Private housing developers could receive up to $95,000 per unit for as many as 20 new affordable rental units built in Newfoundland and Labrador. A newly released request for proposals (RFP) from the provincial housing corporation offers the incentive, through a loan forgiveness model, to housing providers that commit to keep rents at a designated low-end-of-market rate for a period of 15 to 20 years.
The provincial government is targeting about 850 new units of affordable rental housing through the program, which also has a stream for non-profit, co-operative housing and Indigenous providers. The latter group is eligible for a higher capital subsidy of up to $180,000 per unit, but will have to charge lower rents than their private sector peers and keep units as affordable stock for 25 to 30 years.
“The government of Newfoundland and Labrador welcomes the opportunity to partner with our private and community housing sectors to develop affordable rental housing and support increased economic activity throughout the province,” says John Abbott, the Minister responsible for the Newfoundland and Labrador Housing Corporation.
The RFP is now open for private sector submissions until August 31, 2023. The provincial funds could be put toward a new development, an addition on an existing rental housing building or a commercial-to-residential conversion. Projects must bring at least four affordable units to the market, and one to two of those units must be accessible in every project.
It’s envisioned that the new units will be made available to renters with annual household incomes no greater than $42,000. However, program administrators are encouraging mixed-income developments, giving landlords leeway to charge higher rents for units that haven’t benefitted from a capital subsidy within a larger complex.
As such, funding will be dispersed for all units in projects up to 10 units in size, and then for 50 per cent of units exceeding that number. That means a project must have at least 30 units to qualify for funding of the maximum 20 units.
Proponents will be eligible for varying amounts of base funding depending on project locale — set at $65,000 per unit in the St. John’s region; $70,000 per unit in Labrador; and $55,000 per unit elsewhere in the province — and can then qualify for extra funding for exceeding minimum energy efficiency and/or accessibility standards, for committing to a longer period of affordable rents or for a location in close proximity to health care services. Successful candidates will be expected to contribute a minimum of 10 per cent of their own capital equity.
“The Canadian Home Builders’ Association of Newfoundland and Labrador is thrilled with the announcement of the new affordable housing program,” says Alexis Foster, the association’s chief executive officer. “This initiative is vital and we are thankful for the opportunity to provide feedback on the program.”
