The Town of Parry Sound is looking at implementing new tax incentives to encourage the development of more rental accommodations in the municipality.
Following requests from developers and encouragement from council, staff will prepare an amendment to the Community Improvement Program regarding tax increment financing incentives to encourage the development of multi-unit rental housing, and affordable housing units in town.
According to staff, the incentives would be available for private developers building 10 or more rental units. In a brief report to council, staff indicated that the most realistic and impactful incentive would be a Tax Increment Equivalent Grant, which would see the Town share a percentage of the increase in municipal property taxes for a set number of years.
“Tax incentives are often viewed as sharing a portion of the new municipal tax revenue that would have not otherwise existed without the investment having been incentivized,” states the report. “Unlike traditional grants that require an upfront expenditure, a Tax Increment Equivalent Grant is a performance-based incentive funded from a portion of the increase in municipal property taxes generated by a completed development. The redevelopment would increase the assessed value of the property, resulting in higher municipal property taxes.”
At council’s request, staff will explore the possibility of requiring these eligible rental developments to include a set percentage of affordable housing.
“If we are going to give these extra incentives, I want to make sure that there is a percentage within that development envelope (that is affordable),” said Mayor Jamie McGarvey during a council discussion on July 21.
A staff report on the incentive will be presented to council at a future meeting.
