Good news is rare when it comes to affordable housing these days.
I’ll serve you two, on a platter.
The first: UTILE, a social economy company specializing in the construction of student housing, has just climbed into the top 100 of the fastest growing companies in Canada, according to the prestigious ranking of Report on Business1.
This is an unusual recognition for a non-profit organization. Also, and above all, proof that a business model focused on affordable housing can work to its fullest.
The second good news? Prepare well for this one.
The City of Montreal and its central district are capable of making life much easier for developers.
For UTILE’s most recent project, at the corner of Saint-Laurent Boulevard and Ontario Street, the removal of bureaucratic obstacles will allow the group to accelerate its construction schedule by one year and save millions .
An almost moving efficiency as it is so rare.
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Some might describe him as idealistic, but Laurent Lévesque, who co-founded UTILE in 2012, appears to me first and foremost to be pragmatic. The young urban planning graduate has spent years analyzing the problem of the lack of student housing, from all angles, with his colleagues.
They managed to come up with a model for building quickly, well, and at a good cost.
A model that works in real life, not just on paper.
UTILE has started or completed four brand new buildings, which currently house 500 students. There will be 3,000 within three years and the company’s goals are even broader.
PHOTO MARCO CAMPANOZZI, THE PRESS
Laurent Lévesque, general director and co-founder of UTILE
“For us, it is not insoluble: we found a solution for student housing and we are in the process of making it explode across Quebec,” Laurent Lévesque told me in an interview in his downtown offices. city of Montreal.
Projects of this type are not eligible for traditional subsidies, such as those from the provincial AccèsLogis program. To get them out of the ground, the UTILE team had to imagine new financing methods.
In addition to established players, such as the FTQ Real Estate Solidarity Fund or Desjardins, the group has used unsuspected investors: student associations. The Students’ Society of McGill University, for example, will inject $1.5 million into the new Saint-Laurent Boulevard project.
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L’UTILE is a “social” company, but it does not neglect the tight management of its construction costs. This is essential in the current inflationary context.
The group refined its recipe over the course of its first projects. He reproduces it from one site to another, with a few variables, to reduce the bill.
For example: the model of studios and apartments is more or less the same everywhere, which avoids starting from scratch each time, with all that this implies in terms of plans and quotes and the search for new suppliers.
“We don’t do miracles,” summarizes Laurent Lévesque.
The group has gotten away with construction costs of around $200,000 per unit so far, below the recent average for social housing projects.
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UTILE housing is not considered “social”, but rather “affordable”. Their rents are 20% to 30% below the average market price.
In the La Rose des vents project, in the Rosemont district of Montreal, studios rent from $709 per month, and two-bedroom units, at $1,275. In Trois-Rivières, in another building under construction, the four and a half will be offered at $949.
PHOTO PROVIDED BY USEFUL
A studio in the La Rose des vents building, in Montreal
Tenants sign leases and must vacate the premises once their university studies are completed, to make room for a new cohort.
The benefit of building buildings reserved for students is twofold, argues Laurent Lévesque. It makes it possible to meet a very real need – the shortage of student accommodation is severe – and at the same time free up rental apartments in the “traditional” market, which is just as tight.
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Let’s return to the City of Montreal now.
She has pulled out all the stops to streamline administrative procedures with the most recent UTILE project, which will include 167 housing units.
The City first granted an exemption to allow greater construction density on this land paid for 7.6 million. The additional floors will increase the fair market value of the lot to 13.2 million, estimates UTILE, which represents a “value creation” of 5.6 million.
Another accommodating factor, and not the least: the City quickly moved the project file through its various bodies, often dry, such as the urban planning advisory committee (CCU). It also approved the regulatory changes requested by the promoter, under its “section 89”.
This means, in French, that the project is not likely to be slowed down or blocked by a neighborhood referendum.
The City’s help (which could also be described as non-nuisance) will allow the construction schedule to be brought forward by one year. Savings of $40,000 per month, or $480,000, in interest costs on the land.
Thanks to this acceleration, UTILE will at the same time be able to save itself a year of inflation in construction costs (+ 5%). The equivalent of 2.35 million on a project valued at 47 million.
Together, these measures will total more than 7 million and will contribute “to making the project financially viable and offering affordable rents”, according to UTILE. This more than doubles the 6.3 million grant initially granted by the City for this project.
Well done.
To be redone, as often as possible.