Cost of Metro Vancouver affordable housing projects doubles to $215M

Artistic renderings of The Steller at 7388 Southwynde Avenue (Integra Architecture) | The Connection at 7730 6th Street in Burnaby (VIA Architecture)

Metro Vancouver Regional District’s plans to renew and expand its affordable rental housing portfolio appear to have hit a snag. The combined estimated construction cost of two upcoming affordable housing projects spearheaded by the regional district has doubled over about three years.

According to a new report by the regional district’s housing committee ahead of a meeting this week, the combined cost of two projects with a total of 396 rental homes has increased from about $109 million to $215 million.

Regional district staff are now looking to determine a path forward to achieve these projects by borrowing more money and setting aside more of the regional district’s housing reserves to cover the costs.

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The project known as The Steller on a vacant lot at 7388 Southwynde Avenue in Burnaby’s Bryne Creek neighbourhood is to build a six-storey wood-frame building with 122 units and a childcare facility for up to 37 kids.

The Steller’s cost was originally pegged at $45.5 million, but it has now doubled to $93.9 million. To fill The Steller’s budget cap, the regional district is looking to take out a mortgage of up to $26.6 million and contribute up to $22.5 million from its reserves.

7388 Southwynde Avenue Burnaby The Steller affordable housing 3

Site of The Steller at 7388 Southwynde Avenue, Burnaby. (Google Maps)

Existing condition:

7388 Southwynde Avenue Burnaby The Steller affordable housing

Site of The Steller at 7388 Southwynde Avenue, Burnaby. (Google Maps)

Future condition:

Artistic rendering of The Steller at 7388 Southwynde Avenue, Burnaby. (Integra Architecture/Metro Vancouver Regional District)

The regional district attributes the budget increase for The Steller to a 9% increase in building floor area for larger residential units due in part to BC Housing and Canada Mortgage and Housing Corporation (CMHC) requirements for grant and loan eligibility, as well as a larger childcare facility, an increase in the parkade size by 21% for added secured bike parking spaces, and a larger parkade ramp size.

The regional district is working with Integra Architecture on the detailed design phase, which will explore ways to refine the design and reduce costs.

As for the second project experiencing a doubling of its estimated cost, The Connection is the redevelopment of the aging Eastburn Square affordable housing complex at 7730 6th Street in Burnaby. It is planned as a six-storey building with 172 units, including 30 one-for-one replacement units of the existing complex, and one in-suite daycare unit for up to eight kids.

The Connection now carries a construction cost of $120.8 million — up from the original estimate of $63.8 million. The solution to fill this budget gap is to add a mortgage of up to $43.5 million and set aside up to $17 million from the reserves.

Site of The Connection at 7730 6th Street, Burnaby. (Google Maps)

Existing condition:

Site of The Connection at 7730 6th Street, Burnaby. (Google Maps)

Future condition:

Artistic rendering of The Connection at 7730 6th Street, Burnaby. (VIA Architecture/Metro Vancouver Regional District)

According to the regional district, The Connection’s building floor area is now larger by 19% due to the same BC Housing and CMHC requirements, and added bike parking spaces and loading spaces. They are working with VIA Architecture on the detailed design.

Both projects are also seeing major inflationary pressures, particularly since early 2022 when rampant inflation began. Residential construction costs — materials, equipment, transportation, and labour — in Canada have soared by over 50% between early 2020 and 2023.

The regional district has an affordable housing funding partnership with BC Housing, which is providing the regional district with a combined total of $158 million in provincial grant funding to help catalyze 660 new affordable units, with $29.3 million set aside for The Steller and $41.8 million set aside for The Connection.

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