Body: Council Type: Agenda Meeting: Regular Date: March 8, 2017 Collection: Council Agendas Municipality: Frontenac County
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Senior Housing Task Force Meeting - Central Frontenac Wednesday, March 8, 2017 – 1:30 p.m. District 3 Firehall, 1020 Wagner Road, Sharbot Lake,ON
AGENDA Page 1.
Call to order
Election of Officers a) Election of Chair b)
3 - 158
Election of Vice-Chair
Adoption of the agenda a) That the agenda for the March 8, 2017 meeting of the Seniors Housing Task Force - Central Frontenac be adopted.
Disclosure of pecuniary interest and general nature thereof
Adoption of minutes
Deputations and/or presentations
Reports a) Seniors Housing Needs for Central Frontenac Mr. Ken Foulds and Mr. Ed Starr of SHS Consulting will assist the Seniors Housing Task Force - Central Frontenac in determining the seniors housing needs in Central Frontenac. b)
Relevant Documents The following are documents that are relevant or of interest to a Seniors Housing Project:
- Business Plan for Seniors Housing - Marysville Project
- Draft Business Plan for Seniors Housing - Township of South Frontenac Project
- County of Frontenac Seniors Community Housing Pilot Project Final Summary Report
Page 1 of 158
Page
Communications
Other business
Next meeting date
Adjournment
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AGENDA ITEM #b)
BUSINESS PLAN FOR SENIORS HOUSING Marysville Project
March 2015
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
EXECUTIVE SUMMARY In the last several years, seniors housing in Frontenac County has become a more prominent issue due primarily to the aging of the local population. In the “Seniors Community Housing Pilot Project Study”, completed for the County in 2012, this housing need was examined within the context of the broader housing market. The study also reviewed a range of potential housing options and evaluated these against opportunity nodes throughout the County, identifying a range of potential pilot project options. As a result of this work, County Council has designated seniors housing as a priority and allocated funds to explore the feasibility of developing affordable housing projects that respond to identified needs. With the establishment of a seniors task force in 2014, County Council confirmed its intent to consider pilot options in each of the four Townships within Frontenac. While housing needs and potential options to address them vary geographically within Frontenac, the task force determined that initial testing for a project in the Township of Frontenac Islands would be pursued by undertaking a business plan for a project in the Marysville community of Wolfe Island. The interest from the Frontenac Islands community in a seniors project and the background work already undertaken by residents were key factors in this decision. The successful development of a housing project requires a rigorous process and involves multiple steps to move from initial concept through to construction and operation. The scope of work for this study addresses the beginning of this process; preparing a business plan to determine ‘proof of concept’ for the project. To develop this business plan, a stepwise process was used, examining local needs, exploring development options, identifying technical issues and undertaking financial analysis. Community and stakeholders consultations were also conducted as part of this work under the guidance of the task force. Based on demonstrated needs, community consultation and business case analysis, the concept for a small scale seniors housing project situated in Marysville has been developed. The proposed concept for the seniors housing project is:
A five unit rental building with self‐contained apartment units (4 one bedroom units and 1 two bedroom unit) where rents are set at average market rates
The provision of basic amenity space in the form of laundry facilities and a small indoor common area for gathering/socialization
A one storey slab‐on‐grade configuration to accommodate seniors mobility needs, including one unit that would be fully modified for wheelchair accessibility
Located in walking proximity to amenities and services in Marysville, incorporating sustainability features that promote energy efficiency
As an integral part of the analysis, assumptions about project development have also been established, proposing that the project be:
Built using new construction rather than renovation of an existing building
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
Able to expand in additional ‘modules’ of five units as demand warrants
Procured through a formal design/tender process (stipulated price contract)
Financed using a conventional mortgage that is CMHC‐insured
Owned and managed by a newly constituted non‐profit housing corporation
As part of the business plan process, the project concept was financially tested and found to be viable, subject to a number of assumptions outlined in the report. Based on an assessment of preliminary cost estimates, anticipated revenues and assumed contributions, the project would involve:
Estimated capital costs of roughly $1.4M which would be addressed via conventional financing (50%) as well as project contributions in form of grants, fee waivers, land, etc. (50%)
Projected initial operating costs of roughly $50,000 annually which would be addressed via project rents and laundry revenues, generating a modest operating surplus
Apart from the financial assessment, the business plan analysis concluded that:
There is sufficient demand for this small scale project but opportunities should be preserved to enable additional modules of five units where future demand warrants
Potential sites are available that could accommodate development of the project and allow for future expansion
Extending public road access to these sites would be a prerequisite for project development
A series of land use approvals are required to permit the intended use but there do not appear to be any significant barriers to securing these approvals
Due diligence testing would be required prior to acquiring a project site but no impediments are anticipated based on an initial scan of current conditions and background information
Creation of a new non‐profit corporation to own and manage the project appears to be the most plausible option for project governance
As a result of the business case analysis, the proposed project concept is deemed to be viable subject to the assumptions and conditions outlined in the report. To advance the project forward from the business plan stage, a number of steps are required. Initially, this would involve confirming the parameters for moving forward from the initial feasibility testing, including decisions with regard to project governance/ oversight and confirming initial funding commitments. With these decisions made and with sufficient resources in hand, the project could move to the pre‐development stage where initial design, testing and investigations would be undertaken. Upon completion of this pre‐development work and where financial testing continues to demonstrate viability, the project could then move to the construction phase provided that sufficient financial resources are secured to advance the project.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
consulting
Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
TABLE OF CONTENTS EXECUTIVE SUMMARY …………………………………………………………………………………………………………………….. i INTRODUCTION ……………………………………………………………………………………………………………………. 1
1.0 1.1
Project background ………………………………………………………………………………………………………….. 1
1.2
Context for business plan ………………………………………………………………………………………………….. 2
1.3
This report ………………………………………………………………………………………………………………………. 3 Project need…………………………………………………………………………………………………………………….. 5
2.0 2.1
Local housing needs and market indicators …………………………………………………………………………. 5
2.1.1
Demographic Profile …………………………………………………………………………………………………. 5
2.1.2
Housing Profile …………………………………………………………………………………………………………. 7
2.1.3
Summary of analysis …………………………………………………………………………………………………. 9
2.2
Community‐based Indicators …………………………………………………………………………………………… 10 Project concept …………………………………………………………………………………………………………… 12
3.0 3.1
Form and scale ………………………………………………………………………………………………………………. 12
3.2
Unit mix and affordability ………………………………………………………………………………………………… 12
3.3
Amenities ……………………………………………………………………………………………………………………… 13
3.4
Project development options …………………………………………………………………………………………… 14
3.5
Preferred project concept ……………………………………………………………………………………………….. 15 Development Considerations ………………………………………………………………………………… 16
4.0 4.1
Potential development opportunities ……………………………………………………………………………….. 16
4.1.1
Renovation opportunities ………………………………………………………………………………………… 17
4.1.2
New Development Opportunities ……………………………………………………………………………… 18
4.2
Preferred option and procurement …………………………………………………………………………………… 20
4.3
Servicing & technical considerations …………………………………………………………………………………. 21
4.4
Land use approvals …………………………………………………………………………………………………………. 23
4.5
Sustainability …………………………………………………………………………………………………………………. 24
5.0
Financial Feasibility …………………………………………………………………………………………………… 25
5.1
Project assumptions/parameters ……………………………………………………………………………………… 25
5.2
Estimated capital budget…………………………………………………………………………………………………. 26
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
5.2.1
Soft Costs ………………………………………………………………………………………………………………. 26
5.2.2
Hard Costs ……………………………………………………………………………………………………………… 27
5.3
Estimated operating budget …………………………………………………………………………………………….. 27
5.3.1
Operating Revenue …………………………………………………………………………………………………. 28
5.3.2
Operating Expenses ………………………………………………………………………………………………… 29
5.4
Funding/capital requirements ………………………………………………………………………………………….. 29
5.5
Financial viability ……………………………………………………………………………………………………………. 30 Governance……………………………………………………………………………………………………………………… 32
6.0 6.1
Project ownership/oversight ……………………………………………………………………………………………. 32
6.2
Planned approach to management …………………………………………………………………………………… 33
6.3
Operations framework ……………………………………………………………………………………………………. 33 Moving Forward ……………………………………………………………………………………………………………. 34
7.0 7.1
Summary of preferred concept ………………………………………………………………………………………… 34
7.2
Process/critical path ……………………………………………………………………………………………………….. 35
7.3
Key elements & critical success factors ……………………………………………………………………………… 36 Appendix ‘A’ – Needs Profile ……………………………………………………………………………………. 37
8.0 8.1
8.1.1
Demographic Profile ……………………………………………………………………………………………….. 37
8.1.2
Housing Profile ……………………………………………………………………………………………………….. 43
8.2 9.0
County‐wide Housing Needs and Market Indicators ……………………………………………………………. 37
Profile of Seniors Indicators …………………………………………………………………………………………….. 47 Appendix B – Pro Forma Details…………………………………………………………………………….. 52
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County of Frontenac Business Plan for Seniors Housing (Marysville)
consulting
Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
1.0 INTRODUCTION With an aging and diversifying population, seniors housing in Frontenac County has become a growing priority. Recent studies have examined this housing need within the context of the broader housing market and have identified potential options for meeting seniors needs throughout the County. As a result of this work, County Council has designated seniors housing as a priority and allocated funds to explore the feasibility of developing affordable housing projects to meet these needs. While housing needs and associated options vary geographically within Frontenac, it was determined that initial testing for a project in the Township of Frontenac Islands would be pursued by undertaking a business plan for a project in the Marysville area of Wolfe Island. Bringing a housing project from initial concept to on‐the‐ground reality involves a number of sequential stages. Each stage involves a progressively more detailed assessment of the project to ensure that it continues to meet the sponsor’s needs, is financially feasible and is operationally sustainable. Key resource commitments and go‐forward decisions are required for sponsor groups to proceed from one stage to the next. The scope of work for this study addresses the beginning of this process; preparing a business plan to determine ‘proof of concept’ for the project. Specifically, the purpose of this study is to:
- Produce a business plan for the development of Seniors Housing in the Marysville Community in accordance with the RFP specifications
- Engage the Wolfe Island Community, stakeholders groups and the City of Kingston (as the County’s Housing Service Manager) in a discussion regarding local needs
- Develop a business model for the Marysville Community that can be replicated in other communities within Frontenac County
1.1
Project background
In 2010‐11, the City of Kingston and County of Frontenac undertook development of a Municipal Housing Strategy (MHS). The strategy involved a comprehensive, multi‐phase process which examined housing needs, supply trends and priority gaps within the regional housing market. A detailed review of current policies, programs and local initiatives was also undertaken to determine the degree to which identified gaps were being addressed. As a result of this analysis, a formal stepwise strategy was developed as part of the MHS to address priority issues and housing gaps over the short, mid and long range. One of the emerging priorities identified for Frontenac County through the MHS was the growing seniors population and concerns about the ability to adequately meet their housing needs looking forward. As a result, the County undertook a more detailed review of the local seniors housing situation to better understand the range of needs and potential solutions that could be used to address these needs. As part of the “Seniors Community Housing Pilot Project Study” completed for the County in 2012, a review of priority issues and existing conditions was completed. An assessment of housing options was also
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
undertaken to evaluate potential seniors housing models and opportunity nodes throughout the County. Implementation considerations, including generic model costing and a policy framework analysis were also documented to help frame options for moving forward with a potential pilot project. As a result of the study, it was recommended that a task force be created to pursue the establishment of a pilot seniors housing project. The County subsequently struck a Senior’s Housing Task Force to establish a scope for pursuing a pilot project. The Frontenac Senior’s Housing Task Force met in May of 2014 to review possible directions for the proposed project and determined that the most suitable course of action would be to evaluate potential project options and develop a business plan for the proposed project. In accordance with the seniors objectives of the County’s Strategic Plan, Council allocated $1.5M in financial resources that same year to pursue development of up to four small‐scale pilot projects throughout Frontenac County, one in each constituent Township.
1.2
Context for business plan
In the “Seniors Community Housing Pilot Project Study”, a range of potential housing options were examined and evaluated against opportunity nodes throughout the County. Given the broad geography, settlement patterns and local needs, a range of potential pilot project options were identified. One of the study conclusions was that a preferred option for a seniors housing project in the Marysville community on Wolfe Island would be an assisted/supportive housing project providing rental accommodation, either through new construction or redevelopment. With the establishment of a seniors task Figure 1 ‐ Situating Marysville within Frontenac County force in 2014 and the allocation of funds later that year, there was a clear intent to consider pilot options in each of the four Townships with the County. However, the Task Force determined that the initial focus of the investigations would be Marysville. This was due in part to the extensive investigations undertaken and interest in the local community in pursuing a seniors project in the Frontenac Islands. As such, the focus of this business plan is on testing the feasibility of establishing a seniors project in the Marysville community on Wolfe Island. It is the expectation of the County that results from this investigation will assist in facilitating business plans for other small‐ scale pilot projects in the remaining three Townships that make up the County.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
It should also be noted that a recently constructed seniors affordable housing development has been of considerable influence in shaping the parameters for this business case. The development of this five unit project, located just outside of Sharbot Lake, was undertaken by North Frontenac Non‐Profit Housing Corporation utilizing AHP funding. Given the rural location of the site, private water and septic servicing was required for the project. Legislative requirements under the Safe Drinking Water Act make it challenging from an operational cost perspective to accommodate small‐scale projects of more than five units due to the well testing obligations that occur above this threshold. This was a specific design constraint for the project. As a result, a going‐in assumption of this review is that a project scale of more than five units on private well systems would be prohibitive unless a project was developed in modules of five (i.e. 5, 10, 15, 20 units) where each five‐unit module is served by an individual well. While this scalable approach may be achievable technically, overall demand would also need to be evaluated to ensure that a project could sustain itself over time when built in a larger configuration. Other cost and funding factors must also be weighed in this evaluation in order to determine project feasibility.
1.3
This report
This report is the culmination of a multi‐staged study process. The steps that have led to the development of this business pan report include:
Based on project assumptions, this report explores the feasibility of a small‐scale seniors pilot project in the Marysville community on Wolfe Island. As a result, this business plan includes:
An overview of need at both the regional and community level A defined project concept and discussion of options considered An overview of the development considerations that would influence the project A review of financial feasibility Options for project governance and management Considerations for moving forward with the project
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
The business plan provides an assessment of suitability for moving the concept forward and provides recommendations in that regard. In accordance with the terms of reference, the business plan also reflects on opportunities for replicating plan results in other locales within the County, recognizing that housing demands, development conditions and project opportunities may vary from area to area.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
2.0 PROJECT NEED This section of the report provides a summary analysis of housing needs in the Township of Frontenac Islands that is based primarily on statistical data analysis. In addition to detailing demographic trends and housing characteristics, the summary also provides an assessment of the need for affordable seniors housing. This analysis is augmented with the results of community consultations, undertaken as part of this study to determine local perspectives on a potential seniors project. Collectively, this information provides a profile of current housing needs for seniors and provides the analytical foundation for the development of the business case.
2.1
Local housing needs and market indicators
The housing need and market analysis contained in this report includes:
Demographic Profile – Provides an overview of population and household trends, population projections, and income characteristics. These demographic trends are important determinants of housing demand. Housing Profile – Provides an overview of dwelling characteristics and an analysis of household affordability with particular emphasis on seniors.
This section provides highlights for Frontenac Islands which are summarized from a more detailed profile of County and seniors needs that can be found in Appendix A. This supplementary information provides additional context as it relates to the other townships in Frontenac and the overall County. It also contains more detailed information on broader seniors trends across the Frontenacs.
2.1.1 Demographic Profile Frontenac Islands Frontenac Islands is the most southern of the Townships and is physically separated from the northern part of the County by the City of Kingston. Comprised of the two main islands ‐ Wolfe Island and Howe Island – the Township is entirely located in the St. Lawrence River and is accessible only by ferry from Kingston. Not surprisingly, the Township has the smallest land area among the Townships but does have a population comparable in size to North Frontenac. The primary settlement area is the village of Marysville located on Wolfe Island. Population Trends In 2011, the Township of Frontenac Islands had a permanent population of 1,864 which comprised 7.1% of the County of Frontenac’s total population. Frontenac Islands’ population has grown 12.2% since 1996, when it stood at 1,661.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
Table 1. Population Counts, Frontenac County and the Township of Frontenac Islands, 1996‐2036
Geography Frontenac County Frontenac Islands
1996 23,760 1,661
2011 26,375 1,864
% Change 1996‐2011 11.0% 12.2%
2036 32,400 2,435
% Change 2011‐2036 22.8% 30.6%
Source: Statistics Canada 1996‐2011 Community and Census Profiles; Watson & Associates, Population, Housing and Employment Projections for the Frontenacs, June 2014
Based on projections by Watson and Associates undertaken in 2014, the Township’s population is expected to continue to grow, and by 2036 it is estimated the population will research 2,425 persons, a 30.6% increase from 2011. Frontenac Island’s proportion of the County’s total population is expected to rise slightly to 7.5% by 2036. Population by Age Census data by age range shows that the Township of Frontenac Islands has a very high proportion of seniors – more than a fifth of the Township’s population is 65 years or older. This is up from 16.8% in 2001, or 275 seniors. The County as a whole also has a high proportion of seniors at 17.3%, but this is still lower than Frontenac Islands’ proportion. The number and proportion of seniors in the Township will likely only continue to grow as there were 385 persons aged 55 to 64 years in the Township in 2011, which comprised 20.6% of the population. This large number of soon‐to‐be seniors suggests that the senior population will continue to increase. Table 2. Seniors Population, Frontenac County and the Township of Frontenac Islands, 2011
Seniors (65+) as share of population Frontenac Islands Frontenac County
Total Seniors Pop
Total Pop
Seniors as % of Total
395 4,570
1,864 26,375
21.2% 17.3%
Source: Statistics Canada 2011 Census Profiles
Persons aged under 25 years in Frontenac Islands also comprised a significant 23.1% of the Township’s population in 2011, which confirms that nearly half of the Township’s population is either a youth under the age of 25 years or a senior 65 years or older. Households Frontenac Islands had 850 households as of 2011, up 37.1% from 1996 when there were 620 households. Similar to their proportion of the County’s total population, Frontenac Islands was home to 7.8% of the County’s total households in 2011.This proportion is expected to remain the same in 2036, although the number of households is expected to increase an estimated 26.5% to reach 1,075 households. The rate of household growth is notably higher than the population growth rate during the same time period due to shrinking household sizes and diversity in housing types. Data for 2011 showed that of the 315 persons in the Township who were 65 or older, most are living in family households (80%). For the balance (80 individuals), the majority are living alone (65).
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
Tenure Unlike the County, the proportion of owners in Frontenac Island has decline from 89.9% in 2001 to 83.3% in 2011. While the number of owners rose by 22.6% during this time period, the number of renters increased 85.7% as well, indicating that while ownership is very prominent in the Township, the number of renters is also growing. Given the lack of purpose built rental stock, this suggests that renters are seeking accommodation in the informal rental market (secondary apartments, houses, etc. not specifically built for rental purposes). It is also worth noting the County‐wide trend which shows a sustained level of ownership tenure among seniors, especially those 75 and older. This indicates that seniors are staying in their homes longer due in part to the lack of alternate options. A minor factor in these sustained rates would also be the in‐migration of seniors who choose to convert seasonal dwellings for permanent residence. Income In 2010, the median individual income for the Township was $36,564 and the average income was $45,499. In terms of household income, the 2010 median household income was $82,045, compared to a median household income of $58,974 in 2000 (a 41.9% increase). Incomes for the Township are generally higher than County averages and this is reflected in the fact that no households earned less than $20,000 annually in 2010 and a third (33.1%) earned $100,000 or more annually.
2.1.2 Housing Profile Dwellings Similar to the overall County, the majority of dwellings in Frontenac Islands (96.8% or 760 dwellings) are single‐detached dwellings. The remaining 3.2% (25 dwellings) are comprised of low‐rise apartment building units (1.3%), detached duplex apartment units (1.3%), and semi‐detached dwellings (0.6%). These proportions have changed little since 2001 when there were 660 single‐detached dwellings comprising 95.5% of the dwelling stock. In terms of seasonal dwellings, 37.8% of Frontenac Islands’ dwellings (or 475 dwellings) were seasonal in 2011, down from 44.7% in 2001 (533 dwellings). The number of seasonal dwellings in the Township is expected to increase slightly in actual terms to 505 dwellings by 2036, but the share of seasonals as a percentage of housing stock will actually drop to 32.0%. Based on 2011 figures, 26.9% of all dwellings in the Township were built in 1960 or earlier. Another 25.6% were built between 1961 and 1980 and 16.7% were new, having been built between 2006 and 2011. Despite the fact that more than half of all stock was built prior to 1980, housing stock in the Township is in relatively good condition with just 7.0% of the dwellings in need of major repair.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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Relevant Documents The following are documents that are rele…
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AGENDA ITEM #b)
Table 3. Dwellings by Type, Frontenac County and the Township of Frontenac Islands, 2011
Frontenac County
% Single‐detached house Semi‐detached house Row house Apartment, detached duplex Apartment, building that has five or more storeys Apartment, building that has fewer than five storeys Other single‐attached house Movable dwelling TOTAL
Frontenac Islands
%
9,895 80 30 90
95.3% 0.8% 0.3% 0.9%
760 5 0 10
96.8% 0.6% 0.0% 1.3%
0
0.0%
0
0.0%
185 10 95
1.8% 0.1% 0.9%
10 0 0
1.3% 0.0% 0.0%
10,385 100.0% 785 Source: Statistics Canada, Census Profile, 2011
100.0%
Residential Development Potential Due to the proximity of the Islands to the City of Kingston, it is expected that the Township will continue to attract a balance of working families and empty nesters or young seniors. Over the period from 2011 to 2036, Frontenac Islands are forecast to grow by an average of 14 new housing units each year, all of which are expected to be low‐density dwellings. Approximately 90% of these new homes are expected to be developed in the area outside of designated settlement areas1. In addition, it is expected that 80% of the new housing units will be located on Wolfe Island while Howe Island will see 20% of the new housing units. It should be noted that the future population growth potential in the Township is limited in part by the capacity of the Wolfe Island and Howe Island ferries2. In terms of vacant land, the Frontenac Islands has the smallest proportion of vacant land designated as settlement area when compared to the rest of the County (0.5% of the County total). Given the relative size of the Township and level of development activity, this is not surprising. Ownership Housing In 2011, 83.3% of dwellings in Frontenac Islands were owned (650), down from 590 dwellings in 2001. This indicates that while ownership housing is the most dominant form of tenure, the preference for ownership housing within the Township may be diversifying slightly. Price is also an important consideration in the ownership market. According to Statistics Canada Census data for 2011 the Township’s average dwelling value for 2010 was $454,789, which is an increase of 142.6% since 2000, when the average dwelling value was $187,500. Average dwelling values in the Township are much higher than for the County overall, and have increased at higher rates over the last decade.
1 2
Watson & Associates (2011). Population, Housing and Employment Projections for the Frontenacs. Watson & Associates (2011). Population, Housing and Employment Projections for the Frontenacs.
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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AGENDA ITEM #b)
Mortgage status can also provide important information on a housing market. In 2011, 50.0% of the Township’s owner households (285), had a mortgage while the remainder did not, indicating that a large proportion of owners in the Township have considerable equity invested in their homes. Rental Housing In contrast, just 16.7% of dwellings in the Frontenac Islands (130), were rented in 2011. However, the number of rental dwellings has grown in recent years, as there were 70 rental dwellings in the Township in 2001. This suggests that while there is still a very limited supply of purpose‐built rental housing within Frontenac Islands, the supply of informal rental housing has been growing (e.g. secondary apartment, rented homes, etc.) due to pent up demand. Average rents are an important consideration in the rental market. According to Statistics Canada Census data for 2011 the Township’s average monthly shelter cost for rented dwellings in 2010 was $1,051, which is an increase of 42.6% since 2000, when the average monthly shelter cost for rented dwellings was $737. Like the average dwellings values, average rents in Frontenac Islands are much higher than the County overall, suggesting supply is limited and there is a strong demand for rental housing in the Township, especially at affordable levels. Spending on Housing and Shelter Costs As a standard measure of affordability, where households spend more than 30% of their gross income on shelter costs, they are considered to have an affordability problem. In 2010, 10.4% of owners, or 59 households, in Frontenac Islands were spending more than 30% of their income on housing costs and 46.2% of renters, or 60 households, were spending more than 30% of their income on housing costs. These figures are generally comparable with County figure, and this data indicates that renters in the Township are far more likely to struggle with housing costs than owners.
2.1.3 Summary of analysis As a result of the above analysis, demographic and housing profiles for the Frontenac Islands have been established that show:
More than 20% of the of the Townships’ population are seniors (315 individuals in 2011) and this population in expected to grow at a rate faster than the County average
Household growth will continue to outpace population growth as average household size declines
While the majority of seniors tend to live in family households, 20% do not and most of these individuals live alone
The majority of dwellings (over 83%) are ownership tenure and trends continue to show seniors owners are staying in their homes longer, especially those over 75 years of age, due in part to the lack of suitable local housing alternatives.
The number of rental households has been increasing due to demand but the number of purpose‐ built rental units has not, signaling a higher reliance on informal rental market options (e.g. accessory apartments, rented homes, etc.)
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County of Frontenac Business Plan for Seniors Housing (Marysville)
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AGENDA ITEM #b)
In addition to limited housing options, renters face continued increases in rents and as a result, almost half have an affordability problem (i.e. they spend more than 30% of their gross income on housing)
This analysis demonstrates that there is a continued demand for affordable, purpose‐built rental housing and that as the seniors population continues to grow in the Township, more appropriate housing opportunities will be required to meet their needs and enable them to remain in the community.
2.2 Community-based Indicators To augment this analysis and gather local community perspectives on housing needs, a community consultation session was held on October 9th, 2014 at the Town Hall in Marysville. At this session, an overview of housing needs in Frontenac was presented as well as background on the study process. A recap of prior investigations on seniors retirement housing and study work to date was also provided to attendees. Past discussions and investigations have been undertaken by Wolfe Island community members on the issue of seniors housing. This involved focus groups meetings as well as a mail‐out survey which was conducted in 2009. These activities showed that there was an interest in seniors housing in Marysville, especially in terms of future needs. Common themes from these prior investigations indicated: A preference for rental options that are affordable for seniors The strong desire for self‐contained units which promote independent living A wide range of perspectives on preferred amenities, from modest to more elaborate The need to address socialization, accessibility and proximity to services Recognition of challenges that exist with current housing stock and servicing constraints Discussion questions were then posed to those in attendance to gauge current perspectives regarding a seniors project in Marysville. Attendees were specifically asked: What form/scale should the project take? Should it be only for seniors and only for Islanders? Is rental the preferred form of tenure? What unit size and level of affordability is desirable? What amenities should be provided within the project? What should be accessible nearby? Should any services/supports be provided within the project or just be available nearby? Who should own/operate the project? What government support should be provided to enable development of such a project (Township, County, etc.)? Are you or a family member interested in living in a project like this? If so, when? Based on responses from attendees, the following general conclusions were drawn, many of which were consistent with earlier investigations by community members: A project should be of modest scale, single storey and geared towards seniors (65+) – consider ability to add on if demand dictates
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Units should be self‐contained and geared to those able to live independently (i.e. not a care home) They should also be suitable to changing needs over time (i.e. enable aging in place through visitability and /adaptability) Units should be geared to aspiring renters – modest, affordable rents but not necessarily rent‐ geared‐to‐income Sheltered common space, modest in scale – main goal is to allow for socialization Services/supports should be accessible but not necessarily in project Location‐wise, need for walkability, close to amenities/services in the Village Ownership/operation could be via a local board like the clinic already on the Island Funding and support programs come with strings (i.e. rules, waitlists, etc.) – not always welcome/suitable to local context/need so prefer a local solution for local residents Four individuals indicated an immediate interest in the project
Some additional comments arising from these discussions noted: A preference for new development over renovated space in order to better address visitability/accessibility needs Recognition that servicing issues are a notable development consideration (especially water) The island location also presents some development challenges (i.e. costs, access to labour, logistics for getting materials to site) Recognition that there are examples of other models in existence that could be replicated (e.g. Abbeyfield, Kinsmen, condo, life lease) There may also be viable options which are not bricks & mortar (i.e. care network, home matching, etc.) The results of the community consultations are consistent with the findings of the needs analysis in terms of seniors housing in the Township. These community perspectives also provided key insights into the type of housing options and characteristics that were deemed desirable. Together, the needs analysis and community consultation demonstrates the need for a small scale seniors rental project and help to inform the key elements that should/could be incorporated in such a project.
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3.0 PROJECT CONCEPT This section of the business plan defines the project concept, as informed by local needs, stakeholder feedback and with regard for the preferred project attributes identified by the Task Force. These parameters establish the form, scale, unit mix and affordability for the prospective project. Associated amenities are also defined, recognizing the small‐scale nature of the project. As a result of these attributes, configuration options for securing them are reviewed and a preferred project concept is identified. This concept is then analyzed in terms of development potential and financial feasibility in subsequent sections.
3.1
Form and scale
In terms of project form, it is clear that seniors tend to favour low rise forms which are grade‐related. This building configuration is highly supportive of accessibility and eliminates the need for stairs, lifts or elevators. As such, a single storey slab‐on‐grade configuration offers the accessibility and straight‐forward layout suitable for a project of this scale and client type. Likewise, using conventional wood frame construction and a standard slope roof for this building form would be highly economical. The rural, island location and modest demand have an influence on the scale of the project from a sustainability perspective. However, the requirement for private servicing and associated well water requirements also play a significant role in dictating scale. Given the rigorous water testing obligations of the Safe Drinking Water Act for multi‐residential buildings of more than five units, there is an economic benefit to developing projects like this in increments of five. This enables the cost of well infrastructure to be spread across the maximum number of units within the limits of the Act. Under this scenario, one well would be required to service each five unit residential block. In terms of the units themselves, demand has shown a strong affinity for self‐contained apartments that are geared to seniors capable of independent living. This means that each residential unit would have its own kitchen and washroom facilities unlike congregate living arrangements where these facilities can be shared. From that perspective, the project would be much like a typical low rise rental building. Aligning these residential units around a double‐loaded corridor would also provide a high degree of efficiency. Given the current level of demand and the stated Task Force preference for smaller scale, the proposed project is being recommended to start at the five unit size. However, the opportunity to expand the project in modules of five should be preserved when establishing initial project layout at the first phase. In that way, additional residential modules can be added to the project site where sufficient demand warrants.
3.2 Unit mix and affordability Traditionally, seniors housing projects tend to have smaller unit sizes – either one or two bedroom units ‐ as compared with family units, reflecting their inherently smaller household size. Furthermore, affordable seniors units tend to be predominantly one bedroom in size rather than two bedroom, a direct reflection of the rental cost of the unit. Where affordability is less of a concern, seniors projects would typically have
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a higher share of two bedroom units. Given the affordability profile envisioned for the project, a unit mix of 80% one bedroom and 20% two bedroom is proposed. For a project of five units total, this would mean 4 one bedroom units and 1 two bedroom unit. As indicated through community feedback, there is a high degree of interest in rental tenure for the project. This is in contrast to seniors housing models that allow for ownership or some form of equity stake (i.e. condominium, life lease, etc.). Apart from the affordability that rental accommodation provides, there was a clear sense from consultations that prospective residents who were homeowners and would be downsizing would not be interested in locking up equity in such a project. Instead they would choose to reserve the use of their equity for other retirement purposes. While community proponents were supportive of affordability in the project to meet the needs of lower or moderate income seniors, there was limited support for units that were rent‐geared‐to‐income (RGI). Instead, having a mix of potential incomes was considered desirable. There was also recognition that the financial resources needed to sustain RGI rents would impact on project viability. While funding may be available to offset this impact, the obligations that come along with this funding were not seen as attractive by stakeholders3. As such, rental rates have been assumed for the project at average market rent levels (AMR), as reported by CMHC in their annual rental market survey of the Kingston area. For 2014 (the most recently reported year), this would mean 1 bedroom apartments rents at $888 and 2 bedroom apartment rents at $1070. To encourage energy conservation and to buffer against utility cost impacts, tenants would be responsible for their own heat and hydro costs. To better facilitate this, individual unit heating/cooling systems have been assumed rather than large shared systems. Water and sewer charges are not applicable as the project would be developed on private servicing. Given the affordability parameters for the project and the senior client group, it is assumed that a modest unit size would be suitable. This reflects the fact that unit size has a direct influence on overall unit cost and as such, influences the project financial viability. However, because units are anticipated to rent at AMR rates, they would need to provide comparable value in the market place in order to attract/retain tenants. Small‐scale projects like this do not benefit from scale economies and as such, can be more expensive to build on a per unit basis. It is important therefore to rationalize built floor area with regard for maximum chargeable rent in order to support viability. With this in mind, 1 bedroom units are assumed at a size of 600 square feet (gross floor area, GFA) while the 2 bedroom unit has been assumed at 750 square feet GFA.
3.3 Amenities In terms of in‐unit amenities, it is anticipated that standard appliances would be provided (fridge + stove) along with modest storage space. It is also assumed that visitability would be provided interior to the units by maintaining open radius layouts in both the kitchen and bathroom of each suite. Building in options for grab bars in unit bathrooms is also assumed. In terms of building visitability, wider common corridors and 3
RGI funding provided by the City of Kingston as the designated local Service Manager is provided in accordance with program rules and guidelines. These can stipulate requirements for things such as eligibility for the project, obligations to fill vacancies from a central wait list and regular income testing of tenants. Stakeholders cited concerns with restrictions like these and their impact on maintaining local control.
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open radius layouts in laundry and common areas would be employed. In addition to constructing the building at grade, common entry doors would provide for full accessibility. One unit would also be modified to accommodate a tenant with mobility impairment, incorporating additional unit features like a roll‐in shower and accessible kitchen. This would provide the ability to meet changing needs as tenants age in place. Surface parking would also be provided, recognizing that while most tenants would prefer walkability, there would be a need to provide for basic parking as well as visitor parking in accordance with zoning requirements. It is assumed that 7 parking spaces would be provided as part of the project concept. Community consultations identified a wide range of potential amenities/features that could be included within the common area of the project. At the same time, there was a recognition that only modest opportunities for amenity space would exist for a project of this small scale. As above, scale economies for smaller projects make it challenging to add additional GFA due to the limited offsetting income potential of this space. The more amenity space that is added, the more expensive the project is to build and operate on a per unit basis. While there are cost pressures inherent in adding amenity space, creating opportunities for tenants to socialize in a sheltered space was highly valued by stakeholders. To strike a balance in this regard, it has been assumed that a double loaded common corridor would be used to connect all units internally, providing a common access point to the project as well as sheltered access to each unit. Modest coin operated laundry facilities would also be provided (1 washer/dryer pair) for resident convenience. Adjacent or in combination with this space, it is also assumed that a sitting or gathering place would be provided for the benefit of all tenants. This informal space would provide year round indoor shelter and would account for not more than 500 square feet GFA. The size and configuration of this space would be subject to adjustment based on overall building layout. In addition to small individual patio areas for each unit, a common outdoor amenity area would also be provided adjacent to the common interior space. Only a basic seating area and landscaped space have been assumed under current construction costs.
