Affordable Housing Program – Capital Funding Allocation

Recommendation:
That the August 11, 2004, Community Services Department report 2004CSW033 be received for information.

Report Summary

This report outlines the process by which the City will allocate funding under the annual approved capital budget for the Affordable Housing Program (AHP).

Previous Council/Committee Action

At the December 18, 2003, City Council meeting the 2004 Capital Budget, including an amount of $500,000 for Capital Priorities Plan Project XX215520 “Affordable Housing Program (Funded)” was approved.

At the August 26, 2003, City Council meeting the following motion stemming from the Final Report of the Task Force on Affordable Housing, dated July 15, 2003 was passed:

  1. Subject to City Council approval of the 2004 Capital and Operating Budget and the Proposed Grant Funding Agreement, that the Affordable Housing Program (AHP) be established with a total budget of $850,000 per year to carry out the Specific City Actions detailed in Attachment 2 (of the July 15, 2003 Community Services Department report) including:
  1. Capital funding of $500,000 per year to enable the City to partner with the Federal and Alberta Governments under the Canada-Alberta Affordable Housing Partnerships Initiative.

Report

  • The City of Edmonton Low-Income and Special Needs Housing Strategy 2001-2011 authorized a “Limited Funding Partner” role for the City to increase the supply of low-income and special needs housing in Edmonton.
  • Community Services Department developed Capital Priorities Plan (CPP) Project XX215520 “Affordable Housing Program (Funded)” to implement this role. It will enable the City to partner with the Federal and Alberta Governments to provide capital funding towards the development of Edmonton-based projects under the Canada-Alberta Affordable Housing Partnerships Initiative (AHPI). The Affordable Housing Program (AHP) was also developed in view of the indication from the Province that priority may be given to AHPI projects that receive municipal funding.
  • Calculation of Maximum AHP Grant

Community Services Department will apply two criteria to calculate the maximum AHP grant for any particular AHP grant application. It will be based on an average contribution of $7,500 per unit (15% of the maximum AHPI capital grant of $50,000 per unit). These two criteria are:

“Unit Size and Accessibility”; and

“Unit Affordability”.

In applying these criteria, the average AHP grant would be larger to the extent that units have more bedrooms or provide for wheelchair accessibility and rent for well under (e.g. more than 40% below) Average Market Rent (AMR) for similar unit types in the Edmonton Census Metropolitan Area (CMA). Conversely, the average AHP grant would be smaller to the extent that units have fewer bedrooms or do not provide for wheelchair access and that units rent for just under (e.g. 10% to 19% below) AMR for similar unit types in the Edmonton CMA.

The maximum AHP grant will be based on a combination of these two criteria.

  • Other Requirements:

Project proponents will be required to submit a letter specifying their total AHP funding request, their request for provincial AHPI funding and provide sufficient additional information to enable Corporate Services Department to conduct a financial feasibility evaluation for their project. This will include information on:

Proponent/Sponsor Organization:

Legal name, type of organization, primary purpose, major services and activities, primary contact(s), financial status (Statement of Operations);

City Funding Request:

Total AHP funding requested; other City funding assistance requested; purpose of City funding requested;

Project Description:

Unit Types and Rents:

Number and types of units, including wheelchair/adapted units; estimated rents and what is included/excluded in rents; market rent comparisons;

Estimate:

Land; building; site improvements; administration;

Funding Sources:

Total estimated capital costs less requested AHPI and AHP grants; other contributions;

Preliminary Project Pro Forma

Property Management Plan:

Pertinent conditions of the 20-year Grant Funding Agreement with Alberta Seniors (to ensure sustainable affordable housing accessibility to lower-income households); and

Evidence of Community Support

  • The total recommended AHP funding amount will be the lesser of:

The maximum eligible amount determined by Community Services Department through application of the “Unit Size and Accessibility/Affordability” criteria.

For example, one-bedroom units with rent set at 10 per cent below the average market rent (AMR), would qualify for a maximum AHP grant of $3,750 per unit, whereas units that provide wheelchair accessibility and rent at 20 per cent below AMR would qualify for approximately $8,450 per unit; and

The amount requested by an eligible organization.

  • City AHP funding will not be approved for any housing units that do not qualify for a provincial AHPI capital grant.
  • Subject to the application of these criteria, Community Services Department, General Manager will approve all AHP budget allocations up to $250,000. AHP funding applications in excess of that amount will be the subject of a report and recommendation to Community Services Committee.

Legal Implications

Subject to AHP applicants receiving approval of an AHP grant for their project, a funding agreement, in a form to be approved by Law Branch, will be executed.

Others Approving this Report

J.Tustian, General Manager, Corporate Services Department

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