The Town of Okotoks released a summary of the facts and finances of the Homestead project, in response to the Okotoks Ratepayers Community Group’s (ORCG) concerns.
The Town’s original response aimed to provide clarity on “misunderstandings” in the ORCG’s list of 14 concerns presented to council at the June 24 meeting, with the summary, released on July 10, aiming to provide clarity for the community on some of the concerns.
The summary stressed that the project has not yet been approved, the financing of the project as well as the Town’s control, responsibilities, and the business case for the project.
In an interview with the Western Wheel following the publication of the Town’s statements, Coun. Matt Rockley referred to the project as “revenue positive.”
He stressed the Town’s investment of $3.34 million into the project to service and grade the land—in addition to $900,000 for administrative work—would be coming from the capital reserve budget, not tax dollars.
“It’s money that’s being held in reserve, so that $3.34 (million) that will be spent on servicing and getting the site ready for development won’t cause an increase in people’s tax bills,” he said. “There won’t be a jolt to the tax bill for the infrastructure and site preparation.”
The Town has put controls in place to ensure a return on investment to the taxpayers through negotiating a land lease agreement with Realize Communities that would see a 50 per cent repayment of the initial investment, interest payments for the remaining 50 per cent, lease fees equivalent to property taxes.
The long-term financial perspective on the project was “very positive,” with the return on investment valued at $6 million repayment over the course of the 60-year lease, as well as rental revenue from the homes, said Rockley.
The project would also help the Town achieve two of the strategic priorities set during the election based on feedback from the community: the municipal objective of providing affordable and diverse housing, and furthering the environmental initiatives of the Town.
The project fitting into the strategic priorities set by council makes it a good use of the reserve money, said Rockley, and not a lost opportunity cost.
Ultimately, Rockley said the ecovillage was a different way of providing affordable housing, in addition to the more standard affordable housing developments already existing or planned in Okotoks.
“I don’t think that there’s a one-size-fits-all in terms of affordable housing,” he said. “The Town is moving forward with other affordable housing initiatives, such as the partnership with Westwinds and Rowan House on a more multi-unit type residential building, but this is an additional way that the municipality can help to make gains of the area of affordable housing and provide a better variety of the housing types available to people.”
Ryan Nix, from the ORCG, said the group remains unconvinced and will continue its petition efforts to stop the project. The petition currently has over 2,000 signatures and the group is aiming for a minimum of 2,900 by July 20.
With the Town’s contribution and the federal tax-funded CMHC grant for Realize Communities’ portion, Nix said there is over $8 million of tax-payer money going into the project.
Nix said with that price tag divided by 42 homes, each home is valued at double the cost of a high-end tiny home constructed under traditional models—referring to tiny home expert Kenton Zerbin, who said at a workshop in Okotoks this spring that high-end tiny home options are typically $100,000.
“That to us doesn’t add up,” he said. “There’s concerns there that the design and the concept is driving the cost up, and that doesn’t make it in the same spirit of tiny homes as far as being something that’s a cheap, efficient way to live.”
The 42 homes will consist of 12 homes for purchase and 30 homes available for rent. Initial projections for the ecovillage presented to council on Feb. 11 showed the rental prices, including utilities, ranging from $760 to $1,150. Five of the units would be customized for accessible-renters, and 15 per cent of the total rentals would be dedicated to indigenous residents.
According to the Okotoks Housing Needs Assessment Report presented at the July 15 council meeting, the tiny home ecovillage is an affordable housing option, considering the monthly payments for the residents. The analysis found that the four-unit types offered (one bedroom and two bedroom homes for rent and ownership) "are affordable across all household types earning the median household incomes."
Further, it found the project did not indicate any affordability gaps (amount paid for adequate housing over 30 per cent of before-tax income) for any household types, including the more vulnerable housing types of lone-parent and non-census (one person) households.
Addressing council's additions to the lease, Nix called them the “right idea,” but said they didn’t go far enough owing to the calculations not accounting for inflation over the 60-year lease.
“The return on investment of that money is less than the inflation rate,” he said. “So in the end, over 60 years, we’re actually losing money if you apply the time-value of money, which is a pretty basic business concept.”
Coun. Tanya Thorn, who voted in opposition to the project in May, said that the use of the municipal land as well as short-and-long-term financial impacts had not been adequately discussed before approving the project.
Thorn said she disagreed with the arguments provided in the Town’s response regarding the repayment additions to the lease agreement, particularly the payment of annual lease fees equal to property taxes, as it “is not apples to apples.”
The tiny home residents will not be pay property tax since the ecovillage will be built on municipal land, she said, making the cost of providing the municipal services additional to the initial investment in the community.
“They are a homeowner, they are going to be using municipal services within our community (…) and that’s what property taxes cover,” she said. “To say that those tax dollars are part of the repayment and reinvestment on this project, to me, is incorrect because every homeowner in our community should be paying into those things.”
Although council has approved the budget for the ecovillage component of the project, the funding remains conditional on successful negotiation of the land lease agreement.
To view the Facts and Finances summary, the full response on each of the 14 points presented to Council by the Ratepayers group, and more information on the Homestead Project and affordable housing, click here.