3.4 Project development options In terms of options, project needs could be realized though either new construction or renovation of an existing structure. While renovation of an existing space to meet needs can be beneficial, there are also inherent risks in re‐purposing existing structures. There are also challenges that can be faced in meeting design requirement for new spaces, depending on the condition/configuration of the existing structure. Community consultations indicated a preference for new construction as a means of being more readily able to accommodate specific project needs. As such, new construction is considered as preferred compared against renovation. That said, development opportunities for both have been examined as part of this business plan. Another option identified earlier is the potential for the project to be expanded as future demand warrants. While the current assumption is an initial development of a five unit project, expanding this model in successive pods of five units could be a highly efficient way to scale the project up as future demand warrants. By replicating the same building design/configuration and by allowing for an expandable septic system, additional modules could be added to the project in a very cost effective manner. To do this, consideration would have to be given in the initial planning stages to appropriately sizing the project site.
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Siting of the initial and potential future buildings on the site would also need to be given due consideration. This would help to ensure that where demand was warranted, successive phases could be added in a purposeful, cost effective and efficient way.
3.5 Preferred project concept Based on evaluated needs, consultation feedback and with regard for project development experience, a preferred project concept has been developed. The proposed project concept assumes:
Five self‐contained rental apartment units configured around a common, double loaded corridor Of these units, four would be 1 bedroom units (600 s.f.) and one would be 2 bedroom unit (750 s.f.) – one unit would be modified for full accessibility Units would be geared to seniors (65+) who are able to live independently. Rents charged for all units would be equivalent to the CMHC average market rent for the Kingston area and would not include utilities (i.e. heat/hydro paid by tenants) Laundry facilities and a common gathering space would be provided to accommodate tenant socialization. Total initial building GFA is estimated to be in the order of 4,000 s.f. (GFA) Building construction is anticipated to be in a single storey, slab‐on‐grade form with conventional wood framing and a standard sloped roof To facilitate aging in place, the building and the units would be designed to a visitable standard Surface parking for 7 stalls would be included in the project. Project design would be scalable to allow for addition of similar five unit modules as future needs warrant Figure 2 ‐ Conceptual Project Layout
While the ultimate design of the project would provide for component space and the overall configuration of the building, a conceptual layout is provided for illustrative purposes in Figure 2. Having established the preferred project concept, subsequent sections of this report will assess associated development considerations and evaluate the financial feasibility of the project.
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4.0 DEVELOPMENT CONSIDERATIONS As part of the project concept evaluation process, a number of development considerations were examined. These included a review of development opportunities, options for procuring the project, as well as technical/servicing considerations. This section of the report also examines required land use approvals and sustainability features associated with the preferred project.
4.1
Potential development opportunities
Two general approaches to development were considered for the project based on opportunities available in the Marysville area; renovation of an existing building and new construction. Apart from preliminary technical reviews of each options, site visits were also conducted in September of 2014 to assess development potential for each prospective location. Given the preliminary nature of this assessment, development opportunities are discussed in general terms to maintain the anonymity of current building/land owners. Figure 3 ‐ Development Opportunities Reviewed in Marysville
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4.1.1 Renovation opportunities In the case of renovation, two existing buildings were specifically reviewed. Both were well‐located within the village boundary and directly adjacent to Main Street, providing a high degree of walkability and proximity to existing amenities. These two storey structures are established and are estimated to be in excess of 40‐50 years in age. One is estimated to have approximately 15,000 square feet GFA and includes a full commercial kitchen while the other is in the order of 5,000 square feet. Both include residential accommodations and have had additions and alterations over time, as evidenced by multiple level finish and space configurations within the building envelopes. Each also has substantial common area which could accommodate space for social gathering or amenities. In terms of servicing, both have existing well water treatment systems (one shore well, the other a shared well) and septic systems (both are tank‐oriented). Heating is via oil‐fired boilers with hydronic baseboard units and it appears these systems having been upgraded over time. The lots that each building are situated on do allow for parking but the lots themselves are substantially built out. As such, there is limited capacity for expanding the current building footprint at either location. In considering ability to accommodate the preferred development concept, the two renovation options reviewed faced a number of challenges:
Floor plate size and configuration – In the case of the larger building, there is ample floor plate to accommodate the GFA envisioned for the project concept ‐ in fact about three times the required space. For this reason, acquiring and fitting up the building from day one would present financial challenges given the phased approach envisioned for the project. The smaller of the two buildings should be able to accommodate the initial five unit GFA with modest room to spare and as such, might be more suitable to the initial phase. However, the configuration of the existing floor plates for each of the buildings would require extensive renovation in order to address project requirements, especially in the case of accessibility and energy efficiency. Given the extensive nature of these renovations, it is anticipated there would also substantial upgrades required to meet current building code requirements.
Age and condition of buildings – As in any renovation, it is not uncommon to encounter challenges associated with building materials used, repairs undertaken and obligations associated with newer building codes. Older structures typically can have designated substance issues to resolve (e.g. asbestos, UFF insulation, radon gas, etc.). Prior to considering a purchase, part of the due diligence process would involve a formal building condition assessment to document any such issues. This same process would identify the useful life of main building components. While certain older structures may have extended building life due to their more durable construction, this is not always the case. In these instances there can be a more compelling cost/benefit argument for building new, given the longer useful life versus an aging structure. While no formal assessment has been done on either building, the site visit did suggest that challenges would be faced in extending the useful life of the buildings when compared with new construction.
Lot area capacity – While the larger building could accommodate additional units within its current building envelope, there is limited ability to expand the envelope of the building given its current
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lot coverage and surrounding uses. The same is true of the smaller building except that the current envelope would only be able to accommodate the units envisioned under the initial project phase. As such, there is no real ability to expand this building in the future.
Visitability/accessibility – In both instances, the existing buildings are configured with two storey floor plates that are challenged in terms of their ability to provide full visitable access and unit accessibility. Extensive renovations would be required to accommodate these features (e.g. wider halls, open layout kitchens/baths, etc.). However, maintaining the two storey configuration would also oblige the installation of a lift or related device in order to make the 2nd floor truly accessible to residents. The added costs of such devices would be hard to absorb given the scale economies of this small project.
Servicing/HVAC – Both buildings have established water/septic systems that appear to be in adequate working condition. Given their current use, it is not anticipated that capacity issues would be encountered in accommodating the preferred concept. However, the overall age and condition of these systems may require adjustments to better ‘fit’ with the project. Likewise, the HVAC systems for each building would require substantial re‐configuration as part of the renovation process. While this would provide an opportunity to consider energy efficient upgrades on a cost/benefit basis, there are unlikely to be substantial cost savings in retaining existing systems.
As a result, neither of the renovation options were considered to be suitable for fulfilling the requirements of the preferred development concept. Given the common space and kitchen facilities associated with each, they could be better suited to communal/congregate living models for seniors. However, this is not the preferred model for the project and the ability to retrofit visitability and accessibility would remain a significant issue given current floor plate configurations. On the basis of this cursory review, new construction is considered a more appropriate option because it:
better suits the visitability/accessibility requirements of the project in a single storey configuration provides more flexibility to design/configure spaces in accordance with the preferred building concept avoids any potential issues associated with existing structures (code issues, designated substances, servicing and HVAC constraints, etc.) allows for expansion in the future where demand warrants
4.1.2 New Development Opportunities Opportunities to accommodate the building concept via new construction were also considered as part of the review process. During the site visit to Marysville in September 2014, vacant property in two prospective locations was examined for suitability under a new construction scenario. As the core of the village has been developed over the years, there are limited opportunities to accommodate new construction through infill in this area. In addition, the assumed floor plate of 4,000 square feet and minimum distance obligations for servicing (well + septic) mean that minimum lot size for the preferred project concept would be in the order 2‐3 acres, depending on soils conditions and surrounding uses.
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Where room for potential future expansion is contemplated, this minimum lot size would be in the order of five acres or more. There are limited options in terms of vacant parcels within the village boundaries that could meet these requirements. As such, two prospective locations were identified at the edge of the village boundary. Division Street Extension The first of the two locations identified was south of Main Street, coincident with the village boundary and in line with the theoretical extension of Division Street. At this location, some 27 acres of land inside the village boundary are owned by the Township and include an existing cemetery and community sports fields/facilities. To the immediate south just outside the village boundary are lands held in private ownership. These lands are relatively flat and extend southward some 500m from the village boundary. Widthwise, the lands go from Highway 95 in the west to 7th Line road in the east in an inverted “L” pattern, encompassing some 109 acres in all. Obviously the five acre parcel required for the project concept could be easily be accommodated within this holding. However, the configuration and location of the project site within the larger parcel would be subject to further consideration as part of the design process. Road access to the property from Highway 95 would be most direct, although this road is not well suited for walkability and proximity to Main Street. A more walkable and direct connection could be fostered via the Township property as an extension of Division Street. In this location, the subject lands would be some 450m from the Town Hall on Main Street. Assuming this connection was preferred, it would require more than 200m of additional road to be developed. However, this access would provide a safer and more direct connection for project residents to the amenities found on Main Street. Based on preliminary discussions, it is assumed for the purposes of this analysis that the Township would absorb the cost of this road extension. It has also been indicated that the parcel owner of the subject land may be willing to consider donation of the lands for the project as a severance from the overall parcel. As such, land costs have been assumed as ‘zero’ for modeling purposes. No known environmental issues exist in the vicinity of the lands in question, although an Environmental Site Assessment would need to be undertaken as part of the due diligence process4. As a vacant property, well water testing and soils investigations would also be required as part of the due diligence process to confirm servicing capability/parameters prior to acquisition. These costs have been included within the financial modelling. Hillcrest Street Extension The second of the two locations identified was west of Main Street, adjacent to the village boundary and just south of the theoretical extension of Hillcrest Street. At this location, a small parcel of 0.28 acres of land at the end of Hillcreast Street is owned by the Township. This municipally‐owned parcel would provide direct access to the subject lands, situated some 50m west of the village boundary and which are held in private ownership. Low density residential development lies to the east and north of the subject lands, although a notable drop in elevation occurs at the northern edge as one moves towards Highway 96. The subject lands are long and narrow in configuration, extending southward from the Hillcrest Street extension for some 1.7km with an average width of 250m. The parcel is essentially land locked save for an access 4
There was a former landfill site located north and east of the subject area but given its distance from the subject lands, it is not anticipated to be an issue. The required phase 1 ESA would confirm this condition.
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point to Highway 95 at the parcel’s southern terminus, altogether accounting for some 85 acres in total size. The five acre parcel required for the project site could be easily accommodated within this larger parcel. However, the configuration and location of the site within the larger parcel would be subject to further consideration as part of the design process. Presumably the site would be situated immediately south of the road extension, thereby minimizing the length of road extension required. Road access to the property from Hillcrest Street would be most direct, providing walkability and proximity to Main Street. In this location, the subject lands would be more than 550m from the Town Hall on Main Street. This road extension would require the use of municipal lands as well the development of 50‐75m of additional road. Based on preliminary discussions, it is assumed for the purposes of this analysis that the Township would provide the road access and absorb the cost of the road extension. It has also been indicated that the parcel owner of the subject land may be willing to consider donation of the lands for the project as a severance from the overall parcel. As such, land costs have been assumed as ‘zero’ for modeling purposes. No known environmental issues exist in the vicinity of the lands in question, although an Environmental Site Assessment would need to be undertaken as part of the due diligence process. As a vacant property, well water testing and soils investigations would also be required as part of the due diligence process to confirm servicing capability/parameters prior to acquisition. These costs have been included within the financial modelling.
4.2 Preferred option and procurement Given the project concept parameters, it is clear that the benefits of developing the proposed project under new construction are more compelling than renovation of an existing building. Based on local opportunities reviewed, there are sufficient and suitable options to pursue development in this manner, subject of course to appropriate due diligence investigations. While not immediately proximal to Main Street locations, these potential sites would still provide reasonable access to amenities and walkability while accommodating the building form/size envisioned. These sites would also be able to accommodate future expansions where the need was warranted. Typically in a new construction scenario of this type, procurement of the project would be pursued through a formal tender and fixed priced construction contract. To help guide the development process, a proponent would typically engage an experienced development consultant. The role of the consultant would be to marshal the proponent through the development process, from initial concept and feasibility testing through to construction and move‐in. As part of this process, the proponent would also engage an architect to undertake project design. Once design drawings and construction documents were developed and approved, the project would be tendered for pricing, either by invitation or by public tender call. This would encourage competitive pricing for the project among qualified local contractors. This is a standard procurement approach and one that is commonly used where public funds are involved. During the review process, it was noted that the island location and challenges associated with getting labour and materials on‐site have been issues in past construction projects on Wolfe Island. In response to these logistical considerations, it is not uncommon for contractors to include cost premiums to account for these issues, resulting in higher overall project costs on a per unit basis. In some instances, pre‐fabricated
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or modular building alternatives have been pursued to overcome these issues. This would involve the design/manufacture of building modules off site by a supplier. The modules would then be subsequently assembled and finished on‐site, reducing the overall time and cost necessary for on‐site work. Site preparation, servicing and foundation work would still be required but this could be provided either by the modular housing supplier or by separate tender. While individual experience can vary from project to project, it may be possible to achieve some level of savings in unit construction by pursuing this option. However, add back costs for transportation, assembly and fit‐up would also need to be considered which could nullify savings. This approach would also involve different design and construction management roles which would need to be factored into the process. For these reasons, conventional construction has been assumed for purposes of financial analysis. Financial modelling assumptions have assumed a typical design and tender process. As such, pro forma figures include development consultant, architect and contractor estimates. Where alternate procurement options are seen as desirable, the procurement process would need to be modified to reflect this approach. This would result in various trade‐offs in terms of costs but for the sake of budgeting, are assumed to net out about the same. A modified procurement process could also be structured in order to secure pricing for regular versus pre‐fab construction if the proponent wished to pursue that opportunity. Another factor that would need to be considered as part of the design/procurement process is the configuration of the project site as well as the ultimate build out. As noted previously, there are clear benefits to construction of multi‐residential units in modules of no more than five units due to well testing regulations. While only five units are anticipated under this initial concept, allowing for the potential expansion of the project in the future is prudent. As such, initial project siting should have regard for the requirements of current and future modules. For instance, each five unit pod would require a well and these wells would need to be situated a minimum distance away from any septic field or adjacent agricultural uses. A wide range of septic technology exists and it would be advisable to design in future expandability for these systems to help make most efficient use of site area. In setting out the initial project, consideration would have to be given to these future servicing requirements.
4.3 Servicing & technical considerations As noted, there are technical and service considerations associated with project development, many of which must be considered as part of the due diligence process prior to property acquisition and configuration. In the case of the proposed project, the most basic of these is the requirement for an Environmental Site Assessment (ESA). A phase 1 ESA would be undertaken as a screen to determine if there are any potential environmental issues associated with the property. This is primarily due to legislation around environmental liability which places obligations on property owners in regards to found contaminants. While no known environmental conditions exist for the property options identified through this study, if any were discovered through the phase 1 process, a determination would need to be made as to whether to proceed with the lands in question. The current financial pro forma has allowed for a phase 1 ESA but has not included any allowance for environmental remediation.
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A second consideration for the project is well water availability and quality. A review of well water records in the Marysville area and an associated groundwater study5 shows a mix of well types have been used to supply potable water for residential purposes. In areas adjacent to the shoreline, shore wells have been common while inland, shallow dug wells or drilled wells are more common. A general review of hydrogeological conditions suggests there is ample available water to meet local requirements and the number of established wells in the Marysville area would seem to support this. However, the same study indicates that there is limited overburden and that depth to water is typically less than 5m. As such, wells tend to be shallow in the clay layer or even in the topsoil layer. Data also suggests that lower flow rates and water quality issues can be present in some instances. Ideally, the project would be served by a drilled well where quantity of water and quality was suitable for potable purposes. However, as noted above, shallow wells have been more typical. Location of the well on‐site is also a factor due to minimum distance provisions under the Ontario Water Resources Act. In the case of shallow wells, a 30m setback from a contaminant source (i.e., septic bed) is required whereas a drilled well in excess of 6m depth would be allowed to have a setback of only 15m. Pro forma estimates have allowed for basic water testing and one drilled well but have not allowed for any specialized treatment equipment that could be deemed required. As with ESA requirements, well water quantity and quality should be a condition of land acquisition, thereby ensuring that the site can yield potable water to support the project. Given the desire to plan for possible expansion, future water requirements should also be factored into this decision‐making step. A third consideration is soils conditions, particularly as they relate to septic system requirements. It is assumed that a class 4 septic system would be required for the project in order to meet legislated requirements. Given the vacant rural location of the proposed project, it is assumed that this system would be comprised of a distribution tank and filter bed. The size and design of such systems are based on anticipated flow calculations as well as the type/quality of the filter medium used. For that reason, the condition of the soil on site is a key factor in determining septic system requirements. As such, pro forma assumptions have allowed for soils testing that will assist in determining septic system requirements. These same studies could also be used in determining structural bearing requirements for footings and site works. Given the preference for a single storey slab‐on‐grade form with wood frame construction, these requirements are anticipated to be quite minor. It should be noted that emerging technologies are continuing to expand the range of available options to address septic requirements. In many instances, these options serve to enhance efficiency by reducing the area necessary for treatment/filter medium, thereby promoting more efficient use of land. While pro forma assumptions have allowed for a basic tank and distribution system, the result of soils analysis may identify other potential options for consideration. This would include consideration of options that could be expanded in the future to accommodate additional units. Given the siting restrictions for septic systems, it will be important to consider design options early in the development process to help inform site configuration and layout.
5
A review of local conditions is provided in “Frontenac Islands Groundwater and Aquifer Characterization Study” by the Cataraqui Region Conservation Authority (October 2007). While there is a recognition in the study that there is limited date with which to work, general well characteristics and water supply conditions are documented.
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Hydro servicing would also need to be confirmed as part of the pre‐acquisition checklist. Through the site visit process, a visual check confirmed the proximity of hydro service to the potential sites. However, capacity and access points for service would need to be confirmed once siting and building location are confirmed. Standard connection fees have been assumed in pro forma construction figures. Piped natural gas is not available on the island and as such, residential heating is commonly provided through electric, oil or propane sources. Renewable energy sources are also possible (e.g. solar, wind) but would have to be evaluated on a cost/benefit basis given the small scale of the project.
4.4 Land use approvals Land use approvals can play a significant role in project development, depending on prevailing rules and regulations. A review of local land use documents and discussion with County planning officials confirmed that a number of land use approvals would be required to facilitate the proposed project at the vacant property locations. These include: Severance – The potential sites represent only a portion of much larger land parcels. As such, a severance would be require in each instance to legally create the necessary project property from the larger holding. It is not anticipated that issues would be encountered in securing approval. Official Plan Amendment (OPA) – currently, the two potential sites are designated “Rural’ under the Township’s Official Plan. They also fall just outside the village boundary and as such, would require an OPA in order to permit the development of a seniors multi‐unit housing facility. Given the sites’ immediate proximity to the village boundary, the proposed use and plan to provide road access, it is felt there would be reasonable grounds to support a site‐specific OPA. Apart from the application and planning rationale, additional studies may need to be submitted in support of the OPA (e.g. well report, soils report, etc.). Zoning Bylaw Amendment (ZBA) – under the current zoning bylaw, the two potential sites fall within the “Rural (RU)” zone which does not allow for the proposed multi‐residential use. In fact, there is not a zone within the current bylaw which would accommodate the use. As such, a site‐specific ZBA would be required in order to permit development of a seniors multi‐unit housing facility. In order to expedite approvals and given the common issues involved, it would be prudent to make application for both the OPA and ZBA concurrently. The rationale for the ZBA is similar to that of the OPA, so where the OPA application was successful, it is expected that approval of the ZBA would follow. Building Permit – As part of the construction process, a building permit would be required, ensuring that the project was designed in conformity with the Ontario Building Code. While this approval is typically straight forward, the provision of potable water, confirmation of septic system and frontage on a public road would be required before a permit could be issued. As such, servicing and road access would have to be confirmed prior to application for a building permit. As a proponent of the seniors housing project and as the approval authority, it is not anticipated that the Township would have issues in supporting the land use approvals for the proposed project. That said, there are mandatory public consultation requirements associated with most of these approval processes and
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rights of public appeal on municipal decisions. Appeals of decisions could result in delays and add costs to overall project development. Provided that care was taken in addressing the concerns of neighbours through the planning process, it should be possible to secure necessary approvals. Each of the approvals processes also involve the remittance of fees which would add development costs to the project. Given the small scale of the project and given that the Township is a primary proponent of the project, it is assumed in pro forma modelling that application fees would be waived by the Township.
4.5 Sustainability An important lens for project development is the County’s sustainability principles, as articulated in “Directions for our Future: County of Frontenac Guide to Sustainability”. A stated objective of this business plan is to ensure that the proposed project concept supports sustainability objectives. In comparing the proposed project concept with “Directions for our Future”, it’s clear that a number of objectives are being promoted across a range of sustainability areas. These include:
Land use planning/management – the efficient and orderly development of vacant lands in a compact footprint, allowing for future expandability as warranted Energy – the inclusion of energy efficient building features and conservation measures that can be adapted over time (e.g. low voltage lighting, occupancy sensors in common areas, etc.) Water – having safe, effective waste management systems (i.e. septic) that protect groundwater and features that promote conservation (e.g. low flow faucets, toilets) Solid waste management – reduction in solid waste through the use of recycling and composting Transportation – encouraging walkability and pedestrian access to Main Street Housing – providing more diversity in housing choice, encouraging ‘aging in place’ for area residents and promoting quality, compact design
While pursuing sustainability practices is a prime consideration of the County, it is recognized that utilizing certain green and renewable energy technologies can be cost‐prohibitive for projects of a smaller scale. In these instances, the payback period can be unrealistic for the upfront investment required. For that reason, practical, modest cost features are encouraged to promote energy efficiency. These can include things like:
Solar orientation of the building Added insulation in roof and walls Efficient thermal windows and doors High efficiency HVAC systems
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5.0 FINANCIAL FEASIBILITY A core part of determining a project’s viability involves assessing its financial feasibility. At the initial concept phase, this feasibility is based on preliminary assumptions, recognizing that a project’s composition can change as the concept is refined. Throughout a project’s development, this feasibility is tested repeatedly at key milestones as estimates, costs and assumptions are refined. This process enables continued viability checks leading up to the point of construction and allows for decision‐making at key milestones as to whether to proceed. For the purposes of this business plan, financial feasibility has been based on preliminary estimates and assumptions that reflect the current project concept. It is fully expected that as this concept evolves, financial parameters would need to be reviewed and re‐tested to ensure continued viability.
5.1
Project assumptions/parameters
As an integral part of the business plan, the project must demonstrate financial self‐sufficiency in order to attract financing commitments. Therefore, the project must clearly show that the operation of the project will generate sufficient revenues to cover debt service (i.e. mortgage), operating costs and funding of a capital reserve fund, all while achieving a positive debt service ratio. In order to achieve operational viability, capital costs and associated borrowing requirements must be minimized where possible. Contributions to offset capital costs are also used to reduce debt service costs for the project (i.e. mortgage payments) and in that regard, a number of funding sources have been identified to meet these costs. General assumptions utilized in the financial analysis of the project are as follows:
Five units total – 4 @ 1 bedroom (600 sf/unit) and 1 @ 2 bedroom (750 sf/unit)
Total buildable area – 4,000 sf (GFA), including modest amenity space
Building construction – single storey slab on grade, wood frame with standard sloped roof
Private servicing – drilled well and septic system
Procurement ‐ design/tender (stipulated price contract)
Financing – conventional mortgage via private lender with CMHC insurance
Contributions – fees waivers and capital contributions from Township and County
Owner status – non‐profit housing corporation
Using these guiding assumptions, a financial plan for the proposed project has been established and tested for feasibility. The following sections identify the estimated capital and operating costs of the proposed project as well as the funding and capital equity requirements. In addition to detailed assumptions that are discussed in the sections following, summary pro forma tables are also provided in Appendix B that help to clarify the basis for the estimates used.
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5.2 Estimated capital budget Capital costs are those costs associated with establishing the project and include land, construction and associated development costs. The table below is a general summary of the overall estimated capital costs for the proposed seniors housing project. Table 4 ‐ Estimated Capital Budget
Capital Costs Soft Costs Building Consultant Costs Site Costs Legal and Organizational Costs Financing Costs Fees and Permits Contingency SOFT COSTS TOTAL
$176,605 $23,500 $23,000 $19,503 $30,726 $13,667 $286,999
Hard Costs Construction Costs Land Costs HARD COSTS TOTAL
$900,531 $75,475 $976,006
HST TOTAL CAPITAL COSTS
$157,671 $1,420,676
The total capital costs for the proposed project under this configuration are estimated to be $1,420,676. This total includes hard costs (land and construction) of $976,006 and soft costs of $286,999. It also includes an HST amount of $157,671. Details regarding component capital costs are identified below. Total capital costs would be offset by the financial resources and funding outlined in Section 5.4 below.
5.2.1 Soft Costs Soft costs account for the many items/tasks necessary to design and bring the project to the point where construction can occur. Soft costs for the proposed project are assumed to include:
Building consultant costs – includes architect and development consultant costs as well as associated disbursements Site‐related costs – includes site surveying, technical testing and a phase 1 environmental site assessment Legals and organizational expenses – includes legal and organizational expenses as well as capital audit, appraisal and property taxes during construction Financing costs – includes interest during construction as well as lender fees and mortgage insurance premiums (CMHC insured mortgage) Fees and permits – these include development application fees, development charges and permit fees ( offsets for these costs are identified in Section 5.4)
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Contingency ‐ a modest contingency of 5% has been included to account for unforeseen soft cost variances
5.2.2 Hard Costs Hard costs account for land, construction and associated costs for building and fitting up the project. For the proposed project, hard costs are assumed to include the following:
Construction costs – base costs are assumed at $200/sf (GFA) and reflect build‐on‐site construction
Site servicing – includes costs for installation of well, new septic bed and hydro connection fees
Appliances ‐ includes costs for in‐unit appliances (fridges/stoves) as well as washer/dryer facilities in the common area
Escalation and contingency – assumed at 8% of construction cost + site servicing costs to account for unforeseen costs/charges
Land – cost of $75,000 for 5 acres (based on key informants) + land transfer taxes
Harmonized Sales Tax – assumed as applicable for total capital costs
5.3 Estimated operating budget Once built, there are on‐going costs associated with operating and maintaining a project. The table below is a general summary of the overall estimated operating costs for the first year of operation for the proposed seniors housing project. The total operating costs for the proposed project under the current configuration are estimated to be $49,557. This total includes maintenance and administration costs, as well as mortgage costs and capital reserve contributions. HST payable and associated rebates have also been factored into these costs. Net revenues are projected at $54,964 and include rents, laundry revenues and vacancy loss. As a result, a net annual surplus of $5,407 is projected which translates into a debt coverage ratio of 1.15 which demonstrates financial feasibility. Details regarding component costs and revenues are identified in the section that follows.
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Table 5 ‐ Estimated Year One Operating Budget
Operating Budget Estimated Operating Revenue Rental Income from Tenants Laundry Revenue Vacancy Loss Total Operating Revenue Estimated Operating Expenses Maintenance – Wages, Materials and Services Heat Electricity Property Management Fee Other Administrative Materials & Services Capital Replacement Reserves Contribution Insurance Property Taxes HST HST Rebate Mortgage Payments Total Operating Expenses Net Operating Income Debt Service Debt Coverage Ratio NET OPERATING PROFIT/LOSS
$55,464 $1,200 ‐$1,700 $54,964 $1,500 $3,750 $500 $2,748 $0 $2,199 $1,000 $1,500 $1,235 ‐$861 $35,986 $49,557 $41,393 $35,986 1.15 $5,407
5.3.1 Operating Revenue The operating revenue refers to the ongoing income for the project and would include such components as rental income, sundry income and funding contributions. The sources of revenue during the operational phase of this seniors housing development are expected to include only rental income from tenants and laundry revenue. Operating revenues in the first year are assumed to include the following:
Rental income – rents are based on average market rents for the Kingston area as reported by CMHC (the 2014 rates are 1 bedroom units @ $888/mth. and 2 bedroom units at $1,070/mth.)
Laundry revenue ‐ laundry revenue generated from coin‐operated machines has been estimated at $1,200 annually
Vacancy loss – throughout a typical year, vacancies can occur due to the timing of move‐ins and move‐outs. An allowance of 3% of revenue has been used to account for this loss.
While not defined in first year budget figures, it is anticipated that the annual increase in tenant income will be based on the average rate of change of the Ontario Rent Increase Guideline over the last five years.
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5.3.2 Operating Expenses Operating expenses include regular day‐to‐day costs for running the housing project, such as maintenance and services, utility costs, property taxes, landscaping, property management, insurance, administrative materials and services, HST and contributions to a long‐term capital replacement reserve fund. Estimates for operating expenses for the proposed project have been developed using data from projects of a similar nature. The total operating expenses for the proposed project are estimated for the first year to be $49,557 and are comprised of the following notable items:
Maintenance, administration, insurance and property management – Cost estimates are based on average per unit costs in actual projects and assume the use of contract or part time staff for necessary duties, given the small scale of the project.
Utilities – have been assumed for heat and hydro in common areas only as it is expected that heat and hydro for individual units would be paid directly by tenants.
Capital Replacement reserves – in accordance with CMHC mortgage insurance requirements and prudent practice, an annual contribution to the project’s capital reserve fund is assumed in an amount equal to 4% of total operating revenue. This reserve would be used to fund future lifecycle capital repair costs as needs arise.
Property taxes – property taxes are assumed at a reduced rate, equivalent to the single residential rate, which is consistent with recent projects developed under affordable housing programs. This would require a formal tax reduction by the Township and County.
Harmonized Sales Tax – applicable HST has been assumed as well as an associated rebate. The rebate is equivalent to that permitted by non‐profit housing providers.
Mortgage payment – an annual mortgage payment of $35,986 has been assumed based on the projected lending amount ($721,067), a 40 year amortization period and an interest rate of 4.0%. Preferred rates and amortization are assumed as the mortgage would be CMHC insured but held with a private lender. Consideration could also be given for self‐financing by the Township or County as this could result in savings to the project for financing costs.
While not expressed in the first year operating budget, expenses for maintenance, other administrative materials and services, insurance and property taxes are assumed to increase by 2% per year. This is based on the 5 year average rate of increase in the Consumer Price Index. Other expenses, such as heat and hydro are assumed to increase by 4.34% annually based on the five‐year average rate of increase in the Consumer Price Index for utilities. As part of the analysis, viability was also examined beyond the first year of operation. By applying the above inflationary adjustments, costs and revenues were escalated over a five year period. The analysis showed that the project remains viable over the analysis period.
5.4 Funding/capital requirements As an affordable housing project, there typically are contributions, fee relief and/or funding that is required in order to ensure affordability and maintain financial viability. These contributions provide an important
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revenue bridge between the lending capacity of the project and total costs. The table below provides a general summary of the sources of funding that have been assumed for the proposed seniors housing project. Table 6 ‐ Anticipated Project Contributions
Contributions HST Rebate Fees and Charges Waived Capital Grant from the County Land Value Donated Equity Contribution TOTAL CONTRIBUTIONS
$109,884 $30,726 $350,000 $75,000 $133,999 $699,609
Many of these contributions involve waivers of municipal fees/charges while others involve eligible tax rebates or cash contributions. Details regarding contributions are identified below.
HST Rebate – The project has been assumed as sponsored by a non‐profit entity and as such, the project would be entitled to receive an 82% PST rebate and a 50% GST rebate, resulting in a total HST rebate of $109,884.
Wavier of Planning/Building Fees and Development Charges – As a County‐supported project, it is assumed that municipal contributions in‐kind that enhance financial viability would be welcome. Accordingly, it has been assumed that municipal fees for required land use planning approvals, building permit fees and development charges, estimated in the order of $30,000, would be waived for the project.
Capital Grant from the County – In accordance with the terms of reference for the business plan and based on funding allocated for seniors housing by the County, it has been assumed that the project would receive a capital grant of $350,000 from the County of Frontenac
Land Value Donated – Based on discussions with municipal officials, it has been indicated that there is interest from local landowners in donating land for the proposed project. As such, the required land which has an estimated value of $75,000, is assumed to be donated to the project.
Equity Contribution – Based on current estimates of total project costs, potential contributions and assumed debt service capacity, a projected capital shortfall of approximately $133,999 exists. In order to achieve financial feasibility, an equity injection of this amount would be required to support the project. This equity could be secured in the form of fund raising, an additional cash contribution, program funding or some combination of the above.
5.5 Financial viability The financial plan outlined above presents capital and operating budgets that result in a feasible and self‐ sustaining project based on current assumptions. Based on these estimates, total project costs would be in the order of $1.42M. Funding for development costs would be provided through conventional financing of approximately $720,000 and a range of project contributions/rebates totaling $700,000.
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Operationally, the project is estimated to have an initial annual operating cost of just under $50,000 which would be offset by rents and revenues in the order of almost $55,000. This would result in a modest annual operating surplus of approximately $5,400. Calculations show that based on this operating cost structure, the project would achieve a debt coverage ratio of 1.15, demonstrating that it is financially viable. That said, viability assumptions do rely on a number of contributions and fee relief to help defray project costs. These contributions would require the support of both the Township and the County in order to be realized. Going forward, it will be critical to re‐test assumptions as cost and revenue estimates are refined. This will help ensure that as the project concept evolves, options to maintain financial viability can be considered and applied as needed.
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6.0 GOVERNANCE An important consideration in moving forward with the proposed project is understanding how it will be sponsored and operated on an on‐going basis. This has implications not only for basic operations and sustainability but can have an impact the financial assumptions for the project. Following is a review of key governance issues.
6.1
Project ownership/oversight
The project sponsor – the owner – has a fundamental role in the development and long term success of the project. Typically for a project of this nature, an established non‐profit housing organization would be a prime sponsor. The experience they have in project operations and property management would be highly beneficial. However, there are no local organizations like this located in the Township. While there may be established organizations in Kingston that could provide this expertise, the island location and small scale of the proposed project create disincentives for their participation. The Kingston and Frontenac Housing Corporation (KFHC) is such an example, which, despite its size and capacity, has raised concerns about management of remote projects already within its portfolio. Service groups or social agencies may also be able to provide suitable leadership to develop such a project, provided they had an interest in owning/managing a housing project. Based on discussions with municipal officials and feedback from community consultations, it is not evident that there are any interested candidate agencies. Self‐ownership/management structures were also reviewed as part of the “Seniors Community Housing Pilot Project Study” and considered within the context this review. Under these models, there are concerns that the municipal/County investments made in the project would need to be preserved and that these interests would best be served with some form of oversight. Given the preferred rental structure for this project, there continues to be a need for day‐to‐day oversight by a local entity. From discussion and consultation feedback, the notion of providing oversight via a local Board (similar to the existing medical clinic) was cited as a potential option. Given the level of investment in the project by the Township and the County (directly and in‐kind), participation in project governance would be seen as desirable. This would help facilitate initial development of the project and provide a sound footing for future sustainability. While the Township could choose to directly oversee development and operations, it may be best to consider the creation of a separate, legally distinct non‐profit housing corporation that has local community representation as well as Township and County participation. This mix of representation on the Board of the corporation would facilitate arm’s length local oversight while at the same time compartmentalizing liability and risks associated with operations. The on‐going involvement of the County and the Township would further help to provide stability and continuity for the project. In the absence of a suitable local sponsor, the stability of this approach is seen as highly desirable in getting the project up and running.
