Montreal Developers Prefer to Pay Rather Than Build Affordable Housing

In 2021, the city of Montreal passed the Bylaw for a Diverse Metropolis, a regulation aimed at boosting affordable housing production by requiring developers to fund new affordable housing construction, donate land, or pay into a city fund.

So far, reports Roshan Abraham in Vice, every developer has chosen to pay rather than build the housing, resulting in 7,100 new units of market-rate housing. “Every single developer opted to pay a penalty and five donated property rather than build affordable housing, resulting in $16.5 million for city-subsidized housing operated by co-ops or nonprofits—what the city classifies as “social housing”—and $8 million for affordable housing with other subsidies.”

A spokesperson for Front d'action populaire en réaménagement urbain (FRAPRU), a coalition of housing and tenant advocates, said “the problem is not just the lenient design of the 2021 bylaw but the lack of funding for social housing from the Quebec and federal government,” adding that “The group does not believe developers should have had an option to pay a fee instead of producing affordable housing” and that the city’s fee is “far too low,” making it cheaper for developers to simply opt out by paying it.

This matters because Quebec’s population is growing at a rapid clip, and the housing supply isn’t keeping up. “According to a report released by Montreal’s Chamber of Commerce, the city would have to build 23,000 units of housing every year until 2041 for the housing market to level out.”