Developers often conduct studies to determine the financial feasibility of potential projects, including some sensitivity analysis that helps them to determine what happens to the project as certain variables, costs or assumptions change.

A feasibility study program may prove to be useful by allowing developers to explore their options for providing affordable housing, including an evaluation of what happens to the financial performance of the project when possible incentives are factored in. The goal of such a program would be to explore ways to make financially challenging projects like affordable housing economically viable.

An example of a similar program that is offered through the City of Windsor’s Brownfields Redevelopment CIP is the Feasibility Study Grant Program that provides a financial incentive in the form of a grant to help offset the cost of conducting feasibility studies on brownfield buildings and lands. The program is a “50-50” matching grant program where the City of Windsor will provide a grant to an applicant for up to 50% of the cost of an eligible feasibility study up to a maximum grant of $7,500 per feasibility study.

The City of Sudbury offers the Feasibility Grant Program as part of its Affordable Housing CIP. Their program provides up to $5,000 to assist in the completion of feasibility studies, building renovation designs, or business plans to assist in the creation of affordable housing units. This program recognizes that there are additional costs associated with creating affordable housing and provides a grant to help stimulate the design and creation of more affordable housing.

Additionally, The Canada Mortgage and Housing Corporation (CMHC) Seed Funding program offers successful applicants interest-free loans and/or non-repayable contributions to help with costs related to pre-development activities. This can include business plans, preliminary designs, development permits and more. A number of Windsor housing projects have been the recipient of CMHC’s Seed funding program including the affordable housing development at 3100 Meadowbrook funded by all three levels of government. This funding could be combined with any program offered by the City.

Other CIP Strategies

It is common that multiple parcels need to be consolidated in order to have a large enough site to make a redevelopment project feasible. The land consolidation process may be costly and time consuming enough to be a significant deterrent to affordable housing. Other barriers to land assembly include property owners that are uninterested/unwilling to sell; land speculation; accessing to financing because the land has no demonstrable short-term revenue stream; and, fragmented ownership. For these reasons, it is common to see the municipality taking an active role in the land consolidation process.