Halifax council rejects developer's request to back out of affordable housing deal

Halifax regional council has denied a developer's request to not go through with affordable housing units he initially promised. 

In January 2020, developer Nick Stappas won the right to build an eight-storey apartment building at 205 Bedford Highway — which is higher than usually allowed for the area — because 18 of the 55 units would be affordable.

The proposed affordable apartments would include two two-bedroom units and 16 one-bedroom units. They would be rented out at a 30 per cent discount to comparable units for at least 15 years.

Stappas told CBC at the time that offering affordable housing in the new building would be a way of giving back to the community.

But that was before "unforeseen historic events" — like the COVID-19 pandemic and a significant economic downturn — that now make operating these affordable units "currently economically unfeasible and financially unviable," according to the developer's request.

Stappas' company, Rockingham Station Ltd., proposed instead a $174,620 donation toward the Halifax Regional Municipality's affordable housing fund which supports housing around the city.

During a Halifax regional council meeting on Tuesday, area representative Coun. Kathryn Morse said she is "not very happy with this" 

Given that the building is already up with the extra floors in place, Morse urged other councillors to reject the request and hold the developer accountable to the original agreement.

Others agreed, including Coun. Waye Mason who said the developer will have to "figure out a way" to make it work.

"The market always changes. You're going to have this building for 50 years, the market's going to go up, down and sideways," Mason said. 

Coun. Sam Austin pointed out the issue was larger than one apartment building, because agreeing to the developer's request could set a dangerous trend.

"What kind of precedent would we be setting if we allowed people to just basically finish the development and say 'oops, can't do it' … so now we're just going to walk away from that," Austin said.

Affordable housing framework moves ahead

Agreements like this could soon become commonplace in Halifax.

On Tuesday, regional council moved ahead with a plan to create a new framework that would require all new developments to either include affordable units or put up cash-in-lieu to build units elsewhere.

A staff report said after looking at best practices around North America, Halifax's framework should be:

• Mandatory
• Focus on high-growth areas of the region first
• Consider all types of housing including rental and home ownership

The plan should also figure out a threshold for what size of development would be required to have on-site affordable units, with smaller residential and commercial developments allowed to pay into the municipal housing fund instead. 

Staff said this model is most effective at providing "moderately affordable housing" and addresses the needs of those who earn too much to be eligible for social housing, but not enough to afford market rents.

Mayor Mike Savage said while this is a "really important" piece of addressing the province's ongoing housing crisis, much more is needed.

"We do need purpose-built, government paid-for, deeply affordable housing which hasn't been built in this province in a very long time," Savage said. 

Cities like Montreal, Richmond, B.C., and Edmonton already use similar models, the report said. 

The city will now move ahead with an analysis of how such a model could affect the housing market and rental prices. There will also be engagement with the public, non-profit organizations and developers with the plan of coming back to council before next spring.