High construction costs hit Ottawa's affordable housing projects

The John Howard Society of Ottawa says the 40 supportive housing units it's building on CarlingAvenue are desperatelyneeded in the midst of a housing crisis, but construction started at a bad time.

The not-for-profit won the bid in 2019 to build permanent housing for the homeless oncity-owned land near Dow's Lake, then broke ground in September 2020 only toface soaring construction prices, labour and material shortages, and pandemic protocols on the work site.

• City seeks Dow's Lake area land for supportive housing
• Homebuilders under pressure as material costs go through the roof

"You couldn't have had a worse time to start a capital project," said executive director Tyler Fainstat, who considered delaying the $19-million building to not put the organization's other programs at risk.

"We're a not-for-profit. We don't have large money bags, unfortunately."

Fainstatsaidthe John Howard Society is lucky the City of Ottawa is now stepping in to supplement the project with as much as $1.2 million to cover extra costs. The city isusing money that is being repaid from a housing-relatedloan.

Fainstat expects the building, which will also house a new head office for the John Howard Society of Ottawa, to finish construction in March as planned.

Moving from shelter to permanent apartment

That project is just one of several affordable housing efforts facing expensive construction.

The city's list of capitalspending for 2021 also includes $750,000 to be given to the Shepherds of Good Hope for cost overruns at its new buildingon Montreal Road near the Aviation Parkway. Those 42 unitsalso offer supportive housing residents get a permanent home as well asprograms on-site to help manage their alcohol.

Over the past decade, city staff say there has been a big shift to getpeople out ofshelter beds and into such units.

The trend sped up during the pandemic because of federal and provincial funding programssuch as the federal "rapid housing initiative," staff said, leading to such projects as the plannedShepherds of Good Hope expansion on Murray Street.

While that's a good thing the city could soon have 800 supportive units they don't come cheap.

Each supportive unit can now cost more than $400,000, city housing director Saide Sayahtold councillors at a planning meeting last week.

Along with construction prices, the programs themselves added costs, Sayah explained, becausethey required units to be built quickly using modular construction, but a limitednumber of builders coulddo so.

City housing officials expectother projects to facerising costsso it's putting more money into acontingency fund than it would in normal times.

Long list of projects

Overall affordable housing capital spending could total more than $40 million for 2021. City staff listed how it will spend its own $15 million, along with another $4.7 million and $22.4 million expected from the provincial and federal governments, respectively.

For instance, $2.7 million of provincial money goes tothe Centretown Citizens Ottawa Corporation to build an extra 18 units for a total of 49 on Forward Avenue in Mechanicsville, wherea city-run family shelterclosed in 2018.

Meanwhile,$5 million in city money is earmarked for 40 affordable units on municipally owned land off Jasmine Crescent in the ward of Beacon Hill-Cyrville.

That will also mean a new facility for theGloucester Food Cupboard, which operates on the site of an old condominium sales centre. The food bankenvisions a kitchen where it can be a modern-day food centre.

"Ottawa needs more deeply affordable housing,"said executive director Erin O'Manique.

"That's the reason why so many people come to our food bank, because after they've paid the rent there isn't enough money left for groceries."

The spending plan approved bythe city's planning committee last week must still receive council approval Sept. 8.