With the rental vacancy rates hovering around one per cent, Whitehorse can be a nightmare for people looking to find a place to live.
But with three new rental apartment buildings set to begin construction this summer the tide may be turning, if ever so slightly.
Cormode and Dickson is building a three-storey, 12-unit apartment building downtown, near Drury Street and Sixth Avenue. And Falcon Ridge Development is getting set to start construction on two four-storey apartment buildings near to their condo complex near the Logan subdivision.
“It’s been 20 to 30 years since anyone’s done something like this,” said Duncan Lillico, president of Falcon Ridge.
Over the last few years, most of the rental units that have come on the market have been basement suites or condos that are bought by investors.
Just this month it was announced that the Sternwheeler Village apartments, one of the few large rental properties in town, will soon be sold off as condos.
And that’s just tightening the noose on an already tight market.
Lillico, whose company rents out a few of its condo units, mostly to employees, has seen people’s desperation firsthand.
“I’ve had women or wives come in and start crying,” he said. “What’s available out there is so old that they’re falling apart and nothing has been added to that rental market.”
The federal government previously encouraged the construction of Whitehorse’s large apartment buildings by offering incentives. But those programs no longer exist.
“Once that stopped, a number of decades ago, it pretty much it slowed the pace across Canada,” said Mike Gau, the city’s manager of planning and development services.
And up until 2002 the population of Whitehorse wasn’t really growing, he added.
But now, with commodity prices soaring and the mining sector booming, Whitehorse’s housing market struggling to catch up.
In recent years, condos have picked up the slack.
Falcon Ridge, which has built more than 100 condo units in Whitehorse over the last few years, didn’t plan on building rental units when it started, said Lillico.
When it announced plans for the apartment building, condo owners who lived in the first phase of the development weren’t thrilled by the idea, he said.
At the request of the condo board, the company moved the buildings a little farther away, and has priced them for a higher-end market.
“We feel that not only are there not enough rentals, but that so many of the rentals are badly in need of a rehab and update,” said Lillico. “But, honestly, it is hard to motivate a landlord to make capital improvements when they are at 100 per cent occupancy.”
With rents starting at $1,800, the idea is to target professionals who are moving to Whitehorse, he said. More than a dozen of the 56 suites will come furnished.
“I’m constantly getting emails from people coming up to work for Northwestel, for Yukon Electric,” said Lillico. “They need a place to live so we’re trying to fill that niche.”
Preliminary site work for the buildings will begin this summer, but the buildings aren’t set to be finished until next year.
The apartment building that Cormode and Dickson is building downtown could be finished much sooner.
The company is still waiting to get zoning approval from the city, but once that passes, and the preliminary site work is done, construction will only take three weeks, said Jacob Heigers, the company’s general manager.
That’s thanks to modular design. All the parts will be constructed in the south and trucked up to Whitehorse.
“A lot of people do prefab, but not a lot of people manage to do high-rise or commercial prefab, and that’s where our focus lies,” said Heigers.
“This is kind of a world apart.”
When people think of prefabricated buildings they often picture a trailer, which is why Heigers prefers the term modular.
“You would never think it’s prefab,” he said. “It’s quite stylish.”
Not only are modular apartments cheaper and faster to build, but bad weather won’t hamper construction.
“We can put up these units in the middle of some pretty significant bad weather,” said Heigers.
The building could be ready to accept tenants as soon as this winter.
With rents around $1,500, it won’t be what the territory considers “affordable housing,” but it will still be cheaper than what it would cost for the average condo, said Heigers.
The company plans to build another rental building, if this one goes smoothly.
“We’re going to invest in the community, and we are here to stay,” said Heigers. “We don’t simply want to make a profit and get out.”
The project has only been minimally advertised, but they have already gotten almost 20 serious inquiries about the building.
The company is asking prospective tenants for a $75 deposit to reserve a spot, and are hoping to sign people up for a two-year lease.
Such leases are usually important for builders to obtain a loan from lenders.
“They’re going to want to see that you’re going to have enough leases in place to cover all your expenses, plus 30 per cent,” said Lillico. “If it’s going to cost you $100,000 a year, they’re going to want to see signed leases for $130,000 a year.
“Typically, it will be a lease for a two-year period, and that’s where it gets really hard.”
Falcon Ridge is financing the construction of their apartment buildings themselves, which is a good thing because it can be difficult to get a renter to commit to a two-year lease, on top of the nine months it usually takes to get a building up, said Lillico.
“Renters typically aren’t looking that far ahead into the future,” he said. “Buyers are but not tenants.
“Because, who knows what’s going to happen in nine months? Especially in Whitehorse.”
Contact Josh Kerr at email@example.com