(1) the adoption of the following report (August 31, 2000) from the Commissioner of Community and Neighbourhood Services; and

Transcription

1 Development Proposals for 100 Units of Affordable Housing on Two Sites Owned by Community Groups - (Ward 6 - North York Humber and Ward 10 - North York Centre) (City Council at its regular meeting held on October 3, 4 and 5, 2000, and its Special Meetings held on October 6, 2000, October 10 and 11, 2000, and October 12, 2000, adopted this Clause, without amendment.) The Community Services Committee recommends: (1) the adoption of the following report (August 31, 2000) from the Commissioner of Community and Neighbourhood Services; and (2) that, in future, where a proposed development is at or near a border with another Ward then the Councillors for both Wards be consulted: Purpose: To obtain approval to proceed with the development of affordable housing under the Let s Build program on two sites owned by community groups; obtain approval for the making of grants and loans from the Capital Revolving Fund for Affordable Housing (CRF); obtain approval for the entering into of mortgage and ancillary documentation to secure the provision of approximately 100 affordable housing units. Financial Implications and Impact Statement: Grants and Loans: Approval of this report would commit a grant of $146, and mortgage loans not to exceed $5.025 million from the CRF. This would raise the commitments from the funds approved by Council to 100 percent of the amount held in this reserve fund. Capital Budget: As the funding for grants and loans would come from the CRF, an existing reserve fund designated for affordable housing, there would be no impact on the City s Capital Budget Operating Grants: No operating grants are to be provided by the City either now or in the future. Cost Reduction: To the extent the two developments reduce the use of the City hostel system, emergency shelter costs for the City and Province will be reduced.

2 Administrative Costs: There will be an allocation of resources and staff required in connection with the administration of the projects. The City may incur costs if the not-for-profit housing providers default in their obligations to the City. Property Taxes: The two developments will be subject to municipal taxation. The Chief Financial Officer and Treasurer has reviewed this report and concurs with the Financial Implications and Impact Statement. Recommendations: It is recommended that: (1) pending pre-construction confirmation of acceptable development and operating costs by the Commissioner of Community and Neighbourhood Services, the business case submitted by the Royal Canadian Legion Branch 213 be accepted under the Let s Build program as an Affordable Housing Demonstration Project for the development of approximately 40 affordable rental housing units as part of a building to be constructed at 46 Denison Road East, City of Toronto; (2) pending pre-construction confirmation of acceptable development and operating costs by the Commissioner of Community and Neighbourhood Services, the business case submitted by NUC-TUCT Non-Profit Homes Corporation be accepted under the Let s Build program as an Affordable Housing Demonstration Project for the development of approximately 60 affordable rental housing units to be constructed on the existing parking lot of 53 Cummer Avenue, City of Toronto; (3) subject to the required planning approvals, for the purpose of securing affordable rental housing, Council authorize grants and loans from the Capital Revolving Fund (CRF) being an amount not to exceed the following amounts: (a) (b) a grant of $146, and a loan of $2,065, to a not-for-profit corporation to be formed by The Royal Canadian Legion Branch 213 for the development of 46 Denison Road East; and a loan of $2,960, to the NUC-TUCT Non-Profit Homes Corporation, a not-for-profit corporation formed for the development of the west part of 53 Cummer Avenue, and on terms and conditions satisfactory to the Commissioner of Community and Neighbourhood Services, in a form acceptable to the City Solicitor;

3 (4) the grants and loans detailed in Recommendation No. (3) are deemed to be in the interests of the municipality; (5) the Affordable Housing Agreements, Grant and Loan Agreements and any other agreements deemed appropriate by the Commissioner of Community and Neighbourhood Services and the City Solicitor for the making of grants and loans for the provision of affordable housing to lower-income households for at least the duration of the mortgage loans referenced in this report be authorized; all in a form acceptable to the City Solicitor; (6) the termination of grant and loan negotiations and arrangements with either of the two not-for-profit groups be authorized at any time prior to commencement of construction if increases in costs would prevent the achievement of the affordable housing targets outlined in the business plans put forward by the proponents; (7) loans up to $2, per unit as an interest-free project development loans be authorized, subject to the not-for-profit groups matching the funds and subject to these project development loans being incorporated as part of the funds provided by the City from the CRF in Recommendation No. (3) and these project development loans are deemed to be in the interests of the municipality; (8) the advancement of the capital grant and loan from the CRF be conditional upon the not-for-profit groups obtaining a first mortgage commitment on terms and conditions satisfactory to the Commissioner of Community and Neighbourhood Services within three months from the date that any required zoning by-law amendment or minor variance comes into force; and (9) the appropriate City officials be authorized and directed to take the necessary actions to give effect thereto. Background: Let s Build Submissions: Two submissions have been received under the Let s Build program for funding assistance from the Capital Revolving Fund for Affordable Housing that would provide a total of 100 units of long-term affordable rental housing. Both submissions are from community-based not-for profit groups that are willing to donate their land for development and to manage the housing. A conservative estimation of the value of the private land to be made available for the housing is $2.7 million. Current market evaluations would be significantly higher. A commitment of a minimum of $500, of cash and in-kind donations has been made from one group. In addition, considerable volunteer time would be devoted to both developments. The City grant and loans to the two projects would lever over $17.2 million in new rental housing development that would otherwise not take place.

