HomeMy WebLinkAboutFIN-2025-323 - Property Tax Exemption for Affordable Housing - Union Co-Operative
Financial Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: August 11, 2025
SUBMITTED BY: Saleh Saleh, Director, Revenue Division, 519-904-6308
PREPARED BY: Saleh Saleh, Director, Revenue Division, 519-904-6308
WARD(S) INVOLVED: 1
DATE OF REPORT: July 16, 2025
REPORT NO.: FIN-2025-323
SUBJECT: Property Tax Exemption for Affordable Housing- Union Co-operative
RECOMMENDATION:
That the draft by-law attached to report FIN-2025-323 as Appendix ÐAÑ, allowing units
qualifying as a Municipal Housing Project Facility (as defined in By-law 2024-152) located
at 475-477 Lancaster Street West to participate in the Regional Municipality of WaterlooÓs
Municipal Housing Facility Property Tax Exemption program and therefore exempting
them from the CityÓs portion of the property tax levy, be approved.
REPORT HIGHLIGHTS:
The CityÓs affordable housing property tax exemption by-law number 2024-152 made
pursuant to section 110(9) of the Municipal Act, 2001 exempts Municipal Housing Project
Facilities (as defined in Region of Waterloo By-law 24-007) that are owned and operated by
non-profit and co-operative affordable housing service providers to be exempt from the
CityÓs portion of the property tax levy for a period of 20 years starting in 2025.
This report is seeking council endorsement to allow the Municipal Housing Project Facilities
(qualifying units) located at 475-477 Lancaster St. W (owned by USDC at Lancaster Inc.
and operated by Union: Sustainable Development Co-operative Inc. (ÐUnion Co-operativeÑ))
to participate in the RegionÓs property tax exemption program as it relates to exempting the
CityÓs portion of the property tax levy.
The property tax exemption outlined in this report will result in a tax shift of approximately
$30,700 in taxes which would be redistributed to other property classes
BACKGROUND:
On August 12, 2024, Council support ed the CityÓs participation in the Region Ós Municipal
Housing Facilities property tax exemption program as outlined in staff report FIN-2024-299 by
providing a property tax exemption for the City's portion of the levy to qualifying Municipal
Housing Project Facilities owned and operated by non-profit and co-operative affordable housing
service providers for a period of 20 years starting in 2025.
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Council also expressed support for the inclusion of those qualifying Municipal Housing Project
Facilities located at 475-477 Lancaster Street West in this program.
The corporate structure and operations at 475-477 Lancaster Street West are unique, and while
the Municipal Housing Project Facility at this property meets the intent of City of Kitchener By-
law 2024-152, there is a technical need to create a site-specific by-law pursuant to section 110(9)
of the Municipal Act to permit its participation in the program.
The purpose of this report is to approve a by-law exempting the Municipal Housing Project
Facility located at 475-477 Lancaster Street West from CityÓs portion of the property taxes.
REPORT:
Previously, Council approved the CityÓs participation in the RegionÓs property tax exemption
program by providing a property tax exemption for the CityÓs portion of the levy for Municipal
Housing Project Facilities owned and operated by non-profit and cooperative housing services
providers for a period of 20 years starting in 2025. This allows the City to provide property tax
relief to non-profit and co-operatives who own and operate qualifying affordable housing units.
USDC at Lancaster Inc. is listed as the registered owner of the property located at 475-477
Lancaster St W. This property has 58 rental units of which 60% are at the affordable housing
rent threshold and meet the definition of a Municipal Housing Project Facility as defined in
Regional Municipality of Waterloo By-law 24-007. All voting shares of USDC at Lancaster Inc.
are owned by Union Cooperative.
The CityÓs Municipal Housing Facility Property Tax Exemption By-law 2024-152 permits
Municipal Housing Project Facilities (qualifying rental units) owned and operated by non-profit
housing co-operatives incorporated under the Co-operative Corporations Act to participate in the
RegionÓs program, exempting the CityÓs portion of the property tax levy for the qualifying units.
The unique ownership structure of Union Cooperative and USDC at Lancaster Inc., requires an
additional by-law to be enacted to enable its participation in the program.
Staff are recommending approval of the attached by-law in Appendix ÐAÑ to allow the Municipal
Housing Project Facility located at 475-477 Lancaster Street West to participate in the RegionÓs
Municipal Housing Facility property tax exemption program as it relates to exempting the CityÓs
portion of the property tax levy.
