The Honourable Peter MacKay, Minister of National Defense, Minister Responsible for the Atlantic Gateway and Regional Minister for Nova Scotia and Newfoundland and Labrador, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), made the announcement today.

“Our government’s Economic Action Plan is improving housing conditions for those who live in First Nation communities in Newfoundland and Labrador. We are also stimulating the local economy by creating jobs,” said Minister MacKay.

Through Canada’s Economic Action Plan, the Government of Canada has committed $400 million over the next two years to help First Nation communities build needed new housing, repair and remediate existing non-profit housing for their members, and complement housing programs offered by CMHC and Indian and Northern Affairs Canada (INAC). This investment will also provide an economic stimulus for many First Nations and surrounding areas by creating jobs.

The application calls for the year one (2009 – 2010) new funding initiatives under Canada’s Economic Action Plan were very successful and generated a large number of applications. As a result, CMHC will be fully allocating all the available funding for the fiscal year.

The year two (2010 – 2011) application call is now open. Applications for this second round of funding will be accepted between February 1, 2010 and February 22, 2010.

Through Canada’s Economic Action Plan, some $594,711 in CMHC investments will be made available to First Nations in Newfoundland and Labrador to address immediate housing needs.

In addition to INAC’s investment of $140,000 for renovations, CMHC will allocate $140,000 to retrofit 21 social housing units in Miawpukek to improve living conditions in this First Nations’ community.

“Under Canada’s Economic Action Plan, retrofits on some of our Section 95 homes that are not normally able to be completed under regular budgets are now being done thanks to this initiative. While governments still have some improvements to make with regards to housing on reserve, we are certainly thankful for this great start,” said Saqamaw Mi’sel Joe, Miawpukek First Nation. “We are also thankful for the continued support from our partners and funders such as Canada Mortgage and Housing Corporation in Halifax and Indian Affairs in Amherst, Nova Scotia.”

Labrador Video

The home will be designed by Habitat Design + Consulting Ltd. and constructed by Insightful Healthy Homes Inc. as part of Canada Mortgage and Housing Corporation’s (CMHC’s) EQuilibrium™ Sustainable Housing Demonstration Initiative, which encourages designers, builders and developers to design and build the next generation of sustainable housing in Canada.

Senator Yonah Martin, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for CMHC, was joined today by Chris Mattock, President, Habitat Design + Consulting Ltd. and Arthur Lo, President, Insightful Healthy Homes Inc., along with sponsors and supporters in the ground-breaking of one of two EQuilibrium™ demonstration homes to be constructed in British Columbia.

“The Government of Canada is pleased to work with the private sector to develop such innovative homes. We congratulate Habitat Design + Consulting Ltd. and Insightful Healthy Homes Inc. on their winning design/concept and commitment to environmental responsibility,” said Senator Martin. “Harmony House is another example in British Columbia of how beautiful and healthy homes can also conserve energy and resources, and reduce pollutant emissions.”

The Harmony House team will integrate optimal solar orientation, energy efficiency and renewable energy systems into the design and construction of the home, in addition to using natural materials with low levels of pollutants. Photovoltaic panels will supply all the electrical energy needs of the home on an annual basis. Excess electrical energy produced during the day will be fed into the power grid. A “green switch” will turn off all unnecessary circuits at night and when the occupants are out. To reduce water use, landscaping will incorporate indigenous plants which will be irrigated with captured rainwater.

“We are very pleased to collaborate with CMHC and are extremely excited about how this project has come together,” said Mr. Lo. “Thanks to our dedicated team of experts and materials suppliers in fields such as solar energy, ventilation and indoor air quality, we are showcasing not just leading-edge design and construction, but what we believe is the future of healthy living.”

”Having the owners on board from the design stage has really helped shape this project,” said Mr. Mattock. “We have designed a live/work space for increased density living that will enable the owners to operate a complementary health care practice from a separate office space, cutting down on commuting and energy costs.”

Harmony House is one of 15 projects that have won CMHC’s national EQuilibrium™ sustainable housing competitions since the initiative was launched in 2006. All EQuilibrium™ projects will be open to both the general public and professional audiences for tours, and then monitored for performance by CMHC for one year, once occupied.

According to CFC, the survey results also indicate that recent purchasers are knowledgeable about the mortgage process and their lender’s assessment of eligibility. For example, 86 per cent are of the view that the level of total housing and other monthly payments should generally not exceed 40 per cent of gross household income, which is in line with generally accepted mortgage lending practices.

“Given the current economy, this study indicates that Canadians continue to be optimistic about homeownership and are astute mortgage consumers,” said François Blouin, Director, Insurance Products and Strategic Direction, CMHC. “Our results reaffirm what we have seen in previous surveys — when it comes to their mortgages, Canadians are informed and manage their debt prudently.”

The survey shows that recent purchasers are prudent mortgage managers. According to the survey, 75 per cent of purchasers have a goal to be mortgage free sooner than their original amortization. In fact, 20 per cent of recent purchasers report having made a lump sum payment to their mortgage.

