Accelerating the Construction of More Rental Housing
Kingston is facing a critical need for more rental housing. Right now, the City’s rental vacancy rate is just 0.8 per cent, well below the three per cent threshold that reflects a healthy rental market. That means that for every 1000 rental units in the city, only eight are available right now. This pressure leads to higher rents and makes housing even less affordable.
The solution to this problem is to have more rental housing built as quickly as possible, which is why this spring we will be looking at an innovative way to provide incentives for more housing to be built faster. Here’s how it works. Using a municipal tool known as a Community Improvement Plan (CIP), the City will reduce future property taxes for any new rental housing constructed in the next three years. Property taxes are only levied once housing is fully constructed, so for rental housing built by the end of 2026, property taxes will be reduced by 50 per cent for the first two years after construction. This provides an incentive to build new rental housing faster, and it gives the City more property tax revenue sooner, which helps to offset the reduced revenue during the tax reduction period.
Overall, this new program will help accelerate rental housing construction with minimal impact on the City’s annual budget. Recognizing the pressing need for subsidized rental housing for individuals and families who can’t afford market rent, this new program will also provide even greater property tax reductions for the construction of any rental housing units set at below market rent.
My hope is this will encourage more affordable housing, and that overall, we can see this added supply stabilizes the City’s rental housing market. This initiative not only addresses the urgent demand for more rental housing, but also addresses affordability concerns head on – paving the way for a more accessible and balanced housing market in our city.