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Social housing costs at O-Village soar

The 252 affordable housing units promised in the Southeast False Creek Olympic Village are in jeopardy.

A Monday report to Vancouver city councillors said an extra $77 million is needed to complete the social housing program at the $1.075 billion project.

"This was never contemplated by the city at the inception of the project," said the report, which will be considered at the Tuesday council meeting.

"Careful cost control is necessary to prevent any further construction cost increases."

Costs have risen 70 per cent from $65 million to $110 million because of design changes, environmental building standards, construction price increases, developer's fees and taxes.

"The impact on the affordable housing initiative is of significant concern as the viability of the business model for affordable housing has been compromised."

Cost overruns of $125 million caused Wall Street financier Fortress Credit Corporation to stop lending to developer Millennium last fall. The city, which has paid $129 million since October, is seeking at least $458 million in financing. Construction could grind to a halt in mid-March without a new deal.

VANOC contributed $30 million to the social housing. The 2010 Games organizer is supposed to take over the property on Nov. 1 to prepare it for 2,800 athletes and team officials.

Bob Mackin writes for 24 hours and appears regularly on the Hook.

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