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6.2 Planned approach to management Typically, the Board of Directors of the housing corporation ‐ as volunteers ‐ would provide overall guidance and direction to project staff. However, given the small size of the project and its non‐RGI rental structure, it is anticipated that the Board may be required to take a more ‘hands‐on’ approach in lieu of staff. This reflects the fact that the obligations of day‐to‐day management for the project are considered to be quite modest. As a result, both the time commitment and resources available to compensate a property manager are deemed to equate to only a portion of an FTE (full time equivalent). Under this scenario, the Board could take a more active role in management of the project. Alternately, were suitable services found locally to fill these modest administration needs, these services could be secured on a contract or part‐time basis. As a result, property management duties could be undertaken by an individual/firm who already had other local work and could take on these additional project tasks on a fee for service basis. The duties could also be attractive to a local retiree with suitable experience who could be retained on a casual basis. Where the Township favoured a more direct role, a similar fee‐for‐service approach could be used by tasking project management responsibilities to an existing Township position and then billing back the housing corporation for these services. Without the benefit of scale economies and given the island location of the project, flexible locally‐based options for management are considered the most realistic for the proposed project.
6.3 Operations framework Operations associated with the project would function in accordance with the proposed management model for the project. As the project is of insufficient scale to warrant staff, the provision of maintenance services would also need to be secured on a fee‐for‐service basis. Recognizing that cost and availability of external services may be influenced by the island location, securing maintenance support for the project via the Township could be a more practical, lower cost solution for basic maintenance functions. In effect, this approach follows a shared services model whereby maintenance duties could be sourced to an existing Township position and then billed back to the housing corporation. Likewise, higher order maintenance or lifecycle repairs could be facilitated through tendering or standing offers via the Township. Figure 4 ‐ Conceptual Governance Framework
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7.0 MOVING FORWARD 7.1
Summary of preferred concept
Based on demonstrated needs, community consultation and business case analysis, the concept for a small scale seniors housing project situated in Marysville has been developed. This concept has been tested and found to be viable, subject to the assumptions outlined in this report. Based on the proposed concept, the seniors housing project would:
Be modest in scale – five self‐contained apartment units (4 @ one bedroom, 1 @ two bedroom) plus amenity space for a total buildable area of 4,000 sf (GFA)
Include basic amenity space ‐ laundry facilities (1 pair) and a small indoor common area for gathering/socialization would be provided
Accommodate seniors mobility needs – providing a safe, indoor access to apartment units while incorporating visitability and accessibility throughout units and common spaces
Support basic affordability – all units would be rental and offered at average market rent level
Be procures as new construction – this approach would enable a single storey slab‐on‐grade building, with a cost‐effective double‐loaded main corridor, wood frame structure and standard sloped roof
Incorporate practical sustainability features that promote energy efficiency
Be situated in walking proximity to amenities and services in Marysville
Be procured through a formal design/tender process (stipulated price contract)
Be financed using a conventional mortgage that is CMHC‐insured
Be owned by a newly constituted non‐profit housing corporation
Be managed by the Board of the housing corporation through local individuals/firms on a fee‐for service basis, using shared service arrangements with the Township for maintenance wherever possible
As a result of the financial analysis, it has been determined that the project would be viable based on preliminary cost estimates, anticipated revenues and assumed contributions. There is sufficient demand for this small scale project and opportunities should be preserved to enable additional modules of five units where future demand warrants. Potential sites are available that could accommodate development of the project and allow for future expansion. Extending public road access to these sites would be a prerequisite for project development. While a series of land use approvals are required to permit the intended use, there do not appear to be any significant barriers to securing these approvals. Prior to acquiring a project site, due diligence testing would be required to ensure that no environmental concerns or project servicing impediments exist. Based on an initial scan of current conditions and background information, no impediments are anticipated. Viable project governance options exist, the most plausible of which would see the creation of a new non‐profit corporation which would legally own and manage the project.
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7.2 Process/critical path While preliminary feasibility of the project concept has been demonstrated, there are a number of steps necessary to advance the project. Moving forward through these steps, there are a number of decision points where the plausibility of advancing would need to be reconfirmed as the project concept is refined. Initially, this would involve steps confirming the parameters for moving forward from the initial feasibility testing, including the following tasks:
Confirm decision to move forward – in addition to endorsing the business plan, this task would involve securing development consulting expertise to advance the project
Confirm decisions with regards governance/oversight – this would involve defining the County and Township role in the project going forward, as well as pursuing incorporation of the sponsor entity (if this approach is confirmed)
Confirm initial funding commitments – to enable project planning, County and Township contributions would need to be confirmed. Access to financing would also need to be confirmed on a preliminary basis as well as the funding/resources necessary to undertake the next stage of pre‐development work
With these activities completed, a decision regarding proceeding/not would be made in order to move forward to the pre‐development stage. Under this phase, the following activities would be required to advance development of the project to the point of construction commitment:
Assemble technical/design team – this would involve identifying or recruiting development team members, including a project architect and technical testing specialists
Undertake negotiations for land – this would involve securing conditional terms and conditions for acquiring the project site with a local vendor as well as confirming any related road accesses required from the Township
Formalize project design – preliminary design drawings would be developed for comment and subsequent refinement in accordance with the finalized project concept
Complete due diligence for land – in order to finalize site acquisition, environmental and technical testing would need to be conducted to formally confirm that no development constraints existed
Confirm specific service requirements – having confirmed technical parameters and preliminary design, final servicing designs would be developed for water systems, septic systems and utilities into the site
Re‐confirm costs, funding and mortgage financing – in addition to updated pro forma figures, a conditional financing commitment would be secured to confirm financial parameters prior to tendering
With these activities completed, a decision regarding proceeding/not would be made in order to move forward to the construction stage. Under this phase, the following activities would be required:
Prepare contract documents for bidding – final design drawings and accompanying specification would be developed for tendering purposes
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Tendering for construction pricing – contract documents would be tendered for pricing to qualified bidders and results would be evaluated against budgeted construction costs. Both conventional contractors and modular contractors should be invited.
Reconfirm financing and project commitment – final budget adjustments would be made based on tendered costs to secure final financing approvals, thereby enabling owner approval for project commitment to proceed with construction
Negotiate construction contract and commence construction – with approval in hand, a standard construction contract would be executed with the selected bidder
Construction monitoring – through the construction process, regular progress reviews would be undertaken to track progress against the building schedule as well as costs versus budget.
Pre‐occupancy planning – during the construction phase, planning would be undertaken in order to prepare for tenant move‐in and project operations
Post‐occupancy wrap‐up – with the conclusion of construction and the subsequent certification for project occupancy, capital cost reconciliation, HST self‐assessment, warranty inspections, etc. would be completed in order to close out the capital development phase of the project
7.3 Key elements & critical success factors As noted, there are a number of tasks require to move the project forward through successive stages of development. Each stage is punctuated with a decision point on whether to proceed or not to the next stage. While this progressive process lays out a stepwise approach to move from initial viability through to construction, there are some fundamental success factors that are key ingredients for realizing the proposed project. Having these elements in place goes a long way to supporting project viability. Key elements required for a successful project include:
Allocating sufficient resources – having the funds/resources to undertake pre‐development work and advance through construction is essential to the success of the project
Having a clear governance/accountability framework – during development and after occupancy, having a clear and straight‐forward decision‐making structure for oversight
Acquiring strong technical expertise – through the development process, a range of technical issues must be addressed/overcome and having an experienced team is key to staying on track
Procuring a suitable site/location – a fundamental project requirement is finding and securing a suitable location to develop
Securing access to financing – securing financing is a critical component to meeting the financial obligations of development, regardless of project scale
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8.0 APPENDIX ‘A’ – NEEDS PROFILE The “Seniors Community Housing Pilot Project Study” completed for the County in 2012 contained a comprehensive profile of housing and need indicators for the County and its constituent townships. This profile was based on data available at the time. Since completion of the pilot study, additional Census and market data have been released that serve to provide a more current picture of local conditions. This appendix provides an abbreviated update of the original profile, highlighting key housing and need indicators at the County level. Seniors‐based indicators are also examined at the County level and summarized as part of this update. As a result, relevant local conditions in the Frontenac Islands have been highlighted in the body of the report with regard for the broader analysis provided in this appendix.
8.1
County-wide Housing Needs and Market Indicators
8.1.1 Demographic Profile Frontenac County The County of Frontenac is rural in character, covering an expansive area of some 4,000 square kilometres. The County has a permanent population of just over 26,000, complimented by a substantial number of seasonal residents who cottage throughout the Frontenacs. The county is comprised of four townships ‐ North, Central and South Frontenac and Frontenac Islands. The majority of dwellings in the County are single‐detached homes, located in one of the many small villages and hamlets or scattered throughout the extensive rural area. As a result, the land use pattern for the County is very low density in nature. Like other jurisdictions in Ontario, the County is experiencing aging in its population. In fact, the share of the senior population in the County of Frontenac is actually increasing more rapidly than that of the province as a whole. General Population Trends In 2011, the County of Frontenac had a permanent population of 26,375. The majority of this population (68.7%) lives in South Frontenac. Central Frontenac accounts for 17.3% of the population while the rest of the population is divided between Frontenac Islands (7.1%) and North Frontenac (7.0%). Table 7. Population Counts, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Geography Frontenac County Frontenac Islands South Frontenac Central Frontenac North Frontenac
1996 23,760 1,661 15,711 4,615 1,773
2001 24,411 1,638 16,415 4,557 1,801
2006 26,658 1,862 18,227 4,665 1,904
2011 26,375 1,864 18,113 4,556 1,842
2016 28,605 2,120 19,315 5,120 2,050
2021 29,895 2,225 20,250 5,280 2,140
2026 30,900 2,295 21,025 5,380 2,200
2031 31,705 2,365 21,580 5,530 2,230
2036 32,400 2,435 22,050 5,650 2,265
Source: Statistics Canada 1996‐2011 Community and Census Profiles; Watson & Associates, Population, Housing and Employment Projections for the Frontenacs, June 2014
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Over the last 15 years the population of the County has increased by 11.0% overall, growing from a population of 23,760 in 1996. From 2006 to 2011, the County’s population declined 1.1%. While the County has experienced a slight decline recently, it is still important to note that the County’s population is expected to grow and that based on projections by Watson and Associates undertaken in 2014, the population is estimated to increase by some 6,000 people from 2011 to 2036 (23%). Locationally, the population distribution is expected to remain the same, with 68.1% still expected to reside in South Frontenac in 2036 (compared to 68.7% in 2011). The other Townships are also expected to maintain their proportions, with Frontenac Islands’ share rising slightly from 7.1% in 2011 to 7.5% in 2036. Figure 5. Population Growth and Decline Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Population by Age When broken down by age range, Ministry of Finance data shows that the largest age group in the County of Frontenac (including the City of Kingston)6 in 2011 was persons aged under 25 years, comprising nearly a third (29.5%) of the population. The number of persons in this age group is expected to increase by 4,770 by 2036 (10.8%), but the age group’s proportion will drop to 24.7% of the total population. All age groups are expected to increase in real numbers from 2011 to 2036, but senior age groups will see the most sizable increases, with the 65 to 74 year old age group increasing by over 10,000 persons (76.0% increase) and the 75 years and older group more than doubling (17,000+ persons or a 144.8% increase). This compares to a 32.4% increase for the population as a whole.
6
Ministry of Finance figures do not disaggregate data for the County and City of Kingston. As such, figures are reported based on County + City totals.
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Also expected to experience notable growth us the 35 to 44 year age group, indicating there will be more persons of working age in the County in a couple of decades. This could lead to an even greater increase in seniors as this population group ages in the future. Table 8. Population Counts and Trends by Age, Frontenac County (including the City of Kingston), 2011 and 2036
2011
2036
% Change 2011‐2036
Age
%
% % 0 ‐ 24 44,120 29.5% 48,890 24.7% 10.8% 25 ‐ 34 19,125 12.8% 23,910 12.1% 25.0% 35 ‐ 44 18,115 12.1% 26,360 13.3% 45.5% 45 ‐ 54 23,305 15.6% 26,380 13.3% 13.2% 55 ‐ 64 20,155 13.5% 20,720 10.5% 2.8% 65 ‐ 74 13,175 8.8% 23,190 11.7% 76.0% 75+ 11,745 7.8% 28,750 14.5% 144.8% TOTAL 149,740 100.0% 198,200 100.0% 32.4% Source: Statistics Canada, Community Profiles, 2011; Ontario Ministry of Finance, Population Projections Update, 2014
Households In terms of household growth, the number of households in the County has grown 26.0% from 1996 to 2011, from 8,650 households to 10,900 in 2011. This rate of household growth is notably higher than the population growth rate during the same time period, which is due in part to trending towards smaller, more diverse household types. This is reinforced by the fact that even though the County’s population declined 1.1% from 2006 to 2011, households grew 6.2%. Like population trends, the largest proportion of households is situated in South Frontenac, with 66.2% of households. Another 17.5% are located in Central Frontenac with just 8.4% and 7.8% in North Frontenac and Frontenac Islands, respectively. It is projected that households will continue to grow at similar rates over the next 20 years, with an expected increase of 26.6% from 2011 to 2036 for the County. Despite this overall trend, the rate of household growth will be slower in South Frontenac and Frontenac Islands, and faster in North Frontenac and especially in Central Frontenac. Geographical distribution of households amongst the Townships is also expected to remain steady.
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Figure 6. Household Growth Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Tenure Along with population and household trends, tenure is also a key indicator for tracking housing trends. Ownership continues to be very prominent throughout the County. As can be seen in the figure below, the share of households with ownership tenure has been on the rise, with the proportion of owners rising from 85.9% in 1996 to 91.3% in 2011. In contrast, there was a decline in the proportion of renter households during this same period to 8.7% in 2011. In real terms, the number of owners rose 33.0% during this time period, while the number of actual renters declined 23.4%, in 2011, indicating that. Figure 7. Tenure Trends, County of Frontenac, 1996 and 2011
Income An important element in determining housing need is the economic capacity of a household. By examining income trends and characteristics, it is possible to better identify the affordability limitations of households and the impact these have on the housing options available to them.
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In 2010, the median individual income in the County of Frontenac (including Kingston7) was $31,814, slightly higher than the Provincial median income of $30,526. However, the County’s 2010 average individual income ($40,983) was lower than the Provincial average ($42,264). Despite this, incomes in the County are rising at rate faster than the Province. The County’s average individual income level increased by 36.2% from 2000, when it was $40,091, a higher rate of increase than that seen for the Province (28.6%). Similarly, median individual income rose 38.6% for the County from 2000 to 2010, compared to just a 23.0% increase for the Province. Figure 8. Median and Average Individual Income, County of Frontenac (including City of Kingston), 2000 and 2010
This trend towards higher average incomes is evident in changes for those with low or moderate incomes. As can be seen in the figure below, the proportion of individuals earning less than $40,000/year has decreased significantly since 2000 – in particular, those earning less than $10,000/year have dropped from 23.8% in proportion to 14.9% and those earning $10,000 to $19,999 have dropped from 22.0% of the population to 16.1%. On the other hand, those earning $60,000 or more have experienced notable increases, with this group’s proportion growing from 8.5% in 2000 to 21.8% in 2010. While upward trending in incomes is encouraging, the fact remains that nearly half (44.3%) of the County’s population earns less than $30,000/year as an individual.
7
NHS income data for 2010 does not disaggregate figures for the County and the City of Kingston. As such, average and median income figures are reported which include both the County and the City.
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Figure 9. Individual Income Ranges, County of Frontenac (including City of Kingston), 2000 and 2010
In terms of household income, the chart below shows that median and average household incomes have been rising at a rate similar to those of individuals. For the County as a whole (including Kingston8), median household income rose 32.1% from 2000 to 2010 and average household income 35.8%. In comparison, median household income for the Province rose 23.7% to reach $66,358 in 2010, and average household income 28.3% to reach $85,772. Like individual incomes, average and median household incomes for the Province are higher than the County, but growth in household incomes is occurring at a faster rate in the County. Figure 10. Median and Average Household Income, County of Frontenac (including City of Kingston), 2000 and 2010
8
As previously noted, NHS income data for 2010 agglomerates figures for the County and the City of Kingston.
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8.1.2 Housing Profile Housing supply is typically measured based on the availability of housing options for households within a community. These housing options are then compared to housing demand to identify any gaps that may exist. However, gaps in the market are not simply borne out of demand; they can also be driven by factors which limit choices. Generally speaking, households with higher incomes and the ability to live independently are able to exercise this choice in the housing market. By contrast, those with lower incomes and higher care requirements will have much fewer choices. The private market traditionally supplies the majority of housing in most communities and this is certainly the case in the County of Frontenac. Dwellings The majority of dwellings in the County of Frontenac are single‐detached dwellings (95.3% or 9,895 dwellings). The remaining 4.7% (490 dwellings) are comprised of low‐rise apartment building units (1.8%), movable dwellings (0.9%), detached duplex apartment units (0.9%), semi‐detached dwellings (0.8%), as well as a few row houses and other single‐attached dwellings. These proportions have not changed much since 2001 when there were 8,615 single‐detached dwellings and which comprised 93.9% of the dwelling stock. However, the number and proportion of semi‐detached homes did drop by almost half from 2001 to 2011, and the proportion of low‐rise apartment building units and movable dwellings dropped slightly as well. In real terms, South Frontenac and Central Frontenac have a slightly more diverse range of housing types as compared to North Frontenac and Frontenac Islands where dwelling types are quite limited. This tendency towards low density development in the County is typical for many rural communities. Table 9. Dwellings by Type, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2011
Frontenac County
% Single‐detached house Semi‐detached house Row house Apartment, detached duplex Apartment, building that has five or more storeys Apartment, building that has fewer than five storeys Other single‐attached house Movable dwelling
Frontenac Islands
%
South Frontenac
%
Central Frontenac
%
North Frontenac
%
9,895 80 30 90
95.3% 0.8% 0.3% 0.9%
760 5 0 10
96.8% 0.6% 0.0% 1.3%
6475 50 15 65
95.2% 0.7% 0.2% 1.0%
1775 20 10 15
93.9% 1.1% 0.5% 0.8%
885 5 5 0
97.8% 0.6% 0.6% 0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
185 10 95
1.8% 0.1% 0.9%
10 0 0
1.3% 0.0% 0.0%
140 5 55
2.1% 0.1% 0.8%
35 5 30
1.9% 0.3% 1.6%
0 0 10
0.0% 0.0% 1.1%
TOTAL 10,385 100.0% Source: Statistics Canada, Census Profile, 2011
785
100.0%
6,805
100.0%
1,890
100.0%
905
100.0%
Seasonal Dwellings Seasonal dwellings – those used on a non‐permanent basis – have traditionally accounted for roughly 40% of the County’s total dwellings and are located throughout the County. However, the percentage of seasonal households in the County of Frontenac declined from 42% in 2001 to 37% in 2011, to reach 6,068
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dwellings. All of the townships experienced a decrease in seasonal households during this time period, due in part to conversion to permanent dwellings. In contrast, by 2036 the proportion of seasonal dwellings in the County as a whole is expected to rise slightly to 38% or 8,465 dwellings due to new construction, and this growth is expected to be primarily in South Frontenac and North Frontenac. The Frontenacs are becoming more attractive to empty nesters and seniors (within the 55 to 74 age range) and a growing proportion of this group is choosing to retire / semi‐retire at their seasonal properties, converting these to permanent residences. As a result, more recent projections suggest some upswing in the conversion of seasonal dwellings, albeit at a minor rate. According to Watson and Associates (2011), this trend is expected to continue over the next few years with absorption of converted stock. Over the next 25 years, the influence of seasonal dwelling conversion on housing development will have significant impacts within the County, as it will increase the permanent housing stock if conversions continue to occur in favour of development of permanent dwellings. Figure 11. Seasonal Dwelling Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2001‐2036
Age and Condition of Dwellings According to 2011 Census data, 28.4% of the County’s dwellings were built prior to 1960, compared to just 11.6% built after 2000, indicating that the County has a somewhat older housing stock. Nearly a third (28.9%) of the dwellings were built between 1961 and 1980. Despite the aging profile of the stock, housing in the County is in reasonably good shape with just 7.8% (805 dwellings) requiring major repairs in 2011, compared to 8.8% in 2001. Residential Development Potential The Provincial Policy Statement as well as the Official Plans for the Townships within the County of Frontenac encourage new residential development in designated settlement areas. A review conducted by Watson and Associates (2014) showed that as of June 2014, the County had a total of 2,569 hectares of vacant land designated as settlement areas in the Township Official plans.
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Table 10. Overview of Vacant Lands Designated as Settlement Areas by Municipality
North Frontenac Central Frontenac South Frontenac Frontenac Islands Total Frontenac County
Vacant Designated Land (Hectare) 647 411 1,498 13
% of Total Vacant Land within Settlement Areas 25.2% 16.0% 58.3% 0.5%
2,569
100.0%
Source: Watson & Associates (June 2014). Population, Housing and Employment Projections for the Frontenacs
The above table shows that the majority of this land (58.3%) is located in South Frontenac while the smallest proportion of vacant land is located in the Township of Frontenac Islands (0.5%). The availability of substantial vacant lands in South Frontenac correlates with population and dwelling counts that show most growth in the County has and will continue to occur there. Ownership Housing Market As mentioned earlier, 91.3%, or 9,495 dwellings in the County, were owned as of 2011, up from 7,140 dwellings in 1996. This indicates that ownership housing is not only by far the most dominant form of tenure, but the County’s preference for ownership housing is growing. Price is also an important consideration in the ownership market. According to Statistics Canada Census data for 2011 the County’s average dwelling value for 2010 was $304,496, which is an increase of 95.7% since 2000, when the average dwelling value was $155,557. This substantial increase is mainly due to the production of larger homes, seasonal conversions and sustained lower interest rates which foster greater buying power for owners. Mortgage status can also provide important information on a housing market. In 2011, 55.8% of the County’s owner households, or 5,067 households, had a mortgage, indicating that a large proportion of the County’s owners (about 45%) do not have a mortgage and have a substantial amount of accumulated equity in their homes. Rental Housing Market As mentioned earlier, just 8.7% of dwellings in the County (800 units), were rented in 2011 and the number of rental dwellings has actually gone down. Since 1996, rental units have decreasing by 275 units (23%) in the County. This suggests that there is a very limited supply within the County and that the supply is diminishing. It should be noted that in 2011, 14.4% of renter households, or 128 households, were in subsidized housing in the County, indicating that a large proportion of renter households struggle to meet housing costs. These trends show that there is a very limited supply of affordable rental housing in the County. Average rents are an important consideration in the rental market. According to Statistics Canada Census data for 2011 the County’s average monthly shelter cost for rented dwellings in 2010 was $895, which is
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an increase of 32.6% since 2000, when the average monthly shelter cost for rented dwellings was $675. It is presumed that rising utility costs during this period would have had some influence on these increases. Average market rents for the entire County of Frontenac are not reported by CMHC but rents are monitored for the Kingston CMA which includes South Frontenac, Frontenac Islands and Loyalist Township (Zone 4 within the CMA). In the last 9 years, overall average market rents in the CMA have increased by some 34.4%, from $751 in 2005 to $1,009 in 2014. Average market rents vary by unit size, tending to increase as the size of the unit increases. In 2014, average market rents for the Kingston CMA were $662 for bachelor units, $888 for one bedroom units, $1,070 for two bedroom units and $1,411 for 3 bedroom units. Rents in Zone 4 of the CMA tend to be higher than the CMA averages. This was especially true in 2014 for one and two‐bedroom units in Zone 4 which were the highest in the CMA at $963 and $1,271 respectively. Figure 12. Overall Average Rents, Kingston CMA and Zones, 2005 and 2014
Overall, vacancy rates for rental units in the Kingston CMA decreased from 2.1% in 2005 to 1.9% in 2014 for a total of 13,092 units in 2014, compared to 12,381 units in 2006. A healthy vacancy rate is generally considered at about 3.0% so a rate of 1.9% shows a significant tightening of the rental market and when considered with the limited options available, explains the higher average rents being commanded. The vacancy rate of 2.4% for Zone 4 was higher than the Kingston CMA overall in 2014 and up from just 1.3% in 2005. While the rise in vacancy rates could suggest there is more housing stock to meet demand in 2014 compared to nearly a decade ago, vacancy rates are still below the 3.0% level that is considered a balanced market , indicating a slight undersupply of units. While the rental data does not provide a complete picture for the County of Frontenac, it is clear that there is a limited supply of rental housing and that demand for units continues to be strong, based on lower vacancy rates and overall trends. Spending on Housing and Shelter Costs As a standard measure of affordability, where households spend more than 30% of their gross income on shelter costs, they are considered to have an affordability problem. In 2010, 15.7% of owners in the County (1,426 households) were spending more than 30% of their income on housing costs, compared to 16.5% in
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2000 (1,305 households). While the real number of owners spending more than 30% has increased, their proportion has actually decreased. This is in contrast to renters where both the number and proportion of renters spending more than 30% of their income on housing costs increased from 2000 to 2010. In 2010, 47.9% of renter households (426) were spending more than 30% of their income on housing costs, compared to 38.7% of renter households in (370). This data indicates that renters are increasingly struggling with housing costs in the County due to limited supply and increasing rents.
8.2 Profile of Seniors Indicators Population Trends Data on the age of the population shows that in 2011, seniors comprised just over 17% of the population in the County and just over 21% of the population in Frontenac Islands. Both areas had similar increases in the number of seniors, 49.8% for Frontenac County and 43.6% for Frontenac Islands. Table 11. Senior Population, Frontenac County and Frontenac Islands, 1996 and 2011
2001
Frontenac County Frontenac Islands
2011
Total
Seniors 65+
Seniors Proportion
23,760 1,640
3,050 275
12.8% 16.8%
Total
Seniors 65+
Seniors Proportion
% Change 1996‐2011
26,375 1,864
4,570 395
17.3% 21.2%
49.8% 43.6%
Source: Statistics Canada, Census and Community Profiles, 1996 and 2011
When considering sub‐area demographics, it is clear that seniors are not evenly distributed within the County. In real numbers, those 65+ are most prominent in South Frontenac, given the more populace nature of this Township. Proportionally though, seniors make up a much larger share of the current population in both Central Frontenac and Frontenac Islands, and especially North Frontenac where seniors account for one out of every three persons. Table 12. Seniors as a Share of Population, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2011
Seniors (65+) as share of population
Total Seniors Pop
Total Pop
Frontenac Islands 395 1,864 South Frontenac 2,535 18,113 Central Frontenac 1,040 4,556 North Frontenac 600 1,842 Frontenac County 4,570 26,375 Source: Statistics Canada, Census Profile, 2011
Seniors as % of Total 21.2% 14.0% 22.8% 32.6% 17.3%
The Ontario Ministry of Finance produces an updated set of population projections every year to provide planners and researchers with a demographic outlook reflecting the most up‐to‐date trends and historical
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data. Based on Ontario Ministry of Finance population projections, the following table illustrates that between 2012 and 2036, Frontenac County’s (including the City of Kingston) senior population will rise 94.5%, compared to an overall population increase of just 27.0%. The proportion of seniors will also increase from 17.1% in 2012 to 26.2% in 2036. Table 13. Overall Population and Senior Growth Trends, Frontenac County, 2012 and 2036
2012
% Change 2012‐ 2036
2036
Frontenac County (inc. Kingston) 156,060 198,190 27.0% Seniors 65+ 26,700 51,940 94.5% Proportion 17.1% 26.2% Source: Ontario Ministry of Finance, Population Projections Update, 2014
The discussion above shows that the County’s population will be aging significantly, and by 2036 a quarter of the total population will be a senior. This suggests that there will be a sustained need for seniors housing options as the proportion of the senior population increases. This will be especially true for the population aged 75 years and older, which will increase 144.8% from 2011 to 2036, compared to a 76% increase for those aged 65 to 74 years. Households Household structure is another factor to be considered in assessing housing needs. Given the population and households characteristics of the County, it is not surprising that a high proportion of households, including senior households, are family‐based, with related individuals in either a marital, common‐law or lone‐parent structure. Non‐family households – those comprised of individuals living alone or together – make up a much smaller share of all households. Table 14. Household Living Arrangements for Seniors in Private Households, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac 2011
Frontenac County
% Number of persons not in census families aged 65 years and over Living with relatives Living with non‐relatives only Living alone Number of census family persons aged 65 years and over TOTAL
Frontenac Islands
%
South Frontenac
%
Central Frontenac
%
North Frontenac
%
1,080 160 70 850
23.9% 14.8% 6.5% 78.7%
80 10 0 65
20.3% 12.5% 0.0% 81.3%
575 115 40 420
22.8% 20.0% 7.0% 73.0%
245 30 20 195
24.3% 12.2% 8.2% 79.6%
180 5 10 170
3,435
76.1%
315
79.7%
1,945
77.2%
765
75.7%
410
69.5%
4,515 100.0% 395 100.0% 2,520 100.0% 1,010 100.0% Source: Statistics Canada, Census and Community Profiles, 2001 and 2011
590
100.0%
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The majority of seniors in the County reside in a family structure (76.1%). The majority of the County seniors’ not in a census family (78.7% of seniors not in a census family) were living alone. Proportions are similar across the Townships, and especially for Frontenac Islands. These proportions have not changed notably since 2001 although the proportion of seniors in census family structures has risen slightly for all areas. For the County as a whole, the actual number of seniors in census families has increased as compared to seniors not in census families during this period (40.5% versus 20.0%). Tenure As shown in the figure below, the proportion of ownership tenure has been increasing for all senior and soon‐to‐be senior age groups in the County of Frontenac, and ownership tenure is very prominent among these age groups. Figure 13. Proportion of Households Aged 55+ by Tenure, County of Frontenac, 1996 and 2011
While the tendency towards ownership in senior households is very clear, the increasing ownership proportion in the 75+ age groups in particular suggests that more seniors are staying in their own homes longer as they age. This may be due in part to a lack of other housing alternatives for seniors in the community. This trend may also be influenced by the conversion of seasonal dwellings to permanent dwellings by in‐migrating seniors as they choose to retire and make the County their permanent homes. For senior households who have paid off their mortgage, owning their home provides them with housing stability and built‐up equity. Accessing this equity can be an important factor because while housing costs are reduced with mortgage pay‐down, so too are incomes for retired individuals. Given the typically lower income of seniors in the County, the current pricing and the limited supply of units, rental housing remains a viable but limited option for seniors and it is not always affordable. Increasing the supply of rental units at affordable rates would assist in creating more housing choices for seniors in the County. Income Assistance There are a number of pension benefits available to Canadians when they reach age 65. These include the Old Age Security (OAS) pension, which is a monthly benefit, and the Guaranteed Income Supplement (GIS), which is available to low‐income seniors receiving OAS benefits. GIS benefits vary from $506.86/month to
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$764/month depending on if the recipient is single or has a spouse/partner that receives or does not receive OAS pension. In addition, the Guaranteed Annual Income System (GAINS) provides monthly payments to eligible Ontario seniors on top of the OAS and GIS payments. The amount of GAINS benefit is directly linked to the GIS monthly payments and ranges from $2.50 to $83 per month. The following table shows the maximum monthly benefit that a senior living in Ontario can receive. This shows that if a single senior did not have a private pension, they would receive a maximum of $16,934 a year or $1,411 a month. Table 15. Maximum Monthly Benefits for Benefit Period October 1, 2014 to December 31, 2014
Benefit Program OAS GIS GAINS
Per Month $563.74 $764.40 $83.00
Single Per Year $6,764.88 $9,172.80 $996.00
Qualified Couple Per Month Per Year $1,127.48 $13,529.76 $1,013.72 $12,164.64 $166.00 $1,992.00
$1,411.14
$16,933.68
$2,307.20
Total
$27,686.40
Source: Ontario Ministry of Finance (2014). GAINS Benefit Rates
The maximum annual income for a person to receive OAS is $114,815, and for GIS it is $17,088. For a couple where one person receives OAS it is $22,650 and for a couple that does not receive OAS it is $40,944. Another benefit for seniors is the Canada Pension Plan (CPP) which provides a monthly taxable benefit to retired seniors who worked and contributed to the plan. Beneficiaries have to be at least 65 years old or between age 60 and 65 and meet the requirements of the work cessation test. The CPP pension is designed to replace about 25% of a senior’s average pre‐retirement employment income. The following table provides a summary of the CPP payment rates and shows that a senior would receive an average of $7,284 a year and a maximum of $12,456 a year when they retire. Table 16. 2014 Canada Pension Plan Rates
Average Benefit (June 2011)
Maximum Amount
Retirement (at age 65)
$607.33
$1,038.33
Post Retirement Benefit (at age 65)
$9.55
$25.96
Disability
$901.40
$1,236.35
Survivor ‐ younger than 65
$409.26
$567.91
Survivor ‐ 65 and older
$311.19
$623.00
Children of disabled contributors
$230.72
$230.72
Type of Benefit
Children of deceased contributors
$230.72
$230.72
Death (maximum one‐time payment)
$2,294.07
$2,500.00
Combined benefits Survivor / retirement (at age 65)
$798.82
$1,038.33
Survivor / disability
$1,009.71
$1,236.35
Source: Service Canada, Canada Pension Plan Payment Rates, January‐December 2014
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AGENDA ITEM #b)
The Ontario Disability Support Program is an income assistance program that provides financial assistance to low‐income persons with disabilities. The amount of Income Support received depends on family size, income, assets and housing costs. The table below provides the most recent ODSP monthly shelter allowance rates. Table 17. Ontario Disability Support Program Maximum Monthly Shelter Allowances, 2013
Benefit Unit Size 1 2 3 4 5 6 or more
Maximum Monthly Shelter Allowance $479 $753 $816 $886 $956 $990
Source: Ontario Ministry of Community and Social Services, Shelter Calculation, 2013
ODSP benefits are not automatically terminated once a person reaches the age of 65. Seniors who do not receive Old Age Security (OAS) are eligible for ODSP. Seniors who receive OAS may still be able to keep their ODSP benefits if they are financially eligible, that is, if their income is less than what they would receive from ODSP. Most seniors would have a higher income than what they would receive from ODSP due to the combined benefits from OAS, GIS, and GAINS but some seniors may still qualify for Extended Health Benefits (EHB) if their health care expenses are high.
