Saint John creates incentive program to help non-profits create affordable housing

A new grant program in Saint John will help non-profit developers with the pre-construction funds needed to get affordable housing projects off the ground.

The affordable housing grant soft-cost program, approved by council Monday night, will fund 15 per cent or up to $25,000 of pre-construction costs.

These soft costs include consultation fees, architectural or accounting services, preparations of drawings and viability studies, according to the staff report submitted to council.

Andrew Reid, the city's housing manager and the primary author of the report, said the program targets non-profits looking to develop affordable housing.

"The program's aim is to help non-profit organizations, who have an idea but are looking for a little bit of extra funding up front before they submit to finance their project, to create new affordable housing units in the city of Saint John," said Reid.  

Deputy Mayor John MacKenzie, who is also chair of the city's growth committee, said it's a win for Saint John and hopes it will give non-profits what they need to get their projects moving.

"We have a lot of projects that just can't get off the ground because the developers can't afford the upfront cost," MacKenzie said.

"So this is going to help them get their plans in place. Legal fees, whatever it takes to get them started, it gives them a bonus."

Saint John Deputy Mayor John MacKenzie says that the grant will help non-profit led projects that can't get off the ground because they can't afford the upfront costs. (City of Saint John)

The program will complement the city's affordable housing grant program, which provides funding on a "per affordable-unit basis."

Funding for the program comes through the housing accelerator fund, a federal initiative meant to support municipalities with housing development, which the city entered into in December 2023. According to the staff report, the budget for the program will be $100,000 for 2024 and will fund a minimum of four projects.

Deliberately targeting non-profit housing sector

The grant will only be given to non-profit organizations, a move that Reid said is deliberate.

"The program is really intentionally targeting the non-profit housing sector. We know this sector aims to fill the gaps associated with housing that isn't meeting people's needs currently," he said.

Reid said non-profit and public housing make up roughly five per cent of the city's overall housing stock.

MacKenzie said it's important for the program to prioritize non-profits.

"The non-profits are the ones that are really having a hard time with the money," he said.

"They don't have the ability, like some contractors, to go to the bank and get a loan. It's also non-profits that are doing affordable housing — not that normal developers aren't doing that. Non-profits just do it to a bigger degree," said MacKenzie.

The grant will require a minimum of "five net new affordable housing units be proposed, with at least 50 per cent of the development consisting of affordable housing units," states the staff report. 

"The project must be new construction, conversion of an existing commercial/institutional use, or rehabilitation of a residential building."

Grant committee will approve projects, funding

Projects will be approved by a grant committee composed of city staff. Reid said he hopes the committee will meet in early June to review the first number of applications they receive.

"There is a pre-planning phase but we are hoping within the next year to see some traction on this to see, over the next three years, some building permits pulled and then action taken — some shovels in the ground.

Reid said housing projects take time and the impact won't be immediate.

"To see the actual units being created will take time. So we're hoping to sort of plant this seed now to see more housing later on."