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2024-04-22 Growth Committee Agenda Packet - Open Session GROWTH COMMITTEEREPORT Report DateApril 18, 2024 Meeting DateApril 22, 2024 Service AreaGrowth and Community Services HerWorship Mayor Donna Noade ReardonandMembers of the Growth Committee SUBJECT: Affordable Housing Soft Cost Grant Program OPEN OR CLOSED SESSION This matter is to be discussed in Growth Committee Open Session. AUTHORIZATION Primary AuthorCommissioner/Dept. HeadChief Administrative Officer Andrew ReidAmy Poffenroth J. Brent McGovern d RECOMMENDATION That the Growth Committee recommendthatCommon Council adopt the Affordable Housing Grant Soft Cost Program generally as presentedto the Growth Committee on April 22, 2024, and thatstaff be directed to prepare a Terms and Conditions of Fundingtemplate formfor the program for the approval of Common Council. EXECUTIVE SUMMARY The purpose of the Affordable Housing Soft Costs Grant Program is to increase the supplyof affordable housing units by funding non-profit housing developers during the pre-construction stage of a project.The Program will offer grantsup to $25,000 per project to registered non-profit organizationsto help offset the soft costs of a project. Grant Program, whichprovides grants up to $200,000toreimburse hard costs for the construction of affordable units. Funding for the Soft Costs Program is through nd. The Program is anticipated to generate greater support and coordination of the localnon-profit sectorwith other levels of government to help address key housing gaps. PREVIOUS RESOLUTION On December 18, 2023 Common Council entered into a Housing Accelerator Fund Contribution Agreement with the Canada Mortgage and Housing Corporation. REPORT - 2 - the Canada Mortgage Housing Corporation (CMHC), the City is responsible for delivering on eight initiatives aimed at increasing housing supply and introducing systemic changes at the municipal level. Initiative 4 of the Action Plan Capitalizing Affordable Housing aims to incentivize deeply affordable units through the provision of grants geared primarily toward non-profit housing developers. The introduction of a new Affordable Housing Soft Costs Grant Program is intended to increase the supply of affordable housing units by funding non-profit housing developers during the pre-construction stage of a project. Non-profit developers are often required to incur expenses during the preliminary stage of a project as part of submission of a proposal for federal funding programs. The soft costs program is intended to complement the existing Affordable Housing Grant Program, which provides funding on a per affordable unit basis. The Soft Costs Program will help non-profit housing projects move forward at the early and critical funding stage. Program Details The Soft Costs Program will provide 15% of the soft costs prior to construction up to a maximum of $25,000 in the form of a grant to support the development of eligible affordable housing projects. Eligible costs include Consultant fees for professional engineering, architectural, or accounting services including the preparation of drawings, designs, site surveys, environmental site assessments and geotechnical reports, energy and accessibility modeling studies and project viability studies. Eligible costs also include a Building permit fees. Eligibility Criteria Projects must meet all eligibility criteria, including but not limited to the following (pg. 5-6): A minimum of 5 net new affordable housing units proposed, with at least 50% of the development consisting of affordable housing units. The applicant must be a non-profit organization. The project must be new construction, conversion of an existing commercial/institutional use, or rehabilitation of a residential building. Evaluation Eligible projects will be evaluated by a Grant Committee according to the following criteria summarized below (pg. 6-7). Projects may score up to 50 points and further consideration will be given to equitable distribution of grants on an annual basis: Demonstrated track record and financial stability of the organization. - 3 - The project will address the critical housing gaps Housing Needs Assessment. Quality of submission in terms of project readiness, timelines for funding submissions and anticipated construction dates. Alignment of the project with City plans, by-laws and strategies (Municipal Plan, Affordable Housing Action Plan, HAF Action Plan, Zoning) Applicants may be asked for documentation such as financial statements of the organization, correspondence from other funding partners, and quotes/invoices to support the evaluation of their applications. Grant applications will be received throughout the year and reviewed by the Committee quarterly or based on the volume of applications received. Staff is seeking feedback from Growth Committee on whether they would prefer Grant Committee decisions come back to Council prior to any award, or whether the Committee is comfortable with delegating this authority to the Grant Committee, based on the policy criteria. The primary benefit of delegating the authority is the ability to expedite approvals, which will provide recipients with greater certainty and make the program more effective, in addition to saving time and resources. Awards will be publicized by the City for transparency, regardless of who (evaluation committee or Council) awards the grant. Disbursement of Grant Funds / Terms and Conditions Funding Successful applicants will be issued an approval letter and be required to sign a Terms and Conditions Funding Form. To ensure appropriate stewardship of funds, the recipient must agree to the following terms and conditions, which include the following: To prepare and deliver an attestation report outlining how the funds were used; and, To use the funding for the purpose outlined