Government’s failure to enforce contract means end of affordable housing project

The government has walked away from a new 48-unit affordable housing project in Regina, and is now allowing the private developer to rent out the units at full market price instead.

The government sold off 40 housing units in Regina that were previously set aside for low-income residents. Those units were supposed to be replaced by this project. But then the government decided to turn this project over to the private developer because of a four per cent cost overrun on its construction.

"It's frustrating that this government can't get the job done on affordable housing," said David Forbes, NDP housing critic. "This government needs to give a better explanation for why it just handed this project over to the private developer. It's not fair for the private company to have the government insure and underwrite the construction project and then, for that same private company, to break the contract and be allowed to commercialize the project on their own."

The NDP says the government should have stood strong and, if necessary, taken the private developer to court in order to enforce the fixed-price contract it had in place.

"It's basic common sense that any contract should be clear and enforceable and, if there's still a major disagreement about it, the contract should be able to withstand scrutiny in court," said Forbes. "So there must have been significant problems with the government's contract with the developer. Why else would this government just walk away from a much-needed housing project like this?"

Forbes said this mess up is just the latest bad deal between the government and the private companies it selects for projects.

"The government enters into these weak contracts with private companies, and whenever those deals go bad, it's Saskatchewan people that pay the price," said Forbes. "We're seeing that with the $47 million smart meter fiasco, we're seeing that with this failed affordable housing project, and we're bound to see it with this government's private rent-a-school scheme for P3 schools. Enough is enough. Saskatchewan people deserve so much better than this."