Last week, Aryze Developments and Legion Manor Victoria announced they were joining forces to provide housing for seniors, senior veterans and workers in Saanich. The proposed project will be built on land that Aryze has acquired along Hovey Road.

The project has a number of moving parts in re-zoning and financing applications as well as in the management of future building costs that all need to coalesce in order for the project to be successful. The risk lies in their interdependence. 

By partnering with the Manor, Aryze is able to take advantage of Saanich’s new Development Cost Charge Reduction bylaw based on the criteria that the Legion’s building will be a not-for-profit rental housing development that includes an assisted living development and is owned by the not-for-profit society incorporated under the Societies Act.

The bylaw was passed by council in October and could reduce Aryze’s development costs by up to 50%, according to the program’s eligibility criteria.

Legion Manor Victoria is operated by the South Vancouver Island Housing Society, a not-for-profit society run by a volunteer board of directors that has provided affordable housing for veterans and adults 55+ in Saanich for half a century. It’s this designation that makes Aryze eligible for the district’s development cost reduction program and the Legion eligible for BC Housing financing.

The project’s west building, owned by Aryze, will contain approximately 133 market rental homes ranging from studio to three-bedroom units. The east building, which the Legion will own, will contain 62 studio and one-bedroom units for seniors. It addresses the region’s housing gap for emerging young families and for seniors wanting to age in place. 

Legion Manor president Rod Hughes told Capital Daily that acquiring the land has been a huge win. 

“You cannot build affordable housing for seniors unless you get a break somewhere in the process, like if the property is too expensive.”

Owners of the Manor had been looking to expand their footprint for a number of years, but could never afford to buy additional land nearby. The opportunity to grow was made possible when Aryze offered to sell a portion of the land it recently acquired to the society at well below market value. In order to finance its part, the Legion will have to apply for financing from the BC Community Housing Fund, a $3.3 billion provincial investment in affordable rental homes for people with moderate and low incomes.

The cost of land was not the only hurdle the Manor faced in the partnership deal. The deal is dependent on their mutual ability to make successful re-zoning applications to the district and be able to keep its affordable housing on offer against building costs on the other side of the ledger. It all has to “pencil.” 

Building costs still present a challenge

Building multi-family units costs a lot of money and Aryze, like other developers, depends on government program subsidies, grants and lending sources to fund their construction. However, its capacity to attain these sources of financing depends on the revenue it can get, or how much renters can afford to pay so they can meet their net operating costs (NOI). Land acquisition is the most significant “use” or cost to developers. Construction cost is the next.

Those costs are on Hughes radar as well. 

“You have to go through the rezoning process and you have to go through the building while building material prices have skyrocketed and there are labour shortages and difficulty finding skilled labour to build. It all drives all the prices up.”

Aryze was in the spotlight last month when it argued to Victoria council that soaring development costs and approval delays meant it had become fiscally impossible for them to keep the affordable townhome units on Foul Bay Road that were part of an initial agreement with the city on the table. It’s a cautionary tale for this project too, but one that is less likely to repeat itself because of the nature of the partnership with the Legion.

Hughes understands the risk. “Every dollar you put into it eventually has to be repaid in some way. And that if you're running mortgages and things like that, that means it's harder and harder to keep it affordable.” 

According to the BC Housing program, applicants who would live in Legion Manor units must make between $82,310 to $128,810 to apply, what they define as a moderate to low income. If current or future residents don’t make this income, they may apply for Shelter Aid for Elderly Renters (SAFER). The aid comes in the form of cash or rental supplements for eligible seniors.  

The project will take a bite out of a two-year waiting list at the Manor and new residents will be able to take advantage of the same assisted living and other wellness programming that the Manor has been offering for decades. The east building will also have a number of accessible units (30%) with accessible design features for people who use mobility devices.

The east building’s net operating income (NOI) will depend on how much renters can afford to pay. One way to hedge bets is to make smaller units. Studios and one-bedroom units are the biggest bang for a developer’s buck and the Legion’s east building is nothing but. 

‍Also a win for people looking to work close to home

The development also hopes to target people wanting to age in their community but also to grow with it.

In the largest municipality in the CRD, finding staff and workers for growing businesses has become a challenge because housing costs are driving people away from bigger centres like Saanich to more affordable places in the region. Without housing options, its workforce is also looking elsewhere for work. That’s not good for business.

Citing a lack of affordable housing for workers in the tourism and hospitality industry, Victoria approved a $2.5-million boost out of its housing reserve fund for a 40-unit building at 2558 Quadra aimed to ease the affordability strain on workers in the hospitality sector. That model could work for the healthcare sector as well. 

In another project, Aryze is hoping to reach an agreement with Shoreline Medical and the Saanich Peninsula Hospital which will allow them to secure housing for its healthcare workers on its two-acre site.

In a housing advocacy article it published in Sept., the Saanich Peninsula Chamber of Commerce reported that a typical family needs 77% of their gross household income (pre-income tax) for their mortgage payment. A typical family had a monthly income of $8,361 and a mortgage payment of $6,438 per month, leaving little wiggle room in a high-inflation economy for other household expenses. The market rental side of this Aryze project with the Legion Manor will reduce these costs for those lucky enough to secure them. 

Symbolic of the new collaboration, the Aryze design includes an ease of access between the two properties with a pedestrian pathway that connects the market rental west building and the Legion Manor’s east building, a feature representative of the mutual benefits for workers and seniors.