In a nearly $30 million deal that closed at the end of the month, the Housing Trust of Nova Scotia purchased five apartment buildings from HRM.
Ross Cantwell, president of the nonprofit group, said the majority of the 295 units will have affordable rents.
Two of the properties are in Dartmouth (on Albert Street and Portland Street), two on Evans Avenue in Fairview and one near the St. Margarets Bay Road roundabout.
“Our yardstick for success is how many of them we can keep affordable over time, so 75-80% at about the same rents as they are now,” Cantwell said.
Average rents for these units are now around $675 per month for a one-bedroom unit or $750 to $825 for a two-bedroom unit. Cantwell said it won’t change much, but some of the units will need to be market-rate due to project costs.
“A small portion may go to lower market rents over time, but our first priority will be to existing tenants to ensure we keep units affordable,” he said, adding that there will be town halls for tenants to fill in on all the details.
Going forward, he said he expects to develop a system where rent is balanced with tenant income.
The trust will also spend about $15 million on renovations with larger projects likely to start in about two or three months. Some of the units are in such poor condition that they are currently unoccupied and these will likely be renovated first, he said.
Cantwell said residents will not be moved due to the renovations, but may be asked to volunteer to move down the hall to a renovated unit so they can complete work in all units.
“Rent could be the same or $50 more, still very affordable,” he said.
A 13-year journey to affordable housing
Cantwell, a real estate consultant, property manager and developer, joined with other industry professionals to create the trust in 2009 to “own and manage units for low-income families,” said Cantwell. he declared.
They bought two properties on Gottingen and Maitland streets in 2010 with the ambition to build new affordable housing. It took years to draw up a plan and get approval for a six-storey building facing Gottingen Street, which was controversial, Cantwell said. They faced legal appeals from neighbors but won.
It took three years to find federal funding and during that time the budget for the first building, a 115-unit mixed-use complex, grew from $20 million to $35 million.
To build new, it costs about $350,000 per unit in a building of 50 or 100 units, not including operating costs, Cantwell said. This would require a significant amount of government subsidies.
“We’re trying to provide affordable housing, so it became clear to us that we missed the window that the costs were just (too high),” he said.
So they sold the Gottingen property in 2020 and more recently the group of volunteers hired a full-time consultant on staff. In late March – early April, they uncovered a collapsing deal in which a private developer sought to buy five apartment buildings from HRM.
The Trust paid around $30 million for the properties, which equates to just over $100,000 per unit.
“That sounds a lot more reasonable, doesn’t it?” he said.
“Instead of building a 115-unit building where 50% of the units will be subsidized (and the rents will actually be higher), we’re buying 295 units and hoping to keep the vast majority of them affordable.
A little help from HRM
At their May 31 meeting, the Halifax Regional Council voted to grant the Trust $445,500 who will take care of the transfer tax of 1.5%. And once they own the land, the Trust can apply for a 50% refund of their property taxes, which will save about $100,000 a year, if approved. Cantwell said he expects it to take at least six months for it to come into effect.
Funds from the sale of the Gottingen Street property as well as the future sale of the Maitland Street property will go towards this project. Cantwell said they also have funding from government partners, but he wouldn’t mention specifics yet until an announcement is made.
“Our objective is to preserve these buildings, to put them back on their feet, to keep the rents at the most modest price possible.”
“For me, it’s a really positive thing to have happened,” Coun said. Sam Austin (Dartmouth Centre) who owns two such properties in his district. “The obvious alternative is someone picks them up and starts doing expensive renovations, and then the rents would become unaffordable over time.”
Austin, who knocked on the doors of these buildings during his campaign, said there were a lot of seniors with limited incomes living there.
Com. Shawn Cleary (Halifax West Armdale), who owns property in his district, said it was unfortunate the Trust was unable to create new affordable housing, but preserving stock is also important.
“Given the market we’re in, it’s becoming increasingly difficult to keep existing affordable units,” Cleary said.
This situation also underscores the need for more federal and provincial government funding for affordable housing, Cleary added.
Com. Kathryn Morse (Halifax – Bedford Basin West), who has two properties in her district, said what the Trust has done here could serve as a model for other groups to consider the benefits of conservation rather than construction.
“It’s much faster to convert an existing building than to build a new one. Building new ones can take years, and we need apartments to stay affordable now,” she said.
Cantwell said the Trust was looking to acquire an additional 1,000 homes over the next five to seven years.