Developer ends affordable housing partnership with province

A major developer is walking away from almost $22 million in provincial funding for affordable housingand will instead partner with non-profit groups on a project in Dartmouth, N.S.

Clayton Developments is building 875 units as part of its Mount Hope development. Of those units, 373 are designated as affordable.

The company was to receive a per-door subsidy from the province once those units were complete, but Housing Minister John Lohr confirmed to reporters on Thursday that the deal is off.

"We're disappointed," said Lohr. "It's clearly a business decision."

Kevin Neatt, vice-president of planning for Clayton, said the decision to work with several non-profits on the affordable units, rather than the province, was based on cost considerations.He declined to elaborate on what that partnership would entail.

Neatt said he wasn't ready to name the non-profits Clayton is negotiating with or provide a timeline, but said it would not change construction plans.

"It's looking very promising, so I think we're going to be really happy with how that turns out," he said in an interview.

Project aimed at an 'attainable price point'

The deal with the province would have required the 373 units to cost 80 per cent of market value rates, but Neatt said that was presenting challenges. The rest of the Mount Hope project is aimed at "the attainable price point."

Neatt wasn't ready to be more specific but said the project is targeting "the average working" Halifax resident.

The province's per-door subsidy program started in 2009 and provided developers grants of $50,000 per door for affordable units. The grant has since increased to close to $100,000 per door, said Lohr.

The minister said officials in his department are working to find other projects for the $22 million that would have gone to Mount Hope. Lohr said his department is increasing its focus on working with non-profit groups and community developments.

"We know that those can give us longer periods of affordability."

Opposition leaders critical of provincial program, lack of options

NDP Leader Claudia Chender said the decision by Clayton shows that the provincial program "is a failure."

"I think that this government wants to solve every social issue with a private sector partnership and I think that that approach doesn't work," she told reporters.

"You can't incent the private sector to do things that are not economic for them."

Chender said the government needs to invest more money in affordable, non-market housing.

Liberal Leader Zach Churchill said the government cannot count on the private sector to build affordable housing and Lohr's government lacks a plan to do it another way.

"They're trying to double the population of this province. We've run out of houses and housing is less affordable now than it's ever been."