At its April 18 meeting, the District Community and Planning Services Committee approved 24 new affordable housing units under the Muskoka Affordable Housing Initiatives Program (MAHIP) for a funding amount of $2,290,000.
See the projects below:
According to a report submitted to the committee by District staff, the demand was higher than the amount set aside in the 2024 District budget for MAHIP. The MAHIP program is funded by taxation and consists of a multi-residential funding stream and, to a lesser extent, funding for additional residential units (ARU) such as secondary dwellings. This year, a total of $2,400,000 was set aside, of which $2,200,000 would go to multi-residential construction and $ 200,000 to ARUs.
Committee heard that ten applications were received from nine proponents requesting funding for a combined 51 units, totaling $4,990,000 in MAHIP funding in 2024. As a result, staff has had to apply the MAHIP Evaluation Scoring Matrix when looking at multi-residential unit funding applications to determine which applications to recommend for final approval from council. You can find the report HERE.
In a follow-up conversation, Tom Fortier, District Director of Human Services, explained what the District considers affordable rental housing in order to qualify for the construction funding program. To participate in the program, the project proponent has to offer the units at or below the maximum rent established for the program and rent the units to households with incomes at or below established thresholds.
“So the landlord chooses the new tenant upon initial occupancy or turnover. The landlord is also responsible to confirm that their (tenant’s) income is below the threshold,” explained Fortier. The maximum monthly rent those who get funding to build affordable units can charge, excluding utilities, is as follows:
- $713 for a studio or bachelor unit.
- $1,097 for one bedroom.
- $1,374 for a two-bedroom apartment.
- $1,476 for three bedrooms and larger.
Applicants who receive funding must also offer the units to income-tested households for the period specified in the agreement with the District. According to the District website, some of those thresholds involve at or below $40,464 for a one-bedroom apartment and at or below $48,208 for a two-bedroom unit.
“To get the maximum investment, the building proponents would be committing to a 25-year affordability period in exchange for $100,000 per unit of investment,” explained Fortier.
He said if someone builds a unit with District funds and breaks the agreement, forgiveness is earned at the midway point, and they must return 50 percent of the funds received; after that, they would have to pay the funds back at an equal rate. “So… if it was a 10-year affordability period at the five-year mark, 50 percent of our investment would be forgiven. If they left early, between years 5 and 10, they would not have to pay back the first 50 per cent of the investment,” explained Fortier, adding that the agreement also enables the District to confirm that all the terms of the contract are being met.
Steve Hernen, with Brunel Road Management Corporation, has used the program before and is one of the proponents being recommended for funding approval this year. Brunel Road Management Corporation has applied to build eight units at 24 Gouldie Street in Huntsville and has committed to keeping the District affordability threshold for 25 years in exchange for $800,000. From the builder or the landlord’s perspective, Hernen said there are also other benefits as long as you realize you are making a long-term investment.
“The provincial and federal governments have agreed to waive HST on purpose-built rentals, so that’s equivalent to 13 per cent of the cost of the build. The development fees, if you enter into a 25-year agreement, are waived as per Bill 23 with the Ontario government and with the MAHIP program; if you enter into a 25-year agreement, you can receive $100,000 per unit, but you are renting at a reduced rate, and they have to quality as a tenant based on the District rules,” he noted.
Still, said Hernen, when you carefully run the numbers, it’s a good deal all the way around. “It’s a good deal for the landlord, it’s a good deal for government, it’s a good deal for everybody, but it’s a long deal. It’s a 25-year deal,” he said of the highest funding option. “So $1,097 is what a one-bedroom goes for at the agreed rate when you enter the programs. I’m renting one bedrooms at market rent for $1,600 plus utilities. It’s significant, but when you factor everything in, when you run the numbers, it’s a good game for everybody… but I stress the 25 years because if you think you’re going to get in and get out quick and make some money, you’re not,” he explained.
Hernen said another positive is that landlords get to pick the tenants they rent to. Overall, he commended the District for the program and its aim of creating affordable housing in Muskoka.
All recommendations from committee must be ratified by council.
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