District of Muskoka staff are seeking a budget amendment to keep a modular transitional housing project in Gravenhurst on track after unforeseen environmental remediation work and construction delays pushed costs beyond initial estimates.
In a report to the Community and Planning Services Committee and Health Services Committee District staff said the Muskoka Modular Transitional Housing Project at 575 First Street South remains a priority despite mounting challenges.
The development will provide six transitional housing units designed to support individuals experiencing housing instability as they move toward permanent accommodation. District staff noted that while progress continues with the primary contractor, a Phase 2 environmental site assessment and required soil remediation were not included in the original project budget.
Staff are currently tendering remediation work with the goal of completing it before seasonal half-load restrictions take effect in mid-March. Meeting that timeline would help preserve key funding deadlines, though the report acknowledges the schedule is ambitious. Should remediation extend beyond the restriction period, work would resume once limits are lifted, potentially adding further delays.
The unexpected remediation has also affected construction sequencing, including site preparation, storage and timing for delivery of the modular units. Staff say they have worked with the contractor and unit supplier to minimize additional cost impacts, but delays have required added coordination and staff resources.
The proposed amendment also reflects expanded site preparation and finishing costs, including exterior siding, roofing and modest landscaping to better integrate the units with surrounding neighbourhood aesthetics, along with servicing upgrades and building and fire code requirements. Estimates for the additional work include a 15 per cent contingency in line with District procurement policy.
Despite the setback, staff emphasized the project represents the District’s first directly delivered modular housing initiative. The estimated cost per unit, excluding land and remediation expenses, is $137,833.
If approved, occupancy for the transitional housing units is now expected in late summer 2026.
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