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AGENDA ITEM #b)
9.0 APPENDIX B – PRO FORMA DETAILS Project Statistics Sponsor Group: Project Address: Project Type: Site Area:
Units 1 Bedroom 2 Bedroom
County of Frontenac Marysville, Frontenac Island Rental Housing N/A SF N/A m2
(SF)
(m 2)
Rent per Rents as % unit per of AMR month $888 100% $1,070 100% Actual Total Rent Per Annum from Tenants ($ and % of AMR)
3,150
292.6
$55,464
(SF)
(m 2)
% of Total Space
350
33
8.75%
of
Units
Unit Size (SF)
Unit Size (m 2)
4 1
600 750
55.7 69.7
Total # of RGI Units
Total # of Units
0
5
Circulation
Total Size of Dwelling Units
500 4,000
Amenity Space Total Building Area Total parking spaces Revenue generating parking spaces Number of storage lockers
Capital Budget
Construction Period: 10 months
46 372
100.0%
100% AMR
Comments
$888 $1,070
Kingston CMHA AMR (Fall 2014) Kingston CMHA AMR (Fall 2014)
Total Rent, All Units, All Sources $55,464
Total AMR Rent, All Units $55,464
Comments Could include informal mixed use space (ie: multipurpose hallway/foyer/atrium) and laundry
12.50%
7 0 0
County of Frontenac Marysville, Frontenac Island
SOFT COSTS 1 Building
Total Cost Per Unit
2
Comments
of construction costs plus HST, excludes group’s appliances and furniture and fixtures, includes municipal fees, excludes development charges Assume costs will be waived 4.4% of total project costs
6.00%
Architect, Engineer, Landscape 3 Cost Consultant (Quantity Surveyor) 4 Development Consultant 5 Disbursements (Architect/Engineers) 6 Demolition Consultant 7 Building Sub-total
$115,604.57 $0 $60,000 $1,000 $0 $176,605
8 Site
Total Cost Per Unit
9 Building and Property Appraisal 10 Topographic and Boundary Survey
$23,121 $0 $12,000 $200 $0 $35,321
$0 $5,000
$0 $1,000
Geotechnical Assessment
$3,500
$700
Environmental Assessment 13 Other Studies as Required 14 Site Sub-total
$5,000 $10,000 $23,500
$1,000 $2,000 $4,700
11 12
re fact
Assume not required
Comments Assume not required as new construction Estimate based on similar projects Includes investigation of well and septic requirements for soils. Estimate based on similar projects New Phase 1 ESA to July 1 2011 standards is $5,000 Includes well water pump and quality testing
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AGENDA ITEM #b)
15 Legal and Organizational
Total Cost Per Unit
16 Legal Fees 17 Organizational Expenses 18 Marketing/Rent-up 19 Capital Cost Audit 20 Market Appraisal for HST purposes 21
Property Taxes During Construction 22 Legal and Organizational Sub-total 23 Financing Costs
Lender’s Mortgage Advance Fee 28 Lender’s Application Fee
$2,000 $200 $100 $1,200 $700
$2,000 $23,000
$400 $4,600
$10,655 $0 $2,500
$2,131 $0 $500
$2,800 $2,500
$560 $500
$48 $1,000 $19,503
$10 $200 $3,901
29 CMHC Mortgage Insurance Premium 30 Insurance During Construction 31 Financing Costs Sub-Total 32 Fees and Permits
Total Cost Per Unit
33 Minor Variance, Severance Applications 34 Zoning Bylaw Amendment 35 Official Plan Amendment Application 36 Site Plan Approval Application 37 Demolition Permit Fee
Comments 3.75% 0.00% Estimate if private lender $350 per cash advance, charged on all advances Estimate if private lender residential portion: premiums waived, commercial portion: 4.5% of Loan Value, 4.50% HST will apply to this cost
Comments as per fee schedule http://municipality.frontenacislands.on.ca/file $1,433 s/Planning%20Fees%202009.pdf Assumed as waived Assumed as waived
$100 $0 $0
$0 $0
$0 $0
$14,050 $0
$2,810 $0
$0 No fee Assume not required $50 plus $10 per $1000 of estimated costs per Building Bylaw Permit Fees $10.00 http://municipality.frontenacislands.on.ca/file 0 No fee
$16,176
$3,235
$3,220.62/dwelling unit for Wolfe Island and $0.853/ft sq for non residential, as per development charges fees http://municipality.frontenacislands.on.ca/file
$0
$0
No fee
$0 $30,726
$0 $6,145
No fee
41 Local
Estimate based on similar projects on vacant rural land
$500 $0 $0
38 Building Permit Fees 39 Plumbing/Fixture Fee 40 Development Charges
Comments Estimate based on similar projects Estimate based on similar projects Estimate based on similar projects Estimate based on similar projects Estimate based on similar projects
Total Cost Per Unit
24 Interest During Construction 25 Interest on Money Borrowed (pre Construction) 26 Lender’s Legal Financing Fee 27
$10,000 $1,000 $500 $6,000 $3,500
42 School Board Levy 43
Parkland Dedication Fees 44 Fees and Permits Sub-total 45 Soft Costs Summary
Total Cost Per Unit
46 Soft Costs Sub-total (7,14,22,31,44) 47 Soft Cost Contingency
$273,333 $13,667
$54,667 $2,733
48 Soft Costs Total
$286,999
$57,400
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Comments 5.0% includes financing costs of
$19,503
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AGENDA ITEM #b)
49 HARD COSTS 50 Construction Costs
Total Cost Per Unit
51 Base Construction Cost 52 Site Servicing 53 Hydro Connection Fee 54 Remediation Costs 55 Demolition 56 Sprinklers
Comments
$4,000
$800
$200 per square foot of construction Includes septic and well construction Estimate based on similar projects Assume not required Assume not required included in base construction $1000 per unit is a typical cost for a fridge $1,000 and a stove for non-modified units (4 sets)
58 Appliances (Washer/Dryer)
$1,500
$300
$1,500 per set.
59 Appliances (Modified units)
$2,825
$565
Side-by-side fridge $1100; range is $840; $2,825 built-in, side-swing door wall oven is $885 (minimum costs). (1 set)
$33,353 $33,353 $900,531
$6,671 $6,671 $180,106
57
Appliances
60 Escalation 61 Contingency 62 Construction Costs Sub-total 63 Land / Property Acquisition Costs
$800,000 $22,500 $3,000 $0 $0 $0
$160,000 $4,500 $600 $0 $0 $0
4.0% of construction costs 4.0% of construction costs
Total Cost Per Unit
64 Purchase Price / Value 65
Provincial Land Transfer Tax 67 Land Cost Sub-total 68 TOTAL CAPITAL COSTS
$75,000
$15,000
$475 $75,475
$95 $15,095
Comments $0 5 acres First $55,000 at 0.5% + $55,000-$250,000 at 1% + $250,000 and up 1.5%
Comments
Total Cost Per Unit
69 Hard Cost Total 70 Soft Cost Total 71 HST 72 Total Project Cost
$976,006 $286,999 $157,671 $1,420,676
73 Contributions
$195,201 $57,400 $31,534 $284,135
13%
Total Cost Per Unit
74 Minor Variance, Severance Applications waived 75 Zoning Bylaw Amendment waived 76 Official Plan Amendment Application waived 77 Site Plan Approval Application waived 78 Demolition Permit Fee waived 79 Building Permit Fees waived 80 Plumbing/Fixture Fee waived 81 Development Charges waived 82 Parkland Dedication Fees waived 83 Fundraising contribution 84 Land Value Donated 85 Service Manager Grant 86 PST rebate 87 GST Rebate 88 Equity Contribution Required 89 Total Contributions 90 Total Project Cost Less Contributions
$500 $0 $0 $0 $0 $14,050 $0 $16,176 $0 $0 $75,000 $350,000 $79,563 $30,321 $133,999 $699,609 $721,067
91 Mortgage
$100 $0 $0 $0 $0 $2,810 $0 $3,235 $0 $0 $15,000 $70,000 $15,913 $6,064 $26,800 $139,922 $144,213
Comments
Land will be donated 82% rebate applied to the PST portion of HST 50% rebate applied to the GST portion of HST
Comments
92 Mortgage Amount 93 Mortgage Interest Rate 94 Mortgage Amortization 95 Annual Mortgage Payments 96 Bridge Loan Required
re fact
$721,067
No AHP funding assumed
4.00% 40 years $35,986 -$93,975
based on most recent lender quotes
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AGENDA ITEM #b)
96 Operating Budget 96 First Full Year
County of Frontenac Marysville, Frontenac Island
97 Estimated Operating Revenue
Total Per Unit Comments
98 Rental Income from Tenants 99 Laundry Revenue 100 Parking Revenue 101 Vacancy Loss 102 Total Operating Revenue
$55,464 $1,200 $0 -$1,700 $54,964
103 Estimated Operating Expenses 105 Maintenance - Wages, Materials & Services 106 Heat 107 Electricity 108 Property Management Fee 109 Other Administrative Materials & Services 110 Bad Debts 111 Capital Replacement Reserves Contribution 112 Insurance
$1,500 $3,750 $500 $2,748 $0 $0 $2,199 $1,000
113
Property Taxes 114 HST 115
Total Per Unit Comments
$1,500 $1,235
HST Rebate 116 Sub-total 117 Mortgage Payments 118 Total Operating Expenses
-$861 $13,571 $35,986 $49,557
119 Net Operating Income 120 Debt Service 121 Debt Coverage Ratio 122 Net Operating Profit/Loss
$41,393 $35,986 1.15 $5,407
re fact
$11,093 $240 Estimated at $20 per unit per month $0 Estimated at $0 per parking space per month -$340 3% of Rental, Parking, Laundry, Locker revenue $10,993
$300 Estimate based on similar projects $750 Estimate based on similar projects $100 For common areas only. Tenants pay for own $550 5% of (100% AMR + other revenue) $0 Estimate based on similar projects $0 included in vacancy loss $440 4% of Total Operating Revenue $200 Estimate based on similar projects per unit: 40% of multi-residential rate (assumes preferential $300 rate/reduction) $247 Assumes that all Operating expenses are before tax Assumes 82% rebate on the PST portion and 50% rebate -$172 on the GST portion $2,714 $7,197 $9,911
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AGENDA ITEM #b)
BUSINESS PLAN FOR SENIORS HOUSING Township of South Frontenac Draft for Discussion January 2015
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AGENDA ITEM #b)
EXECUTIVE SUMMARY
to be inserted in final report + acknowledgments
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AGENDA ITEM #b)
TABLE OF CONTENTS EXECUTIVE SUMMARY …………………………………………………………………………………………………………………….. i INTRODUCTION ……………………………………………………………………………………………………………………………….. 1 Project background ……………………………………………………………………………………………………………… 1 Context for business plan …………………………………………………………………………………………………… 2 This report …………………………………………………………………………………………………………………………….. 2 PROJECT NEED ……………………………………………………………………………………………………………………………….. 4 Local housing needs and market indicators …………………………………………………………………… 4 Summary of analysis ……………………………………………………………………………………………………………… 18 Community-based Indicators…………………………………………………………………………………………… 19 Housing Task Force Direction ………………………………………………………………………………………….. 20 PROJECT CONCEPT ………………………………………………………………………………………………………………………. 21 Form and scale……………………………………………………………………………………………………………………. 21 Unit mix and affordability ………………………………………………………………………………………………… 21 Amenities ……………………………………………………………………………………………………………………………… 22 Preferred project concept ………………………………………………………………………………………………… 23 DEVELOPMENT CONSIDERATIONS ……………………………………………………………………………………………. 25 Potential development opportunities …………………………………………………………………………….. 25 Redevelopment and acquisition/rehabilitation opportunities ……………………………………………………. 25 New Development Opportunities ……………………………………………………………………………………………. 27 Preferred option and procurement ………………………………………………………………………………… 29 Servicing & technical considerations ……………………………………………………………………………… 30 Land use approvals ……………………………………………………………………………………………………………. 31 Sustainability ………………………………………………………………………………………………………………………. 32 FINANCIAL FEASIBILITY ………………………………………………………………………………………………………………. 34 Project assumptions/parameters ……………………………………………………………………………………. 34 Estimated capital budget …………………………………………………………………………………………………. 35 Soft Costs …………………………………………………………………………………………………………………………….. 36 Hard Costs ……………………………………………………………………………………………………………………………. 37
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AGENDA ITEM #b)
Estimated operating budget ……………………………………………………………………………………………. 37 Operating Revenue ……………………………………………………………………………………………………………….. 39 Operating Expenses ………………………………………………………………………………………………………………. 40 Funding/capital requirements …………………………………………………………………………………………. 41 Financial viability ……………………………………………………………………………………………………………….. 42 GOVERNANCE ………………………………………………………………………………………………………………………………… 42 Project ownership/oversight ……………………………………………………………………………………………. 43 Planned approach to management ………………………………………………………………………………… 43 MOVING FORWARD ……………………………………………………………………………………………………………………….. 44 Summary of preferred concept ………………………………………………………………………………………. 44 Process/critical path ………………………………………………………………………………………………………….. 45 Key elements & critical success factors …………………………………………………………………………. 46 APPENDIX ‘A’ – NEEDS PROFILE ……………………………………………………………………………………………….. 48 County-wide Housing Needs and Market Indicators …………………………………………………… 48 Demographic Profile ……………………………………………………………………………………………………………… 48 Housing Profile ……………………………………………………………………………………………………………………… 54 Profile of Seniors Indicators ……………………………………………………………………………………………… 58 APPENDIX B – PRO FORMA DETAILS ……………………………………………………………………………………….. 63
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AGENDA ITEM #b)
INTRODUCTION With an aging and diversifying population, seniors housing in Frontenac County has become a growing priority. Recent studies have examined this housing need within the context of the broader housing market and have identified potential options for meeting seniors needs throughout the County. As a result of this work, County Council has designated seniors housing as a priority and allocated funds to explore the feasibility of developing affordable housing projects to meet these needs and to prepare business plans for such projects. This report for the Township of South Frontenac represents the second such business plan prepared under this initiative, following completion of the business plan for the Township of Frontenac Islands. Bringing a housing project from initial concept to on‐the‐ground reality involves a number of sequential stages. Each stage involves a progressively more detailed assessment of the project to ensure that it continues to meet the community’s needs, is financially feasible and is operationally sustainable. Key resource commitments and go‐forward decisions are required for sponsor groups to proceed from one stage to the next. The scope of work for this study addresses the beginning of this process; preparing a business plan to determine ‘proof of concept’ for the project. Specifically, the purpose of this study is to:
- Produce a business plan for the development of Seniors Housing in the Township of South Frontenac in accordance with the RFP specifications
- Engage the Township Council and stakeholder groups in a discussion regarding local needs
- Develop a business model that would result in a sustainable seniors housing project serving the needs of the community.
Project background In 2010‐11, the City of Kingston and County of Frontenac undertook development of a Municipal Housing Strategy (MHS). The strategy involved a comprehensive, multi‐phase process which examined housing needs, supply trends and priority gaps within the regional housing market. A detailed review of current policies, programs and local initiatives was also undertaken to determine the degree to which identified gaps were being addressed. As a result of this analysis, a formal stepwise strategy was developed as part of the MHS to address priority issues and housing gaps over the short, mid and long range. One of the emerging priorities identified for Frontenac County through the MHS was the growing seniors population and concerns about the ability to adequately meet their housing needs looking forward. As a result, the County undertook a more detailed review of the local seniors housing situation to better understand the range of needs and potential solutions that could be used to address these needs. As part of the “Seniors Community Housing Pilot Project Study” completed for the County in 2012, a review of priority issues and existing conditions was completed. An assessment of housing options was also undertaken to evaluate potential seniors housing models and opportunity nodes throughout the County.
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AGENDA ITEM #b)
Implementation considerations, including generic model costing and a policy framework analysis were also documented to help frame options for moving forward with a potential pilot project. As a result of the study, it was recommended that a task force be created to pursue the establishment of a pilot seniors housing project. The County subsequently struck a Senior’s Housing Task Force to establish a scope for pursuing a pilot project. The Frontenac Senior’s Housing Task Force met in May of 2014 to review possible directions for the proposed project and determined that the most suitable course of action would be to evaluate potential project options and develop a business plan for the proposed project. In accordance with the seniors objectives of the County’s Strategic Plan, Council allocated $1.5M in financial resources that same year to pursue development of up to four small‐scale pilot projects throughout Frontenac County, one in each constituent Township.
Context for business plan In the “Seniors Community Housing Pilot Project Study”, a range of potential housing options were examined and evaluated against opportunity nodes throughout the County. Given the broad geography, settlement patterns and local needs, a range of potential pilot project options were identified. One of the study conclusions was that a preferred option for a seniors rental housing project would be the development of a facility in the Sydenham community within the Township of South Frontenac, either through new construction or redevelopment. Other communities within South Frontenac were also considered, but the availability of municipal water and the presence of a wide range of community services suitable for seniors made Sydenham the most suitable location for a project of this nature. Following the completion of the first Figure 1 ‐ Situating Marysville within Frontenac County business plan for the Marysville Community within the Township of Frontenac Islands, the decision was made to proceed with preparation of the business plan for South Frontenac, utilizing a similar methodology. A Seniors Housing Task Force for South Frontenac Township was established to guide the process of preparing this plan.
This report This report is the culmination of a multi‐ staged study process. The steps that have led to the development of this business pan report include:
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AGENDA ITEM #b)
Based on project assumptions, this report explores the feasibility of a small‐scale seniors pilot project in the Sydenham community. As a result, this business plan includes:
An overview of need A defined project concept and discussion of options considered An overview of the development considerations that would influence the project A review of financial feasibility Options for project governance and management Considerations for moving forward with the project
The business plan provides an assessment of the suitability for moving the concept forward and provides recommendations in that regard.
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AGENDA ITEM #b)
PROJECT NEED This section of the report provides a summary analysis of housing needs in the Township of South Frontenac that is based primarily on statistical data analysis. In addition to detailing demographic trends and housing characteristics, the summary also provides an assessment of the need for affordable seniors housing. This analysis is augmented with the results of community consultations, undertaken as part of this study to determine local perspectives on a potential seniors project. Collectively, this information provides a profile of current housing needs for seniors and provides the analytical foundation for the development of the business case.
Local housing needs and market indicators Below we provide an assessment of local housing needs and market indicators in the Township of South Frontenac to help determine the need for seniors housing within the area.
Population Trends In the 10 years tracked by the 2001, 2006 and 2011 Censuses, the population of South Frontenac increased by 10.4%, while Frontenac County as a whole increased by 8.0%. The province’s population increased by a faster rate at 12.6%. However, from 2006 to 2011 the population of South Frontenac decreased by 1%. It should be noted that South Frontenac comprised 68.7% of the County’s population in 2011.
Table 1: Population Trends Municipality
2001
2006
2011
% Change 2001‐2011
South Frontenac
16,415
18,220
18,125
10.4%
Frontenac County
24,411
26,658
26,375
8.0%
Ontario
11,410,046
12,160,282
12,851,821
12.6%
Source: Statistics Canada Census Profiles 2001 ‐ 2011
Population by Age The Township of South Frontenac is expected to experience further growth in the next 15 years. It is projected that South Frontenac will still comprise 68.7% of the County’s population until 2031. From 2011 to 2016, the Township’s population is expected to increase by 10%, with the growth of seniors projected at 46% ‐ more than four times the overall population growth rate. From 2016 to 2031, the overall
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AGENDA ITEM #b)
population is expected to grow by 16%, with seniors experiencing a 70% increase. These figures point to the significant need to provide housing options suitable for an aging population. Table 2: Population Projections by Age
2006
2011
% Change 2006‐2011
2016
% Change 2011‐2016
2021
% Change 2016‐2021
0 to 15 years
3,345
2,990
‐11%
2,789
‐7%
2,987
7%
15 to 24 years
2,185
2,175
0%
2,497
15%
2,223
‐11%
25 to 34 years
1,705
1,590
‐7%
3,145
98%
3,328
6%
35 to 44 years
2,945
2,415
‐18%
2,334
‐3%
2,640
13%
45 to 54 years
3,260
3,380
4%
2,739
‐19%
2,364
‐14%
55 to 64 years
2,635
3,040
15%
2,757
‐9%
2,978
8%
65 years and over
2,145
2,535
18%
3,694
46%
4,346
18%
Total
18,220
18,125
‐1%
19,955
10%
20,865
5%
Age
2026
% Change 2021‐2026
2031
% Change 2021‐2031
% Change 2016‐2031
3,157
6%
3,206
2%
15%
2,216
0%
2,443
10%
‐2%
3,018
‐9%
2,755
‐9%
‐12%
3,062
16%
3,036
‐1%
30%
2,362
0%
2,975
26%
9%
2,780
‐7%
2,419
‐13%
‐12%
5,106
17%
6,277
23%
70%
21,701
4%
23,110
6%
16%
Source: Statistics Canada Census Profiles, 2011; Watson & Associates Economists Ltd., Population, Housing and Employment Projections for the Frontenacs, June 2014
Households In terms of household trends, South Frontenac experienced a 14.4% increase in the number of households from 2001 to 2011. Similarly, Frontenac County experienced an 18.6% increase in households, while Ontario experienced a 15.8% increase.
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AGENDA ITEM #b)
Table 3: Household Trends Municipality
2001
2006
2011
% Change 2001‐2011
South Frontenac
5,945
6,765
6,800
14.4%
Frontenac County
9,190
10,265
10,900
18.6%
4,219,410
4,555,025
4,887,510
15.8%
Ontario
Source: Statistics Canada Census Profiles 2001 ‐ 2011
It is forecast that from 2016 to 2031, the number of households in the Township will grow by 18.5%, while the County will increase by 16.8%. In total, 8,715 households are expected to be located in South Frontenac. From 2011 to 2031, an additional 1,750 households are expected to be added in South Frontenac, each of whom will need a place to live. These forecasts point to the need for an expansion of housing supply within the Township during this period.
Table 4: Household Projections Municipality
2011
2016
2021
2026
2031
% Change 2016‐2031
South Frontenac
6,800
7,355
7,855
8,330
8,715
18.5%
Frontenac County
10,900
11,385
12,090
12,735
13,295
16.8%
Source: Statistics Canada Census Profiles, 2011; Watson & Associates Economists Ltd., Population, Housing and Employment Projections for the Frontenacs, June 2014
Tenure In South Frontenac, most individuals own their home. This relationship can be seen in Figure 1. Since 2001, the number of homeowners have increased to 6,315, which indicates a 19% change. However, renters have decreased from 620 in 2001 to 490 in 2011. This represents a 21% decrease over the 10‐ year span. These findings suggest that owning one’s home is the more favoured option, and rental units are becoming less common and diminishing in the Township. This trend may start to reverse if interest rates rise and seniors seek more affordable housing alternatives.
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Figure 1: Housing Tenure in South Frontenac
The Change in Household Tenure Over the Years 7,000
Households
6,000
6,315
6,190 5,325
5,000 4,000 3,000 2,000 620
1,000
575
490
0 2001
2006
2011
Year Owned
Rented
Source: Statistics Canada Census Profiles 2001 ‐ 2011
Income Since 2000, household income has increased for the residents of South Frontenac. In 2000, the median household income was $55,319, which later increased to $81,664 in 2010 and $90,286 in 2016. Between 2000 and 2010, the median household income experienced a 47.6% increase, while by 2016 it experienced a 63.2% increase. From 2010 to 2016, there has been a 10.6% increase. Similarly, the average household income in 2000 ($61,469) grew by 49.1% in 2010 ($91,678) and 64.9% by 2016 ($101,357). In terms of individual income for the residents of the Township, strong growth has been experienced as well. In 2000, the median individual income was $25,525, which later increased to $38,216 in 2010 and $42,251 in 2016. Between 2000 and 2010, median individual incomes experienced a 49.7% increase, while in 2016 they experienced a 65.5% increase. From 2010 to 2016, there has been a further 10.6% increase. Similarly, individual average income in 2000 ($29,786) grew by 45.9% in 2010 ($43,453) and 61.3% in 2016 ($48,041).
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Table 5: Township of South Frontenac Household Income
Income
2000
2005
2010
2016
% Change 2000‐2010
% Change 2000‐2016
% Change 2010‐2016
Median
$55,319
$70,297
$81,664
$90,286
47.6%
63.2%
10.6%
Average
$61,469
$74,988
$91,678
$101,357
49.1%
64.9%
10.6%
Source: Statistics Canada Census Profiles 2001 ‐ 2011
Table 6: Township of South Frontenac Individual Income
Income
2000
2005
2010
2016
% Change 2000‐2010
% Change 2000‐2016
% Change 2010‐2016
Median
$25,525
$31,068
$38,216
$42,251
49.7%
65.5%
10.6%
Average
$29,786
$35,786
$43,453
$48,041
45.9%
61.3%
10.6%
Source: Statistics Canada Census Profiles 2001 ‐ 2011
Over the last 16 years, the average household income in South Frontenac has been growing at a faster rate than the County and the Province. Ever since 2000, households in the Township have steadily had a higher average household income than the County. From 2010 to 2016, the average household income in the Township surpassed both what has been experienced in the County and the Province. Thus, it is apparent that the average household income of South Frontenac, as well as the median household income, will continue to increase at a faster rate than its comparators in the coming years. This points to a need to ensure that the seniors housing project includes a strong component of units available at full market rent.
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Figure 2: The Growth of Average Household Income (2000‐2016)
Average Household Income Growth Over the Years $120,000
Average Household Income
$101,357 $100,000 $80,000 $60,000
$91,678
$66,836 $61,469 $56,786
$77,967 $74,988 $67,762
$85,772 $77,109
$94,828 $85,250
$40,000 $20,000 $0 2000
2005
2010
2016
Year South Frontenac
Frontenac County
Ontario
Source: Statistics Canada Census Profiles 2001 ‐ 2011
Dwellings Single‐detached dwellings comprise 95.2% (6,475) of all dwellings in South Frontenac. In 2011, there were only 50 (0.7%) semi‐detached dwellings and 15 (0.2%) row houses. As for apartments, there were 65 detached duplexes (1.0%) and 140 units in apartment buildings (2.1%) with less than 5 storeys. There were no apartment buildings that had 5 or more storeys. Additionally, there were 55 moveable dwellings (0.8%) and 5 other types of single‐detached houses (0.1%). These statistics show the lack of available housing options that are suitable for seniors in the Township. Similarly, the majority of dwellings in the County are single‐detached dwellings (95.3% or 9,895 dwellings). The remaining 490 dwellings consist of low‐rise apartment units (1.8%), movable dwellings (0.9%), detached duplex apartments (0.9%), semi‐detached dwellings (0.8%), and a few row and other single‐detached dwellings. These counts have not changed much since 2000, since 93.9% of all dwellings were single‐detached dwellings.
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Figure 3: Dwellings by Type
Dwellings by Type in South Frontenac, 2011 Single‐detached house (6,475 dwellings) Semi‐detached house (50 dwellings) Row House (15 dwellings) Apartment (detached duplex) (65 dwellings) Apartment building (5+ storeys) (0 dwellings) Apartment building (less than 5 storeys) (140 dwellings)
95.2%
Other single‐detached house (5 dwellings) Moveable dwelling (55 dwellings)
Source: Statistics Canada Census Profiles 2011
Seasonal Dwellings Traditionally, seasonal dwellings (a non‐permanent form of housing) have accounted for approximately 40% of Frontenac County’s total dwellings. From 2001 to 2011, due to conversion of seasonal dwellings to permanent ones, all of the Townships in the County have experienced a decrease in seasonal dwellings; i.e. a decrease of 42% in 2001 to 38% in 2011. In 2011, the 3,000 units found in South Frontenac accounted for 37.1% of all seasonal dwellings. However, by 2031 it is expected that fewer seasonal dwellings will be constructed, causing the proportion to slightly drop to 36.2%. In fact, from 2011 to 2031 seasonal dwellings are only expected to grow by 1.5% in the Township and increase by 4.0% in the County, suggesting a higher conversion rate to permanent dwellings within the Township.
Table 7: Seasonal Dwellings (Units) Municipality
2011
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2026
2031
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South Frontenac
3,000
3,015
3,030
3,040
3,045
1.5%
Frontenac County
8,090
8,190
8,280
8,350
8,410
4.0%
Source: Statistics Canada Census Profiles, 2011; Watson & Associates Economists Ltd., Population, Housing and Employment Projections for the Frontenacs, June 2014
Age and Condition of Dwellings In terms of the condition of dwellings in the Township, very few of them require major repairs. In 2011, only 500 dwellings (7.24%) required major repairs, while 6,300 dwellings (92.6%) only required regular maintenance or minor repairs. This result suggests that the Township’s housing stock is in good shape, as reflected by 2001 statistics where regular maintenance or minor repairs made up 93% of the total share, while major repairs remained stable at 7%. In South Frontenac, the bulk of the housing stock was built from the pre‐1960s to the early 1990s. In fact, dwellings constructed between the pre‐1960s and 1980 make up 54% of the total housing stock seen today. Those constructed from 1981 to 1990 consist of 20.8% of the total share. After 1991, fewer dwellings were constructed in the Township and from 2006 to 2011 only 225 (3.3%) dwellings were added to the stock.
Figure 4: Dwellings by Period of Construction in South Frontenac
Dwellings by Period of Construction
Period of Construction
2006 to 2011
225
2001 to 2005
590
1991 to 2000
885
1981 to 1990
1415
1961 to 1980
1850
1960 or before
1835 0
200
400
600
800
1000
1200
1400
1600
1800
2000
Dwellings
Source: Statistics Canada Census Profiles 2011
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Residential Development Potential Several policy documents and legislation, such as the Provincial Policy Statement and the Official Plans for the Townships within the County, all support new residential development in designated settlement areas. As of June 2014, Watson and Associates (2014) stated that 2,569 hectares of vacant land are designated as areas of settlement. As seen in Table 8, about 1,498 hectares of vacant designated land is available for development in South Frontenac, which comprises 58.3% of all the available land in the entire County. This data tends to correlate with population and dwelling counts, suggesting that most growth in the County will occur in this area. The development of a new seniors facility in Sydenham would be consistent with these growth expectations.
Table 8: Overview of Vacant Lands Designated as Settlement Areas by Municipality Vacant Designated Land (Hectare)
% of Total Land within Settlement Areas
North Frontenac
647
25.2%
Central Frontenac
411
16.0%
South Frontenac
1,498
58.3%
Frontenac Islands
13
0.5%
Frontenac County
2,569
100.0%
Source: Watson & Associates (June 2014). Population, Housing and Employment Projections for the Frontenacs
Ownership Housing Market As previously stated, 92.8% (or 6,315) dwellings in South Frontenac were owned in 2011, which is an increase of 990 units from 2001. This finding confirms that homeownership is the most dominant form of tenure and that it is growing in demand, although, as noted earlier, this trend could change in future. The Census reported that house prices in South Frontenac increased as well from 2000 to 2010. The average dwelling value in 2010 was $336,568, while in 2000 it was $157,956. During this 10‐year span, house prices have increased by 113%, which may be attributable to the construction of larger homes, the conversion of seasonal dwellings to permanent ones and lower interest rates. Similarly, the County experienced a 95.7% increase in average house prices in the same time, from $155,557 in 2000 to $304,496 in 2010. These housing price trends continued to grow in 2016 as well. Due to the lack of current housing price data for South Frontenac and surrounding municipalities, it is projected that the average house price in the Township was approximately $372,244 in 2016, which is a 10.6% increase since 2010. In a similar
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fashion, housing prices in Frontenac County are expected to grow by 10.6% as well, causing homes to cost $336,773 on average. Moreover, in 2011 the percentage of homeowners with a mortgage was 55.2%, meaning that a large share of South Frontenac households do not have a mortgage (i.e. 44.8%). These numbers are nearly identical to those found within Frontenac County. Given that many local homeowners are seniors, this figure demonstrates that a large number of them possess significant assets, which would help them to afford market rent units in any new seniors housing project. Rental Housing Market In Frontenac County, there were a total of 800 rental units (8.7% of dwellings) in 2011, which have decreased over the years. In comparison, in 2011 South Frontenac experienced a loss of 130 renter‐ occupied dwellings, which translates to a decrease of 21% since 2001. These findings suggest that there is a very limited supply of rental units within these areas, and that supply is decreasing. It also appears that rental units are not affordable for most renters. In 2011, while 5.1% of tenants in the Township are in subsidized housing, approximately 58.8% of renters spend more than 30% of their income on shelter costs. Furthermore, average monthly shelter costs have increased by 31% in the last 10 years, from $627 in 2000 and $821 in 2011. Although average market rent for Frontenac County and South Frontenac are not reported by CMHC due to data suppression, they are however tracked for the Kingston CMA and its surrounding municipalities, which are aggregated as zones. The data in Figure 5 derives from the entire Kingston CMA and Zone 4 of the CMA, where South Frontenac is located. In 2015, average market rents for the Zone 4 area (including South Frontenac) were $593 for bachelor units, $943 for 1‐bedroom units, $1,261 for 2‐bedroom units, and $1,218 for 3‐bedroom units. Overall, from $989 in 2011 to $1,141 in 2015, the average market rent for all unit types has increased by 15.4% for municipalities like South Frontenac. Typically, as unit types grow in size, so too does the cost of rent. In some instances, such as with 1‐bedroom and 2‐bedroom units, the rents found in South Frontenac and others within Zone 4 in 2015 tend to be higher than the CMA averages. For those seniors on fixed pensions and other low income sources, these rents are moving out of reach, demonstrating that there should be some below market rents in any new seniors housing project.
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Figure 5: Average Market Rents (2011 and 2015)
Average Market Rents for Zone 4 (South Frontenac) and the Kingston CMA $1,600 $1,406
Average Market Rent
$1,400
$1,261
$1,200
$1,091
$1,218 $1,104 $989
$943 $915
$1,000 $800 $600
$1,095
$553 $593
$679
$1,141 $1,033
$769
$400 $200 $0 Bachelor
1‐Bed
2‐Beds
3+ Beds
Total
Unit Type 2011
2015
CMA (2015)
Source: CMHC Market Rent Surveys, 2011 and 2015 Overall from 2011 to 2015, vacancy rates for rental units have increased for municipalities like South Frontenac in Zone 4 of the CMA. In 2011 the vacancy rate was at 0.8%, which later grew to 4.9% for all unit types in 2015. In the last four years, the most growth occurred for 1‐bedroom, 2‐bedroom, and 3‐ bedroom units. The vacancy rates for rental units in Zone 4 are higher than those in the rest of the CMA. The CMA vacancy averages are 0.9% for bachelors, 2.5% for 1‐bedrooms, 3.1% for 2‐bedrooms, and 2.9% for 3‐bedrooms. In general, the vacancy rate for all units are 2.8% in the Kingston CMA for 2015. A vacancy rate of 3.0% is considered by CMHC to be a rental market in balance between demand and supply.
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Table 9: Vacancy Rates for South Frontenac and Surrounding Municipalities in Zone 4 Zone 4 of Kingston CMA* Year
Bachelor
1‐Bed
2‐Beds
3+ Beds
Total
2011
**
2.2
0.2
0
0.8
2012
0
2.1
2.3
0
2.1
2013
**
1.3
1.4
0.6
1.3
2014
3.8
3.2
1.9
4.6
2.5
2015
3.4
5
5.2
2.2
4.9
Source: CMHC Housing Market Portal and Rental Housing Market Report, October of every year *Zone 4 includes South Frontenac and other municipalities outside of Kingston **Data suppressed or not available
Affordability and Shelter on Housing Costs A useful approach to understand if there is an affordability problem in a municipality is to analyze how many residents pay more than 30% of their income on shelter costs. CMHC considers any households paying beyond 30% of household income on shelter costs to have an affordability problem. In South Frontenac, the number of homeowners that paid 30% or more on shelter decreased by 15.9% from 2001 to 2011. In 2001 there were 860 households (16.6%); that later decreased to 723 (11.9%) in 2011. Renters, on the other hand, have increased by 15.2% in the same time frame. For instance, in 2001 there were 250 rental households (41%) that later increased to 288 (58.8%) in 2011. These results mirror those that are experienced with Frontenac County as well. These findings suggest that many renters are struggling with housing costs in the South Frontenac due to increasing rents and diminishing supply. As shown in Table 10, rental housing is affordable for a select few households in South Frontenac. With average market rent in 2010 being $989 and increasing to $1,261 in 2016, those who are unable to afford these rents include many one‐person households, renter households, and renters in core housing need. Additionally, in order to afford these rents, most households would need to have incomes that are either $39,600 in 2010 or $50,450 in 2016. Hence, it appears that affordable rental housing may be a challenge for select household groups.
