A new policy at the Peterborough Housing Corporation (PHC) could help prevent a number of houses currently owned by the social-housing provider from falling into the private market.
The policy was quietly enacted by PHC’s board of directors last summer, according to CEO Hope Lee, and it stipulates how the organization will dispose of properties going forward. From now on, PHC will give affordable housing providers (including the City itself) the chance to purchase properties it’s selling before they get listed on the private market. This will give affordable housing providers the opportunity to purchase the properties themselves and maintain their low rents.
As a result, “more affordable housing units will remain available for low-income households,” states a recent report from municipal staff to city councillors.
The new policy comes as PHC sells off dozens of semi-detached duplexes it owns in the Collison Heights neighbourhood. These units have for decades comprised a significant portion of PHC’s stock of rent-geared-to-income housing, but the social housing provider is selling them and using the proceeds as a down payment to build two new affordable apartment buildings on Bonaccord Street.
To-date, 36 of the 50 Collison Heights houses have been sold, Lee said. Almost all have gone to private buyers. One unit in particular illustrates the opportunity this has created for investors. According to HouseSigma, the three-bedroom house at 288 Denne Crescent was sold in 2019 for $305,000. Then in 2021, it was resold for $440,000. And just this month, it was listed for rent on Kijiji.ca at a price of $2,200 per month not including utilities.
The original rationale for selling the Collison Heights houses to help fund the Bonaccord apartment buildings was that “scattered housing is less efficient and more expensive to operate than multi-residential properties,” according to the city staff report. However, in the eight years since the decision to sell was made, the housing market has changed drastically, staff note. “In this environment, losing any form of affordable housing — even to fund the construction of more — is harder to justify,” the staff report states.
PHC’s new policy aims to keep some of the properties as much-needed affordable housing. “Hopefully it will protect some of the Denne/Collison properties,” said Lee. In fact, she said it’s already started to work. In recent months, one house was sold to the municipality and two were purchased by One City Peterborough.
One City jumped at the opportunity to buy the two houses when PHC reached out about the idea, according to co-executive director Christian Harvey. “Our goal is to continue to buy up houses [for] people excluded from the housing market,” Harvey said.
The two units One City purchased are side-by-side, and have four bedrooms each. Tenants will be people who have experienced homelessness or who are at risk of experiencing homelessness, and there will be support services on site delivered by local addiction treatment service provider FourCAST, Harvey said.
Push to sell houses not “as aggressive” as before
When PHC first decided to sell the houses in Collison Heights, it stated that no current residents would be forced to leave their homes in order for the sales to proceed. The houses would only be sold as tenants left them voluntarily, a PHC press release from 2017 stated.
But the Bonaccord construction project went over budget, and when PHC ran into a cash flow crunch last year, it began to apply more pressure on tenants to move out, as first reported by Currents.
In March of 2022, a tenant on Collison Avenue received a letter from PHC that said moving out was “not optional,” and that his house would be sold “in the next 6-12 months.” Kyle Colvin had lived in the house with his family for more than two decades, and he said receiving the letter caused his anxiety to go “through the roof.”
“I just wanted a stable home,” Colvin said at the time. “That’s why we’ve been here so long.”
But Lee said the agency is no longer being so “aggressive” with its tactics. That’s because city council voted in June to provide PHC with an $8 million loan to help cover the Bonaccord project’s shortfall. “They gave us some cash flow assistance, so that it didn’t have to be as aggressive as that,” Lee said.
Currents was not able to reach Colvin to ask what happened with his housing in the year since we first reported his story. But according to HouseSigma, his house has not been sold.
Units at new Bonaccord building range from “affordable” to up-market
So what exactly is PHC building on Bonaccord Street?
The development consists of two buildings. The first has 34 units and was occupied by tenants in 2020. All but one of those units are currently “affordable,” meaning their rents are capped at 80 percent of average market rent, and some tenants have additional government subsidies to make them even cheaper. Some of the 34 units are dedicated to PHC’s Homeward Bound program for single mothers.
The second phase is almost ready for occupation, and it has 85 units. Sixty-five of those will be “affordable,” including 50 intended for seniors and 15 dedicated to people with experience of homelessness. The remaining 20 units will be rented at higher-than-average rents. Rental ads on various websites have recently been advertising one-bedroom units in the building for $2,200 per month and two-bedroom units for $2,800 per month, including heat and water.
Lee said including some market-rate units in the Bonaccord development is important, because it will help create a “mixed-income” community, which has various social benefits. And the rental income from market units helps to make the whole project financially viable, she points out.
Altogether, the two Bonaccord developments are expected to cost a total of $43 million, according to a June 2022 staff report. That’s about $3.5 million more than predicted in 2017. When all of the Collison Heights homes are disposed of, the proceeds from those sales are expected to total about $12 million. Another $5 million has already been provided by all three levels of government. That leaves $26 million that will be debt-financed, with the mortgage payments gradually paid off through the building’s rental income.
More funding needed for affordable housing acquisitions
There are 14 houses left for PHC to sell in the Collison Heights neighbourhoood. Three are ready to sell right now, Lee said, and she’s currently looking for a suitable buyer.
But PHC’s new policy alone doesn’t mean all 14 houses will remain affordable. Local housing providers still need to come up with the money to purchase them when they become available.
Lee said the policy stipulates that PHC will offer a 10 percent discount on the appraised value of a property if it’s purchased by a group that will keep it affordable. But even with this discount, the 14 remaining houses are expected to cost about $5 million in total.
To fund its recent purchase of one of the houses, the City of Peterborough dipped into its rainy day fund for social services. Meanwhile, One City received a “substantial capital donation,” augmented by $219,000 of federal money granted by the United Way, to help with its purchases, Harvey said.
Harvey said keeping all 14 remaining houses affordable is “of the utmost importance.”
“We need houses that are dedicated to people who are marginalized,” he said. “I think the government needs to either purchase [housing itself] or support non-profits like ourselves with purchasing houses that are committed to that purpose.”
While Harvey recognizes the importance of building new housing, he thinks construction timelines aren’t quick enough to meet the immediate needs of people experiencing homelessness. “The quickest way to create stock is to purchase already available houses and to take them off the market,” he said.
Some housing advocates at a national level agree with Harvey. Critics of the Liberal government’s National Housing Strategy have for years been saying that the federal programs need to be expanded to include funding for community housing providers to purchase affordable housing.
As it stands, the programs that make up the National Housing Strategy focus almost exclusively on building new housing — and those programs are failing to track their progress and failing to ensure that the housing they fund is actually affordable, according to a recent auditor general’s report.
On March 13, the House of Commons’s Standing Committee on Finance, which comprises MPs from all four major parties, recommended that the 2023 budget include new funding for the acquisition of affordable housing by community housing providers. Minister of Finance Chrystia Freeland is set to table the Liberals’ budget on March 28.