Financial uncertainty for affordable housing project amid $3.1 million dispute with city hall over development charges

A proposed affordable housing project for London newcomers is in limbo after city hall says they owe millions in development charges. Daryl Newcombe reports.

A 24-storey residential tower that will house newcomers to Canada is facing an unexpected financial hurdle because of a disagreement with city staff about a policy that waives development charges on affordable housing.

For five years the Cross Cultural Learner Centre (CCLC) has been preparing to build a 24-storey residential building at 763-773 Dundas St. in the Old East Village that will include at least 30 per cent affordable units and 22 per cent accessible units.

The financial plan anticipated having all the project’s development charges waived, but late last year city hall notified CCLC that it would be required to pay $3.1 million to the municipality in fees.

“City staff have recommended that only a portion of the units in the project should be approved for abatement of the development fees,” Quintin Lang, CCLC’s board chair tells CTV News.

Based on the city’s calculations, 75 affordable units would have $1.4 million of development charges waived, but the remaining 138 market rent units would require a $3.1 million payment.

The basis for the disagreement stems from city staff’s interpretation of CCLC’s mandate.

According to a staff report, “A technical reading of the DCA (Development Charges Act) requires that the full exemption be applied only to non-profit corporations whose primary objective is to provide housing.”

The report goes on to say, “The applicant, CCLC, provides many services and self describes as ‘London’s leading re-settlement agency,’ to provide integration services and support to newcomers and to promote intercultural awareness and understanding.”

In a letter responding to the city’s decision the CCLC’s lawyer writes, “Currently, 90 per cent of CCLC’s capital assets are dedicated to providing housing for refugees across multiple locations.”

The dispute comes as the project faces critical deadlines to remain on schedule.

Lang says negotiations are currently underway with the Canada Mortgage and Housing Corporation (CMHC), about providing a loan to cover the majority of costs.

“I don’t know how this might affect our negotiations with them,” he explained. “We’ve been dealing with them for several years. And the challenge is that we might have to go back to ground zero and start again with negotiations.”

The lawyer representing CCLC has filed a formal appeal of the decision and is seeking to have all development charges waived.

A special tribunal will consider both sides of the appeal during the Infrastructure and Corporate Services Committee meeting on Jan. 12.

In a letter of support, Executive Director of the Old East Village BIA Kevin Morrison writes, “This project represents one of the most significant and transformative investments in our district in decades. It directly advances long-standing city objectives related to intensification, affordable housing delivery, downtown revitalization, and the creation of complete, inclusive communities along major transit corridors.”

“The Old East Village BIA also notes that the project is being led by a community-based, non-profit organization with a demonstrated social mandate, and that housing delivery—particularly for newcomers and vulnerable populations—is central to the purpose of this specific development,” Morrison added.

“I think it’s super important to have that building there, to have all those feet on the street,” said Coun. Susan Stevenson whose ward includes the Old East Village.

“Staff are recommending to dismiss the complaint before us, based on the fact that they have followed all of the technicalities of the by-law appropriately,” Stevenson explained. “But it is within committee and Council’s purview to, notwithstanding that policy, grant the full DC [development charge] exemption.”

If CCLC’s appeal is unsuccessful, Stevenson will look to her council colleagues for another path forward.

“I will have an alternate motion ready that would grant the full DC [development charge] exemption, as was planned, so that the CMHC funding and the start of this project isn’t delayed,” she said.