use. Proponents will be required to report annually on the rental housing status of the funded units. Program Funding Allocation and Funding Schedule The Service Manager has been approved a total notional funding allocation of $3,650,000 over the five program years distributed according to the schedule outlined in the following table: Year 1 ( ) Year 2 ( ) Year 3 ( ) Year 4 ( ) Year 5 ( ) Total Funding $743,392 $698,751 $734,464 $743,392 $730,000 $3,650,000 Participation in the program is subject to a proposal s alignment with the criteria outlined in this EOI, funding availability, the City and the proponent entering into a rebate agreement, and the project meeting the timelines of the program and other associated Page 7 of 11

8 terms and conditions. In no circumstance would a rebate exceed 100% of the development charges calculated for a single unit and rebates cannot be transferred between units or projects. As development charges can change from time-to-time the rebate calculation will be relative to the fees calculated at the time of payment and permit issuance. Rebates will only be provided after the fees have been paid by the proponent and all other conditions of the rebate agreement have been met. If the City of Kingston does not receive the necessary funding from the Province to implement the program the City is not obligated to provide any development charge rebate funding nor make any other financial considerations relative to a project. Rebates will be issued according to the following project milestones: 50% of the calculated rebate following registration of rebate agreement on title, issuance of building permit, and completion of foundation. 50% of calculated rebate following issuance of full building permit, completion of foundation, and commencement of structural framing. The maximum number of rebates that one project may be eligible for is 50 units. The first 25 units can receive 100% of the eligible development charge rebate according to the EOI parameters and the next 25 units would receive 50% of the calculated rebate. This funding limitation is to ensure no single project would receive the full annual funding allocation. 5.0 Content of the Expression of Interest Submission Complete EOI submissions shall include the following sections with regard given to the page number limits noted: 1. Cover letter on the organization s letterhead identifying the contact information for the primary contact and a brief summary description of the proposal (not more than one pages). 2. Outline of the experience and qualifications of the respondent in residential development, construction, and property management (not more than one page). 3. Narrative description of a viable financial plan, funding sources/availability, and status of any lender consideration or commitment to provide financing to the project, development schedule including timelines for land use planning approval and building permit issuance (not more than two pages). 4. Completed EOI Worksheet (Appendix 1 to this EOI) Page 8 of 11

9 6.0 Evaluation Process and Funding Level The Service Manager will review all complete submissions to consider the viability of the project and the ability of the proponent to meet the funding program timelines. The Service Manager reserves the right to reject incomplete submissions or to ask for additional information. Proposals will be evaluated relative to the evaluation criteria and ranked relative to the prioritization process outlined here. Following the evaluation process a staff report will be provided to City Council outlining the results of the EOI process including recommended year-one program funding commitments. Upon approval by the Ministry proponents will be issued a Letter of Conditional Funding which will outline the initial terms and conditions and required project schedule. Upon acceptance of the Letter of Conditional Funding the City and the proponent will execute a rebate agreement which will specify the ongoing rental housing commitments of the project and remedies/repayment provisions should the project fail to remain rental housing for the full term of the agreement. The rebate agreement will be registered on title of the property for the full twenty-year term. Determination of Funding Level City Council Report Number established the following five measures to evaluate the amount of rebate funding available to an eligible project: 1) starting rent, 2) unit size, 3) accessibility, 4) express transit service availability, and 5) contribution toward the City s GHG reduction goals. The following sub-sections outline the rebate thresholds relative to the measures. In no case shall a rebate exceed 100% of the calculated development charge for a unit. The rebate available to a unit will be the maximum level determined by any one of the individual measures. 1. Starting Rent The primary objective of the Program is to create additional non-luxury purpose-built rental housing supply. In order to encourage affordability amongst starting rents the following thresholds have been established. Units with rents above 125% AMR are not eligible for a rebate under the program. Rent Thresholds Rebate Thresholds 2018 Rent Level One-Bedroom Unit Example 100% AMR or less 100% rebate available Less and $ % to 115% AMR 75% rebate available $976 to $1, % to 125% AMR 50% rebate available $1,122 to $1,219 Above 125% AMR No rebate available $1,220 and above Page 9 of 11

10 2. Unit Size The provincial program guidelines enable Service Managers to implement local eligibility criteria related to preferred unit size. The following table outlines eligibility by unit size: Unit Size Bachelor Unit One-Bedroom Unit Two-Bedroom Unit Three-Bedroom Unit and over Rebate Program Eligibility Eligible Eligible Eligible Ineligible 3. Accessibility The Ontario Building Code prescribes no less than 15% of all suites in a new multiunit residential building must meet prescribed accessibility requirements. For each additional accessible unit provided beyond the Building Code s minimum requirements a 100% development charge rebate will be available to the unit, provided the rent does not exceed 125% of the AMR. The additional accessible units must meet or exceed the minimum accessibility standards of the building code. 4. Express Transit Service Proximity The City s Official Plan encourages multi-unit housing to support transit services and walkability. Eligible projects developed within walkable proximity of an existing or planned express transit stop will be offered a greater level of rebate according to the following thresholds; however, in no circumstance shall a funded unit s starting rent exceed 125% AMR: Express Transit Stop Proximity Less than 400 metres walking distance Rebate Program Available 80% rebate available 400 metres to 600 metres walking distance 60% rebate available 5. Contribution to City s Climate Action Plan/GHG Emission Goals Units with starting rents that do not exceed 125% of the AMR and can demonstrate a positive contribution toward the City s GHG emission reduction may be considered for a greater percentage of rebate if they: a) achieve certification under the Passive House Standard, or b) commit to construction of a Net Zero residential building using a net zero builder qualified through the Canadian Home Builder s Association. In both cases, this standard of building exceeds the current requirements of the Ontario Building Code. Page 10 of 11

11 GHG Emission Reduction Net Zero Building Passive House Standard Rebate Program Available 100% rebate available 75% rebate available Project Prioritization If there is not sufficient funding available to fund all eligible project submissions, prioritization will be determined based on the following: First Priority units created by not-for-profit corporations will be given first priority for funding under the program; units receiving Investment in Affordable Housing and Social Infrastructure Fund funding are not eligible; however, other units in the project are eligible. Subsequent Priority following the prioritization of eligible units proposed by non-for-profit organizations project prioritization will be based on projects that are eligible for the greatest average level of funding on a per unit basis. For example, if project A offers 20 units that are eligible for an average rebate of 75% per unit and project B offers 15 units that are eligible for a 80% rebate, project B would qualify for funding ahead of project A. Based on the calculated average per unit rebate level a prioritization list will be created with the eligible rebate amounts identified. The maximum annual funding allocations will be consistent with the annual provincial program commitments outlined in Section 4. In no case will allocations be made in an amount greater than the annual program commitments; however, if a project fails to meet a program milestone or a change in the proposal offering reduces the funding eligibility, the next project on the prioritization list will be offered the available funding according to the program criteria. 7.0 Submission Requirements Submissions and required content must be submitted in a complete proposal package. Brochures may be included in the proposal package. Failure to comply may result in rejection of the proposal. Hard Copy submissions and digital copy on a CD/DVD or USB Drive in sealed envelopes, clearly marked as to contents will be received no later than 3:00 p.m. Local Time, Monday, June 25, 2018 and shall be addressed to the City of Kingston Housing and Social Services Department, Attention: Housing Programs, 362 Montreal Street, Kingston, Ontario K7K 3H5 Proposals received after the above due date and time will only be consider for waitlist prioritization. Page 11 of 11