|
3 ESTABLISHMENT OF A PRE-DEVELOPMENT LOAN FUND –
FUNDED FROM THE PROVINCIAL MUNCIPAL HOUSING COOPERATION TRUST FUND MISE EN PLACE D’UN FONDS POUR LES PRÊTS LIÉS À LA
PHASE PRÉCÉDANT LES TRAVAUX D’AMÉNAGEMENT – SUBVENTIONNÉ PAR LE FONDS DE
FIDUCIE PROVINCIAL-MUNICIPAL POUR LA COLLABORATION EN MATIÈRE DE LOGEMENT |
Committee RecommendationS
That
Council:
1. Approve
the reallocation of the funding streams within the Provincial/Municipal Housing
Cooperation Trust Fund as follows:
a.
Assign a
total of $370,000 to the establishment of a Pre-Development Loan Fund; and
b.
Assign a total of
$197,000 to support servicing of major residential development and
redevelopment projects.
2.
Approve
that the Director of Housing obtain the consent of the Ministry of
Municipal Affairs and Housing to reallocate the funding within the
Provincial/Municipal Housing Cooperation Trust Fund to support the identified
projects according to the terms, objectives and parameters described in this
report.
3. Subject
to consent by the Minister, approve the establishment of a Pre-Development Loan
Fund to be funded with up to $370,000 from the Provincial/Municipal Housing
Cooperation Trust Fund in order to provide no-interest forgivable loans of
up to $50,000 to community non-profit organizations for the purpose of
purchasing technical and professional expertise that is required to move a
low-income affordable housing project proposal from conceptual design to a more
developed and costed design proposal that is sufficient for evaluation for funding
purposes.
RecommandationS du Comité
Que le Conseil :
1. approuve
la redistribution du financement dans le fonds de fiducie provincial‑municipal
pour la collaboration en matière de logement de la façon suivante :
a.
Affectation de
370 000 $ pour l’établissement d’un fonds pour les prêts liés à la
phase précédant les travaux d’aménagement;
b.
Affectation de
197 000 $ pour la viabilisation de grands projets d’aménagement ou de
réaménagement d’ensembles résidentiels.
2. approuve
l’obtention, par le directeur de la Direction du logement, de l’approbation du
ministère des Affaires municipales et du Logement pour redistribuer le
financement dans le fonds de fiducie provincial-municipal pour la collaboration
en matière de logement afin de financer les projets retenus à la lumière des
modalités, des objectifs et des paramètres décrits dans le présent rapport;
3. approuve
sous réserve du consentement du ministre, la création d’un fonds pour les prêts
liés à la phase précédant les travaux d’aménagement qui sera financé au moyen
d’une somme pouvant atteindre 370 000 $ provenant du fonds de fiducie
provincial-municipal pour la collaboration en matière de logement. Cette façon
de procéder visera à mettre à la disposition d’organismes sans but lucratif de
la collectivité des subventions remboursables sur conditions et auxquelles ne
sera rattaché aucun intérêt. Ces subventions, qui totaliseront un maximum de
50 000 $, permettront aux organismes de bénéficier de l’expertise
technique et professionnelle dont ils ont besoin pour faire passer l’étude de
définition d’une proposition de projet de construction de logements abordables
à un avant-projet de conception plus étoffé et dont on a évalué les coûts, qui
contiendrait suffisamment de renseignements pour réaliser une évaluation du
financement.
Documentation
1. Deputy
City Manager's report, City Operations, dated 17 October 2008
(ACS2008-COS-HOU-0015).
Community
and Protective Services Committee
Comité des services communautaires et de protection
and Council/et au Conseil
17 October 2008/ le 17 octobre 2008
Submitted by/Soumis par:
Steve Kanellakos, Deputy
City Manager / Directeur municipal adjoint
City Operations / Opérations municipales
Contact Person/Personne ressource: Russell Mawby, Director/
Housing/Logement
(613)
580-2424 x, 44162, Russell.Mawby@ottawa.ca
SUBJECT: |
ESTABLISHMENT
OF A PRE-DEVELOPMENT LOAN FUND – FUNDED FROM THE PROVINCIAL MUNCIPAL HOUSING
COOPERATION TRUST FUND |
OBJET :
|
Mise en place d’un fonds pour les prêts liés à la
phase précédant les travaux d’aménagement – subventionné par le FONDS DE FIDUCIE PROVINCIAL-MUNICIPAL POUR LA COLLABORATION EN
MATIÈRE DE LOGEMENT |
REPORT RECOMMENDATIONS
That the Community and Protective Services Committee
recommend that Council:
1. Approve
the reallocation of the funding streams within the Provincial/Municipal Housing
Cooperation Trust Fund as follows:
c.
