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Montréal modifies regulation 20 -20-20 to give developers a break

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The Regulations for a mixed metropolis came into force on April 1, 2021 and aims to force residential developers to include social housing in their real estate projects. (Archive photo)

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The City of Montreal is stepping back and reaching out to developers. The administration of Valérie Plante announced Thursday modifications to lighten the Regulation for a mixed metropolis, also known as “20-20-20”, in order to reduce the financial burden on developers in a difficult economic context and to accelerate the construction of social and affordable housing.

The regulations must be more in line with market realities. […] In the current context, the promoters tell us that they want to develop [but] it must be facilitated and we must ensure that the City of Montreal takes the necessary initiatives, explained Benoit Dorais , vice-president of the executive committee of the metropolis, during a press conference on Thursday.

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Benoit Dorais, vice-president of the executive committee at the City of Montreal (Photo archives)

So real estate developers will pay less, but the City warns them: these adjustments are only temporary and will last until the end of 2026.

The Mixed Metropolis Regulations, which came into force on April 1, 2021, aim to force residential developers to include roughly 20% social housing, 20 % affordable housing and 20% family housing in their projects.

Among the changes to the regulation, there will be a significant increase in the amounts paid to developers who transfer land to the City for social housing purposes. In addition, financial contributions paid by promoters – when they do not comply with the requirements – will not increase until 2026.

The City also exempts real estate projects with 20 units or less from these financial contributions and removes developers' obligations in terms of affordable housing – which will allow them, for example, to save up to $4,000 per unit. for a project of 200 housing units.

We're going to give a breakto developers, which will ensure that the mathematics will rebalance, affirmed Mr. Dorais, who is also responsible for housing, real estate strategy, property evaluation and legal affairs at the City of Montreal.

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[We tell the promoters], we are not going to increase the financial contribution and that should help you. The window of opportunity is there. Your contribution will only increase in two years, when the market should be rebalanced.

A quote from Benoit Dorais, vice-president of the executive committee of the City of Montreal

The “20-20-20” had experienced strong opposition from on the part of the developers, because if they did not respect the requirements, they had to pay compensation to the City. This money raised was then to be used in social and affordable housing construction projects.

Total amount of financial contributions paid to the City of Montreal, as of December 31 December 2023

Social Housing Fund: $15.4M

Affordable Housing Fund: $5.5M

Total contributions collected and planned: $38.7 million

The regulation was also criticized by the official opposition and several organizations, who affirmed that developers preferred to pay compensation rather than build social housing in Montreal. Especially since in two years, only one social housing project has seen the light of day under this regulation.

The official opposition, Ensemble Montréal, immediately criticized the changes made to the Regulations.

The administration tells us today that it will suspend some of the contributions for two years, but that's not “This is not what will speed up construction starts in Montreal […] so we are asking for a suspension of the regulation while the situation recovers, immediately reacted Julien Hénault-Ratelle, the spokesperson for the l' official opposition in housing matters.

The latter is also concerned that developers want to undertake their projects outside the metropolis due to the regulation.

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Julien Hénault-Ratelle, spokesperson for the official opposition on housing

Like Ensemble Montréal, the Chamber of Commerce of Metropolitan Montreal (CCMM) is once again calling for the abandonment of the Mixed Metropolis Regulation. Its president Michel Leblanc recalls that, since 2021, the regulation has led to the construction of very few housing units.

From the beginning, we told the City that the solution would not work. It didn't work and here we are improvising adjustments. And look closely at the developments that will take place outside because it is much simpler, easier and less expensive. We are shooting ourselves in the foot in Montreal, declared Mr. Leblanc.

For its part, the Urban Development Institute of Quebec (IDU), which brings together several developers, supports this decision and is committed to working with the City to restart construction starts. This was also one of the elements that we raised during the public consultations, reacted by email Isabelle Melançon, the president and CEO of the Institute.

With information from Jacaudrey Charbonneau and Benoit Chapdelaine

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