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Edmonton’s Londonderry project is a new model for affordable housing

A rendering of the Londonderry affordable housing project in Edmonton.

CRHC

A $72-million affordable housing development designed to allow residents to grow in place, even as their financial situation changes, has received unanimous approval from the City of Edmonton and will break ground this fall.

Londonderry is a 240-unit redevelopment of a site in the Kilkenny neighbourhood, northeast Edmonton. It replaces an 80-unit affordable housing development of the same name which was vacated in 2014 and demolished a year ago, to make way for the new project.

The unit mix, design and revenue model of Londonderry are being hailed as groundbreaking for Edmonton and those involved hope it will be a blueprint for future affordable housing developments.

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"The goal here is to create a mixed-income project where families aren't forced to leave the community as their economic situation changes, rather they're able to make choices to stay," says Greg Dewling, chief executive officer of Capital Region Housing Corporation (CRHC), who are developing the site in partnership with the city. "We wanted a rental structure which would allow clients to remain in the home they're already occupying and, based on their income, move towards paying market rent."

Mr. Dewling claims that, during the public engagement process, community members expressed concern over fewer families living in the neighbourhood since the old Londonderry development was vacated. He says, "The unit mix and model for the redevelopment will not only bring many more families to Kilkenny, it will allow them to put down long-term roots in the neighbourhood."

In addition to reducing transience, the new model also facilitates financial stability by increasing revenue streams. The density of the Londonderry site will triple, though the volume of "deep subsidy" housing will increase by just 10 per cent. Rental income from the additional full market value units will provide economic sustainability for the whole development.

"With our current model, which requires an operating grant to offset the lower rents, we don't take in enough rental revenue to cover operating expenses in the long term. We need a mix of incomes to pay those operating costs and make the capital investment financially sustainable," Mr. Dewling explains. "We also face the challenge of deferred maintenance; we simply aren't able to invest enough money each year to maintain buildings to a good standard in the long term."

"The old Londonderry development was a prime example of that; we eventually had to come to the conclusion that it would be cheaper to demolish and rebuild it than to maintain it," he adds.

CRHC's new revenue model will be tested on a smaller scale this fall when they open a 70-unit mixed-income apartment development in Parkdale. The Londonderry redevelopment takes the model a step further with a diverse mix of units held together with a modern, community-focused design.

"The design challenge with Londonderry was to bring a range of unit types together to form a seamless, family orientated, community where everyone has access to the amenities they need and everyone feels safe and included," Peter Osborne of GEC Architecture says. "We did that, in part, by creating a townhouse podium of larger units which creates an X formation; maximizing sight lines for parents with children playing outdoors and ensuring plenty of doors to the street."

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"The most unique aspect of this development is that we're designing an integrated community of one-, two- and three-bedroom apartments, plus four- and five-bedroom two-storey townhouses," he adds, "That's quite unusual and not something we would typically design for our private, for-profit clients."

The unique make-up of unit types, Mr. Dewling says, speaks directly to his organization's extensive waiting list.

"We analyzed our waiting list and have mirrored the demand we saw there in this development mix. We have significant need for three- and four-bedroom units, but we also prioritized five-bedroom homes, not because we have a huge waiting list for those but because there's such low turnover on the ones we do have," he explains. "We currently have around 25 families who qualify for a five-bedroom home and, realistically, they're looking at waiting two to three years for something to become available. We're building 19 of those larger properties which will allow us to meet the needs of clients who would otherwise be on our waiting list for a very long time."

Mr. Dewling says their growing waiting list, and falling revenues, is what's driving change in the way CRHC plan to build and operate affordable housing.

"When the oil price dropped in 2014 our waiting list was 1,200 families and it's grown from that to where we're at right now at over 5,000," he observes. "The family incomes of those who qualify for subsidized housing are also falling which means our rental revenues are going down, putting us under further financial pressure. We're still taking in more than 300 applications a month; without a more sustainable way forward, we're going to fail these people."

In an effort to keep waiting lists under control, CRHC is not only changing it's revenue model for new developments and regeneration projects, they're also turning to private-sector joint ventures.

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"Joint ventures allow us to tackle the bottom third of our waiting list, those with higher incomes, because we're able to bring a large number of units to market, with lower capital investment, at a much lower subsidy," Mr. Dewling explains. "We have a development under way right now which will be 174-units at 80-per-cent market value rent. And, we don't have to build it."

"By addressing this lower segment of our waiting list now we don't put them in a position where they have to exhaust every one of their resources in order to rise through our waiting list and eventually get the support they need," he adds.

CRHC is currently planning it's next regeneration project of a site in the northwest neighbourhood of Youngstown. They hope construction will commence in the summer 2019. They also have a proposal with the city for a 150-unit development on a disused school site.

"We have to be innovative in order to create better places for families to live and a financial model where we're not dependent on the government of the day to provide operating grants," Mr. Dewling says. "We want social housing in Edmonton to be fully integrated and unrecognizable. We want to raise the bar in terms of design as well as re-write the financial and social models for this housing type."

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