STRATEGIC PLAN ALIGNMENT:
This report supports Building a Connected City Together: Focuses on neighbourhoods;
housing and ensuring secure, affordable homes; getting around easily, sustainably and
safely to the places and spaces that matter.
FINANCIAL IMPLICATIONS:
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Implementing a property tax exemption for Municipal Housing Project Facilities will have no
impact to the CityÓs tax base revenues. However, th e recommended tax exemption will result in
a shift of tax burden on other taxed property classes such as residential, muti-residential,
commercial for example.
In 2025, the CityÓs portion of property taxes for 475Î 477 Lancaster St W amounted to
$51,168.35. If a tax exemption is applied to the affordable housing portion of this property,
approximately $30,700 in taxes would be redistributed to other property classes.
COMMUNITY ENGAGEMENT:
INFORM Î This report has been posted to the CityÓs website with the agenda in advance of the
council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
Municipal Act, 2001
Assessment Act
DSD-2023-160 Enabling Missing Middle and Affordable Housing
FIN-2024-299 Property Tax Exemption for Affordable Housing
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
ATTACHMENTS:
Attachment A Î Draft By-law
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APPENDIX ÐAÑ TO FIN-2024-299
BY-LAW OF THE
CORPORATION OF THE CITY OF KITCHENER
BY-LAW NO. 2025-XXX
(Being a by-law to provide a property tax exemption for certain qualifying Municipal
Housing Project Facilities located at 475-477 Lancaster Street West pursuant to section
110(9) of the Municipal Act, 2001)
WHEREAS section 110 of the Municipal Act, 2001, S.O. 2001, c.25, as amended
(the ÐActÑ), allows municipalities to enter into agreements for the provision of municipal
capital facilities;
AND WHEREAS Ontario Regulation 603/06 (the ÐRegulationÑ) sets out the classes
of municipal capital facilities for which a municipality may enter into such agreements,
one of which is municipal housing project facilities;
AND WHEREAS The Regional Municipality of Waterloo enacted By-law 24-007,
being a by-law to provide for municipal housing project facilities (the ÐMunicipal Housing
Facilities By-lawÑ);
AND WHEREAS the Municipal Housing Facilities By-law contains the elements of
a municipal housing facility by-law required by the Regulation;
AND WHEREAS the City wishes to provide financial or other assistance as
prescribed by the Act and the Regulation;
AND WHEREAS subsection 110(9) of the Act allows another municipality that has
not entered into an agreement to provide a tax exemption provided that an agreement
has been entered into with the service manager under the Housing Services Act; 2011,
S.O. 2011, c.6, Sched. 1 (the ÐHousing Services ActÑ).
AND WHEREAS The Regional Municipality of Waterloo is a Consolidated
Municipal Service Manager and is authorized to operate and manage housing as well as
establish, fund and administer programs for the provision of residential accommodation
in its service area under the Housing Services Act;
NOW THEREFORE, the Council of The Corporation of the City of Kitchener enacts as
follows:
1. Subject to the following, the City of Kitchener shall approve exemption from
taxation in relation to the portion of municipal property taxes levied by the City of
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Kitchener, for an approved Municipal Housing Project Facility located at 475-477
Lancaster Street West, Kitchener:
a. The Municipal Housing Project Facility must meet the definition of a
Municipal Housing Project Facility as set out in Municipal Housing Facilities
By-law;
b. The exemption shall be limited to the lands, or portion thereof, containing
the Municipal Housing Project Facility;
c. The Municipal Housing Project Facility must be owned by USDC at
Lancaster Inc. and USDC at Lancaster Inc. must be controlled by Union:
Sustainable Development Co-operative Inc.;
d. The owner of the Municipal Housing Project Facility must have entered into
a municipal capital facilities agreement with the Regional Municipality of
Waterloo as a service manager under the Housing Services Act, in
accordance with the provisions of the Municipal Housing Facilities By-law
and section 110 of the Municipal Act to the satisfaction of the Regional
Municipality of Waterloo.
2. Any exemptions provided pursuant to this by-law shall be limited to a period of
twenty (20) years commencing on the effective date of the any agreement to which
said exemption relates, as set out in section 1(c) above.
3. This by-law shall come into force and effect on the date of its final passing.
PASSED at the Council Chambers of the City of Kitchener this ____ day of August,
2025.
_____________________________________
Mayor
_____________________________________
Clerk
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