Affordable Housing Program – Understanding the Cost of Incentives


City of Mississauga & Peel Region


Mississauga, On

NBLC Services

Market Analysis
Affordable Housing Strategies
Financial Analysis

Project Description

On February 10th 2016, City of Mississauga Council endorsed a work plan to develop an affordable housing program for the City. As part of this work plan, with Peel Region as a partner, NBLC was retained to evaluate what and how financial incentives may be required to incent the development of new affordable housing supply.    The product of NBLC’s work included:

  • The identification of financial drivers for creating new rental housing and factors affecting the preservation of existing rental stock;
  • The preparation of detailed pro formas to quantify the potential cost of financial incentives for new affordable housing and to assess sensitivity across varying levels of affordability, tenure, building types and market variables.
  • Analysis on the effectiveness of varying financial incentive tools and programming supporting the creation of affordable rental and affordable ownership housing;
  • Analysis on the opportunities, barriers and costs of creating new and upgrading existing second units and the financial implications for homeowners. This included a review of the Peel Renovates Second Units program,and the role that second units play in contributing to the continuum of affordable housing in Mississauga; and,
  • Guiding principles toward the development of a financial incentive strategy for new affordable housing, including an evaluation of the cost effectiveness of varying incentive approaches.

The study illustrated that financial incentives would be required as part of a broad and comprehensive strategy to encourage investments in new affordable housing within the City of Mississauga. However, it also identified that any financial incentive program must also recognize that each neighbourhood offers different market issues and every developer is unique.

We recommended that the City and Region consider incentive programming in a manner that recognizes the magnitude of the financial gap that currently exists between market and affordable housing, setting clear objectives for the affordable housing investment program and accommodating the unique perspectives and motivations of individual developers.  And, where financial incentives are offered, a performance-based delivery approach was suggested to target affordability as well as other design, tenure, community and economic objectives of the City and Region.

Housing Case Studies