Canmore’s elected officials have voted to sell a piece of land it owns on 17th Street and 11th Avenue to the Canmore Community Housing Corporation to develop its next perpetually affordable housing project.
In a unanimous vote, including Councillor Ed Russell, who voted against the land’s rezoning previously due to concerns over tree removal on the site, council voted to sell the lot for $1.3 million to its own municipally-owned housing corporation – CCHC.
Manager of planning Alaric Fish told council the process to sell the land to CCHC would allow the board governed, municipally-owned corporation in charge of affordable housing to pursue its process of finding a builder to help develop the site as part of its Perpetually Affordable Housing (PAH) home ownership program.
“This process would allow Canmore Community Housing Corporation to secure financing and enter into a contract with a builder for the construction of the intended perpetually affordable housing site,” Fish said.
The site has been a source of controversy in the community as an intended location for affordable housing, especially with residents of the neighbourhood who have expressed concerns over the appropriateness of the location for development.
While it used to be where the community daycare and preschool were located, it is also valued green space for neighbours, who refer to it as Larch Park. The parcel of municipally-owned land has an ice rink and parking area, but no other infrastructure, and is considered by council and Town administration as a highly valuable location for housing.
In addition to using the property to develop affordable housing, council also approved a capital project for 2017 of $625,000 to replace and enhance the ice rink on the site and install public washrooms.
Fish said administration has realized that work also needs to address public parking for the use of the ice rink and access throughout the site.
Fish said subdivision of the property was successful and registered with the land titles office. That means, he said, the municipal reserve designation on the portion of the site being considered for development has been removed and the property rezoned from public use to a direct control district with PAH as its intended use.
But selling the land for $1.3 million would also affect the affordability of the housing developed by CCHC, acknowledged Fish. If 40 units were to be developed, it would add $32,500 to the cost for each.
But it isn’t known yet how many units will be built on the site, or the configuration of the design, as the process to develop those is underway.
“CCHC’s board and administration are going through a request for proposal process,” Fish said. “We have received three proposals for the site and are evaluating those now … at this time it seems like those land costs still fit the objective of having affordable housing units.”
The cost of land in Canmore has been a challenge for municipal leaders who wish to address the lack of available and affordable housing in the community.
But because the land was municipal reserve, its sale is legislated under the Municipal Government Act. The proceeds, Fish told council, must be put toward other municipal reserve purposes and the money from the land sale would go into the municipality’s restricted reserve account related to MR.
The MGA sets out that council can transfer the land for market value or for less than market value to a non-profit organization. Fish said the transaction is proposed to be undertaken when the units are complete, to reduce borrowing costs for CCHC. As well, he said, the land had an assessed value of $520,000 before it was rezoned and subdivided.
The purchase price was arrived at, he explained, by adding that value with the amount the municipality intends to spend on the ice rink and $155,000 to reflect additional potential improvement to the remaining municipal reserve lands left in the overall area.
“The zoning has changed on the site, but it is pretty clear that it is primarily for perpetually affordable housing,” said Fish, adding a market value appraisal is currently being undertaken.
As for the process that is being undertaken by CCHC, its managing director, Dougal Forteath, said it began last fall with an expression of interest process to find private sector partners. He said three possible partners in developing the lot were chosen out of that process, with an official request for proposal process initiated on Dec. 21 and closing Feb. 28.
“All three proponents submitted a proposal and the proponents presented their proposals to the advisory committee and the board on March 6,” Forteath said. “The advisory committee presented their recommendation to the board on March 22 and the board made its own recommendation at that date and the board advised the shareholder on March 28 of the direction it is intending to take.”
Because CCHC is working within the 30-day negotiating period with the proponent selected, Forteath said at this time they are not sharing the selected builder publicly. Once a final contract has been successfully negotiated with the company selected, he said CCHC would hold a public open house to share the successful proposal and design with the community and receive feedback.
Throughout the selection process, CCHC has used an advisory committee to help assess the applications and that included two representatives from the neighbourhood and Town of Canmore’s manager of planning. The three companies chosen were Distinctive Homes, Spring Creek Mountain Village and HDH Community Homes.
Forteath said it was “extremely important” to CCHC’s board to have input on the design from a neighbourhood perspective.
While design details may not be available at this point, he said the expectation is that all of the housing developed would be perpetually affordable home ownership.
“Final decisions on that have yet to be made, but we anticipate it will be 100 per cent PAH home ownership,” he said. “There are factors that are beyond our control that may necessitate some portion may be rental, but those are decisions we will make in the coming months.”
CCHC successfully operates two affordability programs related to housing and both are called perpetually affordable housing (PAH). The home ownership portfolio consists of 44 units in the community and in 2016 within that inventory there were eight home sales as part of the program, according to Forteath, which he said is healthy for the portfolio.
There are also currently 30 people or families on the CCHC waitlist for the PAH home ownership model program. Applications for the year to date as of February were five, which was three more than the same time in 2016. There were 28 applications to the PAH ownership program in 2016.
Mortgage insurance for CCHC home ownership PAH units is provided through insurance company Genworth Canada, not Canadian Mortgage and Housing Corporation (CMHC). It was the subject of a question from the public to council at its March 21 meeting that Forteath took the time to address.
Forteath said CCHC is engaged in ongoing conversations with CMHC about the PAH model to provide the mortgage insurance company with information about its program and the product it provides.
Forteath said the year-long conversation has resulted in recommendations from CMHC to CCHC to its legal instrument that could address concerns the insurance provider has.
One of the complex aspects of PAH home ownership unit is the legal instrument that restricts resale price of the property and that it is to occur through CCHC. The sale price is tied to inflation rates and not market increases and there are further restrictions to restrict residency and occupation of the unit. In other words, owners of a PAH unit cannot turn around and rent it out and those who purchase the units must work in the community and live here.
When CCHC began its PAH program over a decade ago, it modelled its legal instrument after Whistler Housing Authority’s, and at that time CMHC was not willing to provide mortgage insurance, which is why Genworth has been the provider. The legal instrument and resale restriction has also been a challenge for some applicants to obtain a mortgage.
The rental PAH program consists of two buildings – the Hector, with 60 units on Palliser Lane, and McArthur Place, with 48 units at Dyrgas Gate. The rental rates of the program are fixed at a certain percentage below the market rental rates of what is currently available for rent, which CCHC calculates through ongoing data collection of the rental market. There is also a restriction on how much a person living in the units can earn, as well as employment and primary residency requirements.
The wait list for the Hector at the end of February was 35 and for McArthur Place 17. Only two units at McArthur have yet to be occupied, but the Hector has 100 per cent occupancy. In 2016, there were 74 applications for the Hector and 88 for McArthur Place.
CCHC has a wide array of policy documents that guide its work, including eligibility criteria and a policy that sets out how PAH is constructed in terms of minimum requirements, a maximum construction cost of $250 per square foot and other guidelines for units contributed through local developers.
While Three Sisters had provided PAH at Mineside Court a decade ago, currently only two local developers are contributing toward the supply of PAH home ownership in the community – Spring Creek Mountain Village and Distinctive Homes.
SCMV is required to provide five per cent of its development as PAH, although those units were offered to residents of the slowly disappearing trailer park before 2012 when the SCMV area redevelopment plan was approved.
Distinctive Homes, meanwhile, incorporates PAH units into its developments in the downtown core, including the upcoming proposal for development at the corner of Seventh Avenue and Seventh Street.
