Development of Housing for the Homeless -

30 St. Lawrence Street

The Community and Neighbourhood Services Committee recommends the adoption of the following report (June 25, 1998) from the Commissioner of Community and Neighbourhood Services:

Purpose:

To provide an update on progress to date in realizing this proposed permanent housing for formerly homeless men and women, and to obtain authority for an advance from a grant authorized by the Council of the former City of Toronto.

Funding Sources, Financial Implications and Impact Statement:

The recommended advance would come from previously authorized funds.

Recommendation:

It is recommended that the Commissioner of Community and Neighbourhood Services be authorized to advance $40,000.00 of the grant monies from the Capital Leverage Fund to permit completion of working drawings, to allow tendering to proceed, and to pay the application fee for a Building Permit.

Background:

The 30 St. Lawrence Street site has been owned for many years by the City of Toronto. Since 1982, Dixon Hall, a multi-service community agency which provides a range of cultural, educational and social services, has managed an emergency shelter for homeless men in a building on the street frontage, under contract to the City, and with staff funding through Metro Toronto Community Services. The building was not designed for this use and was inadequate in many ways. The intent has been to phase the shelter out, and provide alternative, long term housing. The existing shelter on the site was closed and vacated by July 1, 1998. Dixon Hall worked closely with other hostel and housing providers to ensure that the men who use the shelter found alternative accommodation.

This project is the first long-term housing project for homeless people to be developed in the City since the cancellation of the non-profit housing program by the Provincial Government in 1995. It is being developed by Dixon Neighbourhood Homes (30 St. Lawrence Street) Inc. (DNHI), a subsidiary organization of Dixon Hall, with $400,000.00 in grant support from the Housing Division's Capital Leverage Fund (CLF) and City-owned land conveyed to DNHI for a nominal sum. DNHI will construct and manage ten four-bedroom townhouse units on the rear portion of the 30St.Lawrence site. The project will house 40 previously homeless men and women. The units would be affordable based on the shelter component of the existing social assistance programs. As the DNHI proposal uses less than the full site area, the City would be able to offer the bulk of the street frontage for sale.

The Council of the former City of Toronto adopted Clause No. 34 of Executive Committee Report No. 21 at its September 22 and 23, 1997, meeting, agreeing to convey the rear portion of the site to Dixon Neighbourhood Homes (30St.Lawrence Street) Inc., at nominal cost, subject to a number of conditions being fulfilled within nine months, i.e., by June 23, 1998. This report outlines the status of the development proposal at this time, and requests certain modifications to the previously approved terms of the conveyance.

Comments:

The City has prepared a conditional agreement with Dixon Neighbourhood Homes (30 St. Lawrence Street) Inc. (DNHI) which can be signed at any time. It conveys, at nominal cost, the rear portion of the 30 St. Lawrence site providing that DNHI, by June 23, 1998, has:

(i)made application for and obtained any required Committee of Adjustment consents.

The Committee's favourable decision on the DNHI application became binding on June4,1998.

(ii)amended the existing Social Housing, Collateral, and Development Agreements.

These Agreements have been amended to establish requirements appropriate to the current development proposal, and have been signed on behalf of DNHI. They are being held in escrow by the City Solicitor for registration on closing.

(iii)obtained mortgage insurance, and commitments for construction and long-term financing.

DNHI has a May 7, 1998, letter from CMHC indicating that it is prepared to consider an application for an insurable loan. They require, however, that the site be remediated before giving a final mortgage insurance commitment.

DNHI has obtained conditional approval from the Metro Credit Union for first mortgage financing and has also received a commitment from the Canadian Alternative Investment Co-operative (CAIC) to provide second mortgage funds. However, to obtain the maximum amount at the most advantageous rate from CAIC, a guarantor is required. DNHI has approached the Ministry of Municipal Affairs and Housing to provide the necessary guarantee. A decision is expected shortly.

(iv)entered into a formal agreement with a development partner/project manager for the construction of the proposed development.

DNHI has a letter of understanding with Mark Guslits and Association to provide construction management services.

City staff have been working with Dixon Neighbourhood Homes to ensure that the conditions established by the former City of Toronto Council, noted above, have been met to the satisfaction of the City Solicitor and the former City of Toronto's Deputy Commissioner of Housing.

Once requirements (i) to (iv) above were completed, staff were to undertake the demolition of the existing buildings and site remediation at an estimated cost not to exceed $340,000.00. As remediation is a precondition of CMHC providing mortgage insurance, and as the favourable price obtained several years ago expires on August 1, 1998, demolition and remediation are scheduled to commence on July 20, 1998. Funds for the demolition/remediation are coming from $190,000.00 in insurance settlement monies received following an on-site fire several years ago, held for the account of this project, and $150,000.00 to be advanced by the City from the Land Banking Fund, coming from monies received from the sale of sites declared surplus after the Province's cancellation of the social housing programs.

Once the 30 St. Lawrence project is under construction, the City can offer the front portion of the site for sale on the open market. Based on a recent appraisal of the entire site, the recovery from this sale could be as high as $400,000.00. The recovery from the sale of the front portion of the site should, therefore, be adequate to recoup the City's direct out-of-pocket expense for demolition/remediation, with some additional income to the City. In the event that a closing does not occur with DNHI, for reasons as yet unforeseen, and despite the best efforts of all parties to achieve this badly needed housing, the City will be in a position to sell the clean, vacant site in its entirety. The sale of a clean site should also result in the City recouping its investment in demolition and remediation as a purchaser will not discount an offer by their estimated cost of clean-up.

The Council of the former City of Toronto granted $400,000.00 from the Capital Leverage Fund to DNHI to assist with the capital costs of the development. This amount was subsequently confirmed through the budget process of the new City. It was intended that these funds only be advanced after closing, and according to the progress of construction. Closing will not occur, transferring title to the site to DNHI, until they have a satisfactory construction price and a Building Permit. As both pricing and a permit are dependent on complete contract documents, these must be completed. The group has no funds of its own. Therefore, an advance of $40,000.00 from the previously approved grant should be provided now to allow the development to advance to the pricing and permit approval stage. The money used to fund the permit application will in fact flow back to the City.

Conclusion:

Funding reductions by senior levels of government combined with social and economic changes over the past decade have created a larger and more vulnerable group of low-income people. The most visible aspect of this change is the more than 5,000 people in Toronto who are homeless and who sleep in hostels, stairwells, sidewalks and over subway air vents.

DNHI has presented a proposal for an innovative development to house 40 formerly homeless men and women. This is an important opportunity for the City to participate in the creation of an innovative project to provide permanent housing for the homeless. The proposal will also assist the City in meeting its objective, as stated in the former City of Toronto's Official Plan, to use public land for affordable housing.

Contact Name:

Joanne Campbell

Tel: 392-6135/Fax: 392-3037