City council’s decision Monday to guarantee a line of credit for the St. Albert Housing Society is a boost to its efforts to increase the stock of affordable housing in the city, its leaders said.
Not only will the society be able to purchase 12 more units at Big Lake Pointe, its affordable housing development, but it will be able to fund more affordable housing projects instead of what it could have done with a conventional mortgage.
“It’s an opportunity to acquire housing units at a cost we wouldn’t otherwise acquire them at,” said David McGreer, society board chair.
The society approached council last year asking for a comfort agreement with the city so it could get a mortgage to purchase the units. It owns 15 at the development already. But that request morphed instead into a proposal to guarantee a revolving line of credit the society could use to purchase the units, pay down, then draw on in the future for additional projects.
The units, ranging in size from one to three bedrooms, cost $120,000 each.
“It’s an opportunity we can’t otherwise pass on,” McGreer said.
The line of credit would allow the society to leverage those 27 units for future projects, which could be important when it is unlikely any new grant money will soon be coming from any other level of government.
“It allows us to put our equity to work instead of having it just sit there on a conventional mortgage,” said Doris Vandersteen, the society’s executive director.
But administration actually recommended turning down the revolving line of credit and instead supporting the society’s pursuit of a traditional mortgage, which it could have qualified for without a city guarantee. According to city manager Patrick Draper, a default would have made the city liable for the total cost of the loan and the lender would also have been able to take the Big Lake Pointe units offered as collateral.
“There really is very little security for the city because the bank or institution would have the 27 units as collateral,” Draper explained.
But Coun. Malcolm Parker put forward the motion to provide the guarantee for the revolving line of credit instead.
“We have many people that are very caring,” Parker said.
The motion barely passed 4-3 with Mayor Nolan Crouse, Coun. Cathy Heron and Coun. Cam MacKay voting against. Coun Wes Brodhead was the last to cast his vote and appeared visibly troubled, rubbing his forehead as he did.
“I wanted to explore the options here,” Brodhead had said prior. “I am supportive of the society and bringing more affordable housing to St. Albert but I’d like to explore the different options.”
Crouse said he voted against the motion because the debt of $1.4 million will show up on the city’s books.
“My issue was adding the number to our debt,” said Crouse. “The society could proceed with this project without the city.”
The 39 market rate units at Big Lake Pointe have been occupied. The society expects to receive its occupancy permit for the remaining 79 below-market-rate units by next month.
