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Councilors question Nelson Commons plan for affordable housing contribution

Colin Payne
By Colin Payne
April 15th, 2015

Local developers of the Nelson Commons project and at least some Nelson city councilors aren’t seeing eye-to-eye on what constitutes affordable housing in the city.

At last week’s meeting, council declined to issue variance permits that would have waived the development’s previously approved $54,000 contribution to the city’s Affordable Housing Fund – in lieu of a 25 per cent reduction in the cost of three units in the development that would be designated as “restricted resale” affordable housing.

Instead, they sent the matter to the Nelson Housing Committee for review before making a decision.

The total dollar value of the 25 per cent price reductions would be $225,000, which would come from dropping the market value price of two one bedroom units from about $270,000 down to about $200,000 and another two-bedroom unit from $369,000 down to $276,000.

The properties would retain that reduced sale price going forward, and the City of Nelson would take on the responsibility of managing the units.

But whether or not they’re actually affordable was the major question that came up for debate at council.

In order to afford one of the units, the purchaser would have to make between $55,000 and $65,000 per year – a figure which councilors Morrison and Dailly questioned in terms of affordability.

Councilor Dailly, who is also chair of the Nelson Housing Committee, says those numbers don’t address the people in most dire need of affordable housing in the city.

“There’s a very low level of need at the end where we’re talking about a home at $200,000 and someone needing to make $55,000,” Dailly told the Nelson Daily, noting that the city has identified those in most need of affordable housing as youth, single parents, seniors, people with mental illnesses, and people who are homeless or at risk of being homeless.

“It just didn’t meet any of that criteria, so I thought it was important that since we have a housing committee it was best to get a recommendation from them for council so they can make an informed decision.”

Councilor Morrison was quite vocally opposed to the variances at the meeting, both because of her questions around the affordability of the units, as well as what she sees as unnecessary costs to the city and questions as to whether the city would be effectively getting involved in the development by issuing the permits.

Morrison noted that waiving the $54,000 contribution to the Affordable Housing Fund means letting go enough money to account for nearly a 1 per cent tax increase for Nelson residents, and that doesn’t sit well with her.

“I believe that fund could benefit from that $54,000 and they also want a waiver for almost $10,000 in connection charges,” she told the Nelson Daily. “That’s real money… What does that mean to citizens of Nelson? Really, it’s close to a 1 per cent tax increase.”

She adds that the $225,000 that would be realized toward affordable housing from the sales of the units isn’t actual money toward affordable housing in the city.

“The $225,000 that is then claimed to be saved or given is nothing,” Morrison says. “It’s not real money. They’re selling it at a lesser amount. It’s a number on a piece of paper. Nobody is benefitting from that.”

Morrison adds that the city would have to take on the cost and responsibility of managing the reduced resale homes, which is something that could represent an additional cost to taxpayers and she feels should be managed by the owner.

“This is a private development, and I don’t see that as a role for the city,” she says.

Trying to raise the bar, developer says

Russell Precious, project manager for Nelson Commons, says their goal in changing up the project’s affordable housing contribution was to give more back to the community and raise the standard for future contributions – and council’s reaction to the proposed variances.

“It surprised us because initially we offered $54,000, which is the equivalent of $1,000 per door (unit) toward the Affordable Housing Fund,” Precious notes. “Previously, Amber Bay and Silver Bay (developments) offered $200 per door. We were trying to raise the bar and set a new level (for contributions).”

“But our Vancity (Credit Union) colleagues, who are our primary financial backers, said rather than give $54,000 that would get frittered away, let’s get some people housed. They offered $120,000 if we would match it, so that’s $240,000 to reduce the cost of housing… It seemed like a very generous offer, for ourselves it went from $54,000 to $120,000 with Vancity.”

Precious adds that while he recognizes the pricing doesn’t address the need for those who are most in need of housing, he adds that it does meet a need by some people who are just shy of a position in which they could own their own home.

“It’s a gap we feel is appropriate and something we could offer in the Nelson Commons project,” he says.

What’s more, Precious added that the Nelson Housing Committee already signed off on the variances.

But Dailly notes the committee agreed to the variances last year, before the new council was elected – and he wants to see it past the current housing committee before proceeding any further.

“I’m getting what I want in that it’s going through the process in that it’s going through this year’s committee,” he said. “Russell will come and make a presentation and get a fair hearing of what he has in mind.”

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