Markham is offering developers another financial incentive to build long-term rental housing, but even as council approved the measure, developers argued it won’t go far enough to get more projects built while one councillor warned the city is “bailing out the development industry.”
Council approved a new framework allowing qualifying long-term rental developments to defer up to 50 per cent of their city-wide soft development charges during the most recent council meeting. The policy also extends the deadline for eligible projects to obtain building permits by one year, from Dec. 31, 2026, to Dec. 31, 2027.
What financial assistance is the city providing to developers?
The framework replaces the city’s previous project-by-project approval process with a standardized scoring system. Rental developments are evaluated based on factors including the percentage of affordable rental units, the length and depth of affordability commitments, accessibility, sustainability and other community benefits. Projects meeting the criteria can qualify for up to a 50 per cent city-wide soft development charge deferral.
According to the report, the changes are intended to encourage more purpose-built rental housing during challenging market conditions. Staff said developers have identified current economic conditions, financing costs and market challenges as barriers to new rental construction and requested additional development charge relief.
Staff estimate two rental developments currently in the city’s pipeline, representing nearly 1,000 purpose-built rental units, including about 270 affordable units, could qualify for the maximum deferral under the new framework. Three additional projects currently fall short of the proposed threshold.
Developers, however, told council the incentive may not be enough.
What concerns do developers have about the incentive’s effectiveness?
Speaking on behalf of Box Grove Hill Development Inc., planning consultant Rohan Sovig said his client supports the city’s goal of encouraging long-term rental housing, including affordable housing and accessibility, but questioned whether the incentive is large enough to influence development decisions.
“Our concern is that the cost of reaching that 70 points or 81 points will exceed the value of the actual deferral,” Sovig said.
He argued developments that meet the city’s scoring threshold should receive a 100 per cent soft development charge deferral, rather than the proposed 30 or 50 per cent deferral.
Randy Pettigrew, speaking on behalf of Remington Group, said the company’s rental project is close to obtaining building permits, but significant declines in market rents have made it increasingly difficult to make the project financially sustainable.
“The soft DC deferral, 50 per cent of it, is certainly a help,” Pettigrew said. “It doesn’t necessarily move the needle tremendously, but it is a help.”
He said the incentive would allow developers to maintain amenities and project quality instead of cutting features to reduce costs.
“This DC deferral helps us not to cut corners,” he said.
While Pettigrew said he would like to see a 100 per cent deferral, he described the approved framework as “a good start.”
What did councillors have to say about the framework?
Regional Coun. Joe Li said many developers are struggling under current economic conditions and suggested Markham consider a 100 per cent development charge deferral, similar to the federal government’s approach.
“I think 50 per cent deferral probably is not attractive enough to motivate them to take on the challenge to build that necessary rental housing,” he said.
Ward 3 Coun. Reid McAlpine also supported the motion, but said he did so “very reluctantly.”
“There are social benefits here,” McAlpine said. “But in the process, we are bailing out the development industry.”
McAlpine said he believes the broader issue lies in land values that have yet to adjust to current market conditions.
“Unless they start writing down the value of their landholdings — which means some of them, probably more of them, need to go bankrupt in order to do that — we haven’t really solved the problem,” he said.
According to the report, the new policy could defer approximately $8 million in city-wide soft development charges if the two currently eligible projects proceed. If three additional projects later qualify, the amount deferred could increase to about $13 million.
By Scarlett Liu, Local Journalism Initiative Reporter
Original Published on Aug 11, 2026 at 14:58
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