Digby affordable housing project on hold as federal funding dries up

A plan by a Digby, N.S., non-profit to build affordable housing on the site of a former downtown motel is at a standstill as the group awaits word on federal funding.

The Digby & Area Housing Coalition Society purchased the former Siesta Motel in 2022 with an aim to turn the existing building into affordable housing, coalition chair Nancy Robinson said.

Subsequently, it was decided that it would be more cost efficient to demolish the motel and build 34 units on the site. The units would serve seniors and other vulnerable people facing Digby's severe housing shortage.

Robinson said the units would be genuinely affordable, with tenants spending no more than 30 per cent of their income on rent, including utilities. She said they already have many applicants for the units.

After securing $300,000 in funding including provincial grants for design work and municipal approvals, the $11.2-million project was construction-ready this spring and awaiting the release of federal funds.

After waiting for the outcome of the federal election, Robinson said the group was told the Canada Mortgage and Housing Corporation's affordable housing fund, their expected funding source, had been depleted.

'That's a lot of money'

CMHC said in an email to CBC that it's affordable housing fund "has attracted significant interest and success, resulting in numerous high-quality applications," but did not indicate if and when it will be replenished.

Robinson said the devastating news has left the project in limbo.

"That's a lot of money and it's very difficult to make that up," she said. "It's nerve-racking, not just because of the number of people that are waiting for housing, desperately waiting for housing, and Digby where there's really basically nothing available and certainly nothing affordable."

Robinson said the delay leaves the volunteer organization having to cover significant costs, including the $2,600-monthly mortgage payment on the vacant property.

The delay couldn't come at worse time for Digby, she said. The community's housing shortage has reached emergency levels.

Information Morning - NS8:38What's keeping a new affordable housing complex in Digby from getting off the ground?

A plan to build 34 affordable units in Digby has hit a snag. Everything is approved and ready to go. But the expected funding from the Canadian Mortgage and Housing Coalition is not coming through. We find out what's going on from the Digby and Area Housing Coalition. 

She said the funding issue appears linked to broader changes in federal housing policy. While Ottawa works to implement its new housing plan, she said existing programs like the affordable housing fund have been allowed to lapse.

Robinson said she understands the need for systemic reform, but immediate action is needed to help people in desperate need of appropriate housing.

The coalition has launched a local fundraising campaign and is exploring alternative financing options.

Chris d'Entremont, the Conservative MP for Acadie-Annapolis, which includes Digby, said it was strange the program was still taking applications even though it said its funds have been depleted. He said billions of dollars have gone into the fund, which has existed since 2018.

"We're hoping that as the fall rolls around, of course, there's going to be a budget coming," he told CBC Radio's Information Morning Nova Scotia.

Finance Minister François-Philippe Champagne "has said that there will be a program coming, that there should be funding. So we're hoping it will be topping this off."

With demolition delayed from its planned May 2025 start, Robinson said completion could now slip to late 2026. Meanwhile, for the applicants the wait continues with no clear resolution in sight.

"They are desperate. It's palpable. It's tragic, really," Robinson said.