4 The Royal Canadian Legion Branch 213: Legion Branch 213 is proposing to redevelop their existing facility at 46 Denison Road East with an 80-unit apartment building for seniors. A new Legion hall would be provided as part of the ground floor and be available to all residents. Half of the units would be geared to the lower end of the private retirement home market, although the rents would be well beyond the affordable rent levels targeted under the Let s Build program. The remaining 40 units (20 one-bedroom and 20 two-bedroom) would be at affordable levels. Optional service packages for meals and care will be available to residents in the affordable units from the management company for the building. Currently the Federal Charter for The Royal Canadian Legion does not allow fundraising for capital projects such as affordable housing. As a result, the Legion is not proposing additional cash contributions at this time. The Legion is to form a new not-for-profit corporation to carry out the development and will be exploring potential fund raising options as a result of this approach. However, the Legion Branch 213 is willing and able to contribute its land to the not-for-profit housing corporation. The scale of the building with a range of units will be attractive to first mortgage lenders who will provide the majority of the funding. The site is residentially zoned, but requires an amendment to the zoning by-law to allow an apartment building. NUC-TUCT Non-Profit Homes Corporation: NUC-TUCT Non-Profit Homes Corporation was formed in 1994 by the congregations of the Newtonbrook United Church and the Taiwanese United Church in Toronto which share the church building at 53 Cummer Avenue in the North York Uptown area. The vision at that time was to use the existing resources of the church to provide community-based affordable housing for a range of households. Since the cancellation of the Provincial housing program in 1995, the congregations have been exploring other options. The Let s Build program can provide the financial leverage required. NUC-TUCT is proposing to build a 60-unit mixed income apartment building on the existing church parking lot. The building would contain a range of units suitable for singles, families and seniors. The site is adjacent to a shopping centre and the established neighbourhood has abundant surface and subway transit, schools, parks, medical services, libraries, shopping and a community centre. Parking for 30 cars will be provided in a garage to be built one-half level below grade. Any additional parking for the residential use can be satisfied by an agreement with the church congregations for use of spaces in the new parking lot that will be replaced on the lands retained for the Church building.

5 The Church congregations will contribute the land to its not-for-profit housing company for the development. The land was valued in 1994 at $1.68 million. In addition, the congregations have committed to raising donations of cash and in-kind contributions valued at $500, in order to further reduce the rent levels for some of the units. The North York Uptown Part II Official Plan designates the site for high density residential at 2.2 times lot coverage, thereby encouraging the proposed development. However, the existing zoning is low for density residential uses and an amendment to the zoning by-law will be required to implement the Official Plan designation. Legal Agreements: A series of agreements were developed to facilitate affordable housing development as part of the Let s Build program. These agreements include a Pre-Development Agreement, a Lease Agreement, an Affordable Housing Agreement and a Loan and Grant Agreement. The broad objectives of these agreements are to: establish a framework of accountability for the use of City-owned land and funds from the CRF; and, ensure that City housing objectives including affordable rent levels and the targeting of low-income tenants are achieved over the long term. As no City land is involved in these two developments, the documents will be not be as extensive and will be modified by the City Solicitor as required. Recommended Use of the Capital Revolving Fund: The Reference Group for the CRF has reviewed the business plan submissions for the two developments and has recommended funding, subject to an upset amount being established and City approval of the final construction budget. The recommended grant and loans are based upon the business plans submitted to the City by the two proponents. However, the actual the upset grant and loan limits recommended in this report have been increased by 4 percent to reflect recent increases in interest rates and projected inflation in construction costs. The upset amounts for the grant and loans are shown in Attachment 1. As a part of the final pre-development review, construction budgets will be examined by an independent quantity surveyor and, where appropriate, a loan at a level below the upset amounts recommended in this report may be provided. On the other hand, if this review indicates that major increases in costs would prevent the achievement of the affordable housing targets outlined in the business plans, the funding negotiations may be terminated, and the action reported to Council. Definition of Affordable Housing: For the purposes of the Let s Build program, the definition of affordable housing is housing that is available at a maximum of 90 percent of the average market rents as measured by the Canada Mortgage and Housing Corporation rental survey, adjusted annually. For the end of 1999 this produced maximum affordable rents from $ for a bachelor unit to $ for a three-bedroom unit. Target rents are also established and set at the shelter component of social

