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Inflation blamed for $217M price tag for county housing project

'Even a one per cent increase on a project this size is $2 million a year. It doesn't take long, unfortunately,' says county official

Post-pandemic inflation and the need for a parking structure are a couple of the key factors being blamed for the cost of an upcoming mixed-use housing complex on Rose Street in Barrie’s north end.

With an estimated budget of $217 million — nearly triple the cost of the County of Simcoe’s $79-million, 130-unit Orillia Campus Project — the planned build at 20 Rose St. stands to be the most expensive undertaking the county has taken on in terms of creating affordable housing in the region.

“That’s what we call a Class C budget. We don’t have the design finalized yet. We are giving our best estimate based on what we know," Brad Spiewak, the county’s director of social housing, told BarrieToday. "This is a fairly large build that takes a number of years. So, as staff, we have to predict what this is going to cost three years from now.

“We have to build in inflation estimates, so at the end of the three years, we are coming in on budget and not just on today’s dollars," he added.

That estimate, Spiewak noted, includes the hard costs (building and site works), soft costs (permits, designs, etc.), staff labour as well as the fit-up of the building, which means having all of the tools in place needed to keep the facility running once it’s complete.

“I always compare that to buying a house that has the cupboards stocked, the fridge is full and there are cars in the driveway. For us, that is outfitting the building with all of the tools and racking, equipment, floor scrubbers, tractors, extension cords … so that when it’s open, it’s ready to operate,” Spiewak said.

He acknowledges when looking at this project in comparison to other county-led builds, the cost is significantly higher. That, Spiewak added, is due in large part to the scope of the project, as well as timing and inflation.

“Orillia was pre-pandemic, so for construction costs, you’re looking at 2022. A lot of it, we tendered pre-COVID and actually locked down as much of our costs (as possible) right at the beginning,” Spiewak said. “We were very strategic at the Orillia build. We mass-ordered material prior to peak inflation and stored it. We locked in pricing whenever we could and stored it at the site.”

The other difference with Rose Street, he pointed out, is the parking structure.

“With any other of the county builds, the first thing we try to do is reduce parking wherever we can. We know, typically, in community housing, the ratio of cars is less than the full private market. After that, we are into surface parking, and that’s just not possible at the Rose Street location,” Spiewak said.

The last resort would be to build a parking structure, he added, which, due to the size of the property, is what was required in this project. That alone is expected to cost between $15 million and $20 million.

“It’s significant,” Spiewak acknowledged. “That’s why you try so hard not to do it, and it’s very hard to do it in any sort of affordable housing scenario.”

Post-pandemic inflation is the other big reason for the cost.

“Even a one per cent increase on a project this size is $2 million a year. It doesn’t take long, unfortunately,” he said.

Layouts for the units are in the process of being completed, Spiewak said, adding while the plan is to create 215 units in total, it’s possible even more could be included.

Originally, the county was looking at a 100-unit build on the site near Bayfield Street and Highway 400, Spiewak told BarrieToday, but given the ever-growing housing crisis, council opted for a different option that would provide housing for even more residents.

“This was pre-pandemic and we’re certainly further on in the housing crisis that has ballooned in recent years,” he said.

The concept of making it a “mixed-income” complex simply makes sense, Spiewak added.

“County council, and the City of Barrie, recognized there’s a number of ranges of housing that are missing. The housing crisis isn’t just hitting the very bottom of the income bracket; it’s all the way through. So, a much broader solution was targeted,” he said.

That ultimately resulted in more units to be built, a slightly larger operating model and a larger budget.

The complex, which will be about 282,000 square feet in size — including 80,000 square feet for commercial agency space — will include 64 rent-geared-to-income units, 24 units at 80 per cent average market rent (AMR), 99 units at 100 per cent AMR and 28 units at 120 per cent AMR.

“From a financial sustainability point of view, it helps. In order to be able to charge lower rents, to offset those expenses, you have the ability to charge some slightly higher rents,” Spiewak said.

A mixed-income community is ultimately a healthy community, he added.

“You have that whole range. If you have a building that has a high concentration of high-need individuals at the very lowest end of income — or higher acuity — it can create more social issues. If you can blend that out into more mixed income, you have a healthier mix,” Spiewak said.

Plans for the complex also include a significant amount of commercial space, which will be allotted to a variety of services including the county’s Ontario Works and Children’s Services offices, provincial offices, education partners, and a licensed child-care facility.

Site work is expected to begin this summer and will include preparing for the addition of city services and co-ordinating with plans for work being done on the Bayfield Street bridge.

“We will be looking at excavating for building footings — digging for a parking structure is the big one — and all of the utilities, waste and sewer,” he said. “We are getting very close to submitting our zoning bylaw amendment and site plan to the city.”

The goal is to have the parking structure completed by early 2026 and the residential part of the project open to residents by 2027.

“We all know when it comes to the housing crisis, it’s a huge problem. This is by no means going to solve it, but it will certainly make a very good dent in the problem,” Spiewak said. “It also brings to the table all of those commercial and support agencies … into the local area, which is an improvement.”