Council considering increased debt for community housing
A much-needed $170-million rehabilitation of the region's deteriorating community housing stock is an opportunity that can't be missed, despite requiring the city to increase its debt load, according to Mayor Drew Dilkens.
The proposed seven-year capital spend includes plans for the repair and renewal of existing public and non-profit housing complexes — many which were built in the 1950s to 1980s — throughout the city and county, with $90 million in funding to be provided by the Canada Mortgage and Housing Corp.
The $90 million breaks down to a $36-million forgivable loan — basically a grant — and a $54-million repayable loan.
The remaining $80 million would be the responsibility of the city and county — $40 million in the near term and $40 million to be paid over the longer term.
The cost would be shared on a per-capita basis with the county.
“There is no doubt we will have some debt in future years as a result of this,” Dilkens said.
“But with interest rates low and with the matching money available it is — for a guy who has been adverse to debt since I've been here — this is a sensible use of a debt instrument to fund necessary work that has to happen.”
Dilkens said he “absolutely believes the city can afford the project.
“We're in a position to be able to afford to do this because we have been so fiscally prudent in the last 15 or 16 years here,” he said. “
“Where we once had debt approaching $230 million, at the end of 2019 we were down to $70 million and at the end of (2020) we're probably down to about $48 million.
“We've really focused on reducing debt. We've done a good job at it,” he added. “So we can't miss this opportunity because these opportunities don't come around very often.”
City council will discuss the matter Monday.
Dilkens said many of the city and county's more than 4,700 community housing units are in desperate need of repair.
“We're at the point where many of the units, if we don't undertake this work, they'll have to be taken out of service,” he said. “And that would then put further strain on a community that's already experiencing an affordable-housing challenge.”
The list of necessary repairs include efficiency upgrades aimed at addressing water infiltration and inefficient heating and cooling.
Just over $17 million is earmarked for bathroom and kitchen renovations. Almost $20 million is for exterior work on parking lots, waterproofing and repairs to porches and driveways. Another $14 million is directed toward replacement of building exteriors.
Accessibility improvements are a sizable chunk at $30 million, while $7 million is earmarked for deep energy retrofit (projects to greatly improve energy efficiency) and $7 million more will go toward furnace replacement.
There is also money for repair or replacement of lighting, roofing, elevators, doors, security systems and more.
“A lot of these (units) were built, especially the family units, in the 1950s, '60s, '70s, some in the '80s. There's not a lot of new portfolio that we have,” said Community Housing Corporation CEO Jim Steele. “We've been doing some work along the way but not a lot on the interior of the units.
“We've made sure that they are safe but we need to get inside and do more work,” Steele said. “Accessibility is a major issue. So that will help. It will be easier for people to get around in them.
“And energy management. What we've been working with is helping tenants to pay bills, including utilities and a program like this will address some of those concerns as well.”
The renewed energy efficiency will help offset the costs of operating units for the city as well.
“There's a lot of benefits that will come from doing this, including energy efficiency,” Dilkens said. “That's part of the requirement for the repair and renewal is to add energy efficiency, which links nicely with our climate-change plan, our community energy plan.”
Dilkens said CHC has had to defer a fair number of projects and focus on absolutely critical work and repairs, “because that's been the way it's worked over the last, say, 20 years, because there's been no other funding available from the feds or the province.”
The province downloaded responsibility for community housing a number of years ago, said the mayor, and included some funds “but not enough to cover the unfunded liability.”
Dilkens said funding issues continued to build while Conservative Stephen Harper was prime minister, but when Liberal Justin Trudeau was elected, housing became a priority, and “now the money has been budgeted and it's starting to flow down.
“You never have enough municipal resources on your own to be able to maintain (community housing) as we would our own homes. The city is reliant on senior levels of government for funding. There's just no way a municipality or a region could do it on their own.”
The city has spent approximately $5.5 million a year maintaining the existing stock, Dilkens said, but, “you could only put the pressure on the system to fix critical things for so long before things start falling apart. We're talking about rentgeared-to-income (housing) and just because you reside in a rentgeared-to-income housing unit doesn't mean you should live in substandard housing.”