A $300,000 grant given by the City of North Vancouver to help a non-profit group buy an apartment building gave Mayor Darrell Mussatto a bad case of cold feet at last week's council meeting.

The grant for the Vancouver Resource Society was approved at a June 28 council meeting, alongside a $1.6 million second mortgage used to help purchase the building at 125 East 20th St. in North Vancouver.

The society will convert half a dozen of the building's ground-floor apartments for use by people with significant physical disabilities and the remaining suites will be rented at below-market rates. The grant is meant to help the society service debt and pay operating costs for the first few years while keeping rents roughly 20 per cent below market levels.

But the mayor brought the grant back to council July 20 to be reconsidered.

"I had some second thoughts about this one," he said. "It was confusing to me and I don't think it was actually clear to council what we were doing."

Mussatto said he was still in favour of the five-year, four-per-cent mortgage, but had misgivings about the grant.

"I was quite confused about what that was going for in the report and it's going towards subsidies for rents. That gets into a very dangerous situation," he said.

Mussatto praised the Vancouver Resource Society, whose director Ken Fraser came to appeal for the grant to remain in place. But, said Mussatto, "our responsibility is not housing. It's policing and water and sewers and all those kinds of things. We know that housing is the responsibility of the federal government and they have abdicated their responsibility yet again."

The resource society closed the purchase of the building July 15.

Mussatto asked Fraser if he had "a Plan B" if the city held back the grant.

"Not a good one," replied Fraser. "We have a partnership agreement with you. We are committed to providing below-market housing in that building and we are bound to that. It's signed and registered on title. I guess we're going to get out there and come up with the money."

"I have to say mea culpa," said Coun. Craig Keating. "I made a grave mistake in voting for this."

Keating reiterated two points he made in June: the grant would appear to absolve senior governments of their responsibilities and that other housing groups would start approaching the city for loans and grants.

"What is the good and principled argument for saying, 'I'm sorry, this is a one off'?'" he said.

The apparent collapse of support left Coun. Pam Bookham in the odd position of arguing in favour of passing the grant which she had voted against.

"Couns. Keating and (Guy) Heywood have articulated the arguments for being careful about how we engage in support for these forms of social housing. They were so articulate last week that they persuaded me. But in the end I found myself the only one who voted against this," she said.

"But this week to look at the question of the $300,000 when it is so critical to the deal being successful is too late," she continued. "The time to raise those qualms was last week, not this week."

Couns. Mary Trentadue, Rod Clark and Bob Fearnley all voiced their continuing support for the grant.

The discussion took another bizarre turn when Heywood interrupted the final vote to suggest the $300,000 be offered as a loan added to the mortgage. Heywood, a banker by training, took several stabs at phrasing the amendment, but his financial literacy seemed lost on his colleagues, who scratched their heads and rolled their eyes.

"I am so confused by the situation we find ourselves in," said Clark, who suggested the whole issue be deferred until September, at which point city staff could help decipher Heywood's motion. This motion was defeated, as was Heywood's amendment.

"It's a useful idea," said Fearnley, "but it's too late."

Ultimately, the grant was confirmed 6-1 with Bookham opposed -- exactly the same result as the June 28 vote.