Grants, roads and 'red tape' cut part of Moncton's plan for $15 million federal housing fund

Moncton will receive more than $15 million from the federal government over three years, money the city says will lead to the construction of nearly 500 additional housing units in the city.

“Today is a fantastic day,” said Moncton Mayor Dawn Arnold after a press conference in the foyer of City Hall on Thursday morning.

The money will be used for various support programs for housing developers, to cover the costs of building new roads to develop new areas and to simplify the approval procedures for construction projects.

The funds had been expected to be released following council votes last month and Monday, but the amount was nearly $2 million more than originally stated and further details on how the funds would be used were announced.

The city applied for funding through the Housing Accelerator Fund. The $4 billion program, introduced in last year's federal budget, runs through 2026-27 and is designed to accelerate housing construction across the country.

In Moncton, the city expects that the $15.5 million it receives will lead to the construction of 490 additional housing units within three years.

Bill Budd, the city's director of planning and development, outlined details of the city's plan to reporters on Thursday. (Shane Magee/CBC)

Bill Budd, Moncton's director of planning and development, told reporters that city council will be asked in the coming weeks and months to approve several new programs to achieve that goal.

He said a grant program would provide $20,000 “per door” for up to 15 units, for a total of $300,000.

“We believe this will accelerate up to 10 high-density projects in the city centre that are currently stalled,” Budd said.

He did not name the 10 projects, but said several already had planning or city approvals and work had stalled because construction costs had risen due to interest rates and other factors.

A grant of $10,000 is available to encourage homeowners to add basement apartments or garden apartments, i.e. a second housing unit on a residential property.

The funds will also help cover the city's costs of building new roads. One area would be a road from Mountain Road near New Brunswick Community College west into an 85-acre area where Shannex is building new nursing homes, which Budd said is now “landlocked.”

Another area would be a new road from Harrisville Boulevard to a neighborhood around the École Champlain.

“We believe there are six or seven projects ready for this infrastructure, and it should get going,” Budd said.

A 15-storey building under construction in downtown Moncton last year. (Shane Fowler/CBC)

Further steps to use the funds are intended to help reduce bureaucratic red tape, as Ginette Petitpas Taylor, MP for Moncton-Riverview-Dieppe, put it.

Budd said city staff would propose ways to remove barriers to construction and simplify zoning regulations.

“We are introducing a first phase of this at Monday's council meeting to create more proprietary housing and avoid unnecessary discretionary approval processes,” Budd said.

According to a report by Statistics Canada, the Moncton region is one of the fastest growing metropolitan areas in the country.

A city growth strategy that examines where to create housing in the future predicts the city's population will grow to 116,200 by 2046, a 44 percent increase from 2021.

But these forecasts are based on older figures and do not take recent growth into account.

This growth is driving up property prices as the area's vacancy rate is low and rental costs are rising.

Arnold acknowledged that the money and new units would not be enough to meet the demand in the community.

“Oh, that's absolutely not enough, no,” she said. “But it's a really good start to get things going.”

Ginette Petitpas Taylor, MP for Moncton–Riverview–Dieppe, announced the federal funding agreement with the city on Thursday. (Shane Magee/CBC)

Budd said the city typically builds about 670 housing units annually, and with the funding, the city hopes to increase that by about 10 percent.

Last month, the Council voted on several steps requested by the federal government before the financing agreement could be concluded.

One of them was to instruct city staff to propose changes to the bylaws that would allow four-unit housing in all residential areas of the city.

If this measure is ultimately implemented, it could impact areas of the city where only one or two-unit housing is permitted.

The federal funding announcement featured the flags of Canada and Moncton, and a New Brunswick flag around the corner. The premier has proposed legislation that would block funding arrangements like the one announced Thursday. (Shane Magee/CBC)

Moncton was among 49 municipalities in the province that applied for funding from the housing accelerator, and the first agreement with New Brunswick was announced.

New Brunswick Premier Blaine Higgs suggested to Brunswick News this month that the province could introduce legislation prohibiting federal housing funds from going directly to municipalities.

When asked about these comments, the mayor of Moncton said she was excited that the prime minister was thinking about affordable housing.

“I would welcome it if he would increase the funds that the federal government has invested today,” Arnold told reporters.

Moncton expects the first federal payment, amounting to about 25 percent of the total, to arrive soon.

“We will work closely with the city to make sure they meet their goals,” Petitpas Taylor told reporters. If that's the case, more funds will be released.