Why this P.E.I. developer scrapped his plans for affordable rental units

A P.E.I. developer says the rising cost of building and borrowing has forced him to scrap his plans for 17 rental units, and hand back the government money he received to make six of them affordable.

Instead, Kris Taylor is now selling theunits in the renovated Catholic churchas condominiums.

"I was really proud to bring [the rentals] to my community. We need housing here.Everybody does," said Taylor."And you know, people are asking questions now, how that transitioned into me turning this into condominiums.It's a decision I had to make to maybe save the project from financial trouble."

He purchased the church three years ago, and got approval last year to expand the building and turn itinto a 17-unit apartment complex.

Community Housing Funding

Taylor was grantedfunding through the Community Housing Fund a collaboration between the P.E.I. governmentand the Canadian Mental Health Association P.E.I. divisionto make six of those two-bedroomunits affordable at $1200 per month.

"Six was the maximum I could get through the program ... and those six units were great.I would've rented those easily, quickly. They would've been rented forever," he said.

According to Taylor, it's theother 11, non-subsidizedunits that arethe problem.

To recoup his building costs which he estimates have risen more than 30 per centsince the start of the project and to ensure he cancover his ongoing expenses, Taylor said he'dhave to charge a minimum of $1700 permonth for those units, plus utilities.

I think from a builder'sperspective, it's very tough. I can see projects stopping. I can see peoplenot wanting to do this anymore. Kris Taylor

He fears there just aren't enough people able or willing to pay that much for an apartment in Hunter River, and that he'd be left with several vacant units.

"I'd love to give everyone rent at a more affordable rate," he said. "But with the cost of building now, and insurance and interest rates going up ... I think from a builders' perspective, it's very tough. I can see projects stopping. I can see peoplenot wanting to do this anymore."

Government 'committed' to buying condo units

But while Taylor now has the 17 units listed for sale as condos, it appears four of themmay still turn into affordable housing.

Under his contract with the Community Housing Fund, he said, hanging onto the six subsidized rental units himself isn't an option.

But in an email to CBCTuesday, a spokesperson for P.E.I.'s Departmentof Social Development and Housing said the provincenow plans to buy four of the units, once Taylor finishes paying back the $159,000 in program funding he had received.

"Upon the pay back of the funds, the P.E.I. Housing Corporation has committed to purchasing four of the units to maintain affordability in the project to add to the Island's social housing inventory."

The province didn't provide any more details on when the four units will be purchased or at what cost. The condos are listed starting at $229,900.

"There are still some details we're trying to work out, but I'm hopeful that it can be done," said Taylor."The province is aware they have to try new ways to secure housing in this difficult market."