Fredericton council rejects funding City Motel housing project

Fredericton city council voted Monday against funding part of the John Howard Society's housing project at the City Motel on Regent Street. 

The motion would have seen the city give a one-time $900,000 grant in support of the project and not contribute to the operational cost. But many councillors said it's not the city's place to fund housing projects. 

The John Howard Society had applied for funding through the Canada Mortgage and Housing Corp. to transform the City Motel into numerous housing units.

The project would include 20 affordable housing units, 12 peer-supported units and a 24-bed emergency homeless shelter and cost a total of $4 million.

Council's decision not to support the project was a blow to advocates. Project manager Jason Lejeune suggested council hasn't grasped the changing landscape of affordable housing. 

"I'm sad for the vulnerable people and the citizens of Fredericton who are kind of left in a precarious situation," Lejeune said Tuesday.

"I'm pretty angry at how the John Howard Society's application and request was communicated by many of the councillors. I think there was a lot of misinformation spoken last night." 

CMHC rejected the group's funding application earlier, leaving a $2.9 million gap.

Last week the province committed $1.4 million to the project to keep it alive. But in discussions with the city, Mayor Mike O'Brien said the province came further, offering $2 million and leaving a $900,000 gap. 

6-5 against support

Council's discussion of the issue lasted nearly 90 minutes, and the motion was ultimately defeated 6-5. 

Councillors Dan Keenan, Stephen Chase, Steven Hicks, John MacDermid, Henri Mallet and Kevin Darrah voted against the motion, while Bruce Grandy, Eric Megarity, Kate Rogers, Greg Ericson and Mark Peters voted for it. 

Coun. Eric Price recused himself from the discussion and vote because he is a co-owner of the City Motel. 

Both Grandy and Keenan raised concerns about the sale price of the building in the deal. 

"That hotel was purchased about five years ago at $900,000," said Keenan.  "And the sale price [now] is $2.75 million."

Keenan questioned how that price was agreed upon. 

"It was an agreement that was done between John Howard Society and the owners of the motel with no — as near as we can tell — no professional assessment behind it, and that really significantly concerns me," he said. 

Lejuene said you can't just look at property values when it comes to costing the property as it contained a business with lots of ingrained infrastructure the property owner would have expected to get a return on.

"You don't go to buy a McDonald's and tell the guy you just want to buy the building, you don't want to buy the business," said Lejuene.

Price was not available after the meeting to answer questions on the sale price.

Fears of precedent

Deputy Mayor Steven Hicks said funding the project would set a precedent for other similar projects. 

"If we got down this road then we're going to have every non-profit coming looking for money, and I wouldn't blame them if we approve this, then they might as well sharpen their pencils and come to us because we're opening the floodgates," Hicks said. 

Rogers, chair of the affordable housing committee, said she wasn't worried that funding the project would set a precedent.  

"This is not the course of normal business. No one can say when they walk down our streets that it is business as usual with the amount of people who are lying in alleys, in storefronts, the numbers of stores that are moving because of that… this is not business as usual. This is not average times."

Jurisdiction an issue

Most councillors agreed that the city should not be required to take on social issues, such as housing, which is the responsibility of the provincial and federal governments. 

"We have a crisis on our streets and the people who are responsible for paying for this are doing a less than stellar job of supporting a really vulnerable sector of the population," MacDermid said. "So I would say that the real moral failing is coming from other levels of government."

Megarity, who voted for the motion Monday night, said there needs to be more collaboration on behalf of all levels of government. 

"Going forward with municipal reform coming, we get to play better with our provincial partners and our federal partners and they likewise have to get along with us … I won't belabour this, you know, when it comes down to infrastructure and people — well guess what, I pick people, so I will support this."

Council's reliance on the jurisdiction argument to avoid helping people who can't afford housing bothered Lejeune, who said it means the city is essentially just putting the burden on someone else, in particular non-profit groups.

"Realistically, the city has once again downloaded this issue to community groups like the John Howard Society, Community Action Group, Fredericton Shelters, to which they provide no funding," said Lejeune. 

"That's difficult work to do, takes a lot of staff time and resources to build large applications like this to large programs. It's just very frustrating"

The city's Planning Advisory Committee approved the motel plan in January. In December, council gave its enthusiastic support for the project, waiving builders' permits and offering transit passes to future residents. 

The John Howard Society has said that some of the funding already raised expires at the end of the month if full funding doesn't come through.