Part 1: Disraeli Street Affordable Housing Project Update and Funding Gap Discussion - 03/10/2025

The meeting began shortly after 1:00 p.m. once quorum was confirmed, including one member attending remotely. The agenda was approved with a small adjustment to allow staff updates to flow better alongside closed session discussions. No conflicts of interest were declared, and the minutes from the previous meeting were adopted without issue.

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There were no deputations or public comments, allowing the meeting to move directly into substantive business.

Disraeli Street Affordable Housing Project Overview

The main focus of the meeting was a detailed update on the Disraeli Street affordable housing project, a proposed 12-unit development. Staff presented the first full financial picture of the project using a CMHC Affordable Housing Fund pro forma, which showed projected rents, construction costs, operating costs, and financing structure.

The rental model is based on keeping rents just under 80 percent of local market rates, using Prince Edward County specific rental data, not CMHC’s national database. This approach helps qualify the project for federal funding but limits rental revenue. The total estimated annual rental income was roughly $185,000, which feeds directly into the project’s ability to service debt.

Construction Costs and Design

Staff presented updated construction cost estimates that place the project at approximately $5.6 to $5.7 million, significantly higher than earlier projections from past years. Costs include hard construction, soft costs such as engineering and design, contingency, and taxes net of rebates.

The design uses panelized construction, meaning walls, floors, and roofs are prefabricated off-site. This method reduces build time and improves quality control, but still represents about 31 percent of total project costs. The building is designed to be highly energy efficient, with very low long-term heating and cooling costs.

Operating Costs and Long-Term Financial Reality

Operating costs such as utilities, maintenance, insurance, snow removal, and groundskeeping were reviewed. A key point was that property management costs are not yet included, as staff expect to contract this service externally in the future.

Under the CMHC funding rules, all net operating income must go toward repaying the mortgage. This means the project is designed to operate at financial break-even, not to generate surplus revenue for other housing initiatives. The mortgage term is expected to be 50 years, with mandatory annual contributions to a replacement reserve for long-term building maintenance.

Funding Gap and Risk

One of the most significant issues discussed during the meeting was the projected funding gap of approximately $1.4 million.

While CMHC funding could cover up to 75 percent of total project costs through a combination of repayable and forgivable loans, the remaining portion currently has no confirmed funding source. This creates a substantial financial challenge for the project.

Staff were clear in outlining the risks associated with this gap. Although there is potential for costs to decrease through further design refinements and value engineering, it is unlikely that the gap will be eliminated entirely.

Several possible solutions were mentioned, including:

• Fundraising efforts

• In-kind contributions from partners

• Provincial funding programs

• Future rounds of federal funding

However, none of these options are guaranteed, leaving uncertainty around how the project will ultimately be financed.

Next Steps and Strategic Direction

At this stage, no formal decision was made to either proceed with or pause the project. Instead, the committee directed staff to return with a range of options for consideration.

These options are expected to include potential fundraising strategies, alternative funding mechanisms, possible design adjustments to reduce costs, and different delivery models that could improve financial feasibility.

In addition to the project-specific discussion, staff provided a verbal update on a broader regional affordable housing initiative being developed through the Eastern Ontario Wardens’ Caucus. This initiative aims to combine multiple municipal housing sites into a single expression of interest, making it more attractive to private-sector partners and senior levels of government.

The Wellington site was identified as a strong candidate for this regional approach, due to its existing zoning and servicing, which could allow for faster development timelines.

Recognizing the complexity of the financial and strategic considerations, the board agreed to defer any final decisions until after closed session discussions. This approach allows members to review additional information and weigh potential risks before determining the next steps for the project.

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Disclaimer: This article is based on a meeting with an approximate duration of 2:00:043. Due to the length of the meeting, our team was not able to independently review the full recording in its entirety. As a result, we relied on software-generated transcription, automated summarization, and automated recognition of speakers and participants, which may not be entirely accurate. All transcriptions, summaries, and related content are prepared by our team in good faith and on a reasonable best-efforts basis. The content is provided for general informational purposes only and is intended to support public understanding of the topics discussed. While reasonable efforts have been made to present the information accurately, automated processes may result in errors, omissions, or unintended misinterpretations. This article does not constitute an official, certified, or verbatim record of the meeting, and it should not be relied upon as such. Readers are encouraged to consult original source materials, official minutes, or recordings where available for confirmation or clarification. Questions, requests for clarification, or suggested corrections may be submitted to hello@pecconnect.ca for review and consideration.