Edmonton city councillors will consider whether to sell vacant land in Riverdale to a non-profit for $5 in a bid to boost the affordable housing supply.
City administration is asking councillors to approve the sale of five plots of land for $1 each to Right at Home Housing Society, a non-profit affordable housing provider. In exchange, the non-profit would build and rent out 10 units at or below 80 per cent of market value.
A city report and the proposed terms of the 40-year deal will come before the city's executive committee for review on Monday.
Under those terms, the non-profit would agree to build the units within three years of the deal's proposed closing date, July 30, 2021. If construction does not start by then, the city could choose to buy back the land along 92nd Street at 102nd Avenue. The proposed deal also includes a $25,000 performance fee, which the non-profit would forfeit if it fails to finish the project by the July 2024 mark.
The proposal comes as the city looks to fulfil its plan, approved in 2018, to build an additional 2,500 units of affordable housing by 2022. The city added 438 affordable units combined in 2018 and 2019, according to the report.
Mayor Don Iveson said it's important to offer affordable housing "across the spectrum of need," from supportive housing options to near-market units, such as the Riverdale proposal.
"Obviously it's subject to further conversation at committee, but it's very consistent with the direction that we've said is part of our overall approach to supporting more affordable housing options in the community as all parts of the needs spectrum," Iveson said Thursday.
The 10 proposed units would be designed for families, divided between two duplexes and three semi-detached homes, the report says.
Riverdale, which borders the North Saskatchewan River east of downtown, has a 14 per cent supply of affordable housing units, the report says, two per cent below the city-wide target.
As of 2015, the neighbourhood had half as many low-income households compared to the Edmonton-wide average of nearly 11 per cent. A 2019 city poverty profile also highlighted Riverdale as one of two downtown neighbourhoods showing signs of gentrification.
"It's very consistent with the direction that we've said is part of our overall approach." - Mayor Don Iveson
If the deal is approved, the city would forgo the land's $1.6- to $1.8-million sale value and absorb a net loss of $98,356. The report notes between September 2017 and June 2020 city council has approved six land sales to affordable housing providers, along with a number of parcels to the non-profit Edmonton Community Development Company, for a cumulative book value loss of $7.6 million.
While Iveson maintains affordable housing is provincial and federal jurisdiction, he says the city has taken a lead in providing land for those projects.
"We would not grant those lands at a discount, or for free essentially as in this case, without commitments for meeting some of the needs in the affordable housing continuum," he said.
The federal government announced in October it would give Edmonton $17.3 million as part of its $500 million rapid-housing initiative. Another $500 million for housing projects is expected to divide up from provinces, territories, municipalities, Indigenous governing bodies and non-profits. Applications for that funding close on Dec. 31.
Iveson asked the federal government in September for $387 million to address Edmonton's housing needs, saying the city was facing a "crisis in homelessness and increasing social disorder," as a result of the economic impact of COVID-19 and crashing oil prices.
As of 2016, 48,550 renter households in Edmonton spend more than 30 per cent of their before-tax income on housing, according to the city's affordable housing investment plan. Nearly half spend more than 50 per cent.