Assign a
total of $370,000 to the establishment of a Pre-Development Loan Fund; and
d.
Assign a total of
$197,000 to support servicing of major residential development and
redevelopment projects.
2. Approve
that the Director of Housing obtain the consent of the Ministry of Municipal
Affairs and Housing to reallocate the funding within the
Provincial/Municipal Housing Cooperation Trust Fund to support the identified
projects according to the terms, objectives and parameters described in this
report.
3. Subject
to consent by the Minister, approve the establishment of a Pre-Development Loan
Fund to be funded with up to $370,000 from the Provincial/Municipal Housing
Cooperation Trust Fund in order to provide no-interest forgivable loans of
up to $50,000 to community non-profit organizations for the purpose of
purchasing technical and professional expertise that is required to move a
low-income affordable housing project proposal from conceptual design to a more
developed and costed design proposal that is sufficient for evaluation for
funding purposes.
RECOMMANDATIONS
DU RAPPORT
Que le Comité des services
communautaires et de protection recommande au Conseil:
1. d’approuver
la redistribution du financement dans le fonds de fiducie provincial‑municipal
pour la collaboration en matière de logement de la façon suivante :
e.
Affectation de
370 000 $ pour l’établissement d’un fonds pour les prêts liés à la
phase précédant les travaux d’aménagement;
f.
Affectation de
197 000 $ pour la viabilisation de grands projets d’aménagement ou de
réaménagement d’ensembles résidentiels.
2. d’approuver
l’obtention, par le directeur de la Direction du logement, de l’approbation du
ministère des Affaires municipales et du Logement pour redistribuer le
financement dans le fonds de fiducie provincial-municipal pour la collaboration
en matière de logement afin de financer les projets retenus à la lumière des
modalités, des objectifs et des paramètres décrits dans le présent rapport;
3. d’approuver,
sous réserve du consentement du ministre, la création d’un fonds pour les prêts
liés à la phase précédant les travaux d’aménagement qui sera financé au moyen
d’une somme pouvant atteindre 370 000 $ provenant du fonds de fiducie
provincial-municipal pour la collaboration en matière de logement. Cette façon
de procéder visera à mettre à la disposition d’organismes sans but lucratif de
la collectivité des subventions remboursables sur conditions et auxquelles ne
sera rattaché aucun intérêt. Ces subventions, qui totaliseront un maximum de
50 000 $, permettront aux organismes de bénéficier de l’expertise
technique et professionnelle dont ils ont besoin pour faire passer l’étude de
définition d’une proposition de projet de construction de logements abordables
à un avant-projet de conception plus étoffé et dont on a évalué les coûts, qui
contiendrait suffisamment de renseignements pour réaliser une évaluation du
financement.
The Provincial Municipal Housing Cooperation Trust Fund was established in 1988 to support local initiatives to expand the availability of social housing.
In 2003, Council approved an approach to utilizing the roughly $700,000 remaining in the Trust at the time, including establishing a Pre-Development Loan Fund to assist non-profit agencies in developing detailed proposals for affordable housing projects. The Canada/Ontario Affordable Housing Program began in 2004, which provided access to pre-development funding to take proposals to development, and Canada Mortgage and Housing Corporation developed a Seed Funding program to help groups undertake initial proposal conceptual designs. Requests have started to come in to the Housing Branch from community agencies seeking assistance in developing project concepts to a higher level of detail and design in anticipation of applying for funding or financing.
Staff are
therefore recommending that the Pre-Development Loan Fund concept be
established, and that up to $370,000 from the Trust fund be used to fund up to
$50,000 in forgivable no-interest loans to qualifying agencies to undertake pre-development or
pre-acquisition work on feasibility, assessments and related studies and plans
for projects intended to increase the supply of low-income affordable housing
in Ottawa. The funds will be provided as
a forgivable loan, repayable or otherwise recovered from any public funding
provided to the project. If the project
does not proceed, the loan will be forgiven.
Staff will monitor the success of this program and report back to
Council after two years with recommendations on continuance.
