Social housing | Big promoters are told “no thank you”

At least three major developers who wanted to integrate hundreds of social housing units into their real estate projects were not given the green light, learned Press, an “extremely frustrating” situation that goes against the objectives of social diversity set by the City of Montreal.

Maxime Bergeron
Press

The Prével, TGTA and Atelier Chaloub Architectes (ACA) groups have proposed adding more than 300 low-rent apartments to projects across the city for two years. They took several regulatory steps and invested considerable sums to plan this social housing, but all had to be set aside for lack of adequate funding from Quebec.

“It’s still a shame: the day we want to create social housing, and we are seen as the bad guys who don’t want to do it, well, when we want to do it, the funds are not available. », Summarizes Laurence Vincent, CEO of Prével, one of the largest real estate groups in the city.

The company has attempted to integrate affordable housing into two of its most recent projects. In the Côte-des-Neiges district, Prével joined forces with the community housing developer Bâtir son quartier, to add 30 affordable housing units to a complex of 250 rental apartments. These dwellings would have occupied the first two floors of the building.

As with all private projects that include social housing, a technical resource group (GRT), in this case Bâtir son quartier, would have been responsible for developing the affordable component. The TSOs are social economy enterprises that take care of obtaining the necessary financing from the various levels of government in order to then build community housing.

Economies of scale

TGTA, another major player in the real estate industry, experienced a similar situation in the Mercier – Hochelaga-Maisonneuve borough. In 2019, the group acquired the former Grace Dart hospital on rue Sherbrooke Est, which it plans to renovate and expand in order to create 300 traditional rental apartments.

Even if it was not required to do so, TGTA decided from the start to integrate around fifty social housing units on the site of its project, a stone’s throw from the Cadillac metro station. The plan was to cede part of the land to Bâtir son quartier so that affordable housing could be built at the same time as traditional apartments.

This coordinated strategy aimed to achieve economies of scale and avoid the nuisance of a construction site to future tenants. “In our mind, it has always been clear that the social housing project could start at the same time as ours”, underlines Martin Galarneau, partner of the TGTA group.

The project has evolved and passed all the required regulatory steps for more than 18 months. The start of construction was set for spring 2022. Then, last June, TGTA learned that the social component could not go ahead, due to lack of funds. The portion of land intended for community housing will therefore remain vacant for an indefinite period.

“It means that I am going to start a project, I will eventually start renting it out, and I will not be able to say when the social housing project, which is the neighboring project, will be carried out, deplores Mr. Galarneau. . It creates some uncertainty. ”

While saluting the “good faith” of city officials, Martin Galarneau underlines that he finds himself “wet” as a promoter. The mayor of the borough, Pierre Lessard-Blais, is just as disappointed at the turn of events.

Mr. Lessard-Blais deplores the underfunding of the Accès-Logis program, managed by Quebec, which, according to him, only meets a tiny fraction of the current needs for affordable housing. And this, despite a reinvestment announced just a few weeks ago (see box).

A “discouraged” promoter

All these pitfalls risk discouraging private companies from taking an interest in the construction of affordable housing, believes architect and developer Antoine Chaloub, from the ACA group. He has tried – in vain – to develop two projects totaling 200 affordable housing units for two years in Montreal, again in partnership with Bâtir son quartier. The land is still vacant to this day.

“It may discourage the few promoters who were willing to do this kind of project because you know, these are not projects where we make margins of 25% profit, he underlines. These are projects where, when you reach 7% or 8% of profits, it’s already quite an achievement. ”

Édith Cyr, Executive Director of Bâtir son quartier, deplores the lack of funding granted by Quebec to the Accès-Logis program. His group supports housing cooperatives, non-profit organizations and private developers in arranging financial arrangements to build community housing of all kinds. The situation is the same for everyone: painful.

At present, Bâtir son quartier is working on 16 projects totaling 1,467 affordable housing units, which are “slowed down or blocked” due to lack of funding, says Mr.^me Cyr. Several could be under construction or even already completed if the money was available, she argues. In addition, there are 10 other projects bringing together 928 housing units which are also struggling to obtain funds.

“I do not understand that in a context of lack of housing, where we recognize that people with low and middle incomes are those who have the most difficulty in finding housing and that we have projects that we could implement. ‘before, we do not prioritize funding them sufficiently, deplores M^me Cyr. I find that inconceivable. ”

In addition to the underfunding, the lack of recurrence of the various government programs makes it difficult to plan affordable housing projects, which involve many stages and several stakeholders, specifies Mr.^me Cyr.

Affordable housing

Quebec announces 200 million

The Legault government announced an investment of $ 200 million over four years to stimulate the construction of affordable housing across Quebec in its most recent economic update. The details of this program will be revealed when the holidays return, said Minister of Municipal Affairs and Housing Andrée Laforest in a written statement to Press. “This is a program that will breathe new life into access to affordable housing in Quebec, since, thanks to it, all housing stakeholders, such as community organizations, housing offices, the sector private sector, can help increase the supply of affordable housing in all regions. The goal is to speed up the pace of delivery! This is another step in the right direction and shows that access to affordable and adequate housing is a priority for our government. ”

A “drop of water” in the ocean

The administration of Valérie Plante wants to add 2,000 affordable housing units per year within four years on the island of Montreal. To achieve this, it relies on its new regulation on the “mixed metropolis”, which since April requires all developers of residential projects of more than five homes to add an affordable component. If this is not possible for them, they can pay financial compensation or cede land or buildings to the City. However, the amounts currently offered by Quebec are far from sufficient to meet the demand for anyone who wants to build affordable housing, says elected Benoit Dorais, responsible for housing in the metropolis. “It’s like a drop of water in the ocean. The needs are enormous. He believes that the 200 million announced recently are “the beginning of good news”, but adds that “Quebec must reinvest, not timidly, but massively”.

What is community housing?

The Quebec Network of Housing NPOs offers a clear definition of what social and community housing is: ” [Il] corresponds to a collective property formula which has a social mission and does not pursue any profit purpose. This type of housing can be managed by non-profit organizations, cooperatives and housing offices. “Among these units, there are a good number of which the rent is established according to the income of the tenants, the others being rented at a lower rent than that of the market”, one underlines. The concept of “affordable” housing is much more elastic and sometimes used in a way that is not very representative of the reality of low-income households. Ottawa has recently come under heavy criticism for its interpretation of “affordability”.