Thanks to the committee.
In 2005, after three years of looking into the feasibility of building seniors housing, a meeting was called. One hundred people showed up. At the end of the meeting, 50 people signed up, and Kootenay Columbia Seniors Housing Cooperative was formed.
A 40-acre parcel located in Castlegar was chosen, with a price of $400,000. We required about $7 million in infrastructure. Where was this kind of money going to come from? The seniors joined together and raised about $4.4 million, with the rest coming from credit unions, and the project was under way.
Grandview Housing, which is the co-op part of it, has bungalows and duplexes. Forty-three units have been sold and are being lived in, and six duplexes are under construction.
Calamida Estates, a separate section of the 40-acre parcel, has fee-simple lots for sale to the public. There have been 38 lots sold. Ten homes have been built, and 18 lots are still for sale.
The Château Grandview future site is a 4.3-acre parcel of land. The plan is to subdivide to permit maximum usage. Strata 1, phase 1, will have 63 units of supportive living. Strata 2 will have 72 units of supportive and assisted living. Strata 3, for residential living, will have 16 pods, with 76 beds. Strata 4 will be sold as a fundraiser for Kootenay Columbia Senior Housing Cooperative, KCSHC. And a parcel of land, lot 59, a future 37-lot residential subdivision, is listed for sale as an immediate fundraiser.
How can senior governments assist? It appears to us that current governmental agencies are involved in supporting housing that has as a basic criterion subsidizing rental housing. From our experience, this approach is not efficient or economical, from the standpoint that the delivery of rental housing has the following steps:
First, usually a society or a cooperative is required to be the source of this housing as a sponsor.
Second, a developer of some sort will be required to assemble and deliver the construction. This requires a fee for service and a profit margin for the risk.
Third, financing will always be necessary, and part of this may come from the provincial housing corporation. This usually involves a project manager who knows the requirements of all the agencies. And that person will be paid a fee for this service.
Fourth, other moneys will involve private financing, which will involve a fee to prepare the documentation and registration of mortgages.
Fifth, no financing will take place unless there is mortgage insurance, which usually comes from Canada Mortgage and Housing. This fee must be paid in the initial proposal.
Sixth, no financing can move forward without a mortgage broker. This also requires a fee.
When all of the above is added together, the cost of delivering this housing has an enormous hidden cost, even if it is supported by a not-for-profit organization. The end result is that any government subsidy is higher because of the above costs to render a project affordable.
The option now is that a for-profit developer undertakes a project, with subsidies from governments at different levels, which almost equates to the not-for-profit option.
The alternative is to have the above costs removed as a result of a seniors group managing the housing project. In the instance of Grandview, the following has taken place:
First, the project was developed with seniors' cash.
Second, the designs and concepts are those visualized by seniors who understand seniors' needs.
Third, the developer's fees and profits could be eliminated, because the project is managed by seniors' collective expertise.
Fourth, seniors will recycle their homes to others when they become owners in the project. This is a saving in energy and resources, as active seniors are occupying houses that are too large for them; they are more useful to young families starting out.
Fifth, land and buildings can be set aside for subsidized housing as part of any development, providing the needed support for these projects. This does not isolate these citizens, as is the usual current instance.
Even though we were 8% below their affordability criteria, the refusal of B.C. Housing to interim finance the construction of Château Grandview phase one shows the current misunderstanding of this agency to such a seniors' initiative. Its stance has had the effect of increasing construction interim financing, from the current 1% from B.C. Housing, to 5% and more in the private finance sector.
An 80% reduction in financing costs would do wonders to the resulting seniors' purchase price. The entire cost of this support would be paid back, not from subsidy but from the project itself.
The reluctance of CMHC to guarantee strata title condos, as in this instance, in permitting the public to own their seniors accommodations, rather than renting from a developer who is receiving a return on investment due to a subsidy, is another misunderstanding by government.
With regard to how cooperative associations can assist, we are not informed enough as to how the provincial and federal cooperative associations are constituted and operated.
A recent grant of $15,000 was received by the KCSHC for project development funding for the Château Grandview portion of the overall Grandview development from the federal cooperative agency. This is a huge contribution for a part of the project that is most difficult, as this is where funding usually is in short supply. Perhaps construction interim financing from the national cooperative body may be another area that would greatly assist future projects, as was experienced by the KCSHC.
I am not sure of the services provided by the Co-operative Housing Federation of Canada, but obviously the Grandview project did not take advantage of these services if they were available.
What has become evident to the KCSHC in this project is the following:
Lease ownership is not a favourite with government agencies. The Land Title Office refused to register a life lease, SRE has difficulty with filing disclosure statements with lease ownership, financing is not possible for a lease ownership, and CMHC will not guarantee lease ownership interim financing.
Financing a lease by members of KCSHC only became possible when the Heritage Credit Union undertook an investigation to determine a method to do so. By instructing their lawyers accordingly, the lease document was amended and HCU now finances lease ownership.
The cooperative movement could perhaps take an active role to alleviate these hurdles.
By way of synopsis, housing continues to be a fundamental concern to all of us. Providing shelter to all citizens is a difficult task, which all of us need to become involved with.
The KCSHC found that the lease ownership model is a strong handicap in the development process, and it became necessary to eliminate it.
The experience with design guidelines, as to inclusions and exclusions to ensure a minimal economic impact on sales for those planning a subdivision, is a serious issue. It has become an economic issue in the end analysis.
What the KCSHC members have been able to achieve in a short time is something that can provide lessons to those who are in the process of developing their own project. That may be a benefit to other cooperatives in their future successful ventures.
Thank you.