This week, the city of Vancouver established a fund that will funnel millions of dollars from housing developers into the city’s affordable housing budget.
The money will come from the multifamily tax exemption program, which the city modified earlier this year to allow tax breaks for multifamily housing developers if they contribute to the city’s Affordable Housing Fund.
The city estimates that the Affordable Housing Fee-In-Lieu Fund will bring in $4 million per year once more housing projects are completed, according to Samantha Whitley, the city’s housing programs manager.
“(The money) isn’t collected until project construction is completed,” Whitley said in an email. “We expect to start receiving (funding) within the next three years and anticipate an annual fee-in-lieu contribution of $4 million per year by 2030.”
The city will offer developers property tax breaks for eight years if the developer agrees to contribute either 25 or 50 percent of the tax exemption’s value to the city’s Affordable Housing Fund.
The exact percentage will be “calculated using the projected tax liability to the project and the value of the benefit of the (tax exemption),” a city memo states.
The new funding source will augment Vancouver’s Affordable Housing Fund, which will raise $10 million in 2024 through a citywide tax levy, according to Whitley.
The city will use the new influx of money on a case-by-case basis, Whitley said.
“There is a long list of affordable housing needs and the city will prioritize projects and strategies that will first receive this funding based on timelines and development needs,” Whitley said. “If there are no immediate city-identified funding needs when at least $3 million fee-in-lieu funding is collected, a competitive application process will be used to select projects for funding.”
So far, developers have pledged $6 million toward the Affordable Housing Fund, which will be paid once their housing developments are completed, according to Whitley.
Currently, 49 developments in Vancouver are receiving or set to receive the multifamily tax exemption, 25 of which are utilizing the market rate option, according to a city dashboard.