6 assistance for the various unit sizes. These target rents ranged from $ for a bachelor to $ for a three-bedroom unit. Community Involvement and Consultation: Both the housing developments being recommended in this report will require an amendment to the zoning by-law. This statutory process, of course, requires public notice and community consultation. Both developments will also be required to meet normal City standards and obtain the usual building approvals. Possible Loss of Affordable Housing: If the not-for-profit housing provider defaults under its obligation to complete the construction of their project, or to continue to provide the housing units at affordable rents, the agreements with the City will permit it to seek recovery of the loans from the CRF. However, there is a risk that the housing units would no longer be available at affordable rents. Loans from the Capital Revolving Fund for Affordable Housing: Loans provided from the CRF will be required to be repaid out of net cash flow from each project. Projections included in submitted business plans indicate that the not-for-profit groups receiving loans through the CRF will be able to adhere to their proposed repayment schedules. There is a risk that circumstances may change so that net cash flows are not sufficient to meet mortgage obligations and therefore the groups may not be able to comply with the terms of their repayment agreements. Conclusion: Between 1998 and 2000, City Council has adopted a number of policy initiatives to help create an environment in which the private sector and community groups will be able to develop affordable housing for people with a range of housing needs that are not currently being met in the market. Approval of this report will demonstrate how City resources can assist community groups in using their assets for the provision of affordable housing. Contacts: Evan Wood, Shelter Housing and Support Division, Tel: /Fax , ewood2@city.toronto.on.ca List of Attachments: (1) Details of the Proposed Agreements (2) Location Maps

7 Attachment 1 - Details of the Proposed Agreements The Royal Canadian Legion Branch 213: Property Address: Legal Description: 46 Denison Road East, City of Toronto Part of lot 4, concession 5 west of Yonge Street Approximate Dimensions: Frontage: 233 ft. (71 m) Depth: 150 ft. (44.7 m) Approximate Site Area: 34,950 sq. ft. (3247 m²) Estimated Land Value: Mortgagor: Contact: Agent: Estimate project value: Private First Mortgage: City Loan $900, (conservative) Not-for-profit housing corporation to be formed by The Royal Canadian Legion Branch 213 for the development of 46 Denison Road East Pat Kentner, President The Royal Canadian Legion Branch Denison Road East Weston, Ontario M9N 1B7 Peter Grady Legion Seniors Housing Developments Inc $8.83m Estimated at $5.94m Not to exceed $2,065, structured as $1,230, at 0 percent interest and $835, at 10 percent interest; any reduction in total loan amount to come from interest free portion. City Grant Not to exceed $146, Affordable Housing Agreement: Proposed Units Provided: 40 units within an 80 unit, eight storey apartment building Proposed unit mix: 20 one-bedroom units at $ two-bedroom units at $ Rent levels: Rents within the affordable target range of the Let s Build Program. NUC-TUCT Non-Profit Homes Corporation:

8 Property Address: Part of 53 Cummer Avenue, City of Toronto Legal Description: The whole of lots 253 to 259 and 266 to 269, registered plan 5345, Registry Office of the East and West Riding of the County of York, now City of Toronto (entire unsevered land holdings, including church building) Approximate Dimensions: Total lot, including existing church building Frontage: 304 ft. (92.7 m) Depth: Irregular from 138 to 245 ft. ( 42 to 75 m) Approximate Site Area: Estimated Land Value: Mortgagor: Contact: Agent: Estimated Project Value: Private First Mortgage: City Loan City Grant 68,000 sq. ft. (6,317 m²) $1,680, (1994 appraisal, housing portion only) NUC-TUCT Non-Profit Homes Corporation Evelyn Robertson, President NUC-TUCT Non-Profit Homes Corporation 53 Cummer Avenue North York, Ontario M2M 2E5 Nancy Singer Development Consultant $8.4m Estimated at $3.5m Not to exceed $2,960, at 0 percent interest $nil Affordable Housing Agreement: Proposed Units Provided: 60 units in a six-storey apartment building Proposed unit mix: 14 one-bedroom units at $ to $ two-bedroom units at $ to $ three-bedroom units at $ to $1, Rent levels: Half of the units are at rents within the affordable target range of the Let s Build Program. The other half of the units are at modest market units for older existing rental units. Forty-five of the units will be affordable to households with an income up to 80 percent of the median income for the North York market area.

9 Councillor Frances Nunziata, York-Humber, appeared before the Community Services Committee in connection with the foregoing matter.

10 Insert Location Map of RCL 213 Subject Property

11 Legal Description of RCL 213 Subject Property

12 Insert NUC-TUCT Non- Profit Homes Corporation 53 Cummer Avenue