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Table 10: Average Household Income to Average Market Rent (AMR) in South Frontenac 2010
2016*
Average Household Income of All Households
$91,678
$101,357
Affordable Rent
$2,292
$2,534
Median Household Income of All Households
$81,664
$90,286
Affordable Rent
$2,042
$2,257
Average Household Income of One‐Person Households
$42,988
$47,527
Affordable Rent
$1,075
$1,188
Average Household Income of Renters
$43,349
$47,926
Affordable Rent
$1,084
$1,198
Average Household Income of Renters in Core Need
$21,829
$24,143
Affordable Rent
$546
$604
Average Market Rent (AMR)
$989
$1,261
Required Income to Afford AMR
$39,600
$50,450
Source: Statistics Canada Community Profiles 2011 and 2006 and National Household Survey 2011; CMHC Housing Information Portal; SHS Calculations based on 30% of income spent on rent *2016 household incomes are estimated based growth rate of the Ontario’s CPI
Loughborough Housing Corporation Waiting List Data Loughborough Housing Corporation (LHC) operates a portfolio of 55 social housing units primarily serving senior citizens. About half of these units are rented at market rent and the other half are rented on a rent‐ geared‐to‐income basis. About three quarters of the units are one bedroom units and one quarter are two bedroom units. Another indicator of the need for seniors housing is the LHC waiting list and related data. Tables 11‐14 display these statistics. The tables show that the number of applicants on the waiting list has consistently remained in the 75‐80 range for the past five years. By far the majority of applicants are seeking market rent units. About half of the applicants are seeking one bedroom units, a quarter are seeking two bedroom units and the remainder are seeking either. The data show that only a handful of units are turning over annually (approximately 6‐7 on average), which means that it could take 10 years for all current applicants
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to be housed. Rents are highly affordable – well below current CMHC market rents for the area. The units are primarily targeted to seniors. These observations provide further evidence of the need to expand the supply of affordable rental housing for seniors, as the current waiting period is extremely long and few other options are available to area seniors. Table 11 Loughborough Housing Corporation ‐ Waiting List, 2010‐2016
Waiting List Figures RGI low (one bed) high avg.* Market one bed two bed either Total Total Wait List
2010 4
2011 3
2012 14
2013 4
2014 4
2015 1
2016 5
7 6 19 21 0 40
10 7 19 17 10 46
17 16 27 20 15 62
18 11 29 19 12 60
6 5 33 22 17 72
14 8 33 23 15 71
11 8 34 21 13 68
46
53
78
71
77
79
76
2014 6.5% 93.5% 100% 49.4% 28.6% 22.1% 100%
2015 9.6% 90.4% 100% 51.6% 29.3% 19.1% 100%
2016 10.5% 89.5% 100% 55.3% 27.6% 17.1% 100%
Note: *average for RGI units derived from low/high wait list figures
Table 12 Loughborough Housing Corporation ‐ Waiting List Share 2010‐2016 Waiting List Share RGI Market Total one bed two bed either Total
2010 12.1% 87.9% 100% 53.8% 46.2% 0.0% 100%
2011 12.4% 87.6% 100% 48.6% 32.4% 19.0% 100%
2012 20.0% 80.0% 100% 54.8% 25.8% 19.4% 100%
2013 15.5% 84.5% 100% 56.3% 26.8% 16.9% 100%
Source: Loughborough Housing Corp.
Table 13 Loughborough Housing Corporation ‐ Annual Unit Turnover 2010‐2016 Applicants Housed RGI Market Total Annual turnover rate
4 2 6
2 4 6
2 0 2
6 0 6
3 0 3
6 1 7
0 1 1
10.9%
10.9%
3.6%
10.9%
5.5%
12.7%
1.8%
Source: Loughborough Housing Corp.
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Table 14 Loughborough Housing Corporation ‐ General Information General Information
4377 William St. (Maple Ridge) 4361 William St. (Meadowbrook) Total
Unit Mix RGI 15 13 28 50.9%
Market 15 12 27 49.1%
Total 30 25 55 100.0%
2017 Market Rents One bed 24 18 42 76.4%
Two bed 6 7 13 23.6%
$ $
One’s 678 661
$ $
Two 770 759
Notes: Geared to seniors, primarily 65+ but younger permitted on cascading age policy basis (uncommon) 3 units are considered modified/accessible, have been occupied for 7+ years, no one waiting for them Rents include electricity and water Source: Loughborough Housing Corp.
Summary of analysis As a result of the above analysis, demographic and housing profiles for South Frontenac Township have been established that show:
More than 18.5% of the of the Township’s population are seniors and this population in expected to grow at a rate faster than any other segment of the population.
An expected growth of 1750 households in the next 20 years demonstrates the need for steady growth in the supply of housing in South Frontenac.
Household income has grown strongly in South Frontenac in recent years. This points to the need to ensure a range of rent levels within a new seniors housing project to enable a wider range of housing choices in South Frontenac for seniors at all points on the income scale.
The majority of dwellings (over 90%) are ownership tenure and trends continue to show senior owners are staying in their homes longer, due in part to the lack of suitable local housing alternatives.
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The lack of new rental supply or other housing types aimed at seniors is limiting the choice of options within the South Frontenac market.
In addition to limited housing options, renters face continued increases in rents and as a result, almost half have an affordability problem (i.e. they spend more than 30% of their gross income on housing). As a result, the new seniors housing project should include some units at below market rents.
Waiting list data for Loughborough Housing Corporation shows a strong unmet demand for seniors units. At least half the units should be one bedroom units.
This analysis demonstrates that there is a continued demand for affordable, purpose‐built rental housing and that, as the seniors population continues to grow in the Township, a greater range of options will be required to meet their needs and enable them to remain in the community. Given the commitment of County Council to contribute public dollars towards the project, there needs to be a clear public benefit, particularly in relation to affordability.
Community-based Indicators To augment this analysis and gather local community perspectives on housing needs, a community open house session was held on November 16, 2016 at the Town Hall in Sydenham. At this session, an overview of housing needs in South Frontenac was presented as well as background on the study process. A recap of study work to date was also provided to attendees. A discussion then took place around potential sites for the project, types of amenities and services to be provided, unit mix and rent levels, governance and other key issues. In addition, a questionnaire survey was provided in hard copy to those attending the session and on line to enable interested respondents to express their views. A total of 15 responses were received. The key themes arising from the open house session and the questionnaire responses are summarized below. An overwhelming majority felt there is a need for more seniors housing in South Frontenac. Most felt the greatest need was for lower end of market rental accommodation. It was felt that the gap was going to continue to grow due to the increasing seniors population in the area. About 20% of respondents would consider moving in right away; others felt they would be interested in a 5‐10 year time frame. Most respondents identified Sydenham as the area of greatest need and indicated that preference should be given to South Frontenac residents. It was emphasized that the site selected for the project should have strong access to seniors support services and good transportation linkages to the core area of Sydenham where most of the shopping, banking, health care offices, pharmacy, post office, town hall and other amenities were located.
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The preferred form of housing is a one storey apartment building with self‐contained apartment units for independent living. A two storey building would also be acceptable, providing it is highly accessible. Other features of interest included a courtyard, garden, shared yard space and grounds for walking, as well as a common room, common laundry area, guest suite and hobby/project room. Only one respondent felt that meals should be provided. This could potentially be addressed through linking with an external meals on wheels service. Other services that could be provided would include hairdressing and exercise classes. Several respondents emphasized that the building should be designed to enhance socialization. In terms of unit type, most respondents favoured a mix of one and two bedroom units, with one bedroom units averaging about 650‐750 sq. ft. and two bedroom units averaging 800‐1000 sq. ft. It was suggested that rents should average $800 ‐ $1000 per month, with a modest number of units at rent‐ geared‐to‐income rents if possible for those seniors on low fixed incomes. It was emphasized that the building should be highly accessible to help seniors live independently. In terms of governance, the majority felt that the facility should be owned and operated by a non‐profit Board/organization. Possible options could include ownership by the Township with property management contracted to an external property management organization; a public/private partnership; or a non‐profit Board with Township backing. It was felt that financial support from all levels of government was highly desirable to ensure the long term sustainability and affordability of the units, although there was some concern about the types of terms and conditions that might accompany such funding.
Housing Task Force Direction On December 6, 2016, the consultants met with the Township’s Housing Task Force and reviewed the findings that were arising from the research and consultation. The Committee expressed its support for the concept that was emerging and confirmed the following direction for preparation of the business plan:
The project should be located in Sydenham A project size of 10‐12 independent rental apartment units is preferred The property adjacent to the Grace Centre appears suitable for the project and should be given highest consideration Partnering in some fashion with the two community‐based non‐profit agencies in the area (South Frontenac Community Services Corporation and Loughborough Housing Corporation) was of interest and would enhance the success of the project The Township was not interested in setting up its own corporation to own or manage the facility. Given their experience in managing senior citizen housing, Loughborough Housing Corporation should be approached to determine its potential interest in managing the facility The preferred unit mix is 60% at market rent and 40% at affordable rent (i.e. lower end of market), although a 50/50 mix should be explored to determine if it could be sustained financially.
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The following sections of this report provide a suggested concept plan for the project, based on the above direction.
PROJECT CONCEPT This section of the business plan defines the project concept, as informed by local needs, stakeholder feedback and Housing Task Force Direction. These parameters establish the form, scale, unit mix and affordability for the prospective project. Associated amenities are also defined, recognizing the small‐scale nature of the project. As a result of these attributes, configuration options for securing them are reviewed and a preferred project concept is identified. This concept is then analyzed in terms of development potential and financial feasibility in subsequent sections.
Form and scale In terms of project form, it is clear that seniors tend to favour low rise forms which are grade‐related. This building configuration is highly supportive of accessibility and eliminates the need for stairs, lifts or elevators. As such, a single storey slab‐on‐grade configuration offers the accessibility and straight‐forward layout suitable for a project of this scale and client type. Likewise, using conventional wood frame construction and a standard slope roof for this building form would be highly economical. At the same time, it is recognized that a single storey building requires more land than a multi‐storey building and that, when combined with the land area required for a septic system, creates a need for a sizeable property. Therefore, a two storey building might also be considered, which is actually consistent with seniors buildings owned and operated by LHC. In terms of the units themselves, demand has shown a strong affinity for self‐contained apartments that are geared to seniors capable of independent living. This means that each residential unit would have its own kitchen and washroom facilities unlike congregate living arrangements where these facilities can be shared. From that perspective, the project would be much like a typical low rise rental building. Aligning these residential units around a double‐loaded corridor would also provide a high degree of efficiency. Given the current level of demand and the stated Task Force preference for smaller scale, the proposed project is being recommended at 12 units.
Unit mix and affordability Traditionally, seniors housing projects tend to have smaller unit sizes – either one or two bedroom units ‐ as compared with family units, reflecting their inherently smaller household size. Furthermore, affordable seniors units tend to be predominantly one bedroom in size rather than two bedroom, a direct reflection of the rental cost of the unit. Where affordability is less of a concern, seniors projects would typically have a higher share of two bedroom units. Given the affordability profile envisioned for the project, a unit mix
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of 50% one bedroom and 50% two bedroom is proposed. For a project of 12 units in total, this would mean 6 one bedroom units and 6 two bedroom units. As indicated through community feedback, there is a high degree of interest in rental tenure for the project. This is in contrast to seniors housing models that allow for ownership or some form of equity stake (i.e. condominium, life lease, etc.). Apart from the affordability that rental accommodation provides, there was a clear sense from consultations that prospective residents who were homeowners and would be downsizing would not be interested in locking up equity in such a project. Instead they would choose to reserve the use of their equity for other retirement purposes. The consultation and income analysis showed that a mix of market rent and affordable rent units was most desirable for the project. Funding may be available through the Investment in Affordable Housing Program administered by the City of Kingston, Service Manager for the area, to help achieve this. As such, two scenarios have been developed – one with the 6 one bedroom units rented at 80% of Average Market Rent for the area and funded under the IAH Program, and one with them at full market rent. All of the 6 two bedroom units are assumed to be rented at lower end of market rent. To encourage energy conservation and to buffer against utility cost impacts, tenants would be responsible for their own heat and hydro costs. To better facilitate this, individual unit heating/cooling systems have been assumed rather than large shared systems. Given the affordability parameters for the project and the senior client group, it is assumed that a modest unit size would be suitable. This reflects the fact that unit size has a direct influence on overall unit cost and as such, influences the project financial viability. However, because many units are anticipated to rent at near market rates, they would need to provide comparable value in the market place in order to attract/retain tenants. Small‐scale projects like this do not benefit from scale economies and as such, can be more expensive to build on a per unit basis. It is important therefore to rationalize built floor area with regard for maximum chargeable rent in order to support viability. With this in mind, 1 bedroom units are assumed at a size of about 600 square feet (gross floor area, GFA) while 2 bedroom units have been assumed at about 800 square feet GFA.
Amenities In terms of in‐unit amenities, it is anticipated that standard appliances would be provided (fridge + stove) along with modest storage space. It is also assumed that visitability would be provided interior to the units by maintaining open radius layouts in both the kitchen and bathroom of each suite. Building in options for grab bars in unit bathrooms is also assumed. In terms of building visitability, wider common corridors and open radius layouts in laundry and common areas would be employed. In addition to constructing the building at grade, common entry doors would provide for full accessibility. Two units would also be modified to accommodate a tenant with mobility impairment, incorporating additional unit features like a roll‐in shower and accessible kitchen. This would provide the ability to meet changing needs as tenants age in place. Surface parking would also be provided, recognizing that while most tenants would prefer walkability, there would be a need to provide for basic parking as well as visitor parking in accordance with zoning requirements. It is assumed that 14 parking spaces would be provided as part of the project concept.
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Community consultations identified a wide range of potential amenities/features that could be included within the common area of the project. At the same time, there was a recognition that only modest opportunities for amenity space would exist for a project of this small scale. As above, scale economies for smaller projects make it challenging to add additional GFA due to the limited offsetting income potential of this space. The more amenity space that is added, the more expensive the project is to build and operate on a per unit basis. While there are cost pressures inherent in adding amenity space, creating opportunities for tenants to socialize in a sheltered space was highly valued by stakeholders. To strike a balance in this regard, it has been assumed that a double loaded common corridor would be used to connect all units internally, providing a common access point to the project as well as sheltered access to each unit. Modest coin operated laundry facilities would also be provided (1 washer/dryer pair) for resident convenience. Adjacent or in combination with this space, it is also assumed that a common room would be provided for the benefit of all tenants. This informal space would provide year round indoor shelter and would account for not more than 500 square feet GFA. The size and configuration of this space would be subject to adjustment based on overall building layout. In addition to small individual patio areas for each unit, a common outdoor amenity area would also be provided adjacent to the common interior space. There would also be a small property management office in the building.
Preferred project concept Based on evaluated needs, consultation feedback and with regard for project development experience, a preferred project concept has been developed. The proposed project concept assumes:
12 self‐contained rental apartment units configured around a common, double loaded corridor Of these units, 6 would be 1 bedroom units (600 s.f.) and 6 would be 2 bedroom units (800 sq. ft.) – two units would be modified for full accessibility Units would be geared to seniors (65+) who are able to live independently. Rents charged for all units would be equivalent to 10% below CMHC average market rent for the Kingston area and would not include utilities (i.e. heat/hydro paid by tenants), unless IAH funding is obtained for the one bedroom units, which would reduce rents in those units to 80% of AMR Laundry facilities and a common room would be provided to accommodate tenant socialization. Total initial building GFA is estimated to be in the order of 10,600 s.f. (GFA) Building construction is anticipated to be in a single storey, slab‐on‐grade form with conventional wood framing and a standard sloped roof (providing sufficient land area is available for septic system) To facilitate aging in place, the building and the units would be designed to a visitable standard Surface parking for 14 spaces would be included in the project.
While the ultimate design of the project would provide for component space and the overall configuration of the building, a conceptual layout is provided for illustrative purposes in Figure 2.
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Figure 2 ‐ Conceptual Project Layout
Having established the preferred project concept, subsequent sections of this report will assess associated development considerations and evaluate the financial feasibility of the project.
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DEVELOPMENT CONSIDERATIONS A number of development considerations were examined as part of the project concept evaluation process. These included a review of possible development opportunities, options for procuring the project, as well as technical/servicing considerations. This section of the report also examines required land use approvals and sustainability features associated with the preferred project.
Potential development opportunities Based on existing needs, community amenities and consultation feedback, a project location within the Village of Sydenham was deemed highly desirable for siting of the project. Two general approaches to development were considered for the project based on identified opportunities in the Village; redevelopment of existing building(s) and new construction. Apart from preliminary technical reviews of each of these options, site visits were also conducted in the late fall of 2016 to assess potential for each prospective location. Given the preliminary nature of this assessment, development opportunities are discussed in general terms to maintain the anonymity of current building/land owners. General site locations as dicussed below are illustrated in Figure 3.
Redevelopment and acquisition/rehabilitation opportunities Proximity to the Village centre and its associated amenities was deemed a high priority by stakeholders, noting the desire to have walkability to the project where possible. As a mature village, the core of Sydenham is substantially developed and there are very few vacant parcels available for development, most of which are insufficient in size to accommodate the required project and its associated parking and septic system requirements. As a result, acquisition and consolidation of existing developed parcels would be required to establish a project site of sufficient size. This would entail the purchase of multiple sites and their existing structures at costs higher than vacant parcels located in the periphery of the Village. The demolition of structures and prospective remediation due to past uses would be further potential costs incurred. William Street and to a lesser extent Mill Street are primary corridors in the Village centre along which a number of amenities are located. In fact, the Loughborough Housing Corporation maintains two affordable apartment buildings with a total of 55 units on William Street, and is well‐positioned to access these amenities. No vacant structures suitable for conversion or acquisition/rehabilitation were identified through scanning with stakeholders. However, two prospective locations in this corridor were identified as having possible redevelopment potential. Upon review, it was confirmed that each would require substantive lot consolidation, re‐zoning and demolition of existing structures to facilitate construction of the new project. Septic system requirements would also impact on required land area, obliging sizable lot area where costs are generally higher due to location. Given the current conditions, the costs for pursuing redevelopment in this general area were deemed higher than average and would require a significant degree of cooperation from multiple parties to facilitate.
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Figure 3 ‐ Development Opportunities Reviewed in Sydenham
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By contrast, there were a number of vacant parcels identified on the periphery of the central area which offered the potential to more economically address site requirements for the project while still maintaining reasonable proximity to the village centre. As a result, neither redevelopment nor acquisition/rehabilitation options were considered to be suitable for fulfilling the requirements of the preferred development concept. Based on this cursory review, new construction on appropriate vacant lands outside the central area is considered a more appropriate option because it:
does not require extensive land assembly with multiple parties to affect provides more financial and design flexibility to configure spaces in accordance with the preferred building concept avoids any potential issues associated with adaptive re‐use or demolition of existing structures (i.e., code issues, designated substances, servicing and HVAC constraints, etc.) better suits the visitability/accessibility requirements of the project in a single storey configuration due to larger available site areas allows greater potential for expansion in the future where demand warrants
New Development Opportunities Opportunities to accommodate the building concept via new construction were also considered as part of the review process. As the central part of the Village has been developed over the years, there are limited opportunities to accommodate new construction. In addition, the assumed floor plate of 10,600 square feet and lot requirements for septic system services mean that the minimum lot size for the preferred project concept in a single storey configuration would be in the order 2+ acres, depending on soils conditions and surrounding uses. There are limited options in terms of vacant parcels within the Village and water servicing boundaries that could meet these requirements. While there are larger sites available beyond, piped water services are not available and extending them would not be cost effective. Locating in these outer locales would also situate the potential project even further from the array of community amenities that are resident in the central area of the Village. As a result, five prospective locations were identified with stakeholders that lie just outside the central area. They are between a 600m and 800m distance walk from the central intersection of Mill and William Streets, and lie within the Village’s piped water boundary. Access to piped municipal water is seen as highly desirable as it reduces site area and well water requirements for the project, enabling higher density and more cost‐effective development. Vacant site review During the site visit to Sydenham in the late fall of 2016, vacant properties in five prospective locations were examined for suitability under a new construction scenario. It should be noted that all sites would require development approvals in order to accommodate the permitted use and from that perspective, were deemed equally impacted. The first two locations are proximal to the intersection of Church Street and Portland Avenue, across the river and northwest of the Village core. While both large in size and in direct proximity to the Cataraqui Trail, the parcel to the east of the intersection has limited usability due to its configuration. The parcel to the west is more useable in terms of configuration and frontage but would require a severance. Both sites
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are decidedly more rural in character and do not have any adjacent amenities/services. As of this date, it is not known if the respective private owners would be willing to sell a part of their land holdings or under what terms. A third potential site is located south of Rutledge Road off Morgan Drive, south of the Village centre. The site is located in an established subdivision and is long and narrow, with limited frontage. This configuration makes the site more challenging to use, especially in terms of accommodating the proposed unit count in a single storey configuration and providing the necessary space for a large septic bed. While somewhat more proximal to community services in the core, there are few surrounding amenities. The private owner has indicated an interest in selling the land and/or developing seniors housing, provided suitable funding was made available. The fourth site lies farther west on Rutledge Road, in the area south of the Johnston Lane intersection. This large site would have ample room to accommodate the potential project but would require a severance to size the new parcel appropriately. Despite flexibility in parcel sizing and configuration, there are very limited amenities in proximity to these lands and they are more removed from the village core. The site is also situated on higher topography, obliging a more laboured pedestrian access from the Village centre. Inquiries regarding the site determined that the owner was not interested in selling a part of the property. The fifth site reviewed is located on Stage Coach Road, south of Rutledge Road. The 1.7 acre parcel is fairly rectangular and flat, with ample frontage. This configuration makes the site very amenable to accommodating the required project footprint, although residual lands to the west would enhance site size for development. Initial discussions have indicated that an addition 0.7 acre parcel to the west could be secured at a reasonable cost. The primary lands are owned by the South Frontenac Community Services Corporation (SFCSC) whose community services facility (The Grace Centre) is located immediately to the north. Apart from these social services, there is an ambulance and fire station nearby. While situated within walking distance, the site location on higher topography obliges a more laboured pedestrian access from the Village centre. The owner is a community‐minded organization that provides services to residents, including seniors, and has expressed an interest in seeing a seniors housing facility developed. The proximity to their service centre would enhance the attractiveness of the location for seniors. Preferred property The fifth property identified on Stage Coach Road has a number of strategic advantages when weighed against other vacant property options. The subject site is:
suitable in size and has sufficient frontage to support the proposed concept within the piped water servicing area, thereby not requiring private water servicing proximal to the central area of the Village and the many amenities it offers directly adjacent to a social support agency that already provides services to seniors and has ambulance and fire services nearby owned by an organization interested in seniors housing and a potential partner for the project who could make the property available for the project under favourable conditions
The partnership opportunity with SFCSC makes this site very compelling both locationally and from a financial perspective. Securing the property and the adjacent parcel for a modest consideration would be extremely beneficial to the financial viability of the project. The opportunity to access services offered by
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SFCSC at the Grace Centre is equally beneficial to the project and would provide a unique housing and service relationship for seniors in the Village. Figure 4 ‐ Preferred site and adjacent lands
For the purposes of this analysis and based on preliminary discussions, it has been assumed that SFCSC would be willing to provide their portion of the subject lands at a modest cost. Negotiations with the adjacent land owner would have to be undertaken to add that parcel. No environmental issues are known to exist in the vicinity of the lands in question but to ensure this, an Environmental Site Assessment would need to be undertaken as part of the due diligence process. As a vacant property, soils investigations would also be required as part of the due diligence process to confirm septic servicing parameters prior to acquisition. These costs have been included within the financial modelling.
Preferred option and procurement With regard to development options available and given the defined project concept, there is a clear benefit to developing the proposed project under a new construction scenario rather than an acquisition/ rehabilitation approach. Based on the range of potential local sites reviewed, there are some suitable development options that could be pursued for a seniors housing project. However, there is a clearly
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preferred option in the form of the SFCSC site and adjacent parcel on Stage Coach Road, subject to appropriate due diligence investigations and agreement on terms with the property owner. While this preferred site is not immediately adjacent to the central Village area, there is reasonable access to amenities nearby and general walkability. The site can accommodate the building form/size currently envisioned but any potential future expansion would need to accommodate incremental servicing and land use requirements. Typically in a new construction scenario of this type, procurement of the project would be pursued through a formal tender and fixed priced construction contract. To help guide the development process, a proponent would also engage an experienced development consultant. The role of the consultant would be to marshal the proponent through the development process, from initial concept and feasibility testing through to construction and move‐in. As part of this process, the proponent would also engage an architect to undertake project design. Once design drawings and construction documents were developed and approved, the project would be tendered for pricing, either by invitation or by public tender call. This would encourage competitive pricing for the project among qualified local contractors. This is a standard procurement approach and one that is commonly used where public funds are involved. Financial modelling assumptions have assumed a typical design and tender process with conventional construction techniques. As such, pro forma figures include development consultant, architect and contractor estimates. Only 12 units are anticipated under this initial concept but it would be prudent to design allowing for the potential expansion of the project in the future. In that regard, initial project siting should have regard for the requirements of any possible future expansion. The same holds true for the design and siting of the septic system. A wide range of septic technology exists and it would be advisable to design in the potential for future expandability for this system to help make most efficient use of the site area.
Servicing & technical considerations As noted, there are technical and service considerations associated with project development, many of which must be considered as part of the due diligence process prior to property acquisition and configuration. In the case of the proposed project, the most basic of these is the requirement for an Environmental Site Assessment (ESA). A phase 1 ESA would be undertaken as a screen to determine if there are any potential environmental issues associated with the property. This is primarily due to legislation around environmental liability which places obligations on property owners in regards to found contaminants. While no known environmental conditions exist for the property options identified through this study, if any were discovered through the phase 1 process, a determination would need to be made as to whether to proceed with the lands in question. The current financial pro forma has allowed for a phase 1 ESA but has not included any allowance for environmental remediation. A second consideration is soils conditions, particularly as they relate to septic system requirements. It is assumed that a class 4 septic system would be required for the project in order to meet legislated requirements. Given the vacant rural location of the proposed project, it is assumed that this system would be comprised of a distribution tank and filter bed. The size and design of such systems are based on anticipated flow calculations as well as the type/quality of the filter medium used. For that reason, the
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condition of the soil on site is a key factor in determining septic system requirements. As such, pro forma assumptions have allowed for soils testing that will assist in determining septic system requirements. These same studies could also be used in determining structural bearing requirements for footings and site works. Given the preference for a single storey slab‐on‐grade form with wood frame construction, these requirements are anticipated to be quite minor. It should be noted that emerging technologies are continuing to expand the range of available options to address septic requirements. In many instances, these options serve to enhance efficiency by reducing the area necessary for treatment/filter medium, thereby promoting more efficient use of land. While pro forma assumptions have allowed for a basic tank and distribution system, the result of soils analysis may identify other potential options for consideration. This would include consideration of options that could be expanded in the future to accommodate additional units. Given the siting restrictions for septic systems, it will be important to consider design options early in the development process to help inform site configuration and layout. A sizable allowance has been provided in the pro forma to account for septic design and installation. A third consideration for the project is potable water provision. Within the Village, piped municipal water is provided and would be available at the lot frontage on Stage Coach Road. Discussions with municipal representatives have indicated that there are no service system capacity constraints as it relates to connecting at this site. Where there is consideration for a possible future expansion to the project, associated water requirements should be factored into current design, especially where it may oblige upgrades to service pipe diameter. Hydro servicing would also need to be confirmed as part of the pre‐acquisition checklist. Through the site visit process, a visual check indicated proximity to hydro service for the preferred site. However, capacity and access points for service would need to be confirmed once siting and building location are confirmed. A modest connection fee has been assumed in the pro forma construction figures. Natural gas is not commonly available in Sydenham and as such, residential heating is commonly provided through electric, oil or propane sources (TBC). Renewable energy sources are also possible (e.g. solar, wind) but would have to be evaluated on a cost/benefit basis given the small scale of the project.
Land use approvals Land use approvals can play a significant role in project development, depending on prevailing rules and regulations. A review of local land use documents and discussions with officials confirmed that a number of land use approvals may be required to facilitate the proposed project at the preferred site. These include: Severance – the preferred site owned by SFCSC represents the major part of the project site but there is a desire to add an additional remnant piece of land to the rear of the site to help expand the development potential and accommodate the sizeable septic system. To add this remnant piece, a severance and lot consolidation would be required to create one homogenous parcel of about 2.6 acres. It is not anticipated that issues would be encountered in securing this approval.
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Official Plan Amendment (OPA) – the preferred site is designated “Settlement Area” under the Township’s Official Plan. While there are a broad range of permissions under this designation, the Plan goes on to denote Sydenham as Special Study Area and flag servicing provisions regarding minimum lot area and the ability of private septic systems to meet performance standards (e.g., minimum lot size, setbacks and separation distances). Depending on the application of these policies, an OPA may be required for the preferred site if servicing studies identify performance standard issues but these are not anticipated. If a site‐specific OPA is required, additional studies may need to be submitted in support of the OPA (e.g. soils/servicing report) above and beyond the application and planning rationale. Zoning Bylaw Amendment (ZBA) – under the current zoning bylaw, the preferred site and residual lands fall within the “Urban Residential ‐ First Density (UR‐1)” zone which does not allow for the proposed multi‐residential use. As such, a site‐specific ZBA would be required to re‐zone the lands to Urban Multiple Residential (UMR) to permit the development of a seniors multi‐unit housing facility. Through final building and septic system design, it may become evident that relief from other performance standards may be required and these could be handled as part of the same ZBA application. In order to expedite approvals and given the common issues involved, IF an OPA is required it would be prudent to make application for both the OPA and ZBA concurrently. Building Permit – As part of the construction process, a building permit would be required, ensuring that the project was designed in conformity with the Ontario Building Code. While this approval is typically straight forward, the confirmation of septic system design would be required before a permit could be issued. As such, the approach to servicing would have to be confirmed prior to application for a building permit. As a proponent of the seniors housing project and as the approval authority, it is not anticipated that the Township would have issues in supporting the land use approvals for the proposed project. That said, there are mandatory public consultation requirements associated with most of these approval processes and rights of public appeal on municipal decisions. Appeals of decisions could result in delays and add costs to overall project development. Provided that care was taken in addressing the concerns of neighbours through the planning process, it should be possible to secure necessary approvals. Each of the approvals processes also involve the remittance of fees which would add development costs to the project. Given the small scale of the project and given that the Township is a primary proponent of the project, it is assumed in pro forma modelling that application fees would be waived by the Township.
Sustainability An important lens for project development is the County’s sustainability principles, as articulated in “Directions for our Future: County of Frontenac Guide to Sustainability”. A stated objective of this business plan is to ensure that the proposed project concept supports sustainability objectives. In comparing the proposed project concept with “Directions for our Future”, it’s clear that a number of objectives are being promoted across a range of sustainability areas. These include:
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Land use planning/management – the efficient and orderly development of vacant lands in a compact footprint, allowing for future expandability as warranted Energy – the inclusion of energy efficient building features and conservation measures that can be adapted over time (e.g. low voltage lighting, occupancy sensors in common areas, etc.) Water – having safe, effective waste management systems (i.e. septic) that protect groundwater and features that promote conservation (e.g. low flow faucets, toilets) Solid waste management – reduction in solid waste through the use of recycling and composting Transportation – encouraging walkability and pedestrian access to the Village centre Housing – providing more diversity in housing choice, encouraging ‘aging in place’ for area residents and promoting quality, compact design
While pursuing sustainability practices is a prime consideration of the County, it is recognized that utilizing certain green and renewable energy technologies can be cost‐prohibitive for projects of a smaller scale. In these instances, the payback period can be unrealistic for the upfront investment required. For that reason, practical, modest cost features are encouraged to promote energy efficiency. These can include things like:
Solar orientation of the building Added insulation in roof and walls Efficient thermal windows and doors High efficiency HVAC systems
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FINANCIAL FEASIBILITY A key part of determining a project’s viability involves assessing its financial feasibility. At the initial concept phase, this feasibility is based on preliminary assumptions, recognizing that a project’s composition can change as the concept is refined. Throughout a project’s development, this feasibility is tested repeatedly at key milestones as estimates, costs and assumptions are refined. This process enables continued viability checks leading up to the point of construction and allows for decision‐making at key milestones as to whether to proceed. For the purposes of this business plan, financial feasibility has been based on preliminary estimates and assumptions that reflect the current project concept. It is fully expected that as this concept evolves, financial parameters would need to be reviewed and re‐tested to ensure continued viability. Two development scenarios have been created for the purposes stated above. Option 1 includes 6 one bedroom units funded through the Investment in Affordable Housing (IAH) capital funding program. In this scenario, rents for funded units are set at 80% of average market rent (AMR), receiving $150,000 per unit. The remaining 6 two bedroom unit rents are set at 90% AMR and do not receive capital funding from this program. The outcome of this scenario requires an estimated additional equity contribution of about $350,000 beyond the County commitment of $350,000 to make it financially feasible. Option 2 does not receive capital funding from the IAH program. Rent amounts for the one bedroom units are set at 100% AMR and for the two bedroom units are set at 90% AMR. The outcome of this scenario requires an estimated equity contribution of about $1,095,000 beyond the County commitment of $350,000 to make it financially feasible and to offset the absence of the capital funding mentioned above.
Project assumptions/parameters As an integral part of the business plan, the project must demonstrate financial self‐sufficiency in order to attract financing commitments. Therefore, the pro forma must clearly show that the operation of the project will generate sufficient revenues to cover debt service (i.e. mortgage), operating costs and funding of a capital reserve fund, all while achieving a positive debt service ratio. In order to achieve operational viability, capital costs and associated borrowing requirements must be minimized where possible. Contributions to offset capital costs are also used to reduce debt service costs for the project (i.e. mortgage payments) and in that regard, a number of funding sources have been identified to meet these costs. General assumptions utilized in the financial analysis of the project are as follows:
12 units total – 6 @ 1 bedroom (590 sf/unit) and 6 @ 2 bedroom (805 sf/unit)
Total buildable area – 10,636 sf (GFA), including modest amenity space
Building construction – single storey slab on grade, wood frame with standard sloped roof
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servicing – Township water and septic system
Procurement ‐ design/tender (stipulated price contract)
Financing – conventional mortgage via private lender with CMHC insurance
Contributions – fees waivers and capital contributions from County, land at nominal cost, one scenario assumes IAH funding for 6 units ($150,000 x 6 = $900,000) for option 1
Owner status – non‐profit housing corporation
Using these guiding assumptions, a financial plan for the proposed project has been established and tested for feasibility. The following sections identify the estimated capital and operating costs of the proposed project as well as the funding and capital equity requirements. In addition to detailed assumptions that are discussed in the sections following, summary pro forma tables are also provided in Appendix B that help to clarify the basis for the estimates used.
