Bridgewater affordable housing project likely a no-go as non-profit denied tax exemption

An affordable housing project in downtown Bridgewater likely won’t go ahead as planned after the non-profit behind the project was denied a tax exemption from town council.

As the Examiner reported in December, Art Fisher, the executive director of Family Service of Mi’kma’ki, made a presentation to Bridgewater town council for a tax exemption, among other requests, for its affordable housing project on King Street.

The project started in 2017 when Fisher said the housing crisis was already emerging in Bridgewater and Family Service of Mi’kma’ki was a “first-hand witness” to it. The site at King Street was formerly a hardware store, which has since been was remediated, yet construction on the housing remains at a standstill.

The project will provide 68 units of deeply affordable housing in downtown Bridgewater. Some of those units will be set aside for women and their children who are fleeing situations of domestic violence. The housing will also be connected with the community’s Coordinated Access to Housing System that will provide needed supports to tenants. The project will also be a net-zero-energy build.

Family Service of Mi’kma’ki already has three units of housing in another building on King Street.

Family Service of Mi’kma’ki received $268,000 in funding from the Canadian Mortgage and Housing Corporation (CMHC) this past summmer, but that funding can’t be released to help pay for final reports unless taxes on the project are non-existent or alleviated.

During Bridgewater council’s regular meeting on Monday evening, CAO Tammy Crowder read out the details of the response to Family Service of Mi’kma’ki’s request for tax exemption.

Crowder said Family Service of Mi’kma’ki applied for a tax exemption on two properties, 629 and 641 King St., in January 2021. The exemption for 641 King St. was denied at that time because that property where the housing project is to go, wasn’t occupied and didn’t qualify for a tax exemption under council’s bylaw chapter 184, tax exemption for non-profits. (629 King St. is where Family Service of Mi’kma’ki’s offices and three units of housing are located).

“While the future intent was to have the site occupied by the association to provide non-profit housing, it was not occupied at the time. And for that reason, the application was denied,” Crowder said. 

Crowder said the situation for the December 2022 request is the same as the property at 641 King St. remains unoccupied.

Family Service of Mi’kma’ki also owes property taxes on the location totaling $53,961.43 as of January 3, 2023. The taxes are three years in arrears and per the town’s tax sale policy, the property will be put up for sale this spring if the taxes are not addressed.  

A notice will be sent to Family Service of Mi’kma’ki this week giving them 14 days to make arrangements to pay the back taxes. If the amount isn’t paid, the tax proceedings will go ahead. Then there’s a 60-day countdown to the tax sale.

Crowder said council did have options to address the taxes in arrears.

“Instead of calling it an exemption, you could look at it as a grant,” Crowder said. 

Council also has the option to defer the tax sale by up to two years.

But on Monday, council ultimately voted to deny the request for exemption, not pursue the grant option, or defer the tax sale.

Coun. Stacey Colwell asked about attempts to reach the association about paying the taxes in arrears.  

“I probably will have to support this motion, which disappoints me,” Colwell said. “I had a lot of hope in this affordable housing project but with all these taxes in arrears, I’m not sure I can commit $54,000 in taxpayer money for something we have no assurance will have the project come to fruition. I am disappointed by that.”

‘It really is a missed opportunity’

In an interview with the Halifax Examiner after the council meeting Monday night, Fisher, along with George Buranyi, chair of the board of Family Service of Mi’kma’mi, both expressed regret and frustration with council’s decision.

“We certainly recognized that there were a few different outcomes that were possible,” Fisher said. “We didn’t think the town would automatically go to this outcome, or as quickly go to this outcome.”  

“All the research shows that non-profit housing developments are not sustainable without town/municipal support. We don’t see a way forward without that commitment to the housing continuum.”

Buranyi said the town’s decision was a “missed opportunity.”

“The town is going to be on the wrong side of history. We have a housing crisis across the nation. Here was an opportunity to support a potential 68 units of deeply affordable housing in a community that has, per capita, as high a homelessness rate as almost the city does. So, where are all those people going to go? It’s an opportunity and I think the risk was not maybe as high as the town perceives it. CMHC obviously liked our application because they were prepared to spend $268,000 in seed money given to us to write the reports that would take it to the level of funding the entire project.”

Fisher argued that the definition of “occupied” doesn’t mean current tenants, either private or commercial, using a space. Fisher said the space on King Street was used as part of its youth training program that was part of the remediation of the site. Fisher also noted in his December presentation there was precedent for giving non-profits tax exemption for building affordable housing, citing a case in Ontario.

“I think we’ve occupied the site in two ways. We occupied in ways that fit with the town’s existing bylaw definition of occupation and we’ve also occupied it within the challenge to that definition that set a precedent in that Ontario court case.”

As for paying the amount of taxes owed, Fisher said he “can’t forsee that happening.”

“We can’t do that because we’re a registered charity that does not have program money to spend on taxes,” Fisher said.

In the interview on Monday night, Fisher repeated what he shared in his presentation to council in December, saying non-profits contribute to the community in ways beyond contributing to the tax base. He said over the last few years, Family Service of Mi’kma’ki has brought $8 million in funding to the community for programming.

“How non-profits contribute to a town is through, for example, preventive community-based programming, and through bringing in funding for programs for community supports that are investments in the community, in community development, which is very different than from seeing us as primarily a contributor to the tax base,” Fisher said. “As I was clear in our presentation in December, non-profits don’t have program funding to spend on contributions to the tax base. That’s not what we do.” 

Fisher said while this may be the end of their efforts to build non-profit housing, the agency itself still has work to do. Buranyi and Fisher said they’d be spending the next few weeks wrapping up the housing project, adding there are lessons to be learned about this process.

“The agency will remain in place. We’re pursuing social justice work in relation to homelessness and housing and supports for impoverished people. We will still be operating as a registered charity. This has certainly been a lesson in how difficult it is to move non-profit housing forward in our communities in Nova Scotia.” 

“The thing that amazes me is that towns can become so obsessed under capitalism with accounting and tax income that they fail to imagine, calculate, or support other forms of much more vast social wealth creation, like non-profit housing, and social enterprise community wealth creation, versus community wealth extraction by developers, Galen Weston, et al.”