Habitat for Humanity drops long-planned Spryfield affordable housing project

Habitat for Humanity Nova Scotia has dropped an affordable housing project in Halifax that was billed as the non-profit's largest in Canada, saying the financial case no longer makes sense.

The charity had been hoping to build 52 housing units on the two-hectare site in Spryfield, dubbed Habitat Way, with a mix of townhouses, single-family homes and backyard suites. The site is beside J.L. Ilsley High school, and close to services, stores and on a transit route.

But Habitat N.S. CEO Donna Williamson, who has been in the position for three years, said the organization can only cover half of the $30 million needed for the project.

"It didn't make sense for Habitat and the families that we serve to continue the project, so we had to make the very hard decision of stopping," Williamson said.

She said a variety of issues came together to put the project out of reach.

Since the COVID-19 pandemic, construction, labour costs, and house prices have spiked. That final point is especially tough, Williamson said, because Habitat must sell homes at market value due to its standing with the Canada Revenue Agency.

Spryfield, which had long been an affordable part of Halifax, is now seeing new homes go for over $500,000. Williamson said that doesn't work out to an affordable mortgage for clients who make between $40,000-$80,000 a year, even with Habitat's model of no downpayment.

Habitat has built other homes on Drysdale Road, and Williamson said in 2017 one sold for around $180,000.

"So this is a big difference, and again, it's just more challenging for families," she said.

The province granted Habitat $203,000 in April 2022 for project management, design and other pre-construction costs to create 70 units of townhouses and single-family homes in Habitat Way. That eventually changed to 52 units in the latest 2023 plan. 

Williamson said while they got some money from different levels of government, most of the current federal and provincial housing funding is focused on rentals — which Habitat doesn't offer. She'd love to see governments focus more funding in this area, Williamson said.

"Home ownership is such a key fundamental for generational wealth and independence. And we're afraid that the middle class is disappearing," Williamson said.

There's also a covenant on the land dating from 1994 preventing anything denser than a duplex that was placed on the site by neighbouring landowner Paradigm Investments. Paradigm owns Foxwood Terrace, a multi-unit residential development next to Habitat's wooded parcel.

Court records show Habitat learned about the covenant in 2016, but moved ahead with the project.

In September 2018, the Halifax municipality approved the development agreement for the 78 units, but the project stalled when Habitat filed legal action against Paradigm that November.

Paradigm contested the lawsuit, and it was eventually settled in 2020. The covenant remained in place.

However, a provincial bill brought in last year allows Halifax's chief administrative officer to modify or discharge a covenant when it's more restrictive than the current land zoning with respect to height or density.

Habitat looking to sell land

HRM spokesperson Brynn Budden said any application to lift a covenant would include feedback from neighbouring property owners. The CAO's decision would be appealable to the Utility and Review Board.

"Regardless of if we built a multi-unit or not, we just had to make the best decision for our organization," Willamson said.

Instead, she said Habitat is looking to sell the land to another non-profit focused on affordable housing. Williamson said she's hopeful the new owner could get the covenant removed and offer rentals.

Bruce Holland, president of the Spryfield Social Enterprise and Affordable Housing Society, said their group wants to do just that. 

Holland said they'd like to build three or four apartment buildings with 60 units each, creating as many as 240 units. He said most would go for market rate to make the project sustainable, while 30 per cent of the units would be affordable at roughly 70 per cent of market rent. 

"Deeply affordable housing is disappearing, and there is a certain market sector out there that needs that affordable rate, and so as a society we believe we can meet that need," Holland said.

He added their society would partner with local community group Chebucto Connections to have a food market in one of the buildings, and services like a daycare could be included.

This would be the first project for the society, but Holland said its board includes members with housing and financial experience, so "we're pretty confident that we have the expertise that we need."

The society did get a piece of land from the province on Herring Cove Road last June to build affordable housing. But the next month, Holland announced the society was backing out of the deal because community members had raised concerns.

The Habitat site is "a far better location," he said.

Holland is also running for the District 11 council seat in the upcoming October municipal election.

When asked whether he dropped the Herring Cove project out of fear of upsetting residents and losing votes, Holland said the society would have taken local concerns into account regardless of whether he was running.

"It was a board decision. It wasn't my decision," Holland said.

The Spryfield association is in talks with Habitat for the land, but nothing had been decided as of last week.

Williamson said Habitat has learned a lot from the Spryfield project, but the focus now is to partner with other organizations more often and to build five units a year starting in 2025.