Estimated capital budget Capital costs are those costs associated with establishing the project and include land, construction and associated development costs. The table below is a general summary of the overall estimated capital costs for the proposed seniors housing project. Table 1 ‐ Estimated Capital Budget – Option 1 (6 units funded under IAH Program)
Capital Costs Soft Costs Building Consultant Costs Site Costs Legal and Organizational Costs Financing Costs Fees and Permits Contingency SOFT COSTS TOTAL
$294,828 $30,000 $65,000 $47,761 $103,889 $54,198 $596,178
Hard Costs Construction Costs Land Costs HARD COSTS TOTAL
$1,986,544 $20,100 $2,000,654
HST TOTAL CAPITAL COSTS
$318,807 $2,922,636
The total capital costs for the proposed project under this configuration are estimated to be $2,922,636. This total includes hard costs (land and construction) of $2,000,654 and soft costs of $596,178. It also includes an HST amount of $318,807. Details regarding component capital costs are identified below. Total capital costs would be offset by the financial resources and funding outlined in Section 5.4 below.
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Table 2 ‐ Estimated Capital Budget – Option 2 (no units funded under IAH Program)
Capital Costs Soft Costs Building Consultant Costs Site Costs Legal and Organizational Costs Financing Costs Fees and Permits Contingency SOFT COSTS TOTAL
$294,828 $30,000 $65,000 $58,612 $103,889 $55,283 $608,112
Hard Costs Construction Costs Land Costs HARD COSTS TOTAL
$1,986,544 $20,100 $2,006,654
HST TOTAL CAPITAL COSTS
$321,135 $2.935,900
The total capital costs for the proposed project under this configuration are estimated to be $2,935,900. This total includes hard costs (land and construction) of $2,006,654 and soft costs of $608,112. It also includes an HST amount of $321,135. Details regarding component capital costs are identified below. Total capital costs would be offset by the financial resources and funding outlined in Section 5.4 below.
Soft Costs Soft costs account for the many items/tasks necessary to design and bring the project to the point where construction can occur. Soft costs for the proposed project are assumed to include: Building consultant costs – includes architect and development consultant costs as well as associated disbursements Site‐related costs – includes site surveying, technical testing and a phase 1 environmental site assessment Legals and organizational expenses – includes legal and organizational expenses as well as capital audit, appraisal and property taxes during construction Financing costs – includes interest during construction as well as lender fees and mortgage insurance premiums (CMHC insured mortgage) Fees and permits – these include development application fees, development charges and permit fees ( offsets for these costs are identified in Section 5.4) Contingency ‐ a contingency of 10% has been included to account for unforeseen soft cost variances
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AGENDA ITEM #b)
Hard Costs Hard costs account for land, construction and associated costs for building and fitting up the project. For the proposed project, hard costs are assumed to include the following:
Construction costs – base costs are assumed at $160/sf (GFA) and reflect build‐on‐site construction
Site servicing – includes costs for water hook‐ups, installation of new septic bed and hydro connection fees
Appliances ‐ includes costs for in‐unit appliances (fridges/stoves) as well as washer/dryer facilities in the common area
Escalation and contingency – assumed at 10% of construction cost + site servicing costs to account for unforeseen costs/charges
Land – cost of $20,000 (based on key informants) + land transfer taxes
Harmonized Sales Tax – assumed as applicable for total capital costs
Estimated operating budget Once built, there are on‐going costs associated with operating and maintaining a project. The table below is a general summary of the overall estimated operating costs for the first year of operation for the proposed seniors housing project. Option 1 The total operating costs for the proposed project under this configuration are estimated to be $106,538. This total includes maintenance and administration costs, as well as mortgage costs and capital reserve contributions. HST payable and associated rebates have also been factored into these costs. Net revenues are projected at $115,992 and include rents, laundry revenues and vacancy loss. As a result, a net annual surplus of $9,001 is projected which translates into a debt coverage ratio of 1.20, which demonstrates financial feasibility. Details regarding component costs and revenues are identified in the section that follows. Option 2 The total operating costs for the proposed project under Option 2 are estimated to be $115,711. This total includes maintenance and administration costs, as well as mortgage costs and capital reserve contributions. HST payable and associated rebates have also been factored into these costs. Net revenues are projected at $126,084 and include rents, laundry revenues and vacancy loss. As a result, a net annual surplus of $10,314 is projected which translates into a debt coverage ratio of 1.20, which demonstrates financial feasibility. Details regarding component costs and revenues are identified in the section that follows.
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AGENDA ITEM #b)
Table 3 ‐ Estimated Year One Operating Budget – Option 1 (6 units funded under IAH Program)
Operating Budget Estimated Operating Revenue Rental Income from Tenants Laundry Revenue Vacancy Loss Total Operating Revenue Estimated Operating Expenses Maintenance – Wages, Materials and Services Heat & Water Electricity Property Management Fee Other Administrative Materials & Services Capital Replacement Reserves Contribution Insurance Property Taxes HST HST Rebate Mortgage Payments Total Operating Expenses Net Operating Income Debt Service Debt Coverage Ratio NET OPERATING PROFIT/LOSS
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$115,992 $3,120 ‐$3,573 $115,539 $15,000 $7,200 $1,920 $7,590 $3,000 $5,203 $2,400 $16,200 $3,456 ‐$0 $44,569 $106,538 $53,570 $44,569 1.20 $9,001
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AGENDA ITEM #b)
Table 4 ‐ Estimated Year One Operating Budget – Option 2 (no units funded under IAH Program)
Operating Budget Estimated Operating Revenue Rental Income from Tenants Laundry Revenue Vacancy Loss Total Operating Revenue Estimated Operating Expenses Maintenance – Wages, Materials and Services Heat & Water Electricity Property Management Fee Other Administrative Materials & Services Capital Replacement Reserves Contribution Insurance Property Taxes HST HST Rebate Mortgage Payments Total Operating Expenses Net Operating Income Debt Service Debt Coverage Ratio NET OPERATING PROFIT/LOSS
$126,864 $3,120 ‐$3,900 $126,084 $15,000 $7,200 $1,920 $7,570 $3,000 $5,203 $2,400 $18,000 $3,454 ‐$0 $63,747 $115,711 $62,338 $52,024 1.20 $10,314
Operating Revenue The operating revenue refers to the ongoing income for the project and would include such components as rental income, sundry income and funding contributions. The sources of revenue during the operational phase of this seniors housing development are expected to include only rental income from tenants and laundry revenue. Operating revenues in the first year are assumed to include the following:
Rental income – rents are based on rent levels for CMHC Zone 4 of the Kingston area
Laundry revenue ‐ laundry revenue generated from coin‐operated machines has been estimated at $3,120 annually
Vacancy loss – throughout a typical year, vacancies can occur due to the timing of move‐ins and move‐outs. An allowance of 3% of revenue has been used to account for this loss.
While not defined in first year budget figures, it is anticipated that the annual increase in tenant income will be based on the average rate of change of the Ontario Rent Increase Guideline over the last five years.
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AGENDA ITEM #b)
Operating Expenses Operating expenses include regular day‐to‐day costs for running the housing project, such as maintenance and services, utility costs, property taxes, landscaping, property management, insurance, administrative materials and services, HST and contributions to a long‐term capital replacement reserve fund. Estimates for operating expenses for the proposed project have been developed using data from projects of a similar nature. The total operating expenses for the proposed project are estimated for the first year to be $61,969 for option 1 and $63,747 for option 2 and are comprised of the following notable items:
Maintenance, administration, insurance and property management – Cost estimates are based on average per unit costs in actual projects and assume the use of contract or part time staff for necessary duties, given the small scale of the project.
Utilities – have been assumed for heat and hydro in common areas only as it is expected that heat and hydro for individual units would be paid directly by tenants.
Capital Replacement reserves – in accordance with CMHC mortgage insurance requirements and prudent practice, an annual contribution to the project’s capital reserve fund is assumed in an amount equal to 4% of total operating revenue. This reserve would be used to fund future lifecycle capital repair costs as needs arise.
Property taxes – property taxes are assumed at a reduced rate for funded units, equivalent to the single residential rate, which is consistent with recent projects developed under affordable housing programs. This would require a formal tax reduction by the Township and County. Property taxes for non‐funded units have been assumed at the multiple residential rate.
Harmonized Sales Tax – applicable HST has been assumed as well as an associated rebate. The rebate is equivalent to that permitted by non‐profit housing providers.
Mortgage payment – Option 1: An annual mortgage payment of $44,569 has been assumed based on the projected lending amount ($1,000,397), a 40‐year amortization period and an interest rate of 3.25%. Option 2: An annual mortgage payment of $52,024 has been assumed based on the projected lending amount ($1,167,735), a 40‐year amortization period and an interest rate of 3.25%.
Preferred rates and amortization are assumed as the mortgage would be CMHC insured but held with a private lender. Consideration could also be given for self‐financing by the Township or County as this could result in savings to the project for financing costs.
While not expressed in the first year operating budget, expenses for maintenance, other administrative materials and services, insurance and property taxes are assumed to increase by 2% per year. This is based on the 5 year average rate of increase in the Consumer Price Index. Other expenses, such as heat and hydro, are assumed to increase by 4.34% annually based on the five‐year average rate of increase in the Consumer Price Index for utilities. As part of the analysis, viability was also examined beyond the first year of operation. By applying the above inflationary adjustments, costs and revenues were escalated over a five year period. The analysis showed that the project remains viable over the analysis period.
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AGENDA ITEM #b)
Funding/capital requirements As an affordable housing project, there typically are contributions, fee relief and/or funding that is required in order to ensure affordability and maintain financial viability. These contributions provide an important revenue bridge between the lending capacity of the project and total costs. The table below provides a general summary of the sources of funding that have been assumed for the proposed seniors housing project. Table 5 ‐ Anticipated Project Contributions – Option 1 (6 units funded under IAH Program)
Contributions HST Rebate Fees and Charges Waived Capital Grant from the County IAH Funding Equity Contribution TOTAL CONTRIBUTIONS
$ 218,350 $103,889 $350,000 $900,000 $350,000 $1,922,239
Table 6 ‐ Anticipated Project Contributions – Option 2 (no units funded under IAH Program)
Contributions HST Rebate Fees and Charges Waived Capital Grant from the County IAH Funding Equity Contribution TOTAL CONTRIBUTIONS
$219,277 $103,889 $350,000 $0 $1,095,000 $1,768,165
Many of these contributions involve waivers of municipal fees/charges while others involve eligible tax rebates or cash contributions. Details regarding contributions are identified below.
HST Rebate – The project has been assumed as sponsored by a non‐profit entity and as such, the project would be entitled to receive an 82% PST rebate and a 50% GST rebate, resulting in a total HST rebate of $218,250 for development option 1 and $219,277 for option 2.
Wavier of Planning/Building Fees and Development Charges – As a County and Township‐supported project, it is assumed that municipal contributions in‐kind that enhance financial viability would be welcome. Accordingly, it has been assumed that municipal fees for required land use planning approvals, building permit fees and development charges, estimated in the order of $103,889, would be waived for both development options of the project.
Capital Grant from the County – In accordance with the terms of reference for the business plan and based on funding allocated for seniors housing by the County, it has been assumed that the project would receive a capital grant of $350,000 from the County of Frontenac
Land Value – Discussions with SFCSC indicate they may be willing to transfer ownership of their portion of the preferred site at a nominal cost.
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AGENDA ITEM #b)
Equity Contribution – Based on current estimates of total project costs, potential contributions and assumed debt service capacity, a projected capital shortfall of approximately $350,000 exists for development option 1. In order to achieve financial feasibility, an equity injection of this amount would be required to support the project. This equity could be secured in the form of fund raising, an additional cash contribution, program funding or some combination of the above. Without IAH funding, a larger equity contribution is required. For development option 2, a total equity contribution of $1,095,000 is required to make the project financially viable.
Financial viability The financial plan outlined above presents capital and operating budgets that result in a feasible and self‐ sustaining project based on current assumptions. Based on these estimates, total project costs would be in the order of $2.92M for development option 1 and $2.93M for option 2. Funding for development costs in option 1 would be provided through conventional financing of approximately $1,000,397, and a range of project contributions/rebates totaling $1,922,239. For option 2, these costs include $1,167,735 in mortgage costs and contributions and rebates totalling $1,768,165. Operationally, development option 1 is estimated to have an initial annual operating cost of $106,538 which would be offset by rents and revenues in the order of almost $115,539. This would result in a modest annual operating surplus of approximately $9,001. Calculations show that, based on this operating cost structure, the project would achieve a debt coverage ratio of 1.2, demonstrating that it is financially viable. Development option 2 is estimated to have an initial annual operating cost of $115,771 which would be offset by rents and revenues in the order of almost $126,084. This would result in a modest annual operating surplus of approximately $10,314. Calculations show that, based on this operating cost structure, the project would achieve a debt coverage ratio of 1.2, demonstrating that it is financially viable. That said, viability assumptions do rely on a number of contributions and fee relief to help defray project costs. These contributions would require the support of both the Township and the County in order to be realized. Going forward, it will be critical to re‐test assumptions as cost and revenue estimates are refined. This will help ensure that as the project concept evolves, options to maintain financial viability can be considered and applied as needed.
GOVERNANCE An important consideration in moving forward with the proposed project is understanding how it will be sponsored and operated on an on‐going basis. This has implications not only for basic operations and sustainability but can have an impact the financial assumptions for the project. Following is a review of key governance issues.
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AGENDA ITEM #b)
Project ownership/oversight The project sponsor – the owner – has a fundamental role in the development and long term success of the project. Typically for a project of this nature, an established non‐profit housing organization would be a prime sponsor. The experience they have in project operations and property management would be highly beneficial. The one local organization with experience in the ownership and management of affordable seniors rental housing is Loughborough Housing Corporation, which owns and operates two such buildings in Sydenham. Preliminary discussions have been held with the Corporation, who have indicated an interest in some form of involvement in the project. Their expertise and experience in property management of affordable seniors housing make them well suited to be retained as the property managers for the project. This should be strongly considered. Any other form of involvement in the ownership of the building would need to be discussed with their Board and senior staff. The Township of Frontenac has no previous experience in the ownership and operation of seniors housing of this nature and have expressed the view that, while they may be prepared to support the project in various ways, they do not believe they would be suited to be the owners or managers of the building. Similar views were expressed by South Frontenac Community Services Corporation, which is highly interested in providing supports and services to seniors in the building (especially given the proposed location adjacent to their Grace Centre), but has no experience or expertise in the ownership or management of seniors housing. One approach which may be suitable in view of the interest of all three organizations in the project would be the creation of a separate, legally distinct non‐profit housing corporation that has representation from all three organizations on its Board of Directors. This mix of representation on the Board of the corporation would facilitate arm’s length local oversight while at the same time compartmentalizing liability and risks associated with operations. The on‐going involvement of the Township would further help to provide stability and continuity for the project. The stability of this approach is seen as highly desirable in getting the project up and running.
Planned approach to management As noted above, Loughborough Housing Corporation possesses the experience and expertise to undertake the property management and maintenance of a building of this nature. Given the modest size of the project, this involvement would be on a part‐time basis. They could be retained on this basis for an annual property management fee which would be negotiated with the Board of Directors.
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AGENDA ITEM #b)
MOVING FORWARD Summary of preferred concept Based on demonstrated needs, community consultation and business case analysis, the concept for a small scale seniors housing project situated in Sydenham has been developed. This concept has been tested and found to be viable, subject to the assumptions outlined in this report. Based on the proposed concept, the seniors housing project would:
Be modest in scale – 12 self‐contained apartment units (6 @ one bedroom, 6 @ two bedroom) plus amenity space for a total buildable area of 10,600 sf (GFA)
Include basic amenity space ‐ laundry facilities (1 pair) and a small indoor common area for gathering/socialization would be provided
Accommodate seniors mobility needs – providing a safe, indoor access to apartment units while incorporating visitability and accessibility throughout units and common spaces
Support basic affordability – all units would be rental and offered at or below average market rent level. Rents for the one bedroom units could be lowered to 80% of average market rent if IAH funding is obtained from the City of Kingston.
Be procured as new construction – this approach would enable a single storey slab‐on‐grade building, with a cost‐effective double‐loaded main corridor, wood frame structure and standard sloped roof
Incorporate practical sustainability features that promote energy efficiency
Be situated adjacent to the Grace Centre on land currently owned by South Frontenac Community Services Corporation, plus an adjacent parcel
Be procured through a formal design/tender process (stipulated price contract)
Be financed using a conventional mortgage that is CMHC‐insured, as well as an equity contribution of $350,000 from the County and an additional equity contribution in the order of $350,000 for the IAH‐funded option and $1,095,000 in the non‐funded option
Be owned by a newly constituted non‐profit housing corporation
Be managed by Loughborough Housing Corporation, should they be agreeable to take on that role.
As a result of the financial analysis, it has been determined that the project would be viable based on preliminary cost estimates, anticipated revenues and assumed contributions. While a series of land use approvals are required to permit the intended use, there do not appear to be any significant barriers to securing these approvals. Prior to acquiring the project site, due diligence testing would be required to ensure that no environmental concerns or project servicing impediments exist. Based on an initial scan of current conditions and background information, no impediments are anticipated. Viable project governance options exist, the most plausible of which would see the creation of a new non‐profit corporation which would legally own and operate the project.
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AGENDA ITEM #b)
Process/critical path While preliminary feasibility of the project concept has been demonstrated, there are a number of steps necessary to advance the project. Moving forward through these steps, there are a number of decision points where the plausibility of advancing would need to be reconfirmed as the project concept is refined. Initially, this would involve steps confirming the parameters for moving forward from the initial feasibility testing, including the following tasks:
Confirm decision to move forward – in addition to endorsing the business plan, this task would involve securing development consulting expertise to advance the project
Confirm decisions with regards governance/oversight – this would involve defining the Township role in the project going forward, as well as pursuing incorporation of the sponsor entity (if this approach is confirmed). Discussions would be required with the Boards of Loughborough Housing Corporation and South Frontenac Community Services Corporation about potential representation on the Board of Directors.
Enter into a conditional agreement re property – this would involve meeting the South Frontenac Community Services Corporation to develop an agreement to lease or purchase the preferred property and the adjacent parcel. This agreement would be conditional on all of the requirements of the project being met
Enter into discussions with Loughborough Housing Corporation about property management – this would involve meeting with Loughborough Housing Corporation to determine their interest in assuming the role of property managers of the building
Confirm initial funding commitments – to enable project planning, County and Township contributions would need to be confirmed. Access to financing would also need to be confirmed on a preliminary basis as well as the funding/resources necessary to undertake the next stage of pre‐development work. The City of Kingston would need to be approached regarding the availability of IAH funding.
With these activities completed, a decision regarding proceeding/not would be made in order to move forward to the pre‐development stage. Under this phase, the following activities would be required to advance development of the project to the point of construction commitment:
Assemble technical/design team – this would involve identifying or recruiting development team members, including a project architect and technical testing specialists
Formalize project design – preliminary design drawings would be developed for comment and subsequent refinement in accordance with the finalized project concept
Complete due diligence for land – in order to finalize site acquisition, environmental and technical testing would need to be conducted to formally confirm that no development constraints existed
Confirm specific service requirements – having confirmed technical parameters and preliminary design, final servicing designs would be developed for septic systems and utilities into the site
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Re‐confirm costs, funding and mortgage financing – in addition to updated pro forma figures, a conditional financing commitment would be secured to confirm financial parameters prior to tendering
With these activities completed, a decision regarding proceeding/not would be made in order to move forward to the construction stage. Under this phase, the following activities would be required:
Prepare contract documents for bidding – final design drawings and accompanying specification would be developed for tendering purposes
Tendering for construction pricing – contract documents would be tendered for pricing to qualified bidders and results would be evaluated against budgeted construction costs. Both conventional contractors and modular contractors should be invited.
Reconfirm financing and project commitment – final budget adjustments would be made based on tendered costs to secure final financing approvals, thereby enabling owner approval for project commitment to proceed with construction
Negotiate construction contract and commence construction – with approval in hand, a standard construction contract would be executed with the selected bidder
Construction monitoring – through the construction process, regular progress reviews would be undertaken to track progress against the building schedule as well as costs versus budget.
Pre‐occupancy planning – during the construction phase, planning would be undertaken in order to prepare for tenant move‐in and project operations
Post‐occupancy wrap‐up – with the conclusion of construction and the subsequent certification for project occupancy, capital cost reconciliation, HST self‐assessment, warranty inspections, etc. would be completed in order to close out the capital development phase of the project
Key elements & critical success factors As noted, there are a number of tasks require to move the project forward through successive stages of development. Each stage is punctuated with a decision point on whether to proceed or not to the next stage. While this progressive process lays out a stepwise approach to move from initial viability through to construction, there are some fundamental success factors that are key ingredients for realizing the proposed project. Having these elements in place goes a long way to supporting project viability. Key elements required for a successful project include:
Allocating sufficient resources – having the funds/resources to undertake pre‐development work and advance through construction is essential to the success of the project
Having a clear governance/accountability framework – during development and after occupancy, having a clear and straight‐forward decision‐making structure for oversight
Acquiring strong technical expertise – through the development process, a range of technical issues must be addressed/overcome and having an experienced team is key to staying on track
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Firming up an agreement for the preferred property – a fundamental project requirement is reaching agreement on the preferred property, which is currently owned by South Frontenac Community Services Corporation and its neighbour
Securing access to financing – securing financing is a critical component to meeting the financial obligations of development
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AGENDA ITEM #b)
APPENDIX ‘A’ – NEEDS PROFILE The “Seniors Community Housing Pilot Project Study” completed for the County in 2012 contained a comprehensive profile of housing and need indicators for the County and its constituent townships. This profile was based on data available at the time. Since completion of the pilot study, additional Census and market data have been released that serve to provide a more current picture of local conditions. This appendix provides an abbreviated update of the original profile, highlighting key housing and need indicators at the County level. Seniors‐based indicators are also examined at the County level and summarized as part of this update. As a result, relevant local conditions in the Frontenac Islands have been highlighted in the body of the report with regard for the broader analysis provided in this appendix.
County-wide Housing Needs and Market Indicators Demographic Profile Frontenac County The County of Frontenac is rural in character, covering an expansive area of some 4,000 square kilometres. The County has a permanent population of just over 26,000, complimented by a substantial number of seasonal residents who cottage throughout the Frontenacs. The county is comprised of four townships ‐ North, Central and South Frontenac and Frontenac Islands. The majority of dwellings in the County are single‐detached homes, located in one of the many small villages and hamlets or scattered throughout the extensive rural area. As a result, the land use pattern for the County is very low density in nature. Like other jurisdictions in Ontario, the County is experiencing aging in its population. In fact, the share of the senior population in the County of Frontenac is actually increasing more rapidly than that of the province as a whole. General Population Trends In 2011, the County of Frontenac had a permanent population of 26,375. The majority of this population (68.7%) lives in South Frontenac. Central Frontenac accounts for 17.3% of the population while the rest of the population is divided between Frontenac Islands (7.1%) and North Frontenac (7.0%). Table 7. Population Counts, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Geography Frontenac County Frontenac Islands South Frontenac Central Frontenac North Frontenac
1996 23,760 1,661 15,711 4,615 1,773
2001 24,411 1,638 16,415 4,557 1,801
2006 26,658 1,862 18,227 4,665 1,904
2011 26,375 1,864 18,113 4,556 1,842
2016 28,605 2,120 19,315 5,120 2,050
2021 29,895 2,225 20,250 5,280 2,140
2026 30,900 2,295 21,025 5,380 2,200
2031 31,705 2,365 21,580 5,530 2,230
2036 32,400 2,435 22,050 5,650 2,265
Source: Statistics Canada 1996‐2011 Community and Census Profiles; Watson & Associates, Population, Housing and Employment Projections for the Frontenacs, June 2014
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AGENDA ITEM #b)
Over the last 15 years the population of the County has increased by 11.0% overall, growing from a population of 23,760 in 1996. From 2006 to 2011, the County’s population declined 1.1%. While the County has experienced a slight decline recently, it is still important to note that the County’s population is expected to grow and that based on projections by Watson and Associates undertaken in 2014, the population is estimated to increase by some 6,000 people from 2011 to 2036 (23%). Locationally, the population distribution is expected to remain the same, with 68.1% still expected to reside in South Frontenac in 2036 (compared to 68.7% in 2011). The other Townships are also expected to maintain their proportions, with Frontenac Islands’ share rising slightly from 7.1% in 2011 to 7.5% in 2036. Figure 5. Population Growth and Decline Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Population by Age When broken down by age range, Ministry of Finance data shows that the largest age group in the County of Frontenac (including the City of Kingston)1 in 2011 was persons aged under 25 years, comprising nearly a third (29.5%) of the population. The number of persons in this age group is expected to increase by 4,770 by 2036 (10.8%), but the age group’s proportion will drop to 24.7% of the total population. All age groups are expected to increase in real numbers from 2011 to 2036, but senior age groups will see the most sizable increases, with the 65 to 74 year old age group increasing by over 10,000 persons (76.0% increase) and the 75 years and older group more than doubling (17,000+ persons or a 144.8% increase). This compares to a 32.4% increase for the population as a whole.
1
Ministry of Finance figures do not disaggregate data for the County and City of Kingston. As such, figures are reported based on County + City totals.
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AGENDA ITEM #b)
Also expected to experience notable growth us the 35 to 44 year age group, indicating there will be more persons of working age in the County in a couple of decades. This could lead to an even greater increase in seniors as this population group ages in the future. Table 8. Population Counts and Trends by Age, Frontenac County (including the City of Kingston), 2011 and 2036
2011
2036
% Change 2011‐2036
Age
%
% % 0 ‐ 24 44,120 29.5% 48,890 24.7% 10.8% 25 ‐ 34 19,125 12.8% 23,910 12.1% 25.0% 35 ‐ 44 18,115 12.1% 26,360 13.3% 45.5% 45 ‐ 54 23,305 15.6% 26,380 13.3% 13.2% 55 ‐ 64 20,155 13.5% 20,720 10.5% 2.8% 65 ‐ 74 13,175 8.8% 23,190 11.7% 76.0% 75+ 11,745 7.8% 28,750 14.5% 144.8% TOTAL 149,740 100.0% 198,200 100.0% 32.4% Source: Statistics Canada, Community Profiles, 2011; Ontario Ministry of Finance, Population Projections Update, 2014
Households In terms of household growth, the number of households in the County has grown 26.0% from 1996 to 2011, from 8,650 households to 10,900 in 2011. This rate of household growth is notably higher than the population growth rate during the same time period, which is due in part to trending towards smaller, more diverse household types. This is reinforced by the fact that even though the County’s population declined 1.1% from 2006 to 2011, households grew 6.2%. Like population trends, the largest proportion of households is situated in South Frontenac, with 66.2% of households. Another 17.5% are located in Central Frontenac with just 8.4% and 7.8% in North Frontenac and Frontenac Islands, respectively. It is projected that households will continue to grow at similar rates over the next 20 years, with an expected increase of 26.6% from 2011 to 2036 for the County. Despite this overall trend, the rate of household growth will be slower in South Frontenac and Frontenac Islands, and faster in North Frontenac and especially in Central Frontenac. Geographical distribution of households amongst the Townships is also expected to remain steady.
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AGENDA ITEM #b)
Figure 6. Household Growth Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 1996‐2036
Tenure Along with population and household trends, tenure is also a key indicator for tracking housing trends. Ownership continues to be very prominent throughout the County. As can be seen in the figure below, the share of households with ownership tenure has been on the rise, with the proportion of owners rising from 85.9% in 1996 to 91.3% in 2011. In contrast, there was a decline in the proportion of renter households during this same period to 8.7% in 2011. In real terms, the number of owners rose 33.0% during this time period, while the number of actual renters declined 23.4%, in 2011, indicating that. Figure 7. Tenure Trends, County of Frontenac, 1996 and 2011
Income An important element in determining housing need is the economic capacity of a household. By examining income trends and characteristics, it is possible to better identify the affordability limitations of households and the impact these have on the housing options available to them.
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In 2010, the median individual income in the County of Frontenac (including Kingston2) was $31,814, slightly higher than the Provincial median income of $30,526. However, the County’s 2010 average individual income ($40,983) was lower than the Provincial average ($42,264). Despite this, incomes in the County are rising at rate faster than the Province. The County’s average individual income level increased by 36.2% from 2000, when it was $40,091, a higher rate of increase than that seen for the Province (28.6%). Similarly, median individual income rose 38.6% for the County from 2000 to 2010, compared to just a 23.0% increase for the Province. Figure 8. Median and Average Individual Income, County of Frontenac (including City of Kingston), 2000 and 2010
This trend towards higher average incomes is evident in changes for those with low or moderate incomes. As can be seen in the figure below, the proportion of individuals earning less than $40,000/year has decreased significantly since 2000 – in particular, those earning less than $10,000/year have dropped from 23.8% in proportion to 14.9% and those earning $10,000 to $19,999 have dropped from 22.0% of the population to 16.1%. On the other hand, those earning $60,000 or more have experienced notable increases, with this group’s proportion growing from 8.5% in 2000 to 21.8% in 2010. While upward trending in incomes is encouraging, the fact remains that nearly half (44.3%) of the County’s population earns less than $30,000/year as an individual.
2
NHS income data for 2010 does not disaggregate figures for the County and the City of Kingston. As such, average and median income figures are reported which include both the County and the City.
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Figure 9. Individual Income Ranges, County of Frontenac (including City of Kingston), 2000 and 2010
In terms of household income, the chart below shows that median and average household incomes have been rising at a rate similar to those of individuals. For the County as a whole (including Kingston3), median household income rose 32.1% from 2000 to 2010 and average household income 35.8%. In comparison, median household income for the Province rose 23.7% to reach $66,358 in 2010, and average household income 28.3% to reach $85,772. Like individual incomes, average and median household incomes for the Province are higher than the County, but growth in household incomes is occurring at a faster rate in the County. Figure 10. Median and Average Household Income, County of Frontenac (including City of Kingston), 2000 and 2010
3
As previously noted, NHS income data for 2010 agglomerates figures for the County and the City of Kingston.
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Housing Profile Housing supply is typically measured based on the availability of housing options for households within a community. These housing options are then compared to housing demand to identify any gaps that may exist. However, gaps in the market are not simply borne out of demand; they can also be driven by factors which limit choices. Generally speaking, households with higher incomes and the ability to live independently are able to exercise this choice in the housing market. By contrast, those with lower incomes and higher care requirements will have much fewer choices. The private market traditionally supplies the majority of housing in most communities and this is certainly the case in the County of Frontenac. Dwellings The majority of dwellings in the County of Frontenac are single‐detached dwellings (95.3% or 9,895 dwellings). The remaining 4.7% (490 dwellings) are comprised of low‐rise apartment building units (1.8%), movable dwellings (0.9%), detached duplex apartment units (0.9%), semi‐detached dwellings (0.8%), as well as a few row houses and other single‐attached dwellings. These proportions have not changed much since 2001 when there were 8,615 single‐detached dwellings and which comprised 93.9% of the dwelling stock. However, the number and proportion of semi‐detached homes did drop by almost half from 2001 to 2011, and the proportion of low‐rise apartment building units and movable dwellings dropped slightly as well. In real terms, South Frontenac and Central Frontenac have a slightly more diverse range of housing types as compared to North Frontenac and Frontenac Islands where dwelling types are quite limited. This tendency towards low density development in the County is typical for many rural communities. Table 9. Dwellings by Type, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2011
Frontenac County
% Single‐detached house Semi‐detached house Row house Apartment, detached duplex Apartment, building that has five or more storeys Apartment, building that has fewer than five storeys Other single‐attached house Movable dwelling
Frontenac Islands
%
South Frontenac
%
Central Frontenac
%
North Frontenac
%
9,895 80 30 90
95.3% 0.8% 0.3% 0.9%
760 5 0 10
96.8% 0.6% 0.0% 1.3%
6475 50 15 65
95.2% 0.7% 0.2% 1.0%
1775 20 10 15
93.9% 1.1% 0.5% 0.8%
885 5 5 0
97.8% 0.6% 0.6% 0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
185 10 95
1.8% 0.1% 0.9%
10 0 0
1.3% 0.0% 0.0%
140 5 55
2.1% 0.1% 0.8%
35 5 30
1.9% 0.3% 1.6%
0 0 10
0.0% 0.0% 1.1%
TOTAL 10,385 100.0% Source: Statistics Canada, Census Profile, 2011
785
100.0%
6,805
100.0%
1,890
100.0%
905
100.0%
Seasonal Dwellings Seasonal dwellings – those used on a non‐permanent basis – have traditionally accounted for roughly 40% of the County’s total dwellings and are located throughout the County. However, the percentage of seasonal households in the County of Frontenac declined from 42% in 2001 to 37% in 2011, to reach 6,068
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dwellings. All of the townships experienced a decrease in seasonal households during this time period, due in part to conversion to permanent dwellings. In contrast, by 2036 the proportion of seasonal dwellings in the County as a whole is expected to rise slightly to 38% or 8,465 dwellings due to new construction, and this growth is expected to be primarily in South Frontenac and North Frontenac. The Frontenacs are becoming more attractive to empty nesters and seniors (within the 55 to 74 age range) and a growing proportion of this group is choosing to retire / semi‐retire at their seasonal properties, converting these to permanent residences. As a result, more recent projections suggest some upswing in the conversion of seasonal dwellings, albeit at a minor rate. According to Watson and Associates (2011), this trend is expected to continue over the next few years with absorption of converted stock. Over the next 25 years, the influence of seasonal dwelling conversion on housing development will have significant impacts within the County, as it will increase the permanent housing stock if conversions continue to occur in favour of development of permanent dwellings. Figure 11. Seasonal Dwelling Trends, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2001‐2036
Age and Condition of Dwellings According to 2011 Census data, 28.4% of the County’s dwellings were built prior to 1960, compared to just 11.6% built after 2000, indicating that the County has a somewhat older housing stock. Nearly a third (28.9%) of the dwellings were built between 1961 and 1980. Despite the aging profile of the stock, housing in the County is in reasonably good shape with just 7.8% (805 dwellings) requiring major repairs in 2011, compared to 8.8% in 2001. Residential Development Potential The Provincial Policy Statement as well as the Official Plans for the Townships within the County of Frontenac encourage new residential development in designated settlement areas. A review conducted by Watson and Associates (2014) showed that as of June 2014, the County had a total of 2,569 hectares of vacant land designated as settlement areas in the Township Official plans.
