Nelson Commons under construction.

Council debates Nelson Commons’ housing affordability plan

The Kootenay Co-op's project runs up against the thorny question of what affordable housing means and how to achieve it.

Some members of city council don’t think an annual income of $55,000 signals a need for affordable housing, even though the developers of Nelson Commons and Nelson’s city staff think that in some situations it could.

At Tuesday night’s council meeting, city planner Pam Mireau presented a package of variance requests from Nelson Commons to council. One of them asked that a previously-agreed-upon payment of $54,000 by the developer into the city’s affordable housing fund be waived.

Instead, Nelson Commons proposed that it would offer three suites at 25% below market value permanently, as its contribution to affordable housing. The market values of the units offered are two one-bedroom units at $265,000 and $269,000, and a two-bedroom unit at $369,000. Reduced by 25 per cent, those units would sell for$199,000, $202,000, and $276,000 respectively.

Project developer Russell Precious said in an interview later that the total of the reductions in the three suites amounts to $240,000. He said Vancity Credit Union (one of the project’s financers) offered to supply half of that, and the other $120,000 is “money out the Co-op’s pocket.”

Precious said that a person would have to have an income (perhaps the combined income of a couple) of $55,000 per year to afford those reduced units.

“That is a significant income in Nelson,” said Councillor Michael Dailly at the council meeting. “We have a 2014 housing report that we paid good money for, and that report outlines Nelson’s housing affordability issues. The ones who need help are young adults, low income seniors, people with disabilities, low income families, people with mental health issues and addiction issues, or people homeless or at risk of it.”

Councillor Janice Morrison also criticized the proposal.

“Even with these 25 per cent reductions,” she said,  “this is still what I would consider market housing. I don’t consider $55,000 is a salary of someone who needs to have affordable housing.”

She said the value of the 25 per cent reductions is “not realized money.”

But Precious disagrees. “It gets three more people housed, who are presently renting. They are people who have not yet crossed the threshold which allows them to buy. We are lowering that threshold. That frees up three rental units”

Precious said the Co-op and Vancity have together put together a set of eligibility criteria for the purchase of the reduced suites.

“There are some people who could just meet the criteria on the high end—there might be a single mother and child, and we may say, ‘Wow, this person could really use this.’ Or seniors, we would be looking at seniors in need. These people would be at the top of the list. We are not just trying to create a freebie for somebody.”

The variance request also asked that council waive connection fees of $9837 for the three reduced-price suites.

“If we are going to contribute $240,000 to affordable housing,” Precious said, “and if the city cares about it, the least they can do is not charge hookup fees to the buyers for those three units.”

The developer also asked that council, in the event that the $54,000 is waived and the three reduced-price units created, assume responsibility for the administration of the three reduced suites after the Co-op sells them initially.

Councillor Morrison said the costs of such activity over time are be unknown.

“This variance is being requested under the guise of affordable housing and drawing the city into the mix to legitimize this plan,” she said. “This is a private for profit enterprise and I believe the city should not be investing in it.”

Precious said the Co-op will initially sell the suites and has created the criteria for future purchase of them, and there might not be any administration to do for many years, until such time as the units are sold and re-purchased.

Council voted that the request for a switch from the $57,000 lump sum to three reduced suites, the request that the connection fees be waived in that instance, and the request that the city administer the reduced-price suites after their sale, all be sent back the city staff and the city’s housing committee for another look.  Only Councillor Bob Adams voted against this.

Several other parts of the variance request package passed, however.

The amount of long-term secure bicycle parking will be reduced. The electric car charging stations will be wired in but not installed until such time as electric cars exist in Nelson. Landscape security will be in the form of a cheque that is renewed every 6 months rather than a letter of credit. And the consolidation of the several building lots into one large lot will happen before final inspection and occupancy rather than at an earlier stage.

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