(Quebec) The Legault government’s new affordable housing program faces a significant increase in construction costs of more than 30%, with a price per unit exceeding $450,000. Quebec assures that this outbreak will not have an impact on the number of housing delivered, but projects have been abandoned.
What there is to know
- The Quebec Affordable Housing Program was launched in 2022. It aimed to be “a much faster vehicle for building affordable housing in all regions.”
- The cost per unit of the first call for projects jumped from $344,899 to $453,996 during the last update from the Société d’habitation du Québec.
- According to the office of the Minister of Housing, the same number of housing units will be built despite everything, and this increase will be borne by the project developers. However, around a hundred units were withdrawn following abandonment, and the funds must be reallocated to other projects.
In its most recent update, the Société d’habitation du Québec (SHQ) shows that the Quebec Affordable Housing Program (PHAQ), which replaced AccèsLogis, has still not delivered housing: 324 of them are in the implementation phase and 1283 are in the development phase. What is also striking is the sudden increase in the construction price of these projects.
Umano, in Lévis, supported by a private developer, saw its construction cost double between July 13, 2022 and today. It now reaches 80.7 million, an average of $727,000 per unit. Le Monarque, in Sherbrooke, saw its bill increase from 44.7 million to 78.8 million, at a cost of $588,000 per unit.
Around a hundred housing units have also been removed from the list of housing units under development since December, we also note in this update.
Increase in costs
How can we explain this great leap? “A correction was recently made to the data concerning PHAQ projects so that the most recent versions of the financial arrangements of projects in progress can be considered,” indicated the SHQ in an email which was not signed.
“This increase corresponds to an increase in the cost of carrying out the projects and not the planned financial assistance, which will not affect the number of housing units that will be built,” added the organization. The amount of 300 million planned for 2022 therefore does not change.
PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE ARCHIVES
The Minister of Housing, France-Élaine Duranceau
From the office of the Minister of Housing, France-Élaine Duranceau, we also affirm that the money intended for abandoned projects will be able to finance new projects. “With the subsidies for “abandoned” projects, the objective is to refinance other housing projects, yes,” indicated the minister’s press secretary, Justine Vézina.
Mme Vézina affirms that the amount planned for each project will not change despite the explosion in costs. Promoters, whether private or community, will have to find the money elsewhere, whether municipal, federal or from private lenders or foundations, for example.
The SHQ dashboard does not include the two new waves of projects announced in the PHAQ in 2023 and 2024. This should be done by May, she indicated.
“Forward backwards”
Éric Cimon, general director of the Association of Technical Resource Groups of Quebec, which represents social economy enterprises dedicated to the development of community housing, does not agree. “We are moving backwards,” he says.
The significant increase in price can be explained by the increase in the cost of materials, more expensive financing, and decontamination of land, he explains. But since funding from the Quebec government does not follow, it quickly becomes very difficult, he adds.
“You have to find the shortfall elsewhere: go see foundations, do fundraising, for example. And they ask the cities to give more, but the cities don’t have the means,” he said.
For example, for the Le Monarque project, in Sherbrooke, The gallery and Radio-Canada reported in February that the City, with its contribution of nearly 10 million to the project, spent all of the sums it had reserved for social housing. Municipal officials voted against it, citing the high costs of the project.
We have reached the point where we have broken the piggy bank, scraped all the bottom of drawers and completely exhausted all our resources. Construction costs have exploded, meaning that we are no longer able to keep up.
Évelyne Beaudin, mayor of Sherbrooke, on Radio-Canada
Mr. Cimon, for his part, believes that Quebec faces a risk: if certain projects fall through due to this surge in prices and are abandoned, it will be necessary to reimburse professional fees, such as architect’s plans and construction plans. engineers, and start from scratch elsewhere, at the risk of seeing the price “per door” continue to increase.
“There is a shortfall. We manage to make edits, but it’s complicated. The price of the door keeps going up, Mr. Cimon said. You have to put in the money necessary to achieve the objectives at the time it takes place, because otherwise, it will cost more later. »