London developer gets $130M loan for housing project
On January 8, Canada Mortgage and Housing Corporation (CMHC) announced an investment of more than $130 million to support construction of new affordable-housing units in London.
The national housing agency delivered the funding to developers Old Oak Properties Inc. through the Rental Construction Financing initiative (RCFi), a CMHC program that supports rental-housing construction projects in expensive housing markets across the country. The money comes in the form of a low-cost loan to the developer, which is expected to build new units in response to demonstrated community needs.
London is particularly in need of rental housing stock. The city’s vacancy rate in 2018 was 1.4 percent.
"There is likely no issue more pressing, no issue more important in London right now than affordable housing,” said Mayor Ed Holder. “Nearly 5,000 Londoners are on the waitlist as demand continues to rise. The commitment shown by the federal government and Old Oak Properties Inc. is significant, and will make a meaningful difference in the lives of a great many Londoners for years to come."
Construction is already underway on the former Camden Terrace site at 495 Talbot Street and 110 Fullarton Street, and is expected to last three years. The project scope includes two multi-residential buildings that comprise 420 units. One tower will stand 40 storeys, and will be the tallest building between Mississauga and Calgary; the other will stand 29 storeys.
Between the two buildings, 110 units will have rents lower than 30 percent of median household income in London. Furthermore, 84 of these units will have rents that fall at or below 70 percent of the 30 percent median income in the area. They will provide affordable housing options close to public transit and services.
Additionally, 15 percent of the units will be adaptable or meet universal design standards. The overall project is designed to achieve reduction in energy use of 25.2 percent and reductions of greenhouse gases by 38.5 percent relative to the 2015 National Energy Code for Buildings.
"Old Oak is grateful that Canada Mortgage and Housing Corporation is providing a loan for this exciting new project,” said Oak Oak CFO Jeff Martin. “Named Centro, this will be a landmark development for both London and Old Oak, providing hundreds of high-end, affordable rentals."
The federal government launched the RCFi, under which the Centro project will be partially funded, in April 2017. Since then, the initiative has generated significant interest and quality applications. As a result, the government expanded the program’s funding envelope from $2.5 billion to $13.75 billion. The initiative is expected to spur construction of more than 42,000 rental units across the country.