Funding delays put Blacks Harbour housing project on hold

The non-profit developer behind a proposed $7 million housing project in Blacks Harbour says he's just waiting for federal funding approval to get things rolling.

Project: Village Housing is planning two buildings with a total of 30 units, said Mat Rouleau.

Half of them will be affordable units — having rents scaled to income. Some will have two bedrooms and some will have three.

The location is near the health centre on Lewis Connors Drive, the main corridor in the community, he said, just around the turn on the way to the Grand Manan ferry.

Federal and provincial funding

"We're really essentially ready to start putting this out to tender and looking at construction," said Rouleau.

But funding has to be lined up before that can happen, with the federal and provincial governments being the main funders of the project, he said.

Mat Rouleau is the director of development for Project: Village Housing in Blacks Harbour. He says construction was supposed to start this fall, but that's now been pushed back to spring because of funding delays. (Submitted by Mat Rouleau)

The Canada Mortgage and Housing Corporation and the Federation of Canadian Municipalities have already contributed some funding to the project for pre-development work.

The province has written a letter-of-intent to co-fund it, he said, but there's no final approval yet on a CMHC application that was made about seven months ago.

Municipal funding issue

Rouleau said they were hoping to start construction this fall, but that's now been pushed to spring, he said.

There's also a hiccup with an expected grant of $450,000 from the Municipality of Eastern Charlotte.

The municipality's request for a loan from the Municipal Capital Borrowing Board was turned down.

It's not entirely surprising, said CAO Jason Gaudet, because the board finances things like fire trucks, water projects and municipal buildings.

However, the newly formed municipality is desperate for housing and hasn't had time to amass any revenue of its own that could be spent more freely on this type of project, he said.

"It does take a time to build up the bank, so to speak. And this is our first year, but we were in a housing crisis, you know."

There aren't many developers interested in building housing in the area, he said, and the municipality would like to have a way to support projects it deems worthy.

The municipal grant for the Blacks Harbour project represents "a significant contribution," said Rouleau.

"I'll put it this way, it would be a sizeable gap to fill if we had to replace it with more funding."

Change in CMHC application process

A big part of the delay with the CMHC application has been related to the program rules changing, said Rouleau.

Initially, it only required a project cost estimate based on preliminary drawings, which cost about $50,000 to have done.

Then, the program requirements changed mid-stream, he said, and the cost estimate had to be based on completed drawings, which cost $300,000 to $400,000.

Bridge loans to pay for the drawings had to be obtained from private or social lenders, which will be rolled into the mortgage, said Rouleau.

"Essentially, what they've done is downloaded the risk to non-profits," he said.

"The process with CMHC really can't start until you've invested quite a bit of money and time into the project."

Low vacancy rate

Another big issue, said Rouleau, is there's only enough federal funding for 1,500 units of housing in New Brunswick.

Meanwhile, the estimated affordable housing deficit in the province is 20,000 units, he said.

The local vacancy rate in Eastern Charlotte is less than one per cent, said Gaudet, and employers like Cooke Aquaculture, Connors Brothers Seafood, and J.D. Irving Ltd. all need accommodations for their workers.

Xander Gopen is a senior planner and housing specialist with the Southwest New Brunswick Service Commission. He says some, but not all, of the new programs in the province's housing strategy may help smaller communities. (Submitted by Xander Gopen)

One of the new programs in the provincial housing strategy seems tailor-made for that. It's supposed to help house employees of rural businesses, said Xander Gopen, a senior planner with the Southwest New Brunswick Service Commission.

The Housing Hub is currently accepting applications from employers, he said.

A few other elements of the strategy could also be helpful, said Gopen, such as the Housing Working Capital Fund, however its details have yet to be announced.

Likewise, the Small Community Housing Infrastructure Fund is expected to help pay for things like pre-construction studies and designs, but it hasn't rolled out yet.

Other measures in the strategy seem less applicable to rural areas, said the planner.

Inclusionary zoning, for example, will allow cities to create zones where new development has a minimum portion of affordable units.

In small communities, however, a restriction like that could drive developers away, he said.

"Given the challenges we've had, even with providing incentives to developers to deliver affordable units, I can't see how forcing them to do it will make them more likely to."

Municipalities lost some ways to tap into funds for housing when the Local Governance Act was revised in 2017, said Gopen.

Some legislative tweaks might be helpful, he said.

"I'm a big believer in looking at history and seeing when things worked. … A lot of the affordable housing in this country was developed in the '60s and '70s," Gopen said.

"There may be ways to do it now, but it's so convoluted … municipalities can't figure it out and there's no clear guidance."