The Town of Okotoks is amending its 2023 capital budget to provide more financial support for an affordable housing project.
The Brenda Strafford Foundation's (BSF) Heart Home Network and Westwinds Communities launched the D'Arcy Affordable Housing Project in partnership with the Town in 2021 and since then, costs have increased substantially.
"There has been cost escalations related to site servicing that are higher than what was anticipated by the partners when these projects commenced," planner Michelle Grenwich told council this week. "Initially, the site servicing costs were estimated to be $1 million for the partners. Now that is approaching $2.3 million, so that’s an additional $1.3 million of unanticipated expenses."
After a report was presented during the in-camera portion of the meeting Monday, a decision was made to move the issue to the public forum for a decision. Administration recommended that council waive the additional unexpected site servicing costs, though the option to waive the entire site servicing of $2.3 million was also on the table.
Civic politicians unanimously decided to cover the additional costs.
Grenwich explained that while the partners intend to apply for the next round of the Canadian Mortage and Housing Corporation (CMHC) rapid housing initiative, the grant program is extremely competitive and there's no assurance BSF and Westwinds would see success.
"The last round of grant funding for the CMHC rapid housing initiative, what we saw in Alberta was that 10 per cent of projects were funded and very strong applications didn’t receive funding," she said. "So what we’re seeing is municipalities in Alberta stepping up and providing additional financial contributions to make these projects viable."
While the waiver itself is practical, the financial impact would also increase the chances of a positive application response.
"The current contribution that the Town has provided with the land donation is about 10 per cent of the project costs and option one (waiving $1.3 million in site servicing) would bring that up to about 16 per cent of the project costs," said Grenwich. "That would really assist in demonstrating to funders the long-term operating viability of these projects; just the additional municipal contribution because we’re expecting a highly competitive environment."
According to the Town, Westwinds is set to build 52 below-market rental units in two buildings, completed in two phases. These units will provide housing for families, couples, roommates and seniors who are currently on housing wait-lists. A program for youth is also expected to be facilitated through this build.
A formal agreement with the Town ensures that rental rates will remain affordable for 25 years, while possible CMHC funding could bring additional obligations.
The BSF is set to build 39 supportive housing units with common spaces and in-house services for women and families affected by domestic violence.
The Town purchased 3.3 acres of land on Sage Way in the D'Arcy development in 2019 for $2.6 million. Last May, the Town put one acre of the land up for sale, announcing it was not needed to complete the desired layout. Preconstruction on the area began last summer.
