City looks to sweeten pot for affordable units, office conversions

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London city hall may offer cash to builders to add affordable units to their projects and increase payments to landlords converting offices to apartments.

In two separate proposals to two different city council committees that meet next week, city staff recommend tapping into a $74-million federal government fund to offer increased incentives to developers and landlords.

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 The proposals are:

• offering $45,000 for each affordable unit added to a project.
• increasing a grant for each unit in apartments converted from offices to $35,000 from the current range of $20,777 to $28,155

City staff propose creating a $10-million fund for each project.

“An incentive is certainly helpful but we will have to see if it is enough, how it is structured to see if it works,” Jared Zaifman, chief executive of the London Home Builders Association, said of the affordable housing offer. 

“Typically when adding affordable units it can be expensive to make the math work for the whole project.”

Grants for affordable housing would help because the Ontario government did away with “bonusing” where municipalities offered incentives to builders such as allowing them to add more units or height to a project if they build affordable apartments, Zaifman said.

“The more incentives, the greater the chance it will work.”

The incentives for affordable housing would be offered under the city’s Roadmap to 3000 program, a five-year plan to build 3,000 affordable units that was initiated in 2021. To date about 60 per cent of the units have been approved, are under construction or have been occupied by tenants, said a city staff report going to the community and protective services committee Monday.

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There wouldn’t be a cap on the number of affordable housing units eligible for the grant.

A report proposing an increase in grants in the city’s office-to-residential (OTR) conversion program will be discussed Tuesday at a meeting of city council’s planning and environment committee. Two projects have been approved for 195 Dufferin Ave. and 166 Dundas St. and more applications have been submitted and are under review.

“It is not easy to convert offices to apartments, it is expensive and in some cases it is easier to knock the building down and start from scratch,” said Ward 8 Coun. Steve Lehman, chair of the planning and environment committee.

Of the $10 million fund proposed for office conversions, $800,000 would be spent on a study and $9.2 million on conversions. If all of it is used, up to 263 units could be built, he said..

“It is likely there will be a lot of smaller buildings converted. It is an awesome program and I think we are making strides on downtown revitalization,” Lehman said.

“There are more cranes in the skies. I feel there is a different vibe downtown and we want to keep this going.”

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The project now underway at 166 Dundas St. received a grant in April of  $414,947 to create 15 residential units. If the grant increase is approved, the builder will receive an additional $110,053 reflecting the increase to $35,000 per unit. 

Sifton Properties is converting its office building at 195 Dufferin Ave. into 94 residential units, a mix of 80 one-bedroom and 14 two-bedroom units, with 40 per cent offered as affordable units, chief executive Richard Sifton said.

Construction is scheduled to begin as early as this summer with a goal to have the units occupied by the fall of 2025.

The city retained the consulting firm Urban Insights Inc. along with Durrell Communications and Gillam Group Inc. to review its conversion program and it recommended a maximum grant of $40,350 per unit, but staff are recommending $35,000 because it is the maximum under the federal grant for such programs.

Staff also recommend removing the $2-million cap on each property being converted.

The $74 million, where the $20-million will be taken from to fund the two city programs, is from the federal government’s Housing Accelerator Fund announced in London by Prime Minister Justin Trudeau in September 2023. 

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