Housing Accelerator Fund

 

Photo credit: City of Vancouver modular housing

Introduction

Cities are working hard to meet challenging carbon reduction targets while also meeting the urgent need for more affordable housing within their jurisdictions. The federal government’s Housing Accelerator Fund (HAF) provides an exciting opportunity to demonstrate how affordable, low carbon housing can be a winning combination.  

The Housing Accelerator Fund (HAF) is a $4 billion federal funding program for Canadian municipalities and Indigenous governments, with applications due in the summer of 2023. The primary purpose of the HAF is to create more supply of housing at a faster pace. Secondary objectives include: (1) supporting development of complete communities; (2) supporting development of affordable, inclusive, equitable and diverse communities; and (3), supporting development of low-carbon and climate resilient communities. Funding is available over three years beginning with an advance to successful applicants on signing contribution agreements in the fall of 2023. Funding is proportional to the incremental number of residential units targeted by the recipient, based on a formula of $20,000 per unit with adders for affordability, density and transit proximity.  

Informed by the work of The Atmospheric Fund, the Low Carbon Cities Canada network, of which The Atmospheric Fund is a member, the Tamarack Institute, the Clean Air Partnership, and City Building TMU, this document summarizes high level recommendations for how applicants in urban settings can integrate community climate action and engagement into their HAF proposals and action plans. Suitable options will vary based on municipal context and objectives, and this document will provide a menu of options to consider rather than a formula for all municipalities. Recommended options are grouped into four categories based on the eligible expense categories outlined in the HAF pre-application guide. 

1. Investments in Housing Accelerator Fund action plans

This category of eligible expenses is very broad and includes “any initiative included in the proponent’s action plan and approved by CMHC.” The options below are derived from CMHC’s example housing action plan actions that are not captured in the other categories.

A) Provide as–of–right zoning for housing developments that meet pre-set climate standards. This approach provides an advantage for developers who are meeting conditions that will ensure new housing will have high energy performance standards, making the housing healthier and more resilient and the operation costs more affordable over the longer term. 

• As-of-right zoning refers to initiatives to eliminate the need for zoning by-law amendments or variances for housing developments that meet set criteria.
• Can be done on a city-wide basis or for specific neighbourhoods targeted for intensification or infill.
• Climate standards could include voluntary higher tiers of green development standards for cities that have them or could otherwise be based on a variety of third-party standards (LEED, PassiveHouse, CHBA Net-Zero).
• Climate conditions can be combined with other criteria related to HAF priorities (e.g., affordability) some of which may also reduce emissions (e.g., transit accessibility).
• Funding could be used for policy development and consultation, staff costs associated with reviewing proposals against the pre-set criteria, and/or for incentives for participation (e.g., reduced development charges).

B) Encourage or allow accessory dwelling units and/or multiplexes in single family neighbourhoods, with climate standards. By accessing the housing potential within existing building stock, we can reduce overall cost and GHG emissions compared to new construction and also make use of existing infrastructure. 

• Can be done on a city-wide basis or for specific neighbourhoods targeted for ‘gentle density’.
• Climate standards could include voluntary higher tiers of green development standards for cities with these, or could otherwise be based on a variety of third-party standards (LEED, PassiveHouse, CHBA Net-Zero).
• For housing forms that are already permitted, this might take the form of incentives or reduced fees for participants.
• Approaches could make it simpler and more cost-effective for house owners to add secondary suites, for example by establishing a one-stop shop with pre-approved plans, connections to the local labour pool, and access to grants and financing options.
• Climate conditions can be combined with other criteria related to HAF priorities (e.g., affordability) some of which may also reduce emissions (e.g., transit accessibility).
• Funding could be used for policy development and consultation, cost associated with reviewing proposals against the criteria, or for incentives for participation.

C) Encourage or allow conversion of surplus office buildings to multi-residential, with climate standards. Creatively re-purposing under-utilized spaces for housing reduces the carbon emissions associated with demolition and re-building of existing building assets, and keeps housing within areas already served by existing infrastructure. 