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Table 10. Overview of Vacant Lands Designated as Settlement Areas by Municipality
North Frontenac Central Frontenac South Frontenac Frontenac Islands Total Frontenac County
Vacant Designated Land (Hectare) 647 411 1,498 13
% of Total Vacant Land within Settlement Areas 25.2% 16.0% 58.3% 0.5%
2,569
100.0%
Source: Watson & Associates (June 2014). Population, Housing and Employment Projections for the Frontenacs
The above table shows that the majority of this land (58.3%) is located in South Frontenac while the smallest proportion of vacant land is located in the Township of Frontenac Islands (0.5%). The availability of substantial vacant lands in South Frontenac correlates with population and dwelling counts that show most growth in the County has and will continue to occur there. Ownership Housing Market As mentioned earlier, 91.3%, or 9,495 dwellings in the County, were owned as of 2011, up from 7,140 dwellings in 1996. This indicates that ownership housing is not only by far the most dominant form of tenure, but the County’s preference for ownership housing is growing. Price is also an important consideration in the ownership market. According to Statistics Canada Census data for 2011 the County’s average dwelling value for 2010 was $304,496, which is an increase of 95.7% since 2000, when the average dwelling value was $155,557. This substantial increase is mainly due to the production of larger homes, seasonal conversions and sustained lower interest rates which foster greater buying power for owners. Mortgage status can also provide important information on a housing market. In 2011, 55.8% of the County’s owner households, or 5,067 households, had a mortgage, indicating that a large proportion of the County’s owners (about 45%) do not have a mortgage and have a substantial amount of accumulated equity in their homes. Rental Housing Market As mentioned earlier, just 8.7% of dwellings in the County (800 units), were rented in 2011 and the number of rental dwellings has actually gone down. Since 1996, rental units have decreasing by 275 units (23%) in the County. This suggests that there is a very limited supply within the County and that the supply is diminishing. It should be noted that in 2011, 14.4% of renter households, or 128 households, were in subsidized housing in the County, indicating that a large proportion of renter households struggle to meet housing costs. These trends show that there is a very limited supply of affordable rental housing in the County. Average rents are an important consideration in the rental market. According to Statistics Canada Census data for 2011 the County’s average monthly shelter cost for rented dwellings in 2010 was $895, which is
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an increase of 32.6% since 2000, when the average monthly shelter cost for rented dwellings was $675. It is presumed that rising utility costs during this period would have had some influence on these increases. Average market rents for the entire County of Frontenac are not reported by CMHC but rents are monitored for the Kingston CMA which includes South Frontenac, Frontenac Islands and Loyalist Township (Zone 4 within the CMA). In the last 9 years, overall average market rents in the CMA have increased by some 34.4%, from $751 in 2005 to $1,009 in 2014. Average market rents vary by unit size, tending to increase as the size of the unit increases. In 2014, average market rents for the Kingston CMA were $662 for bachelor units, $888 for one bedroom units, $1,070 for two bedroom units and $1,411 for 3 bedroom units. Rents in Zone 4 of the CMA tend to be higher than the CMA averages. This was especially true in 2014 for one and two‐bedroom units in Zone 4 which were the highest in the CMA at $963 and $1,271 respectively. Figure 12. Overall Average Rents, Kingston CMA and Zones, 2005 and 2014
Overall, vacancy rates for rental units in the Kingston CMA decreased from 2.1% in 2005 to 1.9% in 2014 for a total of 13,092 units in 2014, compared to 12,381 units in 2006. A healthy vacancy rate is generally considered at about 3.0% so a rate of 1.9% shows a significant tightening of the rental market and when considered with the limited options available, explains the higher average rents being commanded. The vacancy rate of 2.4% for Zone 4 was higher than the Kingston CMA overall in 2014 and up from just 1.3% in 2005. While the rise in vacancy rates could suggest there is more housing stock to meet demand in 2014 compared to nearly a decade ago, vacancy rates are still below the 3.0% level that is considered a balanced market , indicating a slight undersupply of units. While the rental data does not provide a complete picture for the County of Frontenac, it is clear that there is a limited supply of rental housing and that demand for units continues to be strong, based on lower vacancy rates and overall trends. Spending on Housing and Shelter Costs As a standard measure of affordability, where households spend more than 30% of their gross income on shelter costs, they are considered to have an affordability problem. In 2010, 15.7% of owners in the County (1,426 households) were spending more than 30% of their income on housing costs, compared to 16.5% in
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2000 (1,305 households). While the real number of owners spending more than 30% has increased, their proportion has actually decreased. This is in contrast to renters where both the number and proportion of renters spending more than 30% of their income on housing costs increased from 2000 to 2010. In 2010, 47.9% of renter households (426) were spending more than 30% of their income on housing costs, compared to 38.7% of renter households in (370). This data indicates that renters are increasingly struggling with housing costs in the County due to limited supply and increasing rents.
Profile of Seniors Indicators Population Trends Data on the age of the population shows that in 2011, seniors comprised just over 17% of the population in the County and just over 21% of the population in Frontenac Islands. Both areas had similar increases in the number of seniors, 49.8% for Frontenac County and 43.6% for Frontenac Islands. Table 11. Senior Population, Frontenac County and Frontenac Islands, 1996 and 2011
2001
Frontenac County Frontenac Islands
2011
Total
Seniors 65+
Seniors Proportion
23,760 1,640
3,050 275
12.8% 16.8%
Total
Seniors 65+
Seniors Proportion
% Change 1996‐2011
26,375 1,864
4,570 395
17.3% 21.2%
49.8% 43.6%
Source: Statistics Canada, Census and Community Profiles, 1996 and 2011
When considering sub‐area demographics, it is clear that seniors are not evenly distributed within the County. In real numbers, those 65+ are most prominent in South Frontenac, given the more populace nature of this Township. Proportionally though, seniors make up a much larger share of the current population in both Central Frontenac and Frontenac Islands, and especially North Frontenac where seniors account for one out of every three persons. Table 12. Seniors as a Share of Population, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac, 2011
Seniors (65+) as share of population
Total Seniors Pop
Total Pop
Frontenac Islands 395 1,864 South Frontenac 2,535 18,113 Central Frontenac 1,040 4,556 North Frontenac 600 1,842 Frontenac County 4,570 26,375 Source: Statistics Canada, Census Profile, 2011
Seniors as % of Total 21.2% 14.0% 22.8% 32.6% 17.3%
The Ontario Ministry of Finance produces an updated set of population projections every year to provide planners and researchers with a demographic outlook reflecting the most up‐to‐date trends and historical
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data. Based on Ontario Ministry of Finance population projections, the following table illustrates that between 2012 and 2036, Frontenac County’s (including the City of Kingston) senior population will rise 94.5%, compared to an overall population increase of just 27.0%. The proportion of seniors will also increase from 17.1% in 2012 to 26.2% in 2036. Table 13. Overall Population and Senior Growth Trends, Frontenac County, 2012 and 2036
2012
% Change 2012‐ 2036
2036
Frontenac County (inc. Kingston) 156,060 198,190 27.0% Seniors 65+ 26,700 51,940 94.5% Proportion 17.1% 26.2% Source: Ontario Ministry of Finance, Population Projections Update, 2014
The discussion above shows that the County’s population will be aging significantly, and by 2036 a quarter of the total population will be a senior. This suggests that there will be a sustained need for seniors housing options as the proportion of the senior population increases. This will be especially true for the population aged 75 years and older, which will increase 144.8% from 2011 to 2036, compared to a 76% increase for those aged 65 to 74 years. Households Household structure is another factor to be considered in assessing housing needs. Given the population and households characteristics of the County, it is not surprising that a high proportion of households, including senior households, are family‐based, with related individuals in either a marital, common‐law or lone‐parent structure. Non‐family households – those comprised of individuals living alone or together – make up a much smaller share of all households. Table 14. Household Living Arrangements for Seniors in Private Households, Frontenac County and the Townships of Frontenac Islands, South Frontenac, Central Frontenac and North Frontenac 2011
Frontenac County
% Number of persons not in census families aged 65 years and over Living with relatives Living with non‐relatives only Living alone Number of census family persons aged 65 years and over TOTAL
Frontenac Islands
%
South Frontenac
%
Central Frontenac
%
North Frontenac
%
1,080 160 70 850
23.9% 14.8% 6.5% 78.7%
80 10 0 65
20.3% 12.5% 0.0% 81.3%
575 115 40 420
22.8% 20.0% 7.0% 73.0%
245 30 20 195
24.3% 12.2% 8.2% 79.6%
180 5 10 170
3,435
76.1%
315
79.7%
1,945
77.2%
765
75.7%
410
69.5%
4,515 100.0% 395 100.0% 2,520 100.0% 1,010 100.0% Source: Statistics Canada, Census and Community Profiles, 2001 and 2011
590
100.0%
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The majority of seniors in the County reside in a family structure (76.1%). The majority of the County seniors’ not in a census family (78.7% of seniors not in a census family) were living alone. Proportions are similar across the Townships, and especially for Frontenac Islands. These proportions have not changed notably since 2001 although the proportion of seniors in census family structures has risen slightly for all areas. For the County as a whole, the actual number of seniors in census families has increased as compared to seniors not in census families during this period (40.5% versus 20.0%). Tenure As shown in the figure below, the proportion of ownership tenure has been increasing for all senior and soon‐to‐be senior age groups in the County of Frontenac, and ownership tenure is very prominent among these age groups. Figure 13. Proportion of Households Aged 55+ by Tenure, County of Frontenac, 1996 and 2011
While the tendency towards ownership in senior households is very clear, the increasing ownership proportion in the 75+ age groups in particular suggests that more seniors are staying in their own homes longer as they age. This may be due in part to a lack of other housing alternatives for seniors in the community. This trend may also be influenced by the conversion of seasonal dwellings to permanent dwellings by in‐migrating seniors as they choose to retire and make the County their permanent homes. For senior households who have paid off their mortgage, owning their home provides them with housing stability and built‐up equity. Accessing this equity can be an important factor because while housing costs are reduced with mortgage pay‐down, so too are incomes for retired individuals. Given the typically lower income of seniors in the County, the current pricing and the limited supply of units, rental housing remains a viable but limited option for seniors and it is not always affordable. Increasing the supply of rental units at affordable rates would assist in creating more housing choices for seniors in the County. Income Assistance There are a number of pension benefits available to Canadians when they reach age 65. These include the Old Age Security (OAS) pension, which is a monthly benefit, and the Guaranteed Income Supplement (GIS), which is available to low‐income seniors receiving OAS benefits. GIS benefits vary from $506.86/month to
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$764/month depending on if the recipient is single or has a spouse/partner that receives or does not receive OAS pension. In addition, the Guaranteed Annual Income System (GAINS) provides monthly payments to eligible Ontario seniors on top of the OAS and GIS payments. The amount of GAINS benefit is directly linked to the GIS monthly payments and ranges from $2.50 to $83 per month. The following table shows the maximum monthly benefit that a senior living in Ontario can receive. This shows that if a single senior did not have a private pension, they would receive a maximum of $16,934 a year or $1,411 a month. Table 15. Maximum Monthly Benefits for Benefit Period October 1, 2014 to December 31, 2014
Benefit Program OAS GIS GAINS
Per Month $563.74 $764.40 $83.00
Single Per Year $6,764.88 $9,172.80 $996.00
Qualified Couple Per Month Per Year $1,127.48 $13,529.76 $1,013.72 $12,164.64 $166.00 $1,992.00
$1,411.14
$16,933.68
$2,307.20
Total
$27,686.40
Source: Ontario Ministry of Finance (2014). GAINS Benefit Rates
The maximum annual income for a person to receive OAS is $114,815, and for GIS it is $17,088. For a couple where one person receives OAS it is $22,650 and for a couple that does not receive OAS it is $40,944. Another benefit for seniors is the Canada Pension Plan (CPP) which provides a monthly taxable benefit to retired seniors who worked and contributed to the plan. Beneficiaries have to be at least 65 years old or between age 60 and 65 and meet the requirements of the work cessation test. The CPP pension is designed to replace about 25% of a senior’s average pre‐retirement employment income. The following table provides a summary of the CPP payment rates and shows that a senior would receive an average of $7,284 a year and a maximum of $12,456 a year when they retire. Table 16. 2014 Canada Pension Plan Rates
Average Benefit (June 2011)
Maximum Amount
Retirement (at age 65)
$607.33
$1,038.33
Post Retirement Benefit (at age 65)
$9.55
$25.96
Disability
$901.40
$1,236.35
Survivor ‐ younger than 65
$409.26
$567.91
Survivor ‐ 65 and older
$311.19
$623.00
Children of disabled contributors
$230.72
$230.72
Type of Benefit
Children of deceased contributors
$230.72
$230.72
Death (maximum one‐time payment)
$2,294.07
$2,500.00
Combined benefits Survivor / retirement (at age 65)
$798.82
$1,038.33
Survivor / disability
$1,009.71
$1,236.35
Source: Service Canada, Canada Pension Plan Payment Rates, January‐December 2014
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The Ontario Disability Support Program is an income assistance program that provides financial assistance to low‐income persons with disabilities. The amount of Income Support received depends on family size, income, assets and housing costs. The table below provides the most recent ODSP monthly shelter allowance rates. Table 17. Ontario Disability Support Program Maximum Monthly Shelter Allowances, 2013
Benefit Unit Size 1 2 3 4 5 6 or more
Maximum Monthly Shelter Allowance $479 $753 $816 $886 $956 $990
Source: Ontario Ministry of Community and Social Services, Shelter Calculation, 2013
ODSP benefits are not automatically terminated once a person reaches the age of 65. Seniors who do not receive Old Age Security (OAS) are eligible for ODSP. Seniors who receive OAS may still be able to keep their ODSP benefits if they are financially eligible, that is, if their income is less than what they would receive from ODSP. Most seniors would have a higher income than what they would receive from ODSP due to the combined benefits from OAS, GIS, and GAINS but some seniors may still qualify for Extended Health Benefits (EHB) if their health care expenses are high.
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APPENDIX B – PRO FORMA DETAILS Option 1 – Assisted Model Option 2 – Market Model
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AGENDA ITEM #b) Option 1 – Assisted Model Project Statistics Sponsor Group: Project Address: Project Type:
South Frontenac Community Services 4295 Stage Coach Rd New Construction 115,851 SF 10,763 m2
Site Area:
Units 1 Bedroom, IAH Funded 1 Bedroom, IAH Funded, Modified 2 Bedroom, IAH Funded 1 Bedroom, Not Funded 2 Bedroom, Not Funded
of Units
6 0 0 0 6
Total # of RGI Units
Total # of Units
0
12
Circulation Community Room Office Laundry Total Building Area Total parking spaces Revenue generating parking spaces Number of storage lockers
Capital Budget
Unit Size (SF)
Construction Period: 12 months
Unit Size (m2)
589 54.7 589 54.7 806 74.8 589 54.7 806 74.8 Total Size of Dwelling Units (SF)
(m2)
8,365
777.1
(SF) 1,198 455 310 310 10,636
(m2) 111 42 29 29 988
Rent per Rents as % 100% unit per Comments of AMR AMR month $603 80% $754 2015 Kingston CMA and Zone 4 Data $603 80% $754 2015 Kingston CMA and Zone 4 Data $807 80% $1,009 2015 Kingston CMA and Zone 4 Data $754 100% $754 2015 Kingston CMA and Zone 4 Data $1,008 100% $1,009 2015 Kingston CMA and Zone 4 Data Actual Total Rent Per Total Rent, All Units, Annum from Tenants Total AMR Rent, All Units All Sources ($ and % of AMR) $115,992 91.4% $115,992 $126,950 % of Total Space 11.26% 4.27% 2.91% 2.91%
Comments 1 Storey Double Loaded Hallway Common Room Corner Office Laundry
Comments
14 0 0
South Frontenac Community Services 4295 Stage Coach Rd
SOFT COSTS 1 Professional Fees 2 Architect, Engineer, Landscape 3 Cost Consultant (Quantity Surveyor) 4 Development Consultant 5 Planning Consultant 6 Disbursements (Architect/Engineers) 7 Advocate Architect 8 Building Sub-total
Total Cost
Per Unit
$134,828.16 $25,000 $110,000 $10,000 $5,000 $10,000 $294,828
$11,236 $2,083 $9,167 $833 $417 $833 $24,569
9 Site 10 Building and Property Appraisal 11 Topographic Survey 12 Boundary Surveys 13 Geotechnical Assessment 14 Environmental Assessment 15 Other Site Studies 16 Site Sub-total
Total Cost
Per Unit
$5,000 $2,500 $2,500 $7,500 $5,000 $7,500 $30,000
$417 $208 $208 $625 $417 $625 $2,500
17 Legal and Organizational 18 Legal Fees 19 Organizational Expenses 20 Marketing/Rent-up 21 Capital Cost Audit 22 Market Appraisal for HST purposes 23 Property Taxes During Construction 24 Insurance During Construction 25 Legal and Organizational Sub-total
Total Cost
Per Unit
$25,000 $10,000 $6,000 $7,000 $8,000 $4,500 $5,000 $65,500
$2,083 $833 $500 $583 $667 $375 $417 $5,458
26 Financing Costs 27 Interest During Construction 28 Lender’s Legal Financing Fee 29 Lender’s Mortgage Advance Fee 30 Lender’s Application Fee
Total Cost
Per Unit
$17,091 $10,000 $1,750 $8,000
$1,424 $833 $146 $667
31 CMHC Mortgage Insurance Application Fee on Residential Units
$2,400
$200
$200
per unit for the first 100 units, $100 thereafter, 0.3% of nonresidential loan amount
CMHC Mortgage Insurance Premium on Non-funded Residential Portion
$3,470
$289
4.50%
residential funded portion: premiums waived; non-funded and commercial portion: 4.5% of Loan Value
$4,000 $1,050 $47,761
$333 $88 $3,980
Total Cost
Per Unit
$1,300 $0 $300
$108 $0 $25
32
33 Insurance Consultant and Title Insurance 34 CMHC Mortgage Advance Fee 35 Financing Costs Sub-Total
36 Fees and Permits 37 Rezoning Application 38 Official Plan Amendment Application 39 Site Plan Approval Application
17-‐02-‐02
6.0% of construction costs plus HST, excludes group’s appliances and furniture and fixtures, includes Based on similar projects 3.8% of total project costs Needed for Rezoning Based on similar projects typically a cost in design-build projects
Comments Based on similar projects Based on similar projects Based on similar projects Based on similar projects $5,000 minimum ESA Phase 1 Use for projects where actual studies not known
Comments
Based on similar projects Based on similar projects Use $500 per unit as minimum for non-RGI units Based on similar projects typical cost $8,000, needed if project’s Fair Market Value will be higher than input tax credits 0.00% use vacant land tax rate or multi residential tax rate and apply to land/property cost, remember t Assumes builder’s risk, etc. carried by contractor
Comments 4.80% interest during construction To be confirmed by financing proposal/agreement $350 per cash advance, charged on all advances Varies, to be confirmed by financing proposal/agreement
$350 per cash advance, first 2 draws not charged
Comments Schd. A to By-law No. 2016-79 - UR1 To URM Rezoning Schedule A to By-law No. 2016-79 - Not Need Likely Schedule A to By-law No. 2016-79
Prepared by SHS Consulting
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AGENDA ITEM #b)
40 Building Permit Fees
$27,811.75
$2,318
42 Local
$74,477
$6,206
43 Fees and Permits Sub-total
$103,889
$8,657
Total Cost
Per Unit
$541,978 $54,198 $596,176
$45,165 $4,516 $49,681
Total Cost
Per Unit
$1,701,792 $68,000 $10,000
$141,816 $5,667 $833
$14.000 $14.00 per $1000 of project value( construction costs)
41 Development Charges
44 Soft Costs Summary 45 Soft Costs Sub-total (8,16,25,35,43) 46 Soft Cost Contingency 47 Soft Costs Total
$6,206 BY-LAW NO. 2014-54 2017 Rate
Comments 10.0% includes financing costs of
$47,761
48 HARD COSTS 49 Construction Costs 50 Base Construction Cost, Residential 51 Site Servicing 52 Hydro Connection Fee
Comments
$160 per square foot of construction Site Servicing & Septic only those costs beyond allowance in construction contract, estimated based on similar projects
53 Fire Safety Plan
$2,200
$183
54 Appliances (Fridge & Stove)
$12,000
$1,000
$1,000
55 Appliances (Washer/Dryer)
$6,966
$581
$6,966
56 Furniture and Equipment 57 Contingency 58 Construction Costs Sub-total
$5,000 $180,596 $1,986,554
$417 $15,050 $165,546
59 Land / Property Acquisition Costs 60 Purchase Price / Value
Total Cost
Per Unit
$20,000
$1,667
61 Provincial Land Transfer Tax
Based on similar projects; required for occupancy $1,000 per unit for a fridge and a stove for non-modified units
Commercial washer $2,215, commercial dryer $1,268. Use 1 set per 9 units. Office & Common Room 10.0% of construction costs
Comments SFCSC will transfer their portion of land for a nominal amount First $55,000 at 0.5% + $55,000-$250,000 at 1% + $250,000 and up 1.5%
$100
$8
$20,100
$1,675
63 TOTAL CAPITAL COSTS 64 Hard Cost Total 65 Soft Cost Total 66 HST 67 Total Project Cost
Total Cost
Per Unit
$2,006,654 $596,176 $319,806 $2,922,636
$167,221 $49,681 $26,651 $243,553
68 Contributions 69 Rezoning Application waived 70 Official Plan Amendment Application waived 71 Site Plan Approval Application waived 72 Building Permit Fees waived 73 Development Charges 74 Local Development Charges waived
Total Cost
Per Unit
$1,300 $0 $300 $27,812
$108 $0 $25 $2,318
Assuming Fee Waived Assuming Fee Waived Assuming Fee Waived Assuming Fee Waived
62 Land Cost Sub-total
Comments 13%
Comments
$74,477
$6,206
Assuming Fee Waived
75 County Equity Contribution
$350,000
$29,167
County Equity Contribution
76 Additional Equity Required
$350,000
$29,167
77 Capital Contribution: Investment in Affordable Housing for Ontario
$900,000
$75,000
78 Additional Contribution
$150,000
Additional Equity Required for 1.20 DCR per unit or 75% of total capital cost per funded unit, whichever is less. For Funded Units Above
$0
$0
79 HST rebate (PST portion)
$158,099
$13,175
82%
rebate applied to the PST portion of HST, residential component only
80 HST rebate (GST portion)
$60,251
$5,021
50%
rebate applied to the GST portion of HST, residential component only
$1,922,239 $1,000,397
$160,187 $83,366
81 Total Contributions 82 Total Project Cost Less Contributions 83 Mortgage
Comments
84 Mortgage Amount
$1,000,397
85 Mortgage Interest Rate 86 Mortgage Amortization 87 Annual Mortgage Payments 87 Operating Budget 87 First Full Year
3.25% 40 years $44,569
South Frontenac Community Services 4295 Stage Coach Rd Total
88 Estimated Operating Revenue 89 Rental Income from Tenants 90 Rent Supplement/Subsidy Top-Up 91 Commercial Rental Income 92 Utilities Recovery (ie. from commercial tenants) 93 Laundry Revenue 94 Parking Revenue 96 Vacancy Loss 97 Total Operating Revenue
$115,992 $0 $0 $0 $3,120 $0 -$3,573 $115,539
98 Estimated Operating Expenses 99 Maintenance - Salaries 100 Maintenance - Materials & Services
$4,800 $10,200
17-‐02-‐02
based on most recent lender quotes
Total
Per Unit Comments $9,666 $0 Top-up to 100% AMR on RGI units only $0 $1 per SF of Commercial rental space $0 0% of Heat, Electricity, and Water/Sewer costs $260 Estimated at $5 per unit per week $0 Estimated at $40 per parking space per month -$298 3% of Rental, Parking, Laundry, Locker, Commercial Revenue $9,628
Per Unit Comments $400 Based on $300 Per Unit $850 Based on $650 Per Unit
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Page 131 of 158
AGENDA ITEM #b)
101 Heat 102 Electricity 103 Water/Sewer 104 Administrative Salaries 105 Property Management Fee 106 Other Administrative Materials & Services 107 Capital Replacement Reserves Contribution 108 Insurance 109 Property Taxes 110 HST
$2,400 $1,920 $4,800 $0 $7,590 $3,000 $5,203 $2,400 $16,200 $3,456
111 HST Rebate
$0
112 Sub-total 113 Mortgage Payments 114 Total Operating Expenses
$61,969 $44,569 $106,538
115 Net Operating Income 116 Debt Service
$53,570 $44,569
117 Debt Coverage Ratio 118 Net Operating Profit/Loss
17-‐02-‐02
$200 Heat for common areas only $160 Tenant Pays Hydro $400 Building Pays Water $0 Included in Property Management Fee $632 6% of (100% AMR + other revenue) $250 Based on $250 per Unit $434 4% of 100% Average Market Rent and Other Income $200 Minimum of $200 per unit, adjust based on owner’s portfolio average $1,350 Property Tax Rate - Funded & Market $288 Assumes that all Operating expenses are before tax $0 Only applicable to groups with municipal status $5,164 $3,714 $8,878
1.20
Should be 1.2 for residential building with 100% funded units
$9,001
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AGENDA ITEM #b) Option 2 – Market Model Project Statistics Sponsor Group: Project Address: Project Type:
South Frontenac Community Services 4295 Stage Coach Rd New Construction 115,851 SF 10,763 m2
Site Area:
Units 1 Bedroom, IAH Funded 1 Bedroom, IAH Funded, Modified 2 Bedroom, IAH Funded 1 Bedroom, Not Funded 2 Bedroom, Not Funded
of Units
0 0 0 6 6
Total # of RGI Units
Total # of Units
0
12
Circulation Community Room Office Laundry Total Building Area Total parking spaces Revenue generating parking spaces Number of storage lockers
Capital Budget
Unit Size (SF)
Construction Period: 12 months
Unit Size (m2)
589 54.7 589 54.7 806 74.8 589 54.7 806 74.8 Total Size of Dwelling Units (SF)
(m2)
8,365
777.1
(SF) 1,198 455 310 310 10,636
(m2) 111 42 29 29 988
Rent per Rents as % 100% unit per Comments of AMR AMR month $603 80% $754 2015 Kingston CMA and Zone 4 Data $603 80% $754 2015 Kingston CMA and Zone 4 Data $807 80% $1,009 2015 Kingston CMA and Zone 4 Data $754 100% $754 2015 Kingston CMA and Zone 4 Data $1,008 100% $1,009 2015 Kingston CMA and Zone 4 Data Actual Total Rent Per Total Rent, All Units, Annum from Tenants Total AMR Rent, All Units All Sources ($ and % of AMR) $126,864 99.9% $126,864 $126,950 % of Total Space 11.26% 4.27% 2.91% 2.91%
Comments 1 Storey Double Loaded Hallway Common Room Corner Office Laundry
Comments
14 0 0
South Frontenac Community Services 4295 Stage Coach Rd
SOFT COSTS 1 Professional Fees 2 Architect, Engineer, Landscape 3 Cost Consultant (Quantity Surveyor) 4 Development Consultant 5 Planning Consultant 6 Disbursements (Architect/Engineers) 7 Advocate Architect 8 Building Sub-total
Total Cost
Per Unit
$134,828.16 $25,000 $110,000 $10,000 $5,000 $10,000 $294,828
$11,236 $2,083 $9,167 $833 $417 $833 $24,569
9 Site 10 Building and Property Appraisal 11 Topographic Survey 12 Boundary Surveys 13 Geotechnical Assessment 14 Environmental Assessment 15 Other Site Studies 16 Site Sub-total
Total Cost
Per Unit
$5,000 $2,500 $2,500 $7,500 $5,000 $7,500 $30,000
$417 $208 $208 $625 $417 $625 $2,500
17 Legal and Organizational 18 Legal Fees 19 Organizational Expenses 20 Marketing/Rent-up 21 Capital Cost Audit 22 Market Appraisal for HST purposes 23 Property Taxes During Construction 24 Insurance During Construction 25 Legal and Organizational Sub-total
Total Cost
Per Unit
$25,000 $10,000 $6,000 $7,000 $8,000 $4,500 $5,000 $65,500
$2,083 $833 $500 $583 $667 $375 $417 $5,458
26 Financing Costs 27 Interest During Construction 28 Lender’s Legal Financing Fee 29 Lender’s Mortgage Advance Fee 30 Lender’s Application Fee
Total Cost
Per Unit
$18,810 $10,000 $1,750 $8,000
$1,568 $833 $146 $667
31 CMHC Mortgage Insurance Application Fee on Residential Units
$2,400
$200
$200
per unit for the first 100 units, $100 thereafter, 0.3% of nonresidential loan amount
CMHC Mortgage Insurance Premium on Non-funded Residential Portion
$12,602
$1,050
4.50%
residential funded portion: premiums waived; non-funded and commercial portion: 4.5% of Loan Value
$4,000 $1,050 $58,612
$333 $88 $4,884
$350 per cash advance, first 2 draws not charged
Total Cost
Per Unit
$1,300 $0 $300
$108 $0 $25
32
33 Insurance Consultant and Title Insurance 34 CMHC Mortgage Advance Fee 35 Financing Costs Sub-Total
36 Fees and Permits 37 Rezoning Application 38 Official Plan Amendment Application 39 Site Plan Approval Application
17-‐02-‐02
6.0% of construction costs plus HST, excludes group’s appliances and furniture and fixtures, includes Based on similar projects 3.7% of total project costs Needed for Rezoning Based on similar projects typically a cost in design-build projects
Comments Based on similar projects Based on similar projects Based on similar projects Based on similar projects $5,000 minimum ESA Phase 1 Use for projects where actual studies not known
Comments
Based on similar projects Based on similar projects Use $500 per unit as minimum for non-RGI units Based on similar projects typical cost $8,000, needed if project’s Fair Market Value will be higher than input tax credits 0.00% use vacant land tax rate or multi residential tax rate and apply to land/property cost, remember t Assumes builder’s risk, etc. carried by contractor
Comments 4.80% interest during construction To be confirmed by financing proposal/agreement $350 per cash advance, charged on all advances Varies, to be confirmed by financing proposal/agreement
Comments Schd. A to By-law No. 2016-79 - UR1 To URM Rezoning Schedule A to By-law No. 2016-79 - Not Need Likely Schedule A to By-law No. 2016-79
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Page 133 of 158
AGENDA ITEM #b)
40 Building Permit Fees
$27,811.75
$2,318
42 Local
$74,477
$6,206
43 Fees and Permits Sub-total
$103,889
$8,657
Total Cost
Per Unit
$552,829 $55,283 $608,112
$46,069 $4,607 $50,676
Total Cost
Per Unit
$1,701,792 $68,000 $10,000
$141,816 $5,667 $833
$14.000 $14.00 per $1000 of project value( construction costs)
41 Development Charges
44 Soft Costs Summary 45 Soft Costs Sub-total (8,16,25,35,43) 46 Soft Cost Contingency 47 Soft Costs Total
$6,206 BY-LAW NO. 2014-54 2017 Rate
Comments 10.0% includes financing costs of
$58,612
48 HARD COSTS 49 Construction Costs 50 Base Construction Cost, Residential 51 Site Servicing 52 Hydro Connection Fee
Comments
$160 per square foot of construction Site Servicing & Septic only those costs beyond allowance in construction contract, estimated based on similar projects
53 Fire Safety Plan
$2,200
$183
54 Appliances (Fridge & Stove)
$12,000
$1,000
$1,000
55 Appliances (Washer/Dryer)
$6,966
$581
$6,966
56 Furniture and Equipment 57 Contingency 58 Construction Costs Sub-total
$5,000 $180,596 $1,986,554
$417 $15,050 $165,546
59 Land / Property Acquisition Costs 60 Purchase Price / Value
Total Cost
Per Unit
$20,000
$1,667
61 Provincial Land Transfer Tax
$100
$8
$20,100
$1,675
63 TOTAL CAPITAL COSTS 64 Hard Cost Total 65 Soft Cost Total 66 HST 67 Total Project Cost
Total Cost
Per Unit
$2,006,654 $608,112 $321,135 $2,935,900
$167,221 $50,676 $26,761 $244,658
68 Contributions 69 Rezoning Application waived 70 Official Plan Amendment Application waived 71 Site Plan Approval Application waived 72 Building Permit Fees waived 73 Development Charges 74 Local Development Charges waived
Total Cost
Per Unit
$1,300 $0 $300 $27,812
$108 $0 $25 $2,318
62 Land Cost Sub-total
Based on similar projects; required for occupancy $1,000 per unit for a fridge and a stove for non-modified units
Commercial washer $2,215, commercial dryer $1,268. Use 1 set per 9 units. Office & Common Room 10.0% of construction costs
Comments SFCSC will transfer their portion of land for a nominal amount First $55,000 at 0.5% + $55,000-$250,000 at 1% + $250,000 and up 1.5%
Comments 13%
Comments
$74,477
$6,206
Assuming Fee Waived Assuming Fee Waived Assuming Fee Waived Assuming Fee Waived Waived as per funding agreement Assuming Fee Waived
75 County Equity Contribution
$350,000
$29,167
County Equity Contribution
76 Additional Equity Required
$1,095,000
$91,250
$0
$0
77 Capital Contribution: Investment in Affordable Housing for Ontario 78 Additional Contribution
$150,000
Additional Equity Required for 1.20 DCR per unit or 75% of total capital cost per funded unit, whichever is less. For Funded Units Above
$0
$0
79 HST rebate (PST portion)
$158,770
$13,231
82%
rebate applied to the PST portion of HST, residential component only
80 HST rebate (GST portion)
$60,507
$5,042
50%
rebate applied to the GST portion of HST, residential component only
$1,768,165 $1,167,735
$147,347 $97,311
81 Total Contributions 82 Total Project Cost Less Contributions 83 Mortgage
Comments
84 Mortgage Amount
$1,167,735
85 Mortgage Interest Rate 86 Mortgage Amortization 87 Annual Mortgage Payments 87 Operating Budget 87 First Full Year
3.25% 40 years $52,024
South Frontenac Community Services 4295 Stage Coach Rd Total
88 Estimated Operating Revenue 89 Rental Income from Tenants 90 Rent Supplement/Subsidy Top-Up 91 Commercial Rental Income 92 Utilities Recovery (ie. from commercial tenants) 93 Laundry Revenue 94 Parking Revenue 96 Vacancy Loss 97 Total Operating Revenue
$126,864 $0 $0 $0 $3,120 $0 -$3,900 $126,084
98 Estimated Operating Expenses 99 Maintenance - Salaries 100 Maintenance - Materials & Services
$4,800 $10,200
17-‐02-‐02
based on most recent lender quotes
Total
Per Unit Comments $10,572 $0 Top-up to 100% AMR on RGI units only $0 $1 per SF of Commercial rental space $0 0% of Heat, Electricity, and Water/Sewer costs $260 Estimated at $5 per unit per week $0 Estimated at $40 per parking space per month -$325 3% of Rental, Parking, Laundry, Locker, Commercial Revenue $10,507
Per Unit Comments $400 Based on $300 Per Unit $850 Based on $650 Per Unit
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AGENDA ITEM #b)
101 Heat 102 Electricity 103 Water/Sewer 104 Administrative Salaries 105 Property Management Fee 106 Other Administrative Materials & Services 107 Capital Replacement Reserves Contribution 108 Insurance 109 Property Taxes 110 HST
$2,400 $1,920 $4,800 $0 $7,570 $3,000 $5,203 $2,400 $18,000 $3,454
111 HST Rebate
$0
112 Sub-total 113 Mortgage Payments 114 Total Operating Expenses
$63,747 $52,024 $115,771
115 Net Operating Income 116 Debt Service
$62,338 $52,024
117 Debt Coverage Ratio 118 Net Operating Profit/Loss
17-‐02-‐02
$200 Heat for common areas only $160 Tenant Pays Hydro $400 Building Pays Water $0 Included in Property Management Fee $631 6% of (100% AMR + other revenue) $250 Based on $250 per Unit $434 4% of 100% Average Market Rent and Other Income $200 Minimum of $200 per unit, adjust based on owner’s portfolio average $1,500 Property Tax Rate - Market $288 Assumes that all Operating expenses are before tax $0 Only applicable to groups with municipal status $5,312 $4,335 $9,648
1.20
Should be 1.2 for residential building with 100% funded units
$10,314
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COUNTY OF FRONTENAC SENIORS COMMUNITY HOUSING PILOT PROJECT FINAL SUMMARY REPORT
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AGENDA ITEM #b)
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PREPARED BY:
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Table of Contents INTRODUCTION TO THE STUDY …………………………………………….. 2 STUDY APPROACH ………………………………………………………………. 2 SENIORS HOUSING ISSUES IN THE COUNTY OF FRONTENAC ………. 3 HOUSING OPTIONS FOR SENIORS IN THE COUNTY …………………… 7 SENIORS HOUSING MODELS…………………………………………………. 7 OPPORTUNITY NODES …………………………………………………………. 8 SENIORS HOUSING OPTIONS ………………………………………………. 10 ASSESSING OPTIONS AND OPPORTUNITIES ………………………….. 12 LOCAL POLICY FRAMEWORK ………………………………………………. 13 IMPLEMENTATION STRATEGY …………………………………………….. 14 COSTING OF MODELS ………………………………………………………… 15 MOVING A PILOT FORWARD ………………………………………………. 18 NEXT STEPS……………………………………………………………………… 22 STUDY RECOMMENDATIONS ……………………………………………… 22
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AGENDA ITEM #b)
Page 137 of 158 County of Frontenac Seniors Community Housing Pilot Project
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INTRODUCTION TO THE STUDY The County of Frontenac is experiencing the aging of its population. An analysis of population trends showed that the population aged 55 years and over increased from 22% of the total population in 1981 to 30% in 2006 and this is expected to continue into the future with the aging of the baby boomers. Studies have shown that the majority of seniors would like to age in place in their own homes or, at least, in their own communities close to their family and friends. The County of Frontenac Seniors Community Housing Pilot Project is being undertaken as a response to the aging population and the desire to plan for the future in a more sustainable way. Through the study process, the County aims to acquire a better understanding of the housing needs of local seniors and the opportunities that may exist to address these needs.
