Costs soar for low-income housing project in Sudbury

A Greater Sudbury sign is pictured in this undated photo. (File)

Costs have risen by almost $1 million for a seniors housing project in New Sudbury, but a staff report on the plan says the added costs will be offset by an increase in local property values.

The plan is to convert a property on Sparks Street into 14 affordable units. The city bought the property in 2020 using funds from the federal government, with an eye on tearing it down and building a new complex.

"The new affordable passive housing project will provide 14 one-bedroom units on an existing centrally located site," said the staff report on the project.

"The site will be completely redeveloped, removing existing foundations, retaining walls, culverts, sidewalks, curbs, asphalt and gravel infill of the previous existing building."

Initial estimates pegged the cost for the project at $5.5 million. Money for construction was to be raised through the sale of vacant homes owned by the city.

But rising costs largely fuelled by the COVID-19 pandemic increased that estimate to $6.35 million, plus $1.1 million for contingencies.

"This cost increase is not a local phenomenon being experienced by 1310 Sparks St. alone," the staff report said. "A review of other housing redevelopments and similar construction projects appear to demonstrate a similar trend, with escalating redevelopment costs."

While costs have soared, so too have housing prices in Greater Sudbury. The city was hoping to raise the $5.5 million through the sales of 18 vacant homes, but ended up netting $6.2 million.

"As a result of the hot housing market in the City of Greater Sudbury, the units have been sold in 'as is' condition at average sale prices exceeding the listing price by over $100,000 each," the report said.

"The additional revenue generated from these sales are anticipated to be sufficient to cover the increased costs for the Sparks Street project."

The report is headed to the city's finance committee Feb. 15. Read the full report here.