The city is getting serious about affordable housing.
For years the affordable housing reserve fund has been slowly building and very little has gone back into the community to address the high cost of housing.
But city council has elected to dust off the fund and dole out 60 per cent of the money it contains for three worthwhile projects: on Nelson Avenue; Hall Street; and Falls Street.
All told, the projects will add 129 units of affordable housing to the city’s inventory, an amount that has not been seen in many years and the city will be contributing $44,777.14 to them.
The Affordable Housing Reserve Fund will be distributed to the three applicants on a per bed basis, minus any units that are eligible for class three status from BC Assessment, with $14,776.45 allocated to the 805 Nelson Ave. project, $17,910.86 given to the development at 205 Hall Street and $12,089.83 for the development at 520 Falls Street.
The applications obviously fit the criteria pretty well, noted Coun. Rik Logtenberg.
“But the amounts seem relatively small given the size of the projects. I was just wondering about that component. Is it going to make a significant difference?
I would like to hear what that difference would be?” he asked.
Although they are really large projects, because of the increase in construction costs over the last few years, they are all facing some shortfalls, explained city senior planner Natalie Andrijancic.
“Ultimately, will it swing the needle one way or another? Maybe not. But I think they are all really great projects and something the city may want to contribute to,” she said.
The 805 Nelson Avenue project — Nelson Cares’ Lakeside Place — is a 47 unit, mixed-use building while the 520 Falls Street project — the SHARE housing initiative — is a 39 unit mixed use building. The Hall Street project is a 43 unit mixed use building as well.
The other option for the fund was to disburse 90 per cent of the fund, leaving only $7,462.87 in it.
“There has to be a certain amount left in there so only a limited amount can go out at any one time,” said Coun. Janice Morrison.
The three projects have hit the maximum allowed at the 60 per cent amount, according to the policy governing the fund.
“It’s a little bit tough to think we are going to help get a project off. We have used the money in the past to do a housing review,” said Morrison.
“The problem here isn’t the policy for affordable housing reserve fund, it’s that we don’t have a few million dollars to use (for these projects).”
The Affordable Housing Policy was updated in September of 2018, to provide direction to city council for requests for financial support from the Affordable Housing Fund. When considering the allocation of funds council had to weigh the following principles: housing need, partnerships, reducing capital costs of a project, and flexibility, as per the policy.
In addition to the guiding principles, applicants are also required to meet 11 criteria which council will use to determine if the city will provide financial support, said Andrijancic.
“There is no budget impact from the three requests, as the financial support would come out of the Affordable Housing Reserve Fund,” said Andrijancic.
She said depleting the fund — as was suggested in option A — would not leave enough money to update the Affordable Housing Strategy, which has not been updated since 2014. The cost to update the strategy has been estimated at $30,000.
“However, the province has introduced legislation to make it mandatory for local governments to conduct housing needs assessments every five years to support planning for affordability,” Andrijancic said in her report to council.
A covenant will first be registered on title stipulating that the developments apply for more class three beds than declared in their application, that the applicant repays the Affordable Housing Reserve Fund on a per bed basis.
As well, any project that does not receive final building permit inspection within the next five years must pay back the Affordable Housing Reserve Fund for the full amount.
The request for funding had been referred to the Nelson Housing committee for a recommendation and it came back that 60 per cent of the Affordable Housing Reserve Fund be allocated to the three projects.
The committee expressed concern about exhausting 90 per cent of the fund without a sustainable funding model to replenish the reserve, noted Andrijancic.