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Wednesday, September 17, 2025
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Lanark County encourages developers to build affordable housing with tax incentive

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LAURIE WEIR

Building more affordable homes just got a boost of encouragement from Lanark County.

The county has approved a plan for an affordable rental housing incentive program, which will include grants in lieu of property taxes and development charges.

The recommendations come from the Municipal Tools for Affordable Housing Development Study.

Emily Hollington, the director of social services, presented the recommendation to the community services committee of county council on Aug. 14.

Through the More Homes Built Faster Act, 2022, the province made changes to the Development Charges Act, 1997, introducing exemptions for affordable residential units, which came into effect on June 1 this year.

Under the Act, a rental unit would be considered affordable when the rent is at or below the lesser of income-based rent (rent that is equal to 30 per cent of gross annual household income, and market-based rent).

Hollington said the affordable housing rental rates for Lanark County in 2024 were $1,331 for a studio or one-bedroom unit; $1,466 for a two-bedroom unit, and $1,685 for a three-bedroom unit.

“The one- and two-bedroom rents we receive straight from the ministry,” Hollington said.  “The three-bedroom is from the 60th percentile of household income.”

There needs to be more three-bedroom units in the county for CHMC to come up with an average, she said.

Hollington said these numbers “really jumped” from the average market rents they’ve had in previous years. “They used to be about $800 a month. This is a reflection of the times.”

She said in this case it’s good as they may be able to incentivize developers to build something with these higher rents.

She said $800 was “really nothing they were ever going to look at.”

Overall, the plan supports the county’s 10-year housing and homelessness plan. “The goal is to increase the supply of affordable, cooperative or supportive housing,” she said.

But it doesn’t look at grants in lieu for affordable homeownership.

Eligible proponents will receive an annual operating grant equal to the value of the county portion of the property taxes (on the affordable units only) for 15 years. Proponents will pay their full property taxes and the county will grant back the county portion upon receipt of annual eligibility verification.

Tenants of eligible units must have income at or below the house income limits prescribed in the Housing Services Act, 2011, and meet the county’s affordable housing asset limit. Rent must be at or below the affordable rental rate and can only increase as per the annual rental increase guideline.

To be eligible, developers would have to create new affordable rental, cooperative, or supportive housing units. They must be self-contained with a washroom and basic cooking facilities.

Hollington said the county sees limited affordable housing development. She said that the program isn’t expected to have a significant budget impact.

For example, the 20-unit affordable building in Perth, is assessed at $1.427 million with an education tax of $2,183 and a municipal portion of $13,642. The county’s portion of $4,826 would be granted back to the developer as an incentive.

Hollington said discussion is also happening with lower-tier governments for similar incentives.

The committee approved the Affordable Housing Tax Incentive Grant and directed staff to proceed with implementation.

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