“CMHC’s 2009 mortgage consumer survey results are encouraging and provide insightful information, indicating that Canadians feel positive about Canada’s housing market,” said the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “As well, Canada’s Economic Action Plan’s home purchase and renovation incentives, and CMHC’s recent outreach campaign to help Canadians who may be facing difficulties with their mortgage payment, are clear actions to support homeowners and the housing market.”

Canadian mortgage consumers recognize the benefits associated with mortgage loan insurance (MLI). According to the survey, 80 per cent of recent purchasers believe that MLI provides an important benefit to the financial system.

Similar to CMHC’s last Mortgage Consumer Survey, the 2009 survey also indicates that Canadians continue to be well served by the mortgage industry, with 77 per cent of recent mortgage purchasers expressing satisfaction with the service received from their lender or broker.

CFC posts that CMHC has conducted the Mortgage Consumer Survey since 1999 to examine consumer behaviour, attitudes and expectations when acquiring, renewing or refinancing a mortgage. This year, CMHC surveyed more than 2,500 recent mortgage consumers online, from mid-March to mid-April 2009. The survey involved the largest sampling of recent mortgage consumers ever undertaken by CMHC for this particular survey.

“Housing is a priority for our government,” said Parliamentary Secretary Ed Komarnicki. “People across Canada, including seniors, persons with disabilities, First Nations, and those living in Canada’s North, will benefit from this investment, which will help to ensure that we continue to offer safe and affordable housing to Canadians.“

CFC reports that Canada’s Economic Action Plan includes more than $2 billion to build new and renovate existing social housing. Of the $2 billion: $1 billion is for renovations and upgrades; $475 million is for low-income seniors and persons with disabilities; $400 million is for on-reserve communities; and $200 million is for housing in the North.

“Since our government made this announcement in January, we have been making real progress in delivering the funds,” added Parliamentary Secretary Komarnicki.  “The spin-off benefits are tremendous. We’re putting Canada’s economy back on the path to growth and making a real and lasting difference for Canadians coast-to-coast-to coast.”

As Canada’s national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.

This project has had a positive impact on the neighbourhood with several nearby properties now under renovation or proposed for new multi-unit residential uses.

The property at 211 Water Street is located on a major arterial road in downtown Charlottetown at one of the major entrances to the City. It is in the older part of the City with the waterfront across the street. Surrounding uses are predominantly residential.

The property was owned by the City of Charlottetown and previously used as a City public works garage, including the storage of associated garage maintenance supplies.The City committed to donate the site to the Kiwanis Club (developer) for the purposes of redeveloping the site for affordable rental housing apartment units prior to the site assessment and remediation.

The site assessment showed that the site was contaminated with petroleum hydrocarbons in soil and groundwater at levels above applicable provincial cleanup criteria.Three adjacent residential properties had also been impacted.The Department of Environment, Energy and Forestry required that a restriction on development be placed on the rear 6 metres (20 feet) of these adjoining residential properties.The City ultimately purchased these properties to expedite the development.

The Canadian Funding Corp says that the development site was subject to a risk assessment using the Atlantic Risk Based Corrective Action (RBCA) process1 to determine whether the known concentrations of petroleum hydrocarbons presented a risk to human health and the environment. This risk assessment determined that the site could be redeveloped subject to a number of land use restrictions, engineering and building design controls being put in place to minimize exposure pathways and prevent vapour intrusion into the building.

The development, named Abe Zakem House was nearing completion as of December, 2004 and units will be rented at below market values.This development has spurred the renovation of an adjacent property as well as plans for redevelopment of several other properties in the downtown area for multi-unit residential use.

Previous Site Use(s) and Condition

The property at 211 Water Street was owned by the City of Charlottetown and was previously used as a City public works garage, including the storage of associated garage maintenance supplies. Previous site activities included large truck service and repair.

In September of 2002, the City demolished the old City Garage Maintenance building at this site.

Environmental Assessment and Remediation

A multi-phase environmental assessment was conducted to identify the level and extent of contamination in soil and groundwater associated with the past releases of petroleum products on this property. Gasoline, diesel oil, and lubrication oil were found in concentrations above the Department of Environment, Energy and Forestry’s applicable Tier I cleanup criteria on the subject property, and three neighboring residential properties.

Although the environmental assessment indicated that the contamination on neighbouring properties was negligible, the Department of Environment, Energy and Forestry required that a “no development zone” be implemented in the rear 6 metres (20 feet) of the rear yards of the adjoining residential properties. The City attempted to negotiate a “no development” covenant with the three affected property owners, but the City ultimately purchased these properties to expedite the development, at a cost of almost $450,000.

