Is time running out to spend $1.2M on Yellowknife housing?

On Thursday, Yellowknife’s Community Advisory Board on Homelessness will meet to discuss the fate of this year’s Reaching Home funding.

Reaching Home is part of a national federal funding strategy designed to help address and prevent homelessness. Over five years beginning in 2019, the city is set to receive a total of $12,284,271.

For a federal funding grant, Reaching Home has an especially wide array of eligible activities and expenses. Communities can use Reaching Home money for everything from the purchase of capital assets to groceries, legal advice, cleaning services and transportation vouchers for residents.

But that unique range of possibilities opens up a wide range of opinions about how to spend the cash.

Even within Yellowknife’s community advisory board – known as the Cab for short – the people responsible for formally recommending how to allocate the money aren’t seeing eye to eye.

And the clock is ticking.

If the money received so far isn’t spent by the end of March 2023, it must be returned to the federal government unless the city can explain the delay.

So far, of the $2,590,643 in Reaching Home funding granted to the municipality, $1,388,373 has been spent topping up existing initiatives like Housing First and a shelter diversion program.

This means $1,202,270 remains on the table.

Programming, or a purchase?

For Cab members, the choice is whether to set aside that money – for example, in the hope of putting it toward a potentially transformative project (that some see as overly idealistic) – or spend the money now on urgently needed programming for non-profits (a choice some see as maintaining the status quo).

Aspen Apartments is a focus of this debate.

Aspen is a residential complex on 51 Street in downtown Yellowknife, currently owned by the federal government through its Canada Mortgage and Housing Corporation, or CMHC.

Once used for worker accommodation, it had a brief stint as a day shelter in 2021 but now sits empty.

For some Cab members, Reaching Home funding provides an opportunity to ensure the Aspen building gets put to good use. They envision a supportive housing project that they believe could have an incredible impact on the community.

Their plan calls for the city to coordinate with CMHC in transferring ownership of Aspen to a yet-to-be-determined non-profit, which will staff and run the project. In the meantime, the city would use Reaching Home money to help out with renovations. Those renovations are expected to come in below the $1.2-million budget.

Several Cab members, including Mayor Rebecca Alty, believe putting a portion of Reaching Home money toward a long-term housing solution like Aspen would have more of an impact than putting it all toward local support services.

“I see Aspen, just like when we purchased the apartment buildings for SideDoor, as a way to invest the money in something where we’re going to see benefits for many years to come,” said Alty.

“Aspen has a 30-year lifespan. So we could spend this $1.3 million and it’ll last for the next 30 years. Do we want to use this money for short-term needs or look at long-term projects?”

Whether the money remains with the city or is passed on to a non-profit, it all has to be spent by the March deadline. For Alty, this means it’s worth pursuing what she feels is a tangible end product.

Rob Warburton sees things similarly, preferring to purchase something with the cash instead of funding programs.

“I don’t want to devalue programming,” said Warburton, a Cab member who was newly elected to city council this week, “but a million bucks of programming money gets spent, we run programs for a year, and then that money’s gone and those programs are over.

“I know there’s a lot of pushback from folks, understandably, because they’re desperate for programming money and they don’t want to roll money over to an unknown. But this is an opportunity that won’t get repeated.”

Given the high cost of building in the North, the prospect of acquiring 36 units of housing – essentially for free – is difficult to ignore.

“If this went to the open market, it would sell in about 15 seconds and be full in a week,” said Warburton, who runs a real estate investment company.

“And with this [Reaching Home] money, there’s no limit on capital, which is the first time I’ve ever seen federal dollars able to be used to buy stuff. It usually comes with a caveat. So this is pretty special.”

Members fear that if they don’t move quickly and take advantage of it, they’ll miss out.

“Real estate’s not time sensitive until it is,” said Warburton. “You need to have it ready for when the feds say yes. Professionally, I’ve been burned before because money wasn’t sitting there when it was needed.”

While the funding hasn’t yet been formally allocated toward the Aspen project, in September, the Cab suggested city staff work with CMHC on transferring Aspen to an organization for non-market housing. Council voted to proceed.

Is it feasible?

All Cab members agree that if the Aspen project came together it would be a game-changer. Some just place more stress on the “if.”