Further, staff are recommending that the
remaining uncommitted funding in the Trust Fund be realigned to continue to
support the work required to prepare City-owned lands for development for
affordable housing, including site servicing studies, environmental assessments,
traffic studies and other planning and development studies.
Provincial approval is required to expend
from the Trust, and with Council’s direction, staff will seek that approval,
and upon receiving it, proceed to implement the programs according to the terms
and conditions identified in this report.
Le fonds de fiducie provincial-municipal pour la collaboration en matière
de logement a été créé en 1988 dans le but d’appuyer les initiatives locales
visant à améliorer l’accessibilité aux logements sociaux.
En 2003, les membres du Conseil ont approuvé une démarche qui consistait à
utiliser le reliquat d’environ 700 000 $ du fonds de fiducie,
notamment pour créer un fonds pour les prêts liés à la phase précédant les
travaux d’aménagement visant à aider les organismes sans but lucratif à
élaborer des propositions détaillées de projets de construction de logements
sociaux. Le Programme Canada-Ontario de logement abordable, qui a été mis sur
pied en 2004, donne l’accès à du financement de préaménagement dans le but
d’aider les organismes à passer de l’étape de la proposition de projet à
l’étape de l’aménagement. La Société canadienne d’hypothèques et de logement a
mis sur pied un programme de fonds de démarrage afin de venir en aide aux groupes
qui entament la réalisation d’une proposition initiale d’étude de définition.
La Direction du logement a commencé à recevoir des demandes de la part
d’organismes communautaires qui souhaitent obtenir de l’aide pour présenter de
façon détaillée leur projet et pour en améliorer la conception en prévision de
la présentation d’une demande de financement.
Nos collaborateurs recommandent donc qu’un fonds pour les prêts liés à la
phase précédant les travaux d’aménagement soit créé et qu’une somme maximale de
370 000 $ du fonds de fiducie soit utilisée pour offrir aux
organismes admissibles du financement sous la forme d’une subvention d’un
maximum de 50 000 $, remboursable sur conditions, et à laquelle ne
serait rattaché aucun intérêt. Cette subvention sera utilisée par ces
organismes pour entreprendre des travaux relatifs au pré-aménagement et à la
pré-acquisition et pour réaliser des études sur la faisabilité, des évaluations
et d’autres études et planifications connexes ayant trait à des projets visant à
augmenter le nombre d’habitations à loyer modique à Ottawa. Le financement sera
accordé sous forme d’une subvention remboursable sur conditions ou recouvrée au
moyen d’autre financement public accordé pour la réalisation du projet. Si la
réalisation du projet n’a pas lieu, on ne demandera pas à l’organisme de
rembourser la subvention reçue. Des collaborateurs évalueront le succès du
programme et, dans le cadre d’un rapport, en recommanderont la poursuite ou
l’arrêt au Conseil
Nos collaborateurs recommandent que les fonds non
engagés provenant du fonds de fiducie soient redistribués en vue de continuer à
appuyer les travaux de préparation des terrains de la Ville pour la
construction de logements abordables. Ces travaux comprennent notamment des
études de viabilisation, des évaluations environnementales, des études de la
circulation de même que d’autres études de planification et d’études relatives
à l’aménagement.
Il est nécessaire d’obtenir l’approbation de la
province pour utiliser le fonds de fiducie. À la lumière des directives du
Conseil, nos collaborateurs tenteront d’obtenir cette approbation, et une fois
qu’ils l’auront obtenue, ils entreprendront la mise en œuvre des programmes
conformément aux modalités décrites dans le présent rapport.
On September 2, 2003, Council approved a draft plan for the use of the funds remaining in the “Provincial/Municipal Housing Cooperation Trust Fund” (ACS2003-PEO-HOU-0005), also known as the Provincial Housing Trust.
These funds were left over from a program put in place in 1988 to develop policies and strategies aimed at encouraging the more efficient and effective use of existing housing stock, and vacant and underutilized land or buildings with the overall aim of increasing the supply of affordable housing.
Some of the initiatives funded under
the original agreement, include:
-
the Strathcona Heights redevelopment
(servicing, social housing funding, rehabilitation pilot funds, Lees Avenue
realignment);
-
joint venture initiatives (e.g.
redevelopment of Clarence St fire station site);
-
Thorncliffe Village (external
servicing and unit allocations);
-
review of residential zoning.
Following municipal amalgamation, a review by Finance identified that there is approximately $700,000 remaining in the Trust Fund, generated from funds that were returned to the City on projects that came in under budget.
