There have been a number of decisions made by the Pallister government that are raising some eyebrows on the housing front. We’ve written about some of these in previous posts. But the recent True North Square deal, juxtaposed against a soon to be eliminated tax credit aimed at stimulating the development of affordable units, are glaring examples of public policy that serves the wealthy at the expense of the rest of us.
The Manitoba Government’s New Rental Tax Credit will be eliminated as of January 2019. This, says the Pallister government, will save the Province $3.1 million per year. The purpose of the tax credit is to encourage the inclusion of affordable units in new housing development.
As described in this article, “qualifying for the tax credit requires at least five units must be created in a new building, a conversion of a non-residential building or an expansion of existing rental housing building, and at least 10 per cent of the units must have rents at or below a defined affordable level.”
At the same time, the Province (and the City it turns out) has abandoned the rules around Tax Increment Financing. It previously required a minimum 10 % of units in TIF zone, be affordable. Affordable, meaning at or below median market rents. As of writing, thats about $1200 for a two-bedroom unit.
The inequity of the Pallister governments housing related policies was made evident in the recent deal made with True North Square. That deal will result in the development of 300 plus high end rental units and condos. And while the TNS received upwards of $45 million in subsidies for the project, not a single affordable housing unit will be part of the mix.
Where does this leave us? Do the math and decide for yourself.
We save $3.1 million a year—we get no new affordable housing.
We spend $45 million—we get no new affordable housing.
How does that make sense?