A risk assessment of the property was completed using the Atlantic Risk Based Corrective Action (RBCA) process to determine whether the known concentrations of petroleum hydrocarbons presented a risk to human health and the environment. Contaminated soils within the building footprint were removed from the site for disposal.The risk assessment recommended the following risk mitigation measures, which were implemented at the site:

• the residential building be constructed in a prescribed
area of the property with no below grade space;
• an impermeable vapour barrier be installed on
the underside of the slab on grade floor of the
residential building to prevent vapour intrusion
into the building;
• installation of a mechanical ventilation system
to prevent vapour intrusion;
• the thickness of the concrete slab was increased
over the standard building code requirement;
• all portions of the property not occupied by the
building footprint must have surface cover (asphalt
and/or topsoil/sod) to encapsulate any surficial
hydrocarbon impacted soil; and,
• horticultural activities on the site which involve
the growing of produce intended for human
consumption are prohibited.

Development Costs and Financing

• Once clean, the property was appraised at $202,500
• Demolition costs were $48,300.
• Environmental consulting fees were $41,900.
• The City of Charlottetown donated the land to the
Kiwanis Club.
• Financing for the project was as follows:
- $202,500 value of land donated by City
- $546,000 Canada/PEI Affordable Housing
Agreement Program grant
- $22,750 CMHC proposal development fund gran
- $42,250 CMHC pdf 0% interest loan
- $50,000 Province of Prince Edward Island
grant and credit
- $250,000 Kiwanis Club of Charlottetown grant
- Remaining project costs financed through
CMHC insured mortgage with the Royal
Bank of Canada
•    Nearly 50% equity was required to obtain CMHC
insurance. It was difficult for the Kiwanis Club to
obtain CMHC mortgage insurance and lender
financing because the Club did not have much
construction experience and had few physical assets.
The project worked because of the availability and
flexibility of the Canada/PEI Affordable Housing
Agreement and cooperation on the part of the
provincial Department of Health and Social Services.
Cooperation from CMHC enabled the equity stake
to be sufficient to obtain a mortgage.
•    Construction costs equal $1.5 million. Project amenities
were kept modest to reduce construction costs.

Affordability

All but one of the units in this development are affordable with rental rates substantially below market value rates.

For example, the rental rate of $485 per month for a one bedroom unit is 22% less than the market rate for a one bedroom unit in the area which is $620 per month.

Moishe Alexander further noted that this development has spurred a revitalization in this downtown neighbourhood with extensive renovations to an adjacent property, as well as plans to redevelop three other nearby properties for multi-unit residential use taking place after the Abe Zakem House development.

Planning

The site required re-zoning and other normal planning amendment requirements as dictated by municipal by-laws, e.g., site plan. Zoning variances were also required to permit increased height and density, and reduced setbacks.

The soil contamination issue resulted in a longer than normal project completion timeline.

A series of public meetings were held with residents of the area who were concerned about the environmental impacts of the contamination and that the development would block their views of the waterfront and add traffic to the neighbourhood.

Economic and Other Benefits

The assessed value of the property is expected to increase by $1.4 million.

The development is contributing to the revitalization of the downtown area and has spurred the start of several smaller infill residential developments which will also add to the assessment and property tax base of the City and Province.

Lessons Learned

The developer had a clear understanding of the level and extent of the contamination, as well as the possible means of mitigation, prior to initiating discussion with the City, and/or adjacent residents regarding redevelopment of the site.With this work done prior to discussion, the developer was able to take a proactive approach with respect to the brownfield issues on the site.

Using a scientifically defensible technical tool such as the Atlantic RBCA process is a valuable and progressive approach to assessment and remediation of a site and redevelopment of a brownfield site for new and more sensitive uses. Nevertheless, the “good science” associated with the risk assessment process may not satisfy the wishes of impacted third-party property owners.

If possible, neighboring property owners should be involved in the planning process as early as possible to increase understanding and acceptance from these property owners for the redevelopment project.

While having a technical tool such as RBCA is important, brownfield redevelopment projects require a champion.

In this case, the project may not have happened without the input and championing efforts of the mayor of Charlottetown and the local member of parliament for Hillsborough.

Solid engineering and technical knowledge were used to overcome the contamination issues, however the planning process and issues resolution around the development require time, effort and diligence.The developer underestimated the effort and time required to obtain financing as a result of the affordable program criteria.

Success Factors – Developer’s Perspective

The risk assessment and mitigation was in some respects the simplest part of the development from a cost and timing perspective.

While difficult, the financing of the project was accomplished through effort, creativity and cooperation with the financing partners including, the City, CMHC and the bank.

Success Factors – Municipality’s Perspective

While the costs to the City were quite high when one considers the costs of cleaning up and donating the land, and purchasing the adjacent properties, this complex redevelopment on a small inner city site is a successful example of the use of a risk management process to enable the redevelopment of a brownfield site for housing. The development has spurred other redevelopment in the downtown area.

This development was a showcase of creativity and problem-solving, particularly since the City made the commitment to provide the land to the Kiwanis Club prior to the site assessment, risk management plan and remediation.