3. strong start administrative agreement entente administrative concernant l’initiative bÂtir pour l’avenir |
That further to Council’s previous approval to participate in the Affordable Housing Program “Strong Start” Program, that the City Manager be delegated authority to enter into funding agreements with the Provincial government for the purposes of participating in and administering the Strong Start program.
RECOMMANDATION
DU COMITÉ
Que suite à l’approbation antérieure du Conseil de participer au
programme de logements abordables « Bâtir pour l’avenir », que le directeur
municipal soit autorisé par délégation à contracter des ententes de financement
avec le gouvernement provincial dans le but de participer au programme Bâtir
pour l’avenir et de l’administrer.
1. Deputy City Manager, Community and Protective Services report dated 23 February 2006 (ACS2006-CPS-HOU-0003).
Report to/Rapport au:
Health, Recreation and Social Services Committee
Comité de la santé, des loisirs et
des services sociaux
and Council / et au Conseil
23 February 2006 / le 23 février
2006
Submitted by/Soumis par: Steve Kanellakos, Deputy City Manager/Directeur
municipal adjoint,
Community and Protective Services/Services communautaires et de
protection
Contact
Person/Personne ressource : Russell Mawby, Director
Housing/Logement
(613) 580-2424 x44162, Russell.Mawby@ottawa.ca
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SUBJECT: |
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OBJET : |
ENTENTE
ADMINISTRATIVE CONCERNANT L'INITIATIVE BÂTIR POUR L'AVENIR |
REPORT RECOMMENDATION
That
the Health, Recreation and Social Services Committee recommend to Council that
further to Council's previous approval to participate in the Affordable Housing
Program "Strong Start" Program, that the City Manager be delegated
authority to enter into funding agreements with the Provincial government for
the purposes of participating in and administering the Strong Start program.
RECOMMANDATION DU
RAPPORT
Que le Comité de la
santé, des loisirs et des services sociaux recommande au Conseil que suite à
l’approbation antérieure du Conseil de participer au programme de logements
abordables « Bâtir pour l’avenir », que le directeur municipal soit
autorisé par délégation à contracter des ententes de financement avec le
gouvernement provincial dans le but de participer au programme Bâtir pour
l’avenir et de l’administrer.
BACKGROUND
On Wednesday, August 31, 2005 the Federal and
Provincial governments announced that $402 million would be allocated to
municipalities as a first wave of funding under the $602 million of
Canada-Ontario Affordable Housing Program (AHP). One of the affordable housing components is Rental and Supportive
Housing. This allocation replaces what
was formerly called the Community Rental Housing Program (CRHP).
The allocation for the City of Ottawa is 305 units, with 230 units
designated rental, 31 units designated for Mental Health and 44 units designated
for Victims of Domestic Violence. The
allocation represents a total financial committment of $21.35 million from the
Federal and Provincial governments.
This capital allocation was rolled out initially through a “Strong
Start" program to immediately begin capital development of 500 units
across the province. Under this
program, municipalities were required to recommend affordable housing projects
for development no later than October 31, 2005, with projects able to secure
building permits by March 31, 2006.
An Action Ottawa “Strong Start” call for proposals was issued on
September 14th and closed on October 7th.
The Selection Committee met on Friday, October 14, and the
recommendations for 3 projects for 76 units of affordable housing were approved
by Council on October 26, 2005. An
additional recommendation for a 63 unit project was approved by Council on
November 30, 2005.
In order to access the $8.3 million in Federal and Provincial
funding for the Strong Start projects, municipalities need to enter into a
Service Manager Agreement. The Province
initally communicated that the existing Service Manager Administrative
Agreement executed in March 2004 for the CRHP would be amended to accommodate
the Strong Start projects.
The Province has instead drafted a new agreement for Strong Start,
which the City of Ottawa must enter into no later than March 31, 2006 in order
to participate in the Strong Start program.
A synopsis of the agreement is attached as Document 1. As this is a successor program to the CRHP,
income limits and any program guidelines previously approved by Council will be
applied to the Strong Start Program.
Note that this agreement covers $8.3 million of the total AHP allocation of $21.35 million of Federal and Provincial funds. The remaining $13.01 million will be handled under a future agreement to be negotiated with the Province, which will be brought forward for Council approval.
CONSULTATION
The recommendation is for administrative changes to the Provincial agreement to support delivery of Council's previous direction to enter into the Strong Start program and submit four low-income housing projects to the Province for funding.
FINANCIAL IMPLICATIONS
The City funding required for the Strong Start projects was previously approved by Council. The funding allocation in this agreement will flow directly to housing providers through a Provincial Contribution Agreement. There is a modest administrative fee that will accrue to the City under this agreement to assist the City in administering the Provincial Contribution Agreements with Housing Providers.
SUPPORTING DOCUMENTATION
Document 1 – Synopsis of Funding Agreement.
DISPOSITION
Corporate Legal Services to review the agreement and
forward to the City Manager for signature.
City Manager to forward the contract to the Minister of Municipal Affairs and Housing for execution.
This is a summary of the key points of the existing agreement compared with the new Strong Start agreement. Please note that negotiations are ongoing with the Province on the Canada-Ontario Affordable Housing Program. Strong Start was an opportunity to develop units before the parameters of the new program were finalized. It was expected that Strong Start units would be administered under the Community Rental Housing Program (CRHP) framework. A new agreement for the Canada-Ontario Affordable Housing Program is expected to be forthcoming at such time when the Province and municipalities have reached agreement on key program delivery issues.
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CRHP Agreement (March 2004) |
Strong Start Agreement (Feb 2006) |
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300 units; $7.5 Million Federal Capital |
139 Units; $3.336 Million Federal Capital $5.004 Million Provincial Affordability Payment |
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$25,000/door Federal contribution $2,000/ door Provincial contribution |
$24,000/door Federal Contribution $36,000/door Provincial Affordability Payment. More capital funding is being provided, however, the Provincial portion is being provided in the form of a monthly “Affordability Payment” to pay principal and 5.5% interest for housing providers to borrow this money at market rates. |
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Requirement for matching contributions for the Federal contribution |
No requirement for matching funds. The City of Ottawa has made a commitment to achieve rents affordable to people on the Registry waiting list. For this reason the City has committed capital funds ($30,000/unit) to the program. |
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Administrative Fees paid to Service Manager 3.27% of the Federal Contribution $245,250 |
Administrative Fees paid to the Service Manager: 3.27% of the Federal Contribution $109,088 |
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Communications Protocol with CMHC and the Province and Provincial reporting requirements. |
Unchanged. |
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Twenty year term, 5 year phase out. |
Unchanged. City agreements generally have longer terms (30-50 years) |
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No dedicated units for supportive
housing. |
Commitments from Minister of Community
and Social Services or Minister of Health and Long Term Care for tenants of
supported housing. The City did not
fund any supportive or supported housing under Strong Start. There are 75 units dedicated for victims
of Domestic Violence and Mental Health in the City’s unit allocation. (Doesn’t
Apply to Strong Start) |
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Joint Security for capital contributions. |
Unchanged. |
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Imbalanced Risk sharing. It was recognized at the time that the indemnification clauses were a problem. At the time, Staff and Council accepted that the need to provide affordable housing overshadowed the difficulties the City had with the risk sharing. |
Unchanged. This is a key issue that is being addressed in current negotiations for the new program. It was clear when we went forward under Strong Start that projects would operate under the same indemnification provisions of the CRHP. |
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Rents required to be Average Market Rent or less |
Rents encouraged to be 20% below Average Market Rent or lower. |