Low-income housing sparks debate in council

By Miriam Ostermann, Associate Editor

Strathmore town council failed to see eye to eye on spending several thousand dollars for the maintenance and repairs of the Affordable Housing Project established in 2010 – an initiative to which the town has already dished out over $2 million in mortgages and land value.
Administration received a letter from Bayside Villa Condos requesting nearly $20,000 to finance fencing, repairs and bike racks to lessen the financial strain on the condo corporation. The letter stated that without a financial contribution from the town, the corporation would only be able to provide the improvements by increasing condo fees. The fees have already been increased twice over the last year and the board will be voting to increase them again in the new year, the letter said. The document also stated fees are becoming unaffordable to the unit owners of the low-income housing project.
However, most of council felt that by originally contributing $2.42 million for a second mortgage – therefore providing the opportunity for first-time home ownership with a low down payment – was fulfilling the town’s moral obligation. Councillor Jason Montgomery referred to the town as acting as a bank and stated that it’s not the bank’s responsibility to provide upgrades or amenities but a homeowner responsibility – a statement many on council echoed.
“Eight years ago, when this project came on, that was the exact philosophy of our council at the time; we felt we had a moral responsibility and that was to provide a second mortgage to these properties to allow individuals who perhaps couldn’t afford to own a property the opportunity to do so,” said Councillor Bob Sobol at the regular council meeting on Oct. 9.
“At the end of the day it’s very important that we remember that we did not rent these houses to anybody. We’re not a landlord, we are the holder of a second mortgage, period. It was simply our effort to assist people to own a home … this is not our cup of tea and I don’t feel that the town has a responsibility to be providing funds for repairs.”
In 2010, the Town of Strathmore sponsored the Affordable Housing Project by contributing $1.94 million in cash and $722,000 in land value – with some of the money provided by the provincial government. The project consisted of 48 affordable housing two- and three-bedroom units for people who qualified to purchase the units. At the time, 48 second mortgages in favour of the town, with an average amount of $50,412 per mortgage, were placed, totalling $2.42 million.
Currently, 47 still remain in place while one mortgage has been repaid in the amount of $47,644. According to Mel Tiede, director of corporate services with the Town of Strathmore, ensuring the units are well maintained may prove beneficial in the future.
“The $8,000 is not a large amount in the total relative scheme of the whole project, (and) we do have a financial interest,” Tiede said. “It’s in our own interest to have these units maintained at a high standard. While we are not obligated legally to do that, we do have, as you say, some skin in the game; we do have roughly $2.4 million of receivables at some point in time that we would like to get back and recycle that money and use it for other affordable housing projects.”
In the letter sent by the corporation’s treasurer, the town is asked to contribute $2,535 for maintenance required due to birds gaining access to ventilation intakes; $15,480 for fencing to reduce damage or potential damage in the future; and three bike racks each with a cost of $600.
Administration recommended council consider an amount of $8,640 – 50 per cent of the cost of fencing and bike racks. However, council defeated the motion to authorize a one-time payment to the condominium corporation for Bayside Villa Condos with funding from the affordable housing operation reserve, and the proof of a reserve fund study before the money is released, and that the condo board provide proof of spending of the money before the end of the 2019 fiscal year. Councillor Denise Peterson and Councillor Tari Cockx voted in favour of the motion.
Councillor Lorraine Bauer proceeded to make a motion for administration to approach the corporation and to investigate the amount of money currently in their reserve fund, information several councillors said would influence their decision.
While Peterson questioned the town’s right to request the information, stating the actions to be an intrusive wrong thing to do and that the town wouldn’t have asked any other mortgage holder for such information, administration assured that it would be appropriate as the town has a vested interest in the project and is a mortgage holder.
“I think the council is correct in requesting some due diligence and I think that’s appropriate under the circumstances. They’re asking us for several thousand dollars and at this time I would recommend that we need to do some more due diligence on this,” said James Thackray, chief administrative officer with the Town of Strathmore.
Council was also asked to consider establishing an affordable housing operative reserve and to transfer the $47,644 that resulted from the mortgage paid on one unit for future affordable housing initiatives.
Peterson spoke in favour of the reserve, adding that 75 families, equivalent to 200 people, are still without adequate housing within the community. Other councillors also spoke in favour of the reserve.
“I do support the idea of setting up this reserve,” said Montgomery. “I think it’s prudent to do so. I hope that we come up with a better system in the future for affordable housing and dealing with affordable housing with that money.”
Council unanimously voted in favour of establishing the reserve.