• In the post-pandemic hybrid work world, many cities have a long-term surplus of commercial office space. Zoning bylaws may restrict conversion of office buildings to housing, and renovation costs can be high.
• Policy changes and/or incentives could be used to encourage/allow conversion to housing, with climate standards.
• Climate standards could be based on a minimum carbon reduction from baseline, prescriptive measures (electrification of heating and hot water) or a retrofit-viable third-party standard (e.g. EnerPHit).
• Climate conditions can be combined with other criteria related to HAF priorities (e.g. affordability) some of which may also reduce emissions (e.g. transit accessibility).
• Funding could be used for policy development and consultation, cost associated with reviewing proposals against the criteria, or for incentives for participation (e.g. reduced development charges)

D) Reducing or eliminating minimum parking requirements while requiring new parking spaces to be EV-ready. Reduced parking spaces make developments more affordable and encourages lower-carbon transportation, while integration of EV infrastructure at the outset is cheaper than retrofitting them in at a later date.

• Meeting minimum parking requirements can increase housing costs (up to $80K per parking spot), while increasing embodied carbon emissions significantly.
• It is five times more expensive to retrofit buildings to add EV charging than it is to build the buildings EV-ready to begin with.
• Oversupply of parking spaces in neighbourhoods with close proximity to rapid transit encourages car use at the expense of transit ridership.
• Combining relaxation or elimination of parking minimums with adding EV ready requirements for new parking spaces can be a win-win-win for affordability, climate, and industry.
• Can be done on a city-wide basis or for specific neighbourhoods close to transit.
• Funding could be used for policy development and consultation, or compliance management (with respect to EV-ready requirements).

E) Increasing resources for community engagement. Knowledge of what potential residents desire from their housing, and engagement of local communities to build support at the local level is critical to the success of affordable low carbon housing. This work is challenging and time-consuming. Therefore, there is a case for using HAF funds to ensure municipal teams have adequate resources to support robust community engagement on sustainable, affordable housing policies, programs and projects. 

• Commit to engaging people with lived/living experience (e.g., those who are most impacted by the issues) at each stage of the project.
• Determine engagement goals (e.g., informing decisions, building capacity, strengthening relationships), which groups you want to engage and the appropriate level of engagement (e.g., whether you’re informing, consulting, involving, collaborating, or shifting power). Share power by opening up decision-making processes.
• Curate accessible and inclusive spaces, being clear about each actors’ role, decision-making processes, and the principles and desired results guiding the engagement. Create ways for community members (and everyone!) to share feedback about their experience on the project.
• Eliminate or mitigate common barriers to participation such as childcare, transit, physical and technical accessibility, cultural and gender inclusivity, safety and security, and sense of belonging, capacity and confidence. For more extensive processes (e.g., workshops, advisory groups) consider addressing financial barriers to participation by paying community members at rates similar to what you’d pay consultants or staff.
• Take time to build trusting relationships and to understand what community members seek from the engagement. Plan ahead and engage early and often, making engagement an ongoing rather than a one-off activity and embedding two-way training and mentoring between community members and city staff and decision-makers.

2. Investments in affordable housing

This category includes: (1) construction of affordable housing; (2) repair or modernization of affordable housing; and (3), land or building acquisition for affordable housing.

A) Construction of affordable housing with climate standards. Benefits of integrating low-carbon features into new affordable housing include resilience to extreme heat, improved indoor air quality and comfort, reduced energy and carbon costs, and avoided cost of subsequent retrofits to meet climate commitments. 

