Canmore’s elected officials and residents of a local housing cooperative are in a tough spot and it is between the proverbial rock and a hard place.
Mountain Haven Housing Cooperative, located on Dyrgas Gate and completed in 2008, is on the brink of bankruptcy, and the local affordable housing project has a plan to overcome its financial difficulty.
But it needs council’s help.
With that in mind, Canmore council passed first reading of a bylaw which, if approved, would provide Mountain Haven with a $1.5 million loan and time to formulate, with other stakeholders in this pickle with them, the conditions of how the group can get back in the black.
Chief Administrative Officer Lisa de Soto explained the municipality and its Crown corporation, Canmore Community Housing Corporation (CCHC), are inextricably linked to Mountain Haven. That’s because the land is owned by CCHC and leased to Mountain Haven and in 2006 the council of the day funnelled a $2.6 million grant from the province into it.
De Soto said that loan’s conditions put the Town on the hook for paying back the full amount if the cooperative association were to go bankrupt.
“Due to a myriad of issues mainly related to restricted conditions on ownership and rental requirements, Mountain Haven Cooperative now finds itself on the brink of insolvency and the Town of Canmore and CCHC are intrinsically linked to Mountain Haven,” she said.
“The Mountain Haven board has sought guidance of some knowledgeable community leaders and they have put together a business plan that has the support of its membership.
“That business plan is intended to deliver their development out of financial hardship and back to a viable business model that would be worthy of lender support.”
In addition to CCHC and the Town of Canmore, de Soto said other stakeholders include mortgage insurance providers, the province of Alberta, and creditors Mountain Haven currently owes money to. She said a loan from the Town is required for lenders to start providing mortgages for units available for purchase.
The housing project has 44 units, of which 17 are lease-to-own or rental units and the remainder are equity units that can be bought and sold, with resale restrictions. There are also eligibility and income restrictions associated with units at Mountain Haven that have made it difficult for mortgages to be approved.
In order to address the current financial situation, de Soto said stakeholders would have to agree to certain conditions like changing income eligibility and amending the maximum resale value of the units. But those details need to be worked out still, and de Soto said with first reading of a borrowing bylaw, administration would have the ability to do that work, meet with affected parties and return with a detailed plan at second reading.
For council, however, it was clear that if no action was taken, not only would the Town be on the hook financially, but the families living in those units would also be facing the loss of their homes as a result.
Councillor Sean Krausert said foreclosure is a real possibility for those families.
“One way to avoid financial liability to the Town and protect those homeowners would be to have further discussions with stakeholders and by doing so proceeding with first reading gives an opportunity for those discussions to take place,” he said. “This is just a bad situation no matter which way you turn.”
While the proposed loan would be interest free, Mayor John Borrowman amended the bylaw to include a three per cent interest rate on the loan, noting council is indeed stuck between a rock and a hard place with this situation.
“But we have placed liveability in Canmore and affordability in Canmore at the top of our priority list and by giving this bylaw consideration, we give stakeholders involved an opportunity to all come to the table and agree to a number of fairly significant terms,” said the mayor.