in the application. If these conditions are not complied with, the recipient will be liable to reimburse the City. Final attestation reports will be made publicly available per the policy requirements. STRATEGIC ALIGNMENT Council Priorities Common Council has established five priorities for their 2021-2026 term. Affordable Housing aligns with the following Council Priorities. Action is needed to increase supply of housing that will address the non-market gaps in the local housing continuum and ensure a mix of affordable housing in all neighbourhoods. Grow: Population Growth o Grow our population at a rate of 2% annually by the end of - 4 - Belong: Livable Neighbourhoods o Facilitate a mix of affordable housing in all our neighbourhoods. Affordable Housing Action Plan The Soft Costs Program will invest in two major themes of the Action Plan. Eligible projects include both those which aim to acquire and preserve existing housing stock as affordable housing and new construction that will increase supply of affordable housing. The Soft Costs Program s goal of investing in non-market housing solutions by coordinating local affordable housing efforts between levels of government to gain access to these funding programs. Only through coordinated effort will the City be capable of addressing the two most critical housing gaps of supportive/special need housing and housing for the most vulnerable households. Housing Accelerator Fund Action Plan The Soft Costs Program will implement initiative 4 Capitalizing Affordable Housing of the HAF Action Plan. SERVICE AND FINANCIAL OUTCOMES The 2024 budget for the Soft Costs Program budget will be $100,000, which should fund a minimum of four projects. The program is funded entirely by the Housing Accelerator Fund (HAF). For subsequent years of the HAF action plan, the soft costs program will be refined as needed, and the annual budget funded through the HAF plan will be based on uptake, program evaluation, and availability of HAF funds. Attestation reports will be monitored throughout the deployment of the program to understand whether project outcomes are in alignment with the goals of the program, and they will be made public. is 1124 units of which 101 units must be affordable units. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Stakeholder Engagement Upfront cost was identified as a funding hurdle throughout community consultation with the non- Housing Action Plan. Non-profit housing developers were also engaged specifically in the development of the Soft Cost Program and Program information was shared at the Developer Symposium on March 21, 2024. - 5 - Staff consulted with Envision Saint John, the City of Fredericton, and the City of Moncton (which offers a new and similar grant program). The City also reviewed a similar program (Preconstruction and Infrastructure Fund to Support Housing Fund) offered by the Regional Development Corporation (RDC) and the Seed Funding Program offered by the Canada Housing and Mortgage Corporation (CMHC) to ensure alignment with applications made by non-profits Internal Engagement The Program has been reviewed by other services areas, including Financial Services and General Counsel Office. A draft terms and Conditions Form (Schedule A) is currently being reviewed by General Counsel Office. ATTACHMENTS Attachment 1 Affordable Housing Soft Cost Grant Program Policy Draft . f Click here to enter text. . . . Title:AffordableHousingSoft Costs GrantProgramPolicy Subject:AffordableHousingSoft Costs GrantProgram Category:GrowthandCommunityServices PolicyNo.:GDS-XXX M&CReportNo.:XXX EffectiveDate:2024-xx-xx NextReviewDate:XXX Area(s)thispolicyappliesto:GrowthandCommunity OfficeResponsibleforreviewofthisPolicy: ServicesCommunity Planning and Housing, Growthand CommunityServices RelatedInstruments:PolicySponsors: M&C2022-304AffordableHousingActionPlan Commissioner of Growth and Community Services M&C No 2023-002 Affordable Housing Grant Program M&C No 2023-289 City of Saint John Housing Accelerator Fund 2024-2026 Action Plan DocumentPages: Thisdocumentconsistsof7pages. RevisionHistory: DateCreated: CommonCouncilApprovalDate: Contact: GrowthandCommunityServices 2024-xx-xx2024-xx-xx Contents 1. Policy Statement..........................................................................................Error! Bookmark not defined. 2.ProgramBackground....................................................................................Error! Bookmark not defined. 3.ProgramEvaluation.....................................................................................................................................3 4.Definitions...................................................................................................................................................3 5.Goals............................................................................................................................................................4 6.Soft Costs GrantOverview...........................................................................................................................4 6.1GrantDescription..................................................................................................................................4 6.2Intake Period.........................................................................................................................................5 6.3Eligible Expenditures.............................................................................................................................5 6.4DisbursementofGrantFunds................................................................................................................5 7.Project Eligibility Requirements..................................................................................................................5 