Beacon Community Services is negotiating to buy 12 units at 834 Johnson St. on behalf of B.C. Housing and sublet them to tenants for between $800 and $1,200 a month.

The total cost for each of the units is to be $190,000. B.C. Housing in partnership with CMHC will provide $145,000 toward each unit. Beacon Community Services is contributing $240,000 in capital funding.

Victoria councillors agreed yesterday to contribute $120,000. An application is being made to the Regional Housing Trust Fund for $180,000, says a city staff report.

The remaining 98 units in the 14-storey, 110-unit project are being sold to the public as strata units.

Coun. Lynn Hunter, chairwoman of the B.C.-Yukon division of the Multiple Sclerosis Society, also called the idea exciting.

"I applaud this developer and Beacon Community Services for providing this housing that is really needed. I know that the people at the Multiple Sclerosis Society will be very interested and I'm very proud to be part of a council that is going to pass this," Hunter said.

It's one of those wonderful partnerships between a developer, B.C. Housing, a non-profit -- in this case, Beacon Community Services -- and the City of Victoria," Mayor Dean Fortin said in an earlier interview.

"We buy the whole floor at a bargain price that creates these 12 units of non-profit housing, and help construction continue in our downtown," Fortin said.

Financially, there's a huge advantage to building specifically for the client group rather than retrofitting, said David Chard of Chard Development, the company building the Johnson Street highrise to be called The 834.

"It's a very significant advantage from a cost perspective for the end user," Chard said.

"To make changes where you're involving plumbing and different heights for counters is a very expensive situation afterwards. That's why we're having these discussions."

Excavation has begun for the new building.

bcleverley@tc.canwest.com