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Transitional housing design-build cost jumps to $14.4M

The proposed 40-unit transitional housing complex on Lorraine Street, west of the Notre Dame Avenue and Lasalle Boulevard intersection in New Sudbury, has ballooned in cost from its original upset limit of $10 million projected during 2021 budget deliberations

Given how most everything has ballooned in cost in recent months, it’s no big surprise to see the transitional housing complex planned for Lorraine Street jump to a projected $14.4 million.

So described Ward 9 Coun. Deb McIntosh in response to city administration’s latest report on the project, whose upper-level cost estimate was projected at $10 million early last year.

Despite the cost jump, McIntosh anticipates her colleagues maintaining their support for the project during the Aug. 9 finance and administration committee meeting it’s on the agenda for.

City council threw their unanimous support behind the project during 2022 budget deliberations, and next week’s meeting will provide them another go/no-go decision point.

“We are a compassionate city, and we don’t want to leave anybody behind,” McIntosh said. “I believe the will of council will be to move forward and make sure we have the funding we need.”

McIntosh joined Ward 10 Coun. Fern Cormier and Ward 12 Coun. Joscelyne Landry-Altmann in pushing for the project’s business case during 2021 budget deliberations, which the federal government chased with a $7.4-million grant. While the federal funding is contingent on the city creating a minimum of 28 units, the project is slated to include 40.

The units and clinical supports within the building are being designed to help transition the chronically homeless into permanent community housing such as the 38-unit building planned to open next to the water tower on Pearl Street next summer.

Unlike permanent community housing, the transitional housing complex is “not just apartments,” McIntosh said. “There are clinical supports in this building for people.”

The facility is planned to include an Assertive Community Treatment Team consisting of 12 full-time and four part-time staff coming at a total cost of $1.74 million per year when fully rolled out, according to a business case council debated during 2021 budget deliberations, at which time its annual operating cost was estimated at $2.24 million. 

These costs fall under the provincial government’s jurisdiction, but city council has opted to proceed with both this and the supervised consumption site using municipal funds until such time as the province steps up. 

There has been no indication the province intends on funding these health-care facilities.

Last year, Mayor Brian Bigger issued a public plea, and Ontario’s Big City Mayors joined the fight alongside the Association of Municipalities of Ontario this year.

McIntosh attended an AMO meeting in June, and reflected this week there was support for funding programs such as the transitional housing complex “across the board,” and the organization is advocating for this with the province on behalf of municipalities. 

“This is a huge crisis we’re experiencing right across the province and the country, and my sense of council is we’re willing to work with the province, but we’re still not willing to wait,” she said.

A barrier to the project moving forward is opposition from surrounding residents standing in opposition. Their representative on city council, Ward 5 Coun. Robert Kirwan, is backing them up.

“The transitional housing, from my position and from what I’m getting from the residents, is better off downtown because you’ve got all those other services in the area, too,” Kirwan said, clarifying area residents aren’t against affordable housing and are concerned about the transitional housing component.

Since the $7.4 million in federal funding toward affordable housing isn’t contingent on the housing being transitional, Kirwan said the city might be better off targeting it toward housing seniors instead.

Although public consultation followed city council selecting Lorraine Street for the transitional housing complex, Kirwan said it started off on the wrong foot when residents learned about the project through local media coverage, “which is pretty hard for me as a councillor to defend.”

The cost ballooning to $14.4 million is also of concern, Kirwan said, noting the original business plan city council approved early last year cited an upset limit of $10 million. Reducing the number of units from 40 until it hits the original price point might also be an option.

The transitional housing complex’s ongoing operational costs, which should be funded by the province, will be a tough pill to swallow for the city council elected on Oct. 24, Kirwan said.

“Are they willing to raise taxes by almost one per cent to cover the medical costs for that one building?” he asked. “If I’m around the table, I’m not prepared for that, that’s … not a city responsibility.”

“There is not an overwhelming demand for seniors housing,” McIntosh said of Kirwan’s alternative plan. There is, however, a list of approximately 120 people who might immediately benefit from transitional housing geared toward shifting the chronically homeless into permanent community housing.

In the midst of the city’s closely linked homelessness and opioid crises, she said it’s difficult to find anyone who hasn’t been affected, or knows someone affected, by these issues the city is striving to resolve through efforts such as the transitional housing complex.

“Any time there’s a change in the neighbourhood there are concerns,” she said, noting the city plans on hosting another community engagement session before the complex is built.

The city hosted a virtual information session on Nov. 18, 2021, for which they prepared a presentation highlighting project details. A list of questions and answers came out of the meeting.

The latest round of information to be debated by the finance and administration committee on Aug. 9 centres on the project’s costs. The city recommends awarding an approximately $12-million design-build tender to Alberta-based Nomodic Modular Structures Inc. and Buttcon Ltd. The $14.4-million total cost includes the design-build work, HST and a contingency.

Federal funding of $7.4 million, provincial funding of $1 million and a $6-million draw from municipal reserves is planned to pay for the build, which will carry no municipal tax levy impact.

Of the seven bids submitted, of which six were by companies based in Ontario, the winning bidder obtained the highest score based on the city’s evaluation. 

According to a tender document drafted by the city, the transitional housing complex “will assist in filling gaps and alleviate pressures on other services such as hospitals, paramedics, police, social service agencies, justice and correctional services by providing housing to individuals that are preparing for next steps in treatment or are being discharged from hospital but still require intensive support to remain successfully housed.”

The 40 one-bedroom units will be 400 square feet in size and will have no balconies, according to the tender document.

The plan includes parking for 24 vehicles, a common area, security office and two units for onsite support services. It’s envisioned as a modular build, which McIntosh said means it will go up quickly once the contract is awarded.

Tyler Clarke covers city hall and political affairs for