8.GrantEvaluationCriteria.............................................................................................................................6 8.1Grant Committee..................................................................................................................................6 8.2Evaluation Criteria.................................................................................................................................6 9.Attestation Report......................................................................................................................................7 Affordable Housing Soft Costs GrantProgramPolicy 1.Policy Statement TheAffordable Housing Soft Costs Grant construction of deeply affordable housing by helping grow the share of housing stock in the city that is owned and maintained by registered non-profit organizations. Grants will be offered to assist with pre-construction project costsand will provide the non-profit applicants with greater opportunities to take advantage of available provincial and federal funding programs for housing. 2.Program Background TheSoft Costs Program is intended to increase the supply of affordable housing units by funding developers during the pre-construction stage of a project. The City recognizes that affordable housing developers often are required to incur expenses during the preliminary stage of a project as part of submission of a proposal for provincial and/or federal funding programs. A soft costs program has the potential to impact the work of local developers seeking to create affordable units at this critical funding stage. The program may also leverage other early phase development programs such as Pre-construction FundSeed Funding Program. 3.ProgramEvaluation a)The Soft Costs Program will be monitored and reported upon annually.At the end of the HAF period, program resultswill be publicly reported, as captured through an attestationreport required from all funding recipients.The following metrics will be used to evaluate the outcomes of the program: Total number of applications/organizations supported Total number of affordable housing units financially supported, permitted, and under construction Total number of project costs leveraged, by year, through soft costs support 4.Definitions Affordable housing unit (SD) through its Affordable Housing Rental Program and/or Canada Mortgage and Housing Corporation (CMHC). CMH affordable housing unit means a unit that provides a minimum depth of affordability where tenants pay no more than 30% of their before-tax income on housing costs and the unit remains affordable fora minimumof20years.Affordableunitmustmeet,atminimum,the definitionof-Investment Fund, where affordable housing unit means a unit that must be less than 80% of the Median Market Rent and be maintained for a minimum of 20 years. 3 CMHC/Federal Funding Programs CorporationwhichincludesbutisnotlimitedtotheNationalHousingCo-InvestmentFundand Rapid Housing Initiative. Commissioner means the Commissioner of the Growth and Community Services Department responsible for the oversight ofthis policy, or his/her designate. Non-profitdeveloper meansacorporationinvolved in the creation of affordable housing nopartofthe incomeofwhichispayabletoorotherwise available for the personal benefit of any proprietor, member, or shareholder thereof. Soft c means project costs incurred directly in connection with the designand planning of a proposed project prior to the commencement of construction. 5.Goals TheSoft CostsProgramisdesigned to achieve the following outcomes: Providing pre-construction funding to non-profit developers who are preparing a funding submission to the provincial/federal government for the creation of affordable housing units; Providing timely and relevant financial support to developersseeking to increase the supply of affordable housing, with an emphasis on non-profit housing developers; FulfillingtheAffordableHousingActionprincipleofpromotingpublicinvestmentfor public benefit; Supportinghousingprojectsinprovidinglong-termaffordablehousingoptions; Addressing the following gaps in the local housing continuum identified in the Affordable Housing ActionPlan:Supportive/specialneedshousing,housingtothemostvulnerable households,and affordable rental housing. 6.Soft Costs GrantOverview 6.1GrantDescription a)The Soft Costs Program provides15% of thesoft costs prior to constructionup to a maximum of $25,000to support the development of eligible affordable housingprojects. b)Where an applicant has been unsuccessful in obtaining provincial or federal pre-construction fundingand subject to written approval by the Commissioner,the Soft Costs Program provides up to 70% of the soft costs prior to construction up to a maximum of $10,000 to support the development of eligible affordable housing projects. 4 6.2Intake Period a)Grant applications will bereceived throughout the yearand reviewedby the Grant Committee quarterly(March, June, September, December), or through a Grant Committee meeting scheduled at the discretion of the Commissioner , based on the volume ofapplications received. b)Grant intake may pause or cease to occur at the discretion of the Commissioner , based on available funds. 6.3Eligible Expenditures ThefollowingexpendituresareeligibleundertheSoft Costs Program: a)Consultantfeesforprofessionalengineering, architectural, or accounting servicesincluding the preparation ofdrawings, designs, site surveys, environmental site assessments and geotechnical reports, energy and accessibility modeling studies and project viability studies. b)Building permit fees and other related pre-construction fees. c)No other costs will be considered unless approved explicitly in writing by the Commissioner d)Expenditures incurred prior to January 2, 2024,will not be considered eligible, unless otherwise approved in writing by the Commissioner. 