The 2003 report identified strategies for the use of the remaining funds, as follows:
-
Servicing of major residential
development and redevelopment projects ($100,000);
-
Pre-development loan fund for
non-profit housing providers ($250,000);
-
Retention strategies for affordable
housing stock ($100,000);
-
Property development policies and
strategies ($20,000);
-
Planning process, policies and studies
($170,000); and
-
Housing information and research
($50,000).
To date, $198,250 has been drawn from the Trust Fund to support the development of the City Housing Strategy, and various development studies for a number of city-owned sites put forward under the Action Ottawa program, including 424 Metcalfe St., 260 Tompkins Ave., 324 - 328 Tulip Crescent. The balance remaining as of October 15, 2008 is $534,163.
Staff are recommending that the uncommitted funds remaining in the Trust be reallocated to support two core projects:
-
Servicing of major residential
development and redevelopment projects ($197,000);
-
Pre-development loan fund for
non-profit housing providers ($370,000);
And
that the remaining projects be completed and/or closed, as appropriate:
-
Retention strategies for affordable
housing stock ($0);
-
Property development policies and
strategies ($0);
-
Planning process, policies and studies
($197,000) (committed); and
-
Housing information and research ($0).
Servicing of major residential development and redevelopment projects targets the work required to prepare City-owned lands for development for affordable housing, including site servicing studies, environmental assessments, traffic studies and other planning and development studies. To date, $100,000 has been spent on this work for a number of city-owned sites put forward under the Action Ottawa program, including 424 Metcalfe St., 260 Tompkins Ave., 324 - 328 Tulip Crescent. Allocating additional funds from other Trust fund projects would allow this important work to continue as City-owned sites become available.
The more significant project being recommended is to establish the proposed Pre-Development Loan Fund originally proposed in 2003. Since the above report was tabled, the Canada/Ontario Affordable Housing Program (AHP) was implemented. The AHP provides up to $70,000 per unit in Federal and Provincial funding to develop housing that is affordable to lower-income households.
The City of Ottawa has also contributed land, capital and development incentives (waived development charges and permit fees) to ensure that AHP projects reached as low an income level as possible. 772 units have been funded in Ottawa under this program since 2004, for a total project value of about $114 million.
Approved projects were able to access up to
$150,000 each in pre-development funding from the AHP. Pre-development funding is generally
provided as an advance on construction funding draws, and thus are part of the
total capital contribution to a given project.
In the case of the AHP, pre-development funding is used to advance a
selected project proposal to development, and typically covers costs associated
with preparation of construction drawings and the planning approvals process.
The Canada Mortgage and Housing Corporation
(CMHC) has a Seed Funding program that provides up to $10,000 grants and
$10,000 in forgivable loans to proponents interested in developing affordable
housing. Seed
Funding may be used to pay for housing market studies to evaluate need and demand,
development of a business plan, exploration of funding sources or options,
preliminary financial viability analysis, environmental site assessment,
preliminary design of the housing project, and incorporation of a
not-for-profit organization. Because these programs were
available, pre-development funding from the Provincial Housing Trust has not
been accessed.
The current AHP is winding down, and all
available funds have been allocated, but the need for more affordable housing
continues to grow. CMHC’s Seed Funding
program is expected to continue, but there is often a gap between the
activities that program supports and the activities often required to fully
develop a proposal for funding or financing.
For example, to move a project from conceptual design to a more
developed and costed design proposal, sufficient for evaluation for funding
purposes, requires technical and professional expertise. In the past, proponents to the AHP in Ottawa
have relied on pro bono support from
architects, development consultants and others in hopes that projects will be
selected and funded, and thus that those costs can be covered. Cost range from $30,000 to $75,000, and are
not recovered if projects are not selected.
Given that many proponents for low-income affordable
and supportive housing are non-profit service agencies, these costs are
significant, and present a barrier to moving forward with ideas for adding to
the stock of affordable housing in Ottawa.
Staff are therefore recommending that the
previously identified concept establishing a pre-development loan fund from the
Provincial Housing Trust be developed and put in place to support project
planning activities and help project ideas become more solid so that they are
ready if and when new funding opportunities are available.
The funds will be provided as a forgivable
loan on the premise that the loan amount would be recovered if a project
proceeds. This enables a relatively
small amount of funding to be used repeatedly to support project development. If
a project does not proceed, the loan would be forgiven, which means that
eventually the fund would be exhausted.
