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City, province unveil tax incentives for downtown housing development
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The first developers expected to apply for the program include Qualico, which plans to build 150 units inside seven retrofitted buildings in the East Exchange, and Taurean Global, which wants to build at least 60 units inside the former Penthouse Furniture building (pictured) on Princess Street in the West Exchange.
The city and province hope to stimulate more downtown housing with a $20 million package of tax incentives that will be doled over the next three years.
Mayor Sam Katz and Premier Greg Selinger announced a long-awaited program that will see developers of new or existing apartment buildings, condos or mixed-use buildings in downtown Winnipeg receive grants to help make the developments possible.
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Under a funding mechanism known as tax increment financing, the grants will be equal to new tax revenue stemming from increases in the assessed value of the properties in question. That way, the city and province will only be spending money they would not have received if the developments didn't take place.
The grants will have a ceiling of $40,000 per unit. They will begin to flow when the buildings are complete, not when the properties are reassessed.
Downtown development agency CentreVenture may provide some financing before construction starts, under a separate program.
At least 10 per cent of the units that will be created must be affordable, with rents pegged at about $500 per month for a one-bedroom apartment. As well, 10 per cent of the units must be accessible to people who use wheelchairs.
But those percentages apply to the entire program, not individual buildings.
The new grant program will effectively replace the city's existing multi-family and mixed-use grant program, which offered city property-tax credits. The new program will offer credits on both municipal property taxes and provincial education taxes.
Developers have been reluctant to invest in downtown because of the high cost of redevelopment and the hit they incur when properties are reassessed after the development takes place.
The first developers expected to apply for the program include Qualico, which plans to build 150 units inside seven retrofitted buildings in the East Exchange, and Taurean Global, which wants to build at least 60 units inside the former Penthouse Furniture building on Princess Street in the West Exchange.
It is not clear whether the program will be expanded if all the grants are doled out quickly. It is possible four to six buildings could eat up the entire $20 million kitty.
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Updated on Thursday, March 25, 2010 at 3:13 PM CDT: Corrects typo
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