THE provincial government has unveiled a new tax credit for developers to build affordable rental units for low-income households.
The credits will be worth up to eight per cent of construction costs, to a maximum of $12,000 per living unit.
Housing and Community Development Minister Peter Bjornson said Wednesday the province needs more affordable housing and the tax credit is one incentive the government can use to get the private sector involved.
The measure was signalled in last April's budget. It had been put forward, along with dozens of other recommendations, by an advisory panel of industry and community leaders.
Bjornson would not say how many affordable units the government hoped to generate through the tax credit, but said developers have welcomed the measure.
"It has certainly generated some interest from private developers to look at developing more housing here in Manitoba," he said Wednesday, including one builder who plans "major developments" inside and outside Winnipeg. The minister refused to name the company.
The program is expected to cost the province $1.4 million in its first year and $4.4 million in total.
Qualifying projects must be new construction or building conversions from non-residential use. Building permits must have been issued no earlier than April 16 this year and units must be ready for occupancy before 2017.
Private and non-profit housing developers, including non-profit co-operatives, are eligible for the new tax credit. At least 10 per cent of the units in a qualifying building must have affordable rents, which will be set by Bjornson's department based on "localized median market rates" across the province.
Mike Moore, president of the Manitoba Home Builders Association, said he expects the program will generate interest from his members.
"I think this is a very positive step on the part of the province to put this incentive forward, and I hope that a number of people take them up on it," he said.
Apartment vacancy rates in Winnipeg have hovered around one per cent for several years. The situation has been exacerbated for low-income renters seeking affordable units.