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Yukonomist: The range of Range Point outcomes

There was some good news on the housing front this week. Whitehorse city council signed off on the innovative and sizable Range Point subdivision near Northland Trailer Park, joining the Kwanlin Dün First Nation (KDFN) and Yukon government in supporting the venture.

There was some good news on the housing front this week. Whitehorse city council signed off on the innovative and sizable Range Point subdivision near Northland Trailer Park, joining the Kwanlin Dün First Nation (KDFN) and Yukon government in supporting the venture.

However, exactly how good the news is will depend on how many units ultimately get built there. The master plan says this could range widely, depending on the vagaries of zoning requirements, setbacks and builder preferences. The proposed neighbourhood could house between 250 and 627 units. At the Yukon average of 2.3 people per household, that works out to between 575 and 1,442 people.

That sounds like a lot. If you own a home, it might make you worry the extra supply will drive down the value of your house. If you are hoping to buy, it might make you think prices will get less unaffordable in a few years.

While Range Point is substantial, however, it will get eaten up quickly as newcomers continue to arrive in large numbers. Especially if the number of units ends up at the lower range.

The Yukon’s population was 43,964 as of June 30, 2022, having grown 1.8 per cent or about 800 people over the previous year. At 2.3 persons per household, those 800 people need 350 housing units.

Yukon government population forecasters suggest future years will be similar.

So the range of possible units, from 250 to 627, means that Range Point will only meet the equivalent of between nine and 21 months of population growth.

This is where those vagaries of zoning requirements, setbacks and builder preferences come in. Multifamily builders will have to decide if they build many smaller units or fewer big ones. Individual builders will have to decide if they want to include a basement suite or laneway tiny house on their lot. Our municipal government will have to make many small decisions when asked for flexibility on setbacks, parking and other regulations.

These decisions will steer the neighbourhood somewhere between those 250 and 627 units.

Traditionally, this is the part of the process where vocal opponents of growth and housing development push back hard on development and density. A decade ago, for example, the nearby Porter Creek D housing development received so much opposition that it was essentially shelved by city council.

However, now, for those who are just back in town after having spent the last few years on the trapline with a broken radio, Whitehorse is experiencing a housing crisis.

It is hard to exaggerate the widespread pain the gap between housing demand and supply has caused. Housing is eating up an ever higher percentage of the income of Yukon families. It contributes to our disturbing homelessness crisis. It puts extreme stress on lower-income Yukoners and forces individuals to keep living in situations they would be healthier to leave. And it chokes the entrepreneurialism of Yukoners, since it is hard to find labour. Business investment is discouraged, since staff need to be paid so much just so they can afford rent.

The City of Whitehorse is the key player in determining whether Range Point becomes a home to 575 to 1,442 Yukoners. Real estate is a detail business, and there will be a million questions of regulatory interpretation. Builders will make requests for exceptions, some sensible and some less so. In the big picture, the city has an opportunity to be flexible and make some innovative moves to encourage builders to build as many units as possible at Range Point, rather than the opposite.

The development itself has a lot going for it. The project is a partnership between KDFN and the territorial government. Of the 18.45 hectares, four-fifths is KDFN land. The two governments have been working together since 2020 on the neighbourhood plan. Three years may seem like a long time, but in the complex world of real estate and inter-governmental relations it is good to be already in front of city council. The plan is for lots to be available in 2025-26.

An innovative part of the plan is for the lots on KDFN land not to be sold, but made available on 125-year leases. Unless you’ve been reading the recent GERO.AI study on how humans may be able to live to be 150, this ought to be plenty of lease tenure for most people.

KDFN citizens will have the first opportunity to get the leases, after which they will be open to the general public. The lease costs will be the same for everyone.

Importantly, thanks to the income-tax provisions of Yukon self-government agreements, a significant portion of the income tax paid by both First Nation and non-First Nations residents on the KDFN leases will be go to KDFN.

“The site will be a source of pride and financial sustainability for KDFN,” say the planning documents.

Income tax revenue transforms the economics of land development. Most land developers buy land, upgrade it, then sell or lease it. KDFN will also get juicy income-tax revenues.

The system creates a trade-off, however. Canada’s income-tax system is highly progressive, meaning that people with higher incomes pay higher rates of tax. In the three territories, according to Statistics Canada, the top 10 per cent of taxfilers by income pay 64 per cent of the total income tax.

This means KDFN will generate more income-tax revenue if it reserves more of the land for bigger properties that high-income Yukoners like to live in. This, however, leaves less space for units for citizens and non-citizens of moderate and lower incomes. The Range Point proposal suggests the approach will be a compromise, with a mix of single detached homes, duplexes, “cottage cluster” and multi-family buildings.

Back to the housing crisis, which government officials keep saying is a top priority. Hard-bitten political analysts, however, know that you should watch what officials do and not what they say.

A lot of eyes will be on the City of Whitehorse’s actions over the next few years, which will determine whether Range Point solves the housing problem for 1,442 Yukoners or just 575.

Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.