“It’s a great concept,” said a Cab member who asked to remain anonymous for this report to discuss the group’s internal decision-making.

“We don’t have housing stock. We rely hugely on [dominant northern landlord] Northview for providing housing to our vulnerable population, which is problematic at best.

“So if all the right pieces were in place … 36 units of supportive, affordable housing would go so far for this community. It would be massive. But right now, it’s a pipe dream.”

The Cab member – we’ll call them Cab Member 1 for the sake of simplicity – fears the current plan is not realistic, and worries about what may be sacrificed in the interim.

“There are two things you need to look at,” said Cab Member 1.

“One, is the building attainable? And yes, OK, the building is potentially attainable. Two, who could run that building? Is there an organization that could run such a building right now?

“Because if there isn’t one, what is the point of the city buying and renovating a building, and potentially just having it sit there because no one is willing or able to take it on?”

For Cab Member 1, the lack of concrete planning makes it frustrating to see organizations like the YWCA struggling to feed Yellowknife families, when that kind of programming would also be eligible for Reaching Home funding.

“I don’t think this idea is malicious. It’s idealistic,” they said.

“But it’s also horrifically problematic when it means that, because we’re so focused on this ideal solution, a million dollars is sitting in a bank account – when it could be going to existing programming and non-profits that are struggling.”

Another member of the Cab, who similarly sought anonymity to discuss the board’s work in public, feels the same way. We’ll call them Cab Member 2.

“This is a huge amount of money to have sitting on the table, when you’ve already received proposals you could implement today,” said Cab Member 2.

“This is not acceptable. I cannot for the life of me fathom why they’re ignoring NGOs, who need that money now, for a project that may or may not happen.” 

Can’t the city wait?

For proponents, the possibility of what Aspen could be makes holding on to the funding for as long as possible worthwhile.

Even so, some Cab members argue the city could just wait until the 2023-24 Reaching Home funding comes in. That will provide $2,726,096, and the city could take the funding needed for the Aspen project from that.

Yet Warburton doesn’t like that solution.

“If we allocate [this year’s] money toward Aspen, the worst-case scenario is that we sit on it for a few months and then we deploy it elsewhere if it doesn’t work out,” he said.

“But the worst case if we spend the money on programming is that the opportunity comes up to take the building, and we don’t have the funds.

“When you acquire a building, you instantly take over maintenance, snow clearing, heating, water… which is going to cost a lot of money for a building of that size. So if you have no money allocated, who’s paying for that?”

But others say the worst-case scenario is that the money doesn’t go to Yellowknife residents or a supportive housing project, but into the pockets of a landlord.

“If no NGOs put up their hand [once the building is renovated], then it just goes to open market,” said Cab Member 2. “Any landlord could buy that building and turn it into a profitable business.” 

Neither Alty nor Warburton think that is a concern.

“Some NGOs are renting from Northview at market price for housing units,” said Alty, “when they could be breaking even or even profiting [at Aspen].”

“I don’t see finding an operational partner being a problem,” said Warburton.

“Like, do you want a free house? People figure out pretty quick how to structure something when the asset is free.

“The barrier here is not operational ability. The barrier here is the ability to get the asset in the first place.”

Are we actually running out of time?

There’s also disagreement about the seriousness of the March 31 federal cut-off by which the money must be spent.

Alty, for example, says that deadline is “not super black and white.” But Cab Member 1 worries that “the reality is we could potentially lose this money.”

“We have to give the feds a really good rationale as to why they should let us roll it over,” they said. “And by all accounts, ‘we just haven’t allocated it yet’ is not a good rationale.”

Whether the Cab will proceed with the Aspen project, or put the rest of this year’s money toward a non-profit before the deadline, depends on Thursday’s meeting.

Warburton, for his part, hopes that one day he’ll get to see at least 36 people with an apartment to call their own.

“That is the whole reason I joined Cab,” he said. “To actually house people.”

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Correction: October 19, 2022 – 8:03 MT. This article originally stated the next Cab meeting is on Wednesday. It’s actually on Thursday, October 20. (If you’re a Cab member who sprinted out of bed on Wednesday upon reading this… sorry.)