• Definition of affordable housing under HAF is based on municipal definition where available, or provincial definition otherwise.
• HAF funding is $39,000 per planned affordable housing unit, with additional adders for density and transit proximity.
• This could be for public housing (e.g., operated by municipal housing corporation), non-profit housing, or market housing with long-term affordability covenants for a portion of the suites.
• Could take advantage of surplus municipal lands where available and consider pursuing models and options to support not-for-profit development on public lands, to enable more climate-friendly features by eliminating the profit margin required by for-profit developers. Climate standards could include voluntary higher tiers of green development standards for cities that have them, or could otherwise be based on a variety of third-party standards (LEED, PassiveHouse, CHBA Net-Zero).
• Climate and affordability conditions can be combined with other criteria related to HAF (e.g. transit accessibility).
• Funding could be used for policy/program development and consultation, cost associated with reviewing proposals against the criteria, development and construction costs (for public housing) and/or for incentives/subsidies (for non-municipal housing).

B) Acquisition and/or renewal of affordable housing with climate standards. Preserving housing stock that is at risk of demolition helps to prevent the GHG emissions associated demolition and new construction. Renewal of buildings including deep energy retrofits can bring health and resilience benefits for residents, for example, replacing fossil fuelled boilers with electric heat pumps can create cooling service to older buildings where central air conditioning is not currently available.

• Definition of affordable housing is based on municipal definition where available, or provincial definition otherwise.  
• HAF funding is $39,000 per planned affordable housing unit, with additional adders for density and transit proximity.  
• This could be for public housing (e.g. operated by municipal housing corporation), non-profit housing, or market housing with long-term affordability covenants for a portion of the suites. 
• Renewal of existing housing may need to focus on preservation of housing stock that is at-risk (of demolition and redevelopment) in order to meet the overall goals of the HAF program. In other words, energy retrofits of otherwise serviceable housing may not qualify.   
• Could take advantage of surplus municipal lands where available.  
• Climate standards could be based on a minimum carbon reduction from baseline, prescriptive measures (electrification of heating and hot water) or a retrofit-viable third-party standard (e.g., EnerPHit). 
• Funding could be used for policy/program development and consultation, cost associated with reviewing proposals against the criteria, development and construction costs (for public housing) and/or for incentives/subsidies (for non-municipal housing).  

3. Investments in housing related infrastructure

A) Investments in public transit that supports housing. Combining plans for affordable housing and flexible, low-carbon local transportation services improves quality of life and ensures that new homes or neighbourhoods are not unduly causing an increase in transportation emissions.

• Investment in public transit to support housing is an eligible expense under the program.  
• Given the three-year program timeline, this is unlikely to support any major new higher order transit projects, which tend to have much longer planning and construction timelines. 
• However, there may be scope for micro-transit solutions (e.g. electric shuttle buses to closest transit station) or local service improvements (more frequent bus service or new stops adjacent to new housing developments).

B) Investments in community energy systems that support housing. Low-carbon community energy systems can enable housing development, improve resilience and enhance affordability through reduced energy and carbon costs.  

• Investment in community energy systems that support housing is explicitly listed as an eligible expense. 
• Community energy systems isn’t defined in the guide, but the standard federal definition is a system that supplies heating, cooling and/or power to multiple buildings from a centralized plant or from several interconnected but distributed plants.  
• This could include expansion and/or decarbonization of existing systems, or design and construction of new systems.  
• This could include public or private community energy systems. 
• Given the three-year program timeline, it may be challenging to fully construct a major new community energy system, but funds could be used for feasibility studies, design work, or preliminary construction work.  
• This could include ‘micro’ community energy systems, such as geo-exchange system serving two-or three adjacent buildings which might be part of the same development project.  
• Any investments in community energy systems should be low-carbon systems not based on fossil fuels. Examples include geo-exchange, waste-water heat recovery, industrial waste heat recovery.  
• A variety of energy developers offer options for third party ownership and operation of community energy systems, allowing these systems to be constructed with no incremental cost to developers/owners.  

4. Investments in community-related infrastructure that supports housing

A) Investments in active transportation infrastructure. Taking advantage of opportunities to expand active transportation infrastructure expands affordable transportation options, reducing emissions and improving mobility options. 

• Investment in bicycle lanes is explicitly listed as an eligible expense, as long as it supports new housing. 
• Funding could be used for policy/program development and consultation, design and construction costs.