The 30 subsidized apartments will be located in Crescent Valley, one of the city's most disadvantaged neighbourhoods in the north end, as part of a new 60-unit, mixed-income building.
The federal government will contribute $1.2 million for construction through Canada's Economic Action Plan, designed to stimulate the economy and create jobs during the global recession.
Meanwhile, the province will spend $2.3 million over 20 years for rent supplements.
"This development is a wonderful example of all aspects of the community coming together to create quality, affordable housing that will not only have a meaningful impact on the lives of the residents but will also play a key role in revitalizing Crescent Valley," said Social Development Minister Sue Stultz.
Just last month, the YM-YWCA announced it also plans to build its new facility in the community.
"I'm really proud of this neighbourhood," said Saint John Portland MLA Trevor Holder.
"Crescent Valley can be a role model to the rest of the province, of what happens when a community comes together, sets clear public priorities," he said.
Both of the projects are in part the result of a survey of residents, who identified a need for more housing and recreation.
"This is what they need — recreation and new affordable housing — and we're well on the way now," said community activist Juanita Black.
"So I think the residents will be really happy."
Some units fully accessible
Elias Management Group Inc. is expected to begin construction of the $9-million mid-rise seniors' apartment building in the spring. It will be located where 88 dilapidated low-income units were levelled just a few years ago.
The 60-unit building will include 30, one-bedroom rent subsidized units. Six of them will be fully accessible, while the other 24 will be senior-friendly. Half of the senior-friendly units will include roll-in showers.
The remaining 30 units will be one- and two-bedroom apartments.
The building will also include a community room and a multi-purpose area to host events and activities.
"Our government is dedicated to giving a hand-up to those in need, which is why we are proud to have invested in this project in Saint John", said Saint John MP Weston.
"These new units are more than just a safe and affordable place to live, they are key to meeting the needs of seniors who will call them home."
A construction date for the YMCA has not yet been set.