Developers caution Saskatoon city hall over proposed changes to infill incentives

Developers convinced a Saskatoon city council committee Wednesday to give some more thought to proposed changes to a longstanding incentive to encourage infill.

After some confusion over how to proceed, the committee voted to reconsider the applicable areas for a suite of changes to incentives that offered tax breaks for developers who build on vacant lots or where derelict buildings stand.

Developers who appeared before council’s planning, development and community services committee said they approve of changes to encourage affordable housing units, but criticized the idea of shrinking the area where the incentive program would apply.

Patrick Wolfe, who appeared on behalf of unnamed stakeholders for infill development, called the proposed reduction in the area where the program would be active “regressive.”

“There's so many more costs [to build infill housing] that it's about anywhere from five to 10 times more [expensive], and even with the tax abatement it is still more than [development in] the suburbs,” Wolfe said.

Wolfe distributed printed colour-coded maps showing where he thinks the incentive program should apply. He reminded politicians on the committee that construction costs have soared in the last five years.

“So this tax abatement, now more than ever in these times, makes all the difference,” Wolfe said.

Under the existing incentive program that dates back to 2011, developers who built on vacant lots would be eligible for a full five-year tax break provided certain criteria were met.

Under the new proposals, 15 per cent of a development’s units must be considered affordable to be eligible for the full tax break. A minimum of five units in a building would need to be affordable to get the tax abatement.

Infill developments in the approved areas without an affordable component would receive a full property tax break in the first year, then 80 per cent in the second year, 70 per cent in the third year and half in the fourth and fifth years.

But the areas where the program would apply have been reduced to the city centre and along current transit corridors that have been identified as key growth areas by city hall. Wolfe argued for a wider area to include other busy streets that could become transit corridors in the future.

That sentiment was echoed by James Wright, the owner of Westcliff Developments, who said he has taken advantage of the vacant lot incentive three times to build residential buildings.

Wright said a 15-storey apartment building at the corner of Main Street and Dufferin Avenue in the Nutana neighbourhood and a 14-storey apartment building under construction a block away at Main and Broadway Avenue each reached a point where his company was unsure the project would proceed.

Wright said the vacant lot incentive helped his company decide to move forward.