A $3-million, interest-free loan for bridge financing to create supportive housing projects in Barrie has city council’s blessing.
The two-year loan to Redwood Park Communities, which was approved Monday night, will provide financing for these projects and be subject to funding assurances from the Canadian Mortgage and Housing Corporation (CMHC).
“This is straightforward, this is to build housing to prevent homelessness and house the homeless,” said Mayor Jeff Lehman. “The bridge loan is to allow the projects to happen faster if, and only if, the federal government commits the (CMHC) funding.
"If they don’t get the federal financing, we’re not giving them a loan," he added.
The loan will be fully repaid to the city by June 30, 2023, and the city will enter into a loan agreement with Redwood Park Communities, a charity which has been active in the community for a decade.
An amount of $1 million will be released in the interim and any further funding would be revisited by general committee at its meeting scheduled for Aug. 9, 2021.
“The money that we’ve provided is all based on Redwood actually getting guaranteed funding through CMHC,” said Coun. Ann-Marie Kungl.
But Coun. Sergio Morales wanted two per cent interest on the money lent, to be refunded or credited upon hitting construction targets.
“An unsecured, interest-free loan to anybody is unheard of,” he said. “This would be quite another level of risk. All this does is mitigate it.”
But Morales’ motion to that effect failed.
“We’ve agreed it would be an interest-free loan,” Coun. Clare Riepma said. “I see no reason to change that at this point.”
“I understand there’s risk to this,” Coun. Robert Thomson said. “By adding an interest rate of two per cent, how does that mitigate the risk to the corporation?
“It doesn’t add skin in the game. This is an organization which relies on good faith, asking people for money and donations. I don’t believe they’re not going to pay us back,” he added. “You either want to lend the money or you don’t.”
The motion to approve the loan passed by a 7-3 vote, with Couns. Morales, Mike McCann and Gary Harvey voting against it.
“It is a great project. I’ve seen this type of transitional housing work very well in other municipalities, but that’s not the problem,” Harvey said. “It’s just the fact they (Redwood) have come to the city with no guarantor attached to this (loan).
“I just have concerns with the ability to pay and, unfortunately, those concerns far outweigh others that I am willing to take with taxpayers’ money," he added.
Supportive housing is a combination of housing assistance and support that enable people to live as independently as possible in their community.
Redwood Park has one project of 12 units of transitional housing for families behind the Salvation Army Citadel Corps on Lillian Crescent and much of the cost has already been fund-raised. The other project can’t be identified because it involves the purchase of private property, but it would be under the federal government’s Rapid Housing Initiative (RHI).
The RHI is a billion-dollar program to help address urgent housing needs for vulnerable Canadians — especially during the pandemic — through rapid construction of affordable housing.
Redwood Park expects to hear about its funding applications approval in the next few weeks, but the money might not flow for many months. The city loan will allow Redwood Park to begin work on the projects right away; in the case of the transitional housing on Lillian Crescent, the pipes are already in the ground and construction can begin almost immediately.
The loan arrangement will also include the city treasurer releasing money in increments toward supportive housing projects approved by the CMHC. All draws of the money will be for construction costs and no operating costs, such as Redwood Park Community salaries. All draws must also be supported with construction invoicing.
Redwood will also provide a monthly report to the city, outlining the construction scheduling, costs and documentation to support all draws being made for construction expenditures associated with the supportive housing projects.
The County of Simcoe is the lead agency for social housing and support for both these projects. Operating funds will flow through the county and be paid for by all county residents.
Late last year, council approved a refundable $50,000 loan to support the County of Simcoe and Redwood Park Communities’ efforts to buy property for supportive and transitional housing in Barrie.
Redwood Park Communities provides safe, affordable and supportive housing. Its United House, for example, provides transitional housing and support to women leaving the Barrie Women and Children’s Shelter in five renovated, fully furnished apartments.
Since opening United House, this partnership has been expanded to offer additional housing options through the second-suites program. It provides tenants with affordable rental options in neighbourhood settings, while also generating rental income for homeowners. The space is rented out to Redwood Park Communities, which pays rent directly to the homeowner.
