Mississauga City Council endorsed a work plan to develop an affordable housing program for the City. As part of this work plan, with Peel Region as a partner, The City of Mississauga (the City) has retained N. Barry Lyon Consultants Limited (NBLC) to evaluate the potential costs of financial incentives which might be required to incent the development of affordable housing. This report presents the findings of an economic analysis that is intended to inform the Council’s future decision-making with respect to the development of the City of Mississauga’s Affordable Housing Program. The purpose of this analysis was to Identify the financial drivers for creating new rental housing and factors affecting the preservation of existing rental stock, Prepare detailed proformas to quantify the potential cost of financial incentives for new affordable housing, and to assess sensitivity across varying levels of affordability, tenure, building types, and market variables, Advise on the effectiveness of varying financial incentive tools in supporting the creation of affordable rental and ownership housing.

The understanding of the cost of creating new and upgrading existing second units and the financial implications for homeowners and Outline preliminary considerations in the development of a financial incentive strategy for affordable housing, including an evaluation of the cost-effectiveness of varying incentive approaches. This report, Understanding the Cost of Incentives, is intended for information purposes in order to educate staff, decision-makers, and the public about the magnitude and types of potential incentives that could be considered to support new affordable housing development if the Council were to choose to offer them. This discussion around the potential provision of financial incentives for affordable housing is only a starting point.

It should be acknowledged that there could be pressure on municipal finances when providing these incentives. Without a dedicated revenue stream for affordable housing, the provision of financial incentives, in any form (loans, grants, deferrals, or waivers) would all ultimately affect the City’s budget and this could have an effect on the broader tax base. The next step in this process would be to assess the real fiscal impacts that might result from the provision of financial incentives. Residential demand in the City of Mississauga is strong and growing, with current projections indicating that over 2,000 new housing units per year will be required by 2041 to meet Provincial population projections. With the City at the end of its greenfield growth phase, this residential demand will be housed in higher density formats and on infill or repurposed properties. With continued population growth and limited supply in lower-density housing forms, average home pricing has increased substantially.