The city administration's proposed inclusion plan (20-20-20) will negatively impact construction and affordability in Montreal.
The creation of social housing is a state responsibility but Valerie Plante believes she can make it a private obligation by demanding that promoters for any project that is not 100% in conformity with zoning must build 20% of their units as social housing, 20% as affordable of which 20% must be 3 bedrooms or more.
I have spoken with several developers who indicate this requirement will steer them off island or to the west island. They also pointed out that anyone who does build in Montreal will have to substantially raise the purchase price of the remaining units in their project to pay for the inclusion obligation thus in effect eliminating middle class housing.
I wrote to the IDU recently (letter below). They have given me a document that they shared with Valerie Plante which indicates that the inclusion policy and the REM tax will see an impact of +24% on condos and +22% on rental housing in the Centre-Ville. Te impacts are less in the other parts of the island but according to the IDU still mean a 13 to 16% price/rent increase in much of Montreal.
The city had a group of experts look at the impact and they concluded that pruces and rents would rise. However a political decision has been made to go ahead anyway. My prediction is that this will significantly slow construction and once the REM opens will see most new construction transfer to the south shore.