City says granting subsidies to nonprofit student housing is ‘first time, but won’t be the last’

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Montreal Mayor Valérie Plante and her government on Thursday launched a new initiative to accelerate the construction of affordable housing in Montreal, announcing a $21.4 million “portfolio” grant to a non-profit affordable student housing developer to support four of its projects at one time.

The city already provides direct funding for nonmarket housing projects for low- and moderate-income people. Providing larger “portfolio” grants to organizations with multiple projects in talks is intended to speed up construction by eliminating the need to wait for funding applications for each project, Plante said at the news conference, which was attended by other city officials and Laurent Levesque, president and CEO of the Housing Developers Association. The non-profit company that received the funding is UTILE.

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“When we say we want to facilitate this process, accelerate construction starts, in this case, a ‘portfolio’ agreement will allow UTILE to start multiple projects at once so that they can move forward more quickly,” Plante said, adding that the long-term, large grant provides predictability for nonprofit developers and gives them leverage to obtain other financing.

“Instead of looking for piecemeal opportunities, we provide a huge support to nonprofit sponsors from the beginning so that they can access all development opportunities.”

“This is the first, but it is by no means the last,” Benoit Dorais, vice chairman of the city’s executive committee, said of the “portfolio” grants. He said a second such grant would be announced in the coming days.

Since 2020, UTILE (Unité de travail pour l’implantation de logement étudiant) has built three affordable student housing buildings in the province, with rents ranging from 10% to 30% below market rents. Two of the buildings are located in Montreal and one in Quebec City. Annual rent increases in UTILE buildings are also below market increases to ensure long-term affordability.

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Levesque said UTILE’s four projects, which will receive $21.4 million in funding from Montreal, will have a total of 670 units and will house about 1,000 students.

One of the UTILE projects receiving city funding is a 285-unit high-rise building called Cardinal that will house about 358 student tenants and is scheduled to begin construction this year in Griffintown. The first tenants are expected to arrive in 2027.

The second project is called Riverside Soundis being developed in partnership with the Concordia Student Union at Pointe St-Charles. The 95-unit apartment building will house approximately 208 tenants and is expected to begin construction next year and be completed in 2026.

The third project, located on St-Hubert Street in the Plateau Mont-Royal district, will have 149 apartments and will accommodate approximately 235 tenants. The project, co-developed by the École Polytechnique Student Union, is scheduled to start construction at the end of 2025 and be delivered in 2028.

The fourth project, with plans to build 141 apartments and house around 200 tenants, is located around the MIL campus at the University of Montreal Outremont. Construction is expected to begin in late 2026, with delivery in 2028.

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Levesque said the city’s grant accounts for about 10 percent of the investment in the four projects.

Without the city’s funding, he said, “we would have to work longer and have to jump through more hoops to get funding, so these projects might not be completed for another few years.”

Plante and Dolais also point out that Montreal is the second-largest student city in North America after Boston. “Montreal is a student city, it’s part of our identity,” Dolais said. “We have to keep these students, we have to attract them. But we need to make sure we provide housing for them like everyone else.”

The city said the $21.4 million grant to UTILE comes partly from the social housing fund of the Community Métropole Montreal (CMM).

Between 40 and 60 per cent of the $21.4 million will come directly from contributions from for-profit developers to a city fund established under Montreal’s Diverse Metropolis Ordinance, which was enacted three years ago. The Plante government passed the ordinance to force developers to build social, affordable and “family” housing in their for-profit projects. If they opt out, they must pay compensation to the city fund, though critics say the city isn’t collecting enough. As of October, approximately $26 million in damages have been collected under the ordinance.And no developer has personally delivered social or affordable housing.

The city’s latest move to support non-market housing development Plante announced the news earlier this week. The city will allocate $3 million over three years, starting in 2025, to support the start-up phase of social and affordable housing projects. Plant City Council also pledged this week to set a 120-day target deadline for the city and its boroughs to issue building and alteration permits for residential projects that do not require zoning changes and where the property is fully owned by the project developer.

The government has set a goal of increasing the share of non-market social or affordable housing in Montreal to 20 per cent by 2050. Currently, it stands at 7 per cent.

lgyulai@postmedia.com

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