Pitt Meadows shelves affordable housing requirement as study finds apartment projects ‘not financially viable’

Pitt Meadows is shelving the idea of requiring affordable housing units in new developments for now, after a new financial analysis concluded the city’s apartment projects are already struggling to find profits under current market conditions.

The report, presented to council on April 28, found six-storey wood-frame apartment developments in Pitt Meadows are generally not financially viable at present – even without additional affordability requirements or amenity charges factored in.

“If you start adding programs like this, that pro-forma diminishes, and we won’t get that housing,” said Mayor Nicole MacDonald.

Council received the findings as part of a broader review of the city’s amenity cost charges (ACCs) and a feasibility assessment into inclusionary zoning, a planning tool that allows municipalities to require a portion of units in new developments be secured as below-market affordable housing.

The study, prepared by consultants, analyzed six representative development sites in Pitt Meadows using developer “pro forma” financial models that weighed construction costs, financing, fees, projected revenues and expected developer returns.

The review concluded the city’s existing ACCs – which are collected from new development to help pay for recreation facilities, public art, heritage conservation and environmental conservation – are unlikely to deter ground-oriented housing projects such as duplexes, townhouses and small-scale multi-unit housing.

However, apartment projects were a different story.

Planning director Patrick Ward told council that under the current stressed market conditions, six-storey wood frame projects are generally not financially viable across much of B.C.

The city adopted its ACC bylaw in June 2024, becoming one of the first municipalities in B.C. to do so following sweeping provincial housing legislation changes.

Ward said the city considered the bylaw particularly important because new provincial as-of-right zoning rules reduced municipalities’ ability to negotiate community amenity contributions through rezonings.

“As a local government, we had lost our ability through rezoning processes to request community contributions from development,” he said. “So it was really important to get this bylaw in place.”

Current ACC rates range from $3,560 for secondary or garden suites to $8,480 for single-family homes, while apartments are charged $5,240 per unit.
Despite concerns about apartment feasibility, staff are not recommending lowering those fees.

Ward said provincial legislation requires ACC rates to generally align with anticipated population growth generated by each housing type, while the consultant’s analysis also found removing the charges entirely would still not restore apartment project viability.

The report also examined whether Pitt Meadows should introduce inclusionary zoning, which has been used in larger urban centres such as Vancouver, Burnaby and Richmond to secure below-market rental housing in new developments.

The consultant modeled scenarios where 10 percent of units in apartment developments would be rented below market rates either based on market pricing or Canada Mortgage and Housing Corporation (CMHC) averages.

In every tested scenario, the projects remained financially unworkable.

“Apartment developments are not viable in Pitt Meadows today, so no amount of inclusionary zoning would be financially feasible at this time,” the report states.

Ward said the issue is tied less to inclusionary zoning itself and more to broader economic conditions and local development constraints.

“It’s a fabulous policy tool in my opinion when it works,” he said. “Unfortunately the numbers just aren’t working here in Pitt Meadows.”

Coun. Mike Manion questioned whether there was a point in recent years when inclusionary zoning may have worked financially in the city.

Ward responded that it was difficult to pinpoint because of fluctuating factors including interest rates, construction costs, taxes and development charges.

“It could be that inclusionary zoning has never potentially been viable in the City of Pitt Meadows,” he said, pointing to the city’s floodplain conditions, underground parking challenges and airport zoning height restrictions.

The consultant’s report highlighted several barriers unique to Pitt Meadows, including its limited land base due to the Agricultural Land Reserve, high groundwater conditions, floodplain restrictions and federal airport regulations limiting building heights.

Coun. Bob Meachen said the report underscored the challenges municipalities face under broad provincial housing mandates.

He noted the last apartment building to be built in Pitt Meadows was in 2019.

“That’s seven years ago,” Meachen said. “We’re being forced into doing certain things in a certain way, when we are a very unique community.”

Mayor Nicole MacDonald echoed those concerns, saying the city needs “tailor-made solutions” rather than blanket provincial approaches.

“Inclusionary zoning may never have been a tool that could be used here,” she said, referencing long-stalled development sites in the community.

Coun. Alison Evans said the findings reinforced the balancing act municipalities face between encouraging housing construction while ensuring growth pays for infrastructure and amenities.

“Now is not the time to be increasing ACCs,” she said. “But I’m also glad that they weren’t found to be inhibitive.”

The consultant’s report noted Pitt Meadows remains a relatively small and slow-growing housing market compared to neighbouring communities, with the city lacking significant recent apartment development activity.

Still, the report described Pitt Meadows as having a “small town feel” and a “quality-of-life premium” that has helped housing values remain comparatively resilient despite the current market slowdown.