STUDY APPROACH
Phase 2: Housing Options Analysis involved conducting an environmental scan to identify models for seniors housing that were appropriate for the County context and assessing these models using a defined criteria. Results were summarized and recommendations were made regarding “best fit” models based on the seniors housing issues identified in Phase 1. These “best fit” models were then assessed against identified opportunity nodes to develop a sense of potential options
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The overall approach in completing this study involves four phases and incorporates a range of research and consultation methods including statistical analysis, focus groups and interviews, and relevant literature reviews.
Phase 1: Existing Conditions Analysis includes a review of demographic and socio‐economic information related to seniors and the development of an inventory of housing and support service options for seniors in the County of Frontenac. Results of this review were presented to stakeholders through numerous public consultation sessions in the four local municipalities. This phase of the study identified the housing needs and gaps and the key housing issues for seniors in the County.
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that address seniors’ housing needs, resulting in the selection of a preferred option. Phase 3: Policy Framework Analysis involved reviewing land use planning documents and other relevant policy documents to identify opportunities and barriers to creating seniors community housing in the County. Recommendations were developed to address policy barriers identified in relation to the preferred option. Phase 4: Implementation Strategy involved developing an implementation plan for the preferred option, including an assessment of the financial feasibility of this option. This report summarizes the Study results as detailed in the component reports developed through the Study process.
SENIORS HOUSING ISSUES IN THE COUNTY OF FRONTENAC The population of the County of Frontenac is aging and this will have an increasing effect on the demand for seniors housing and support services
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The senior population in the County of Frontenac is expected to increase from 15.6% in 2006 to 27.1% in 2036 and this will be especially notable for those aged 75 years and over. There is a strong desire to enable seniors to age in place but to do this, the growing seniors population will need housing options that are smaller in form, require less maintenance and are more accessible than housing that has been developed to date. This growth will also increase demand for support services, both in‐home and in more specialized care environments. Promoting an adequate range of choices throughout the local housing continuum is essential in order to ensure that seniors can live independently to the greatest degree possible and remain in or close to their own communities for as long as possible.
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The permanent population in the County of Frontenac is increasing gradually but growth will continue to be primarily concentrated in South Frontenac A large proportion of the population and household growth is occurring in South Frontenac and this trend is expected to continue, given its proximity to the City of Kingston. As a result, the majority of new permanent dwellings that will be developed are expected to be located in South Frontenac. There is sufficient land to accommodate this growth as 57.8% of the County’s vacant land in designated settlement areas is located in South Frontenac. Growth will also continue in other parts of the County albeit at a much smaller scale. This growth will be very modest in the northern part of the County and it is projected that some permanent dwellings will be converted to seasonal dwellings as a result of this lower growth. Addressing housing needs throughout the County as development evolves will be important, as will the need to ensure that this development is sustainable. The forms of housing being built in the County are not reflective of seniors needs
The age and condition of existing housing stock in some areas of the County will only serve to fuel this problem, making it more difficult for seniors to maintain the homes they are in. Even for those with no economic constraints, there is little choice to downsize in the community and this has led to many seniors staying put despite the changing housing or support needs they may have. To better address these needs and support sustainability, improved access to community amenities and support services is also required. Looking forward, a greater diversity of housing types is needed to meet the needs of the seniors population and provide greater choice in the housing market. A large proportion of seniors have low incomes The average household income of seniors 65 years and older in the County is lower than the average household income of seniors in the City of Kingston or the Province. Furthermore, between 10% and 15% of seniors are spending 30% or more of their income on housing costs, indicating a housing affordability problem. In 2006, almost 15% of older senior households (75 years and older) and 10% of senior households
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The analysis of recent and expected housing development activity shows that almost all new housing developments throughout the County have been located outside designated settlement areas and will continue to be in the form of single detached dwellings. This low density form of housing is unsuitable for most aging seniors in terms of size, cost and
ability to maintain. Conversion of seasonal to permanent dwellings is also expected to contribute to housing supply as immigrating retirees continue to make the County their home but, again, these will be outside of most settlement areas and are less likely to meet the needs of aging residents.
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(65 to 74 years of age) had household incomes of $18,200 or less (i.e. within the first household income decile). For these households, an affordable monthly housing payment – whether ownership or rental – would be $455 per month or less. By comparison, in the limited rental market that exists, housing options start at $553 per month for a typical bachelor unit. Figure 1: Average Household Income by Age Range; 2006
available from the Canada Pension Plan but only for seniors who had worked and made contributions. Traditionally, social housing has provided accommodation that best addresses the needs of low income households through rent‐geared‐to‐income accommodation. Within the County, there are a modest number of social housing units but as of October 31st, 2011 there were a total of 74 seniors on the centralized wait list for social housing. For a considerable segment of the seniors population who have low incomes, housing options continue to be extremely limited. There is a need for affordable and appropriate housing options for seniors across the continuum
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For seniors with pensions and sufficient retirement savings, a wider variety of housing choices are available. In contrast, those on fixed incomes with only basic retirement benefits have very limited options. This is quite evident when one considers that the total annual pension benefit that a senior can expect from Old Age Security, Guaranteed Income Supplement, and Ontario’s Guaranteed Annual Income System combined is $16,205. Additional pension income would be
While seniors with low incomes represent a clear concern, affordability for seniors along the housing continuum is also an issue. In 2006, more than 55% of older senior households (75 years and older) and just over 42% of senior households (65 to 74 years) had household incomes of $40,446 or less (i.e. within the first three income deciles). Based on this income, households would require accommodation at a monthly cost of about $1,000 or less to be considered affordable. While some parts of the rental market meet this level of affordability, options are very limited and high demand has resulted in increasing rental prices.
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In the case of new ownership options, pricing would stretch the income capacity of average senior households. Even for those who have paid down mortgages and accumulated equity, the carrying cost of older homes that require repairs is becoming increasingly challenging. Unlocking this equity is also a factor given local market conditions, the limited choices available in the housing market and the pricing that new options are commanding. Figure 2: Comparison of Average House Prices to Affordable House Prices by Household Income Decile: County of Frontenac
Affordability is also a concern for those with higher care requirements. At more than $32,000 per year, current average retirement home costs would exceed the means of many senior households, especially for those relying on government pensions. While residence in a long term care home is subsidized, required co‐payments are still beyond what a senior who is solely dependent on government benefits can afford. By expanding the range of housing and support options for seniors across the cost spectrum, the goal of keeping seniors in / near their community would be better served. There is a need for housing and support service options for seniors to allow them to remain in their own communities
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Housing services are available for seniors who require supports to live independently and recent LHIN initiatives are focused on enhancing in‐home care as an alternative to long term care residency. Experience has shown that the provision of in‐home supports to aging senior households can help reduce health risks and isolation. This is particularly important for seniors who are living in more remote areas where existing support services are not as readily available and where the only alternative would be institutionalization. The expansive service area and low density population in the central and northern parts of the County make service delivery for in‐ home care challenging. Demand for in‐home services will
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continue to grow as the senior population increases and maintaining an adequate level of supports will be essential to enable aging in place.
SENIORS HOUSING MODELS The County of Frontenac is rural in character with a permanent population of just over 28,000. It also has a very low density land use pattern and there are many areas within the County with only limited services and amenities. As such, housing options for seniors need to fit appropriately into the rural context of the County. These options should be low density in nature and have a residential rather than an institutional character. Another consideration is the limited servicing in the rural areas as well as the limited transportation options. Where possible, housing options for seniors would benefit from taking advantage of existing services to enhance efficiencies and increase the sustainability of the project. Seniors housing options range from independent living to dependent living / custodial care based on the level of care/ support required by the individual. Independent living options would be most appropriate for seniors who are cognitively intact and can perform activities of daily living, such as preparing meals and personal hygiene. Semi‐independent living, also called assisted living, options would be appropriate
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For County residents who require supports to live semi‐ independently or require 24‐hour care, only limited options are available within the County. For example, there are six long term care homes serving the residents of the County but none are located within the County proper and only one is located in proximity to the south end of the County. Similarly, only two social housing projects that have support services are located within the County. While other housing options are available, most are in the City of Kingston and would require a senior to relocate in order to gain access. Increasing local housing options, especially in the semi‐independent category, would help to support the aging in place philosophy for County residents.
HOUSING OPTIONS FOR SENIORS IN THE COUNTY
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for seniors who need assistance to undertake activities of daily living and who cannot live on their own but do not need 24‐ hour care. Seniors who have higher care requirements and who need 24‐hour care would be best served in dependent living options which are also called custodial care. The housing options examined for the County of Frontenac Seniors Community Housing Pilot Project are:
OPPORTUNITY NODES To better understand the potential fit for these seniors housing models within the County of Frontenac context, an analysis was undertaken of the opportunities that currently existing within the County to accommodate these models. While most of the County population lives outside of the settlement areas, the amenities, choices and development potential these settlements can offer make them possible candidates for seniors’ housing development.
North Frontenac
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Increasing level of care / supports
In North Frontenac, the settlement areas of Ompah, Plevna and Cloyne were examined. As smaller, remote settlements, it is not surprising that these areas have limited amenities and services, rely on private servicing and have little in the way of settlement definition. While Cloyne is situated within the Hwy. 41 corridor, it has limited land potential for project development. Ompah and Plevna both have more ample lands for development but because of their remote location, they would be less attractive to seniors and difficult to sustain. Of the three locations, Plevna would seem to offer the best opportunity for housing development, but given the modest local demand and lower overall growth rate in North Frontenac, providing supports to seniors in‐home would seem to make more economic sense, enabling them to age in place.
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Central Frontenac In Central Frontenac, the settlement areas of Sharbot Lake, Parham, Arden, Mountain Grove and Tichborne were examined. In the case of the latter two, there are limited populations or amenities to support seniors’ housing development and in these instances, development of a seniors’ housing project would be severely challenged. In the case of Arden and Parham, the size, configuration and scale of the settlements is somewhat larger, with a modest complement of amenities. While a unique opportunity in the form of a surplus school exists in Parham, it is unlikely that a seniors project of that size could be sustained, notwithstanding its proximity to the Hwy. 38 corridor. In the case of Arden, a small scale project may be possible to develop but serious questions remain about its ability to sustain itself, especially given its location on a regional collector.
South Frontenac South Frontenac is home to a number of populace settlement areas including Sydenham, Verona, Harrowsmith, Inverary and Battersea. Situated to the east, both Inverary and Battersea have small convenience service clusters but only limited amenities. Their location in close proximity to Kingston makes them attractive to commuters, as exemplified by the modest tract housing development in Inverary. However, development potential is modest with limited infill capability for new housing and only one or possibly two conversions to multi‐residential forms. Harrowsmith offers a similar scale
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Sharbot Lake, with an estimated population of over 560, is the largest settlement area in Central Frontenac and has a range of services and amenities. Uniquely positioned along the Hwy. 7 and Hwy. 38 corridors, it is well‐situated in terms of transportation. However, the two corridors create two very different settlement forms, with the Hwy. 38 corridor providing a more traditional main street atmosphere. Development opportunities are limited and only minor infill or re‐development opportunities may exist in the south end.
Perhaps the most notable opportunity lies in the public school which is expected to be surplus within the next year. As a pre‐ existing building, potential for adaptive reuse or conversion to seniors housing may be possible and sustainable, given the local ‘critical mass’ of services and amenities which exist close by.
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settlement area but situated on the Hwy. 38 corridor. Amenities and services are somewhat more evident and there are expansive municipal lands in the form of municipal parks situated to the west of the main street. Opportunities exist for new development or possible commercial conversion but ironically, Harrowsmith’s location in proximity to the more populated centres in Sydenham and Verona diffuses its local demand.
The primary settlement on the Frontenac Islands is in Marysville, immediately adjacent to the ferry docks. As a small, walkable village, a modest population is served by a number of services and amenities. Within the village proper, only minor development potential exists in the form of infill or redevelopment and municipal lands are largely already utilized. Given the modest population and access limitations of ferry service from Kingston, there is limited potential for a small scale seniors’ housing development in Marysville. While adjacent, Howe Island is much less populated and has less direct access to Kingston proper. As such, it is not seen as a desirable location for a seniors’ project at this time.
SENIORS HOUSING OPTIONS By taking the models, identifying their development characteristics and assessing their locational suitability with regard for factors that influence opportunities, it is possible to refine the list of potential models which would be best suited for the County of Frontenac to the following:
Small scale standard rental While not exclusively a seniors’ model, a small scale standard rental building of five units with ‘stacked’ home care servicing is certainly a model that can be replicated in smaller communities throughout the County. While scale economies
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Sydenham to the east and Verona to the north, are the two most populated centres in the County, with an estimated population of 730 and 860 respectively. Both have established core areas with a mix of local commercial uses and amenities. In the case of Sydenham, the core area is concentrated and pedestrian friendly. Surrounding the core is established residential development, leaving only minor infill and redevelopment opportunities. Beyond the core area on the periphery of the village, ownership opportunities may exist with the private sector regarding tract lands, particularly given the water service which is unique to Sydenham. Verona, as the most populated centre, straddles the Hwy. 38 corridor, forming a walkable main street with services and amenities. Some infill and redevelopment potential is apparent along this corridor but there are also municipal land holdings to the east which may provide potential housing opportunities, especially in proximity to the existing McMullen Manor.
Frontenac Islands
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will present cost challenges for projects of this size, seeking existing buildings for renovation or rehabilitation may provide a more economical cost structure. To help bolster sustainability, having a settlement population of 250 or more with some local amenities would be advisable (i.e. Marysville, Harrowsmith, Sharbot Lake, Sydenham, Verona).
Abbeyfield
Assisted living / Supportive Housing
Life Lease
A smaller scale assisted or supportive housing model would be best situated in a service catchment area with sufficient access, population and amenities. Again, scale economies will present development challenges but infill opportunities in Verona or Sydenham and adaptive reuse of the surplus school in Sharbot Lake could yield positive projects. Provided a sufficient site could be found, a redevelopment project could also be considered in Sydenham, particularly in light of the available water service.
As an ownership option typically requiring a larger tract of land, the implementation of a life lease project could be ideally located in Sydenham and may be positioned as a partnership with or initiative by local real estate interests. While this model could be replicated elsewhere, the proximity to Kingston, amenities and established housing market make Sydenham an attractive choice.
As a model of congregate living, this option may not appeal to all seniors. As a self‐contained support option, it does, however, favour more rural or small village settings. As either an infill or as a redeveloped building, the Abbeyfield model could successfully be located in Marysville or Sydenham.
Home Care
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Recognizing that on‐going sustainability is a key consideration in developing ‘bricks and mortar’ solutions, especially in more remote areas with low or no growth, it is important that options exist to meet seniors’ needs in these areas. While promoting home care throughout the County is beneficial, it is particularly important in the northern settlement areas of Ompah, Plevna, and Cloyne which have a limited population base with which to sustain a seniors housing facility.
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ASSESSING OPTIONS AND OPPORTUNITIES The evaluation of the five short‐listed options using the developed model assessment criteria indicates that the Assisted Housing / Supportive Housing option and the Home Care option rank highest in terms of overall criteria, primarily on the strength of their ability to impact on seniors needs and their ability to enhance the local area. Ratings 3=High degree 2=Moderate degree 1=Low degree Impact seniors’ need Sustainability Affordability Funding potential Partner potential Enhance local area Leveraging potential Total Rating Score
Small scale standard rental 2 2 2 2 2 2 2 14
Assisted Living /Supported Housing 3 2 3 2 1 3 3 17
Abbeyfield
Life Lease
Home Care
2 2 2 1 2 3 1 13
1 3 1 1 2 2 1 11
3 2 2 2 3 3 2 17
The continued provision and expansion of the Home Care programs can have a meaningful impact, especially in the case of the more remote northern settlements of the County. While a ‘bricks and mortar’ solution is more challenging to justify and support in this area, the flexibility that Home Care programs provide can help address changing needs over time by addressing these needs in‐home and by improving the quality of life for isolated seniors. While expanding the Home Care model can assist in proactively addressing support needs throughout the County, enhancing services in the Ompah, Pleva and Cloyne areas can help better address needs where they might not otherwise be met.
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The preferred options based on rank scoring include both a ‘bricks and mortar’ solution as well as a home care solution. In the case of the Assisted Housing / Supportive Housing option, opportunities for a new infill project in Verona or Sydenham and adaptive reuse of the surplus school in Sharbot Lake are top prospects that could help serve a wide catchment area and enhance the stability of the communities in which they would be situated.
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LOCAL POLICY FRAMEWORK 2.
That the County, as part of the Official Plan process currently underway, incorporate specific policies noted in County of Frontenac Seniors Community Housing Pilot Project
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Housing in Canada and Ontario operates within a framework of legislation, policy and programs. This policy framework, including the local policy framework, influences the development of housing in a community and has an effect on the ability to realize the identified opportunities for seniors housing in the County of Frontenac. For this reason, a review of relevant municipal legislation, strategic documents and local initiatives was conducted to identify potential opportunities and barriers to the development of a Seniors Community Housing Pilot Project. As a result of this assessment, the following recommendations are provided to support a broader range of seniors housing and support services:
the Policy Framework report that encourage the provision of seniors housing options, to support both existing and new development. That the County work with local townships to align local Official Plan policies with the new County Official plan, particularly as they relate to promoting opportunities for seniors housing. That the County work with local townships to expand zoning provisions as noted in the Policy Framework report that support a range of housing options for seniors that are consistent with County and local Official Plan policies. That the County institute a housing first policy for its surplus municipal lands and work with local townships and institutional agencies to develop an inter agency protocol which promotes an exchange or right‐of‐first‐refusal approach for surplus lands deemed suitable for housing development. That the County continue to work with the City and with local townships to implement the recommendations of the Municipal Housing Statement and to actively participate
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as a key stakeholder in the development of the Housing and Homelessness Plan being developed by the City of Kingston for the Kingston‐Frontenac service area. 6. That the County continue to pursue implementation of Community Improvement Plans as a vehicle for supporting community renewal in established settlement areas and for helping to promote renewal of housing for seniors using this tool. 7. That the County expand its authority to grant potential incentives for affordable housing by adopting a municipal capital facility by‐law and by encouraging local townships to do the same. 8. That the County continue to advocate for additional support service funding and expansion of service offerings within the County to help improve seniors’ ability to age in place.
IMPLEMENTATION STRATEGY
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Having defined and assessed potential housing models against opportunity nodes in the County, preferred housing options have been identified as follows: (a) Assisted/supportive housing This option would provide an affordable, semi‐ independent living environment for seniors in self‐ contained units, primarily one and some two bedroom units in a small scale configuration. The project would incorporate supports to address the moderate care needs of residents, including coordination of services and daily monitoring to assist with activities of daily living. Such a project could be established through infill, redevelopment or adaptive reuse of an existing structure and possible opportunities have been identified in Verona, Sydenham and Sharbot Lake. By situating a project in one of these established settlements, a wider catchment area can be served and the sustainability of the anchor community can be enhanced. Expanding the service component of the project to include a ‘spoke and hub’ approach could also increase service offerings to the surrounding community and help improve the quality of life for other seniors still resident in their own homes.
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(b) Home care Recognizing that a ‘bricks and mortar’ solution may not be sustainable at this time in more remote areas of the County, an expansion to home care services would help enable aging in place for seniors capable of living independently with minor supports. This is particularly evident in the northern area of the County where the aging of the population and limited rate of growth is more pronounced. While enhancing home care supports for seniors throughout the County would be beneficial, bolstering supports in the communities of Ompah, Plevna and Cloyne should be a priority consideration to address the needs of local seniors. In addition to expanded home care, home adaptation or retrofit programs and community paramedicine services would also assist in addressing the needs of seniors to age in place in more remote areas of the County.
COSTING OF MODELS
Model One – New Build (20 units) Costing for this model is based on a 20 unit single storey rental project and assumes new construction. An important assumption is the inclusion of a capital investment in the amount of $150,000/unit which would come from various government funding programs and local sources. Rents are affordable to residents at 80% of average market rent. Estimated capital costing for this model, including both costs and contributions, is as follows: Model One – Capital Summary Costs A Construction Costs Sub‐total B Land Cost Sub‐total Hard Costs Total (A+B) C Soft Cost Total Total Project Cost (A+B+C) Contributions D Capital Investment ($150,000/unit) E HST Rebate (82%) F Mortgage Financing Total Contributions (D+E+F) Total Contributions Less Total Costs
County of Frontenac Seniors Community Housing Pilot Project
Total Project 3,138,858 119,780 3,258,638 599,671 3,858,309 Total Project $3,000,000
Per Unit 156,943 5,989 162,932 29,983 192,915 Per Unit 150,000
335,688 522,621 3,858,309 0
16,784 26,131 192,915 0
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On the basis of the assisted/supportive model identified as preferred, detailed costing for three ‘bricks and mortar’ options has been developed. This analysis has been completed using typical costing parameters and is intended to reflect a general picture of financial viability based on set assumptions. A detailed discussion of these assumptions and
the actual analysis can be found within the Implementation Report for this study. As housing projects are influenced by any number of factors which can translate into specific financial impacts, it is important to note that the analysis provided here is for illustrative purposes only.
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Operating estimates for the project indicate a modest annual operating surplus and reflect a healthy debt coverage ratio of 1.64, indicating financial viability. This ratio would actually enable a higher share of project financing if required. Model One – Operating Summary YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
Net Annual Revenue
160,298
163,505
166,775
170,110
173,511
Total operating costs Operating Surplus (Deficit)
142,042
144,318
146,642
149,010
151,426
18,256
19,187
20,133
21,100
22,085
Financial viability could be further enhanced for this model by providing relief from municipal development fees/charges.
Model Two – Conversion/Renovation (13 units)
Model Two – Capital Summary Costs A Construction Costs Sub‐total B Land Cost Sub‐total Hard Costs Total (A+B) C Soft Cost Total Total Project Cost (A+B+C) Contributions D Capital Investment ($125,000/unit) E HST Rebate (82%) F Mortgage Financing Total Contributions (D+E+F) Total Contributions Less Total Costs
Total Project 1,569,739 119,780 1,689,519 447,166 2,159,043 Total Project $1,625,000
Per Unit 120,749 9,213 129,963 34,397 166,080 Per Unit 125,000
192,215 341,828 2,159,043 0
14,785 26,294 166,080 0
Operating estimates for this model indicate a modest annual operating surplus and reflect a solid debt coverage ratio of 1.59, illustrating financial viability. This ratio would actually enable a higher share of project financing if required. Model Two – Operating Summary Year 1
Year 2
Year 3
Year 4
Year 5
Net Annual Revenue
103,464
105,533
107,644
109,747
111,993
Total operating costs Operating Surplus (Deficit)
92,520
93,999
95,508
97,052
98,625
10,944
11,534
12,136
12,745
13,368
Financial viability for this model could be further enhanced by providing relief from municipal development fees/charges.
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Costing for this model is based on a 13 unit conversion or renovation of an existing building (e.g. surplus school). Like Model One, the project incorporates rental units that are affordable, renting out at 80% of average market rent. A capital investment component of $125,000/unit has been assumed in this model which is reflective of the lower estimated construction costs. It should be noted that in any conversion or renovation scenario, capital costs would need to be validated based on extensive due diligence, given the potential for structural, fit‐up and environmental issues
associated with existing buildings. Estimated capital costing for this model is as follows:
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Securing the building at a reduced rate could also yield savings that would make the project even more financially attractive.
Operating estimates for this model indicate a modest annual operating surplus and reflect a reasonable debt coverage ratio of 1.20, illustrating basic financial viability.
Model Three – Abbeyfield (8 units)
Model Three – Operating Summary
Unlike Model One or Two, the Abbeyfield model contemplates a project developed using community resources. Costing for this model is estimated based on an 8 unit conversion or renovation of an existing building. As a congregate living project, rents include accommodations, food and housekeeping services. As such, monthly resident charges are higher than average market rents but are lower than typical full service facilities. Financing and fund raising are key assumptions related to this model. Estimated capital costing for this model is as follows: Total Project 611,240 576,300 1,187,540 187,073 1,374,613 Total Project 122,430 221,223 1,030,960 1,374,613 0
Per Unit 76,405 72,037 148,442 23,384 171,826 Per Unit 15,303 27,652 128,870 171,826 0
Operating Surplus (Deficit)
Year 1
Year 2
Year 3
Year 4
Year 5
153,408
156,476
159,606
162,798
166,054
138,253
139,905
141,588
143,308
145,064
15,155
16,571
18,018
19,490
20,990
While assumed as a community funded project, financial viability and affordability for residents under Model Three could be further enhanced by providing municipal grants/loan, relief from municipal development fees/charges or relief from property taxes.
Home Care and Supports In the case of more remote areas of the County, ‘bricks and mortar’ projects are less attractive given limited growth and sustainability challenges. As noted, Home Care options are much better suited to these locales in order to serve seniors needs. Primary responsibility for support services falls to delivery agencies that are funded by senior government programs and as such, increasing or re‐allocating home care funding would need to be pursued with these funders. Another complementary program that has emerged in more rural locales is the use of community paramedicine to help
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Model Three – Capital Summary Costs A Construction Costs Sub‐total B Land Cost Sub‐total Hard Costs Total (A+B) C Soft Cost Total Total Project Cost (A+B+C) Contributions D HST Rebate (82%) E Fundraising F Mortgage Financing Total Contributions (D+E+F) Total Contributions Less Total Costs
Net Annual Revenue Total operating costs
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supplement in‐home health services/supports. Programs like this which help to create a safer, healthier home environment for seniors would certainly enhance seniors independence in remote areas where traditional housing projects are more difficult to justify financially. In that same vein, home adaptation programs that help create safer in‐home living environments for seniors also help support aging in place objectives. Typically the programs work by providing modest grants or loans (e.g. up to $15,000) to eligible households to make homes more accessible or more functional (i.e. grab bars, ramps, etc.). Existing programs like Kingston‐Frontenac Renovates provides finite funding for initiatives like this but could be augmented by the County to help serve a greater number of senior households.
Resource/funding opportunities
Waivers/reductions in County and/or local municipal building and development fees and charges Reductions in County/local property taxes Contributions of municipally‐owned land Contributions of surplus buildings (e.g. schools) Low interest or interest‐free loans Funding to assist in adapting homes for aging in place (e.g. Kingston‐Frontenac Renovates or County‐funded) Allocation of Municipal Service Manager funding under housing programs (i.e. Investment in Affordable Housing Program, Commercial Rent Supplement Program, etc.)
MOVING A PILOT FORWARD As noted in the previous section, advancing a capital pilot project requires significant resources, often secured from multiple sources. However, there are a number of other important aspects to consider in moving a pilot project forward, including the process involved in advancing development as well as the necessary project components. Central to this discussion, however, is the role the County should take in any such endeavour.
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Capital projects provide community assets which help to serve local residents over the long term. However, these projects take significant resources to be realized in the short term. Making projects affordable to lower and moderate income households presents an added challenge as development costs must be further offset by funding or financing in order to be affordable and viable. There are also very real fiscal challenges being faced by traditional project funders. As a result, it is more common now to marshal resources from multiple sources or seek out non‐traditional funding in order
to advance project development. Some of the resources that could be utilized in combination to help support the development of local seniors housing are:
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Critical path
Currently, the County is involved in a number of aspects in the local housing system which serves seniors and other residents in Frontenac. These roles include:
In the case of a typical housing project, there are a number of significant milestones in moving a project stepwise from its initial concept through to construction and operation. Following is a brief overview of some of the more notable activities that are undertaken:
- Concept development – establishing an initial project team, defining an approach to development and the involvement of potential partners, and creating a working concept
- Proof of concept – establishing project demand, refining the working concept, identifying development and procurement options
- Preliminary business plan – testing the development potential and financial feasibility, determining fundability and assessing capacity to sustain over the longer term
- Initial funding commitment – securing financial resources to move the project through the pre‐development phase, establishing a project site/location
- Pre‐development activities – undertaking due diligence, technical testing and formal design work, marshalling resources or financing to construct the project
- Construction – construction would proceed via a pre‐ determined procurement process
- Pre‐occupancy planning ‐ organizational preparation for operation of the project, transition of financing
Funding contributor – cost sharing for prescribed social housing programs and services with the City of Kingston Delivery agent/operator – operating Fairmount Home for the Aged (municipally owned) Stakeholder – maintaining a vested role within the local housing system for seniors, especially as a delivery agent Advocate – seeking out other government resources and identifying priorities to help address and support local needs Facilitator – enabling development, promoting partnerships, setting priorities and providing leadership
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These roles encompass a wide range of engagement in the local housing system. It is contemplated through the recommendations of the recent Kingston‐Frontenac Municipal Housing Statement that these roles and responsibilities will continue to evolve and align with the local housing system. As the County considers how best to advance a seniors pilot project, it will need to clarify how its involvement will align with or augment these roles.
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County Roles in Housing
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- Post‐occupancy wrap‐up – winding up construction matters with the project/development teams
Support services/resources – having a tangible commitment for support service funding is key in order to provide a successful living environment for seniors
Essential components Moving from the concept of a project through design, construction and operation is a progressive process with multiple decision points along the way. To help ensure project success, there are a number of critical ingredients that collectively can minimize the roadblocks encountered along the way. Some of the key components include:
In addition to external funding opportunities, the County has various resources which it could bring to bear to help support project development. Capital incentives could include: Waivers/reductions in County and/or local municipal building and development fees and charges Reductions in County/local property taxes Contributions of municipally‐owned land Contributions of surplus buildings/facilities Low interest or interest‐free loans Direct capital funding As noted in the Policy Framework component of the Study, the County would need to establish Municipal Capital Facility authorities via by‐law in order to grant a number of these incentives. Similar incentive‐granting authorities are available under the Planning Act for Community Improvement Plans. In order to create the ability to grant seniors housing incentives, it is recommended that the County, in concert with local Townships, establish Capital Facilities By‐laws as recommended in the recently adopted Kingston‐Frontenac Municipal Housing Statement.
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Clear and articulated project vision – establishing a clear project scope/vision at the outset to guide the process Experienced development team – having a team that is knowledgeable in order to keep the project ‘on track’ Dedicated project sponsor – an experienced and reliable project partner is critical to long term success Secured location/facility – a secured site/building for the project can significantly reduce development timelines Solid business case demonstrating feasibility – Rigorous financial testing using realistic assumptions in order to demonstrate both viability and sustainability Funding and/or financing – Having sufficient resources for pre‐development activity is critical to get the project off the page. Substantial funding or financing to build the project must be committed or in place prior to construction – this is absolutely essential.
County resources
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Apart from capital incentives aimed at pilot project development, the County could also consider making available other resources/supports to assist with seniors housing issues. These could include: Adaptation grants/loans – In order to supplement and expand on existing programs/funding (i.e. Kingston‐ Frontanac Renovates), the County could establish its own program to fund housing adaptations for seniors to assist in upgrading or modifying their residence to safely age in place. Capacity building grants/loans for prospective project sponsors – In order to supplement and expand on existing programs/funding (i.e. CMHC’s SEED or PDF funding), the County could establish its own program to help cultivate local project concepts.
While the focus of the report has been on preferred options identified through the Study process, it is clear that a number of the options considered could have merit depending on local housing market conditions and the willingness of local partners to advance such projects. Notwithstanding the pilot project initiatives with which the County may proceed, the County does have the opportunity to facilitate other housing solutions by creating a conducive development environment. As noted in the Policy Framework component of the Study, the County plays an active role in the regulation of land use policy and has the opportunity to align and create more flexible housing policies which can help to encourage the development of affordable seniors housing alternatives. As recommended in the recently adopted Kingston‐Frontenac Municipal Housing Statement, the County should continue to pursue these regulatory refinements. Likewise, the County plays an active role in advocating for seniors services and supports with the Southeast LHIN and among local service agencies. In addition to pursuing pilot project objectives, the County should continue to pursue enhancements to support service funding that helps seniors age in place.
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As part of it deliberations on roles and the pilot project, the County should also identify what capital incentives it would be prepared to make available to foster a pilot project. It could then offer up incentives to interested local partners based on the degree to which they meet pilot project objectives. Prospective projects are usually identified through an open procurement process – either via Expressions of Interest or a Request for Proposals.
Facilitating other options
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NEXT STEPS In order to advance a viable seniors pilot project, the County would need to: Identify the scope of the seniors pilot project it wishes to pursue and define the County role Establish financial authorities and tools, as well as committing funding and/or resources for the project Seek out interested partners to advance the proposed pilot project through development Continue to create an attractive development environment for appropriate seniors housing projects
STUDY RECOMMENDATIONS
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In addition to addressing those recommendations made as part of the Policy Framework component of this study, the County will need to pursue a number of avenues specifically related to pilot project development. To advance a seniors pilot project, it is recommended:
- That the County form an implementation group/task force to help establish a seniors housing pilot project
- That the County adopt a project scope for the preferred housing pilot and define its role for the project
- That the County identify funding, resources and incentives that it is willing to provide to support a
seniors pilot project. In addition to establishing Municipal Capital Facility authorities, the County should consider the use of the following incentives: Capital funding Waivers/reductions in County and/or local municipal building and development fees/charges Reductions in County/local property taxes Contributions of municipally‐owned land/buildings Low interest or interest‐free revolving loans 4. That the County seek from the City of Kingston (as Service Manager) a funding commitment to help support the pilot project and local seniors housing needs 5. That the County promote SEED funding to possible pilot project sponsors in order to build local capacity and undertake project viability investigations 6. That the County solicit detailed pilot project proposals from interested community partners using an Expression of Interest or a Request for Proposal 7. That the County, in conjunction with local support agencies, seek funding enhancements from the Southeast LHIN for local seniors support services, local home care services , community paramedicine initiatives and home adaptation initiatives. 8. That the County foster the development of other forms of affordable and appropriate seniors housing by creating a more flexible local regulatory environment.