6.4DisbursementofGrantFunds Grants will be disbursed to successful applicants upon the following: a)The Grant Committeeissuing an approval letter to the applicantconfirming their decision; and, b)The Funding Recipient signing an Affordable Housing Soft Costs Grant Program Fund -Terms and 7.Project Eligibility Requirements To be eligible for consideration, grant applicationsmust meet the following requirements: a)The applicant must submit a complete application form that includes all required information. The GrantCommitteereservestherighttodeterminewhethertheapplicationiscompleteor incomplete. b)At least 50% of the proposed development must consist of affordable housing units. c)The applicant must be the registered owner,acting on behalf of the registered owner with written permission, or provide proof of an option agreement or purchase and sale agreement of the property. d)The applicant must be a registered non-profit organization, unless otherwise approved by the Commissioner. 5 e)The project must propose the creation ofa minimum of 5 net new affordable housing units. f)Eligible projectsmust propose one of thefollowing: i.New construction ii.Conversionof an existing commercial or institutional use iii.Rehabilitation of aresidential building that will result in net new housing units. g)Eligible project types includethe following: i.Community and affordable housing ii.Mixed-housing (market / affordable rental units) iii.Transitional or supportive housing h) Municipal Plan and be in conformity with the Municipal Plan. i)The project must havereceived or have an application in the queue for all required planning approvals with a positive staff recommendation. j)Theapplicant or their affiliate must be ingood standing with the City in terms of any other existing agreements, notices to comply, By-law violations, property taxes, or overdue feesor charges. 8.GrantEvaluationCriteria 8.1Grant Committee a)Applications will be reviewed and awarded by a Grant Committee appointed by the Commissioner. b)The Committee may request additional documentation fromthe applicant to support their application, including financial statementsof the organization, correspondence from other funding partners,and quotes or invoices. 8.2Evaluation Criteria Applications will be reviewed and prioritized by the Grant Committee in accordance with the following criteria. Applications can score up to a maximum of 50 points: a)The applicant is anon-profit developer with a demonstratedtrackrecord in building and managing affordable housing with financial statements demonstrating the stability of the organization(10points); b)The extent to which the project will address the following critical housing gapsidentified by the : supportive/special needs housing and housing for the most vulnerable households(10points); c)The quality of submission in terms of project readiness, timelines for funding submissions, and anticipated construction dates(10points); 6 d)Alignment of the project with City plans, by-laws and strategies such as the Municipal Plan, Affordable Housing Action Plan, HAF Action Plan, Zoning(5 points) e)The project is undertakenon land that has already received appropriate planning approvals(5 points); f)The City is able to confirm the applicant has entered into an application process with Canada Mortgage Housing Corporation or NB Housing to support the development(5 points); g)The City is able to confirm the applicant has entered into an application process to seek other pre-construction funding through other sources such as the Regional Development Corporation and Canada Mortgage Housing Corporation(5 points); h)Consideration will also be given toensuring equitable distribution of soft costs grantson an annual basis. 9.AttestationReport 9.1 Funding recipients will be required to submit an attestationreport outlining how the funds were used. These reports will be made publicly available. 9.2 The City reserves the right to request additional information or explanation of such reports. 9.3 The funding recipient shall be liable to reimburse the entirety ofthe amount paid under the following conditions: a.If the funding recipient utilizes the funding for purposes other than that which is contemplated in their application without written consentof the City; or b.If the attestation reportto evaluate use of thefundingis not delivered to the City by the date specifiedin the Terms and Conditions of Funding without written consent of the City. 7 d l u o w m e t s y s e e t t i m m o C n o i t a u l a v E f o e p y t t a h W CƩƚƒʹCity of Saint John, New Brunswick <webform-noreply@saintjohn.ca> {ĻƓƷʹ Wednesday, April 3, 2024 4:22 PM ƚʹ Common Clerk <commonclerk@saintjohn.ca> {ǒĬƆĻĭƷʹ Webform submission from: Submission to Council Form \[ External Email Alert\] **Please note that this message is from an external sender. If it appears to be sent from a Saint John employee, please forward the email to spamsample@saintjohn.ca or contact the IT Service Desk.** Submitted on Wed, 04/03/2024 - 16:21 Submitted by: Anonymous Submitted values are: About Person/Group Submitting First name Adam Last name Pottle Mailing Address Telephone Email If you do not wish to have your personal information (address, phone number, email) become part of the public record, please check this box. Yes About your Submission Topic of submission Open pit at the top of King St Purpose for submission (what is the ask of council): Council should use all tools available to require the owner of the pit to install proper, 'permanent' 6' chainlink fencing around the perimeter pending construction. The wire mesh, rebar, Jersey barriers, and tattered signage are both unsightly and unsafe. Additionally, the closure of the right-turn-only lane on Charlotte should be restored until construction commences. Executive summary Immediate fix required for the site