Minister defends decision to return low-income housing to private company

The minister of social services says it was her decision to allow a private contractor out of an agreement to build social housing in Regina and she stands by it.

Harpauer didn’t want to “thump” on developer in court

Social Services Minister Donna Harpauer is defending her decision to allow a private developer to walk away from a contract to build low-income housing. (CBC)
Deveraux Developments and the provincial government agreed to a fixed price contract to build low-income housing in Regina’s Hawkstone neighbourhood, but the deal fell apart. (Geoff Leo/CBC)
The minister of social services says it was her decision to allow a private contractor out of an agreement to build social housing in Regina and she stands by it.

“We did basically let them off the hook for the contract rather than go through any legal hassle and that way we’re (the provincial government) out no money,” Donna Harpauer told CBC’s iTeam.

The province had a fixed price contract with Deveraux Developments to build a 48-unit low-income housing project in Regina for a fixed cost of $9.9 million.

But Deveraux had a $400,000 cost overrun and it asked the province to pay half the amount.

Harpauer decided the government wouldn’t pay the cost overrun.

But she also decided not to enforce the contract in court.

The NDP’s David Forbes has criticized that decision.

“They should have gone to court to enforce the contract. It's only common sense that any contract you sign should stand up in court,”

Forbes argued it’s more important to secure social housing for low income people than to avoid conflict.

But Harpauer has a different perspective.

“I think that our relationship with Deveraux warrants the fact that we don’t thump on them when they’ve had a misfortune,” Harpauer explained.

Instead of suing, Harpauer agreed to take back the province’s deposit on the project and allow Deveraux to keep the development.

The developer plans to rent out the units at market rate.

Harpauer sympathetic to Deveraux

Deveraux’s President and CEO Denis Jones admits that the cost overrun was the company’s fault.

And Harpauer has some sympathy for that.

“I don’t question that he’s run into some hardship with this particular site that he didn’t anticipate. And it’s just not a regular occurrence,” Harpauer said. “It’s a one-off decision that we made to continue with a strong partnership.”

Harpauer’s decision meant that the 48 low-income units intended to alleviate the housing shortage in Regina will be delayed for two and a half to three years.

The province will re-tender the project in the new year.

Regina housing supply improving: minister

But the minister of social services points out that Regina’s housing shortage isn’t as severe as it used to be a few years ago.

In 2012, Regina’s rental vacancy rate was among the lowest in Canada at 0.60 per cent, but Harpauer points out that it’s now two and a half per cent.

In response to a CBC iTeam question about the waiting list for social housing faced by homeless people Harpauer said, “you’re assuming that there’s these desperate homeless people.”

“We are very aggressively and proud of increasing the number of units available and I think our record speaks loudly to that. And in fact, it has dropped the wait list of families by 50 per cent,” explained Harpauer.

About the Author

Geoff Leo

Senior Investigative Journalist

Geoff Leo has been a reporter for CBC News in Saskatchewan since 2001. His work as an investigative journalist and documentary producer has earned numerous national and regional awards.

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