Loans would be provided at no interest to the borrower.
The original proposal submitted by staff in
2003 was for $250,000 for this purpose.
Staff are recommending that $370,000 remaining in the Trust fund be
allocated for this purpose. A maximum
of $50,000 per project would be provided.
Funds would be allocated on a first come, first served basis.
Proponents would need to submit a request in
writing, including a detailed conceptual outline of their proposed
project. It is expected that funds
would be used to retain professional consulting services to develop detailed
designs, development pro-forma, site or building evaluations and related
tasks. Funds will not be provided to
projects to undertake basic conceptual development of project ideas or to
achieve the basic requirements for accessing these funds, as described below. In other words, these funds will be directed
to proponents that have already done the basic work to develop a project
concept, but who need assistance to turn that concept into a reasonable project
proposal.
The submission would need to provide the
following information:
-
How
the requested funds would be used, and what timeframe the pre-development work
is expected to be completed
-
How
the proposed project meets the City’s policy objectives of improving the
availability of low-income affordable housing, supportive housing, or housing
targeted to specific groups, and why those groups need special purpose housing
-
What
experience the group has in developing, owning and operating housing that meets
the proposed objectives, or if the group has explored partnerships to provide
that experience, including letters of support documenting those partners intent
to work with the proponent towards a project
-
Identification
of expected sources of funding and financing, including land, grants, operating
funding, fundraising and loans. Where
possible, letters confirming the intent in principle to secure those resources
will be provided
-
Confirmation
of the proponents’ intent to consult with City Planners on proposed project
ideas as part of the pre-development activities.
-
Confirmation
of the proponents’ intent to repay the pre-development loan subject to securing
funding or financing to proceed with the project.
Priority will be given to proponents that
have already accessed CMHC’s Seed Funding program and thus have developed a
reasonable concept and business plan for the proposal, on the understanding
that the City’s funding is to develop that proposal and business plan towards
successful funding and development.
Successful proponents will enter into an
Municipal Housing Project Facilities Agreement confirming that funds will be
repaid if the project receives appropriate funding, and that the project will
meet the terms of the Municipal Housing Facilities By-law 2006-01 to provide
affordable housing over a minimum of 20 years.
The agreement can be modified as the project moves to successful
completion. If the project does not
proceed, the Agreement will be terminated.
The main risk with this approach is that some
project ideas will not come to fruition and the investment of City funds will
be lost without the expected return of additional housing being provided. Staff will work closely with funded groups
to maximize the chances of success by facilitating access to expertise and
other resources where possible, and providing advice on how previous projects
funded by the city have been successful.
The second risk is that funding to support
the development of these projects will not be available. As noted above, the current AHP is winding
down, and all funds allocated to Ottawa have been disbursed. However, the continued need to invest in new
affordable and supportive housing is gaining growing support in the community,
and to some extent, investing in the refinement of projects will help the
proponents make their case for the necessary funding and resources.
The Federal government announced in September
2008 their intent to continue to fund the Federal Affordable Housing
Initiative, with $125 million a year across Canada. Based on experience, this would translate to about $3.75 million
to Ottawa, which if matched by both the Province and the City would result in
about $11.25 million a year being available to support adding to the stock of
affordable housing in Ottawa. Current
costs suggest this level of funding would support from 110 to 180 units a year,
depending on whether new development or acquisition of existing units is
supported. Staff are also preparing a
report to Committee on establishing a Municipal Housing Reserve to support the
City’s interests in investing in the provision of low-income affordable
housing.
Because the funds are in the form of a Trust,
the terms of the 1989 Operating Agreement with the Province must be
respected. This requires that staff
notify the Province of the intent to allocate the funds for these purposes, and
seek approval for their use. If the Province
does not approve this use of the funds, staff will report back to Council
accordingly.
The current balance of the
Provincial/Municipal Housing Corporation (PMHC) Trust Fund is $534,163. These funds are dedicated to the conditions
of the operating agreement that have been entered into with the Province. As specific projects are ready to proceed,
new capital projects will be established and funds will be transferred in from
the PMHC Trust Fund.
Housing Branch staff will notify and seek
approval from the Province of the intent to use the Trust funds for the stated
purpose.
Housing Branch staff will establish a
pre-development loan fund per the terms and discussion outlined in this report.
Legal will draft loan agreements suitable for
the purposes of the loan fund.
Notice will be given to the community of the
availability of this funding program.