“Affordable Housing” is an exercise in irony (Irony , feigned ignorance), in its broadest sense, is the juxtaposition of what on the surface appears to be the case and what is actually the case or to be expected). The reason we say this is because when most people hear the term ‘affordable housing’ they think of ‘rent for reasonable cost’ which in the case of Government definitions is definitely not the case. Irony is the best figure of speech to describe an item that is coming before Council in its next meeting.
The Town held hearings about the CIP a few years back; a process wherein the Town devoted funds that they thought would fund measures that would increase the supply of housing. The main approach was to allow residents to apply for a grant that would enable them to build extra housing units in their houses. There were other funds and tax relief for commercial applications. At the time of the hearings a couple of delegations spoke about the how private enterprise and developers had failed to build ‘affordable housing’ despite the mandate in the Official Plan that developers had to build a percentage of ‘affordable’ units in each development. Their argument was simple – “developers had failed to build in the past so why give them money now?”
Rewind to five years ago Balder Corporation came to Town, bought the disused Caine Lumber site and decided to build an apartment block. In 2019 Balder applied for grant money and relief from development charges because they promised to build 15 ‘affordable units’
Quoting Cobourg News: The total to be approved is $147,914 in grants and $100,000 in loans. Add the previously approved deferral of $548k (effectively a loan) and waiving of interest of $111k (effectively a grant) and the total subsidies by the Town are:
Grants: $148K + $111K = $259K; Loans: $100K + $547K = $647k.
The whole thing is a little confusing but the key point is that only 4 of the 71 units will meet the Town’s definition of affordable. Compare this to the original promise of 15. The good news is that the stock of rental units has been increased. I guess John D wrote that last sentence with tongue in cheek.
BUT now the Balder Corporation now is telling Council that because of ‘market conditions’ they can only build 4 ‘affordable’ units. Council is being asked by Staff to prepare the bylaw that will give Balder $647K even though the number of ‘affordable’ units is only going to be 4 instead of 15.
Not only does this situation put Council on the spot but also displays the developer in a bad light and proves once again, to us at the BurdReport that the Private Sector has failed in its efforts to provide ‘affordable’ housing. So what should Council do, the builder cannot claim poverty – people have already rented units and most are ready to move in. For the builder to claim ‘financial hardship’ would be ridiculous in the fact that the loss of $647K is not going to drive the project into bankruptcy. The worst case scenario would be for the builder to refinance and sell the units as ‘condos’. An average unit price of $500K per unit would realise $37 million, a sum far in excess of building costs.
The point here is the Council should impose fiscal responsibility and either hold Balder to the promise of 15 ‘affordable’ units or only approve $172K (4\15) or back out of the deal as a demonstration of ‘discipline’.