Affordable housing project in London faces funding dispute

Dispute Over Development Charges May Impact Affordable Housing Project

A dispute with the City of London regarding development charges could delay or even derail a project that aims to provide affordable housing units in London’s Old East Village.

Project Overview

London’s Cross Cultural Learners Centre (CCLC) has city approval to build a 24-storey tower with 213 housing units on Dundas Street East, between Hewitt and Rectory streets. The project includes 75 units that will be offered at below-market value.

Development Charges Exemption

When planning for the project began almost six years ago, it was expected that all units would be exempt from development charges (DCs). These charges are paid to the city to cover growth costs.

However, a recent city staff report states that the DC exemption applies only to the 75 below-market units. The city claims that full exemption is limited to organizations whose core objective is housing.

CCLC’s Mission and Funding Concerns

CCLC is a registered non-profit that primarily helps newcomers settle in London. Many of its clients are refugees fleeing conflict zones.

Limiting the DC exemption to 75 units could result in unbudgeted costs of over $3 million for CCLC.

Quintin Lang, chair of CCLC’s board of directors, stated that this limitation could create a funding gap that jeopardizes the entire project. The majority of funding comes from a mortgage with the Canada Housing and Mortgage Corporation, which has strict rules.

Potential Impact of the Dispute

“It might kill the project,” Lang said regarding the DC dispute. He noted that if they had to renegotiate, they might not qualify for loans, which could delay funding.

Lang mentioned that funding exemptions changed when the Ontario government passed Bill 23 in 2022. At that time, CCLC’s application process for the project, named Doorways to Dreams, was already underway.

CCLC has filed a complaint with the city and hired a lawyer to challenge the city’s stance.

City Staff and Council Response

City staff recommend dismissing CCLC’s complaint. Councillor Susan Stevenson, whose ward includes Old East Village, described the funding dispute as a “technicality.” She noted that CCLC lacks a separate subsidiary focused on housing.

A letter from CCLC’s lawyer states that moving the land to a new subsidiary would incur significant land transfer taxes.

Stevenson plans to propose a motion at Monday’s Infrastructure and Corporate Services Committee meeting to seek a DC exemption for all project units.

Community Impact and Future Plans

Stevenson has argued that Old East Village needs city support to revitalize the area, which faces challenges like vacant buildings and open drug use.

“This is one of the key developments for that area,” she said. “It would be great to have that growth and the feet on the street.”

Lang remains hopeful that a solution can be found so construction can begin this year, with tenants moving in by 2028.