Non-profits not giving up on Mountain housing project despite multimillion-dollar shortfall

A pair of Hamilton non-profits say they remain committed to a 266-unit affordable-housing project despite a multimillion-dollar funding shortfall.

The city has bolstered the 60 Caledon Ave. project through a $9-million grant, but now adequate federal support is the question.

We just have to keep going back to the drawing board," says Brian Sibley, executive director of Hamilton East Kiwanis Non-Profit Homes Inc.

The city grant represents the value of waived municipal development charges on the roughly $134-million project.

In addition to that boost in capital, Kiwanis and Victoria Park Community Homes - which form the Caledon Community Collaborative - needed the upfront municipal commitment to apply for federal co-investment funding.

But in a recent meeting with Canada Mortgage and Housing Corporation (CMHC), they learned the federal contribution would be less than hoped.

What I can say is we are not prepared to put in an additional $20 million over and above our already committed investment of $36 million," Lori-Anne Gagne, Victoria Park's chief executive officer, said in an email.

While the CMHC's tightened approach to funding is a factor, Sibley noted, he also pointed out the budget for 60 Caledon has increased considerably due to soaring construction costs and rising interest rates.

Caledon is one example of what is happening in the entire country."

In an emailed statement, the CMHC wouldn't speak to the project's application but offered general comments about the sector's difficulties.

We know that increased interest rates and construction costs are adding significant pressures on housing providers, and that these challenges are making the construction of new housing and the repair of existing housing more expensive."

That has directly impacted funding asks" of the CMHC, which delivers grants and low-interest loans through the federal government's National Housing Strategy programs.

The funding squeeze coincides with a local housing affordability crisis driven by spiking property values and rents in recent years.

Hoping to provide relief on the central Mountain, Kiwanis and Victoria Park teamed up in 2020 to buy 60 Caledon, a 2.8-hectare (seven-acre) former high school property - off Upper James Street just south of Mohawk - from the city with the help of a $5-million municipal grant.

The energy-efficient design involves 266 units in two, six-storey apartment blocks and five, three-storey townhouse buildings with outdoor green space.

MP Chad Collins (Hamilton East-Stoney Creek) and fellow Liberal MPs met with CMHC officials to hash out a solution for 55 Queenston Rd., a CityHousing project facing a funding shortfall.

Environmental costs have added to the tab for the 40-unit Queenston traffic circle project along Hamilton's future LRT line, noted Collins, a former city councillor and CityHousing president.

Rising construction costs are a widespread problem that have CMHC taking a second look" at covering overages despite lots of federal assistance," he said.

I think when you take into account those rate hikes and the cost escalation, the monies just don't go as far as they did before."

Earlier this month, city council agreed to provide 55 Queenston Rd. with a $4.6-million backstop to allow the project to move forward.

Amid the chaos of rising costs, Kiwanis expects to welcome renters to a new 60-unit affordable-housing building on Acorn Street, off Sanford Avenue North between King and Wilson, in early October.

The non-profit was lucky" to move that $21-million project forward before the world went crazy," Sibley said.

But the planned $60-million redevelopment of Kiwanis townhouses at 1540 Upper Wentworth St., between Stone Church and Rymal, into denser apartments faces similar hurdles as 60 Caledon Ave., he said.

But at least Kiwanis already owned the land when it embarked on the 126-unit, eight-storey project, Sibley noted. So it's not bleeding interest."

It's also one of 19 projects that Hamilton is Home, a coalition of non-profits that includes Kiwanis and Victoria Park, warned council last month would be in jeopardy without municipal commitments to apply for federal co-investment funds.

Finance staff, however, advised council tens of millions in waived development charges would present a significant strain on city coffers.

Council agreed to the $9-million grant for 60 Caledon, but left the question of funding for the rest of the coalition's projects to a future housing plan staff are drafting.

As a collective, we still face a funding equity gap, plus uncertainty with rising interest rates and construction costs," Tricia Lewis, director of operations with Kiwanis, said in an email.

Hamilton is Home remains optimistic and will continue to work collaboratively with our municipal, provincial and federal partners."

Likewise, Gagne says Victoria Park plans to press senior levels of government for more funding.

In the meantime, the goal is to submit a site plan application to city planners by mid-September with the hope of being ready for construction next spring. And by then, we'll know if our political advocacy was successful."

Teviah Moro is a reporter at The Spectator. tmoro@thespec.com