Developers eye affordable housing dollars

The Yukon government may finally spend $13 million in federal housing money it has been sitting on since 2006.

The Yukon government may finally spend $13 million in federal housing money it has been sitting on since 2006.

Twenty-two organizations have expressed interest in using the money to develop new affordable housing in the Yukon.

“One of the gaps that we’ve seen in the marketplace is that we have working single mothers, young couples, working young families – that affordable part of the market has eroded over time,” said Michael Hale, vice-president of operations with the Yukon Housing Corporation.

“Rental rates have gone so high, the vacancy rates are so low that there are people who in previous years have been able to rent on the private market, and they just can’t find it now. And we’re targeting that group.”

The money comes from the leftovers of the $50-million Northern Housing Trust, which the federal government gave to the territory to address housing needs in 2006. Most of the money – $32.5 million – was given to Yukon First Nations to address their most pressing housing needs, and $4.5 million was used to construct the new Betty’s Haven, a 10-suite transition home for women fleeing violence.

In October the government put out a request for qualifications looking for organizations with ideas on how to spend the money.

As part of the deal, the government would pay up to half of the capital costs for new affordable housing rental units. In exchange, the developer would agree to keep rent affordable for 10 years.

Affordable will be defined as no higher than 95 per cent of median rent in the area.

Median rent for a one-bedroom apartment in the Yukon was $850 in September of 2013, according to government statistics, so “affordable” would mean a rental rate of no more than $807.50.

The government’s last attempt to stimulate investment in affordable housing fell flat when no qualified bidders were interested in a land parcel, Lot 262, earmarked for that purpose.

In that case, the government planned to sell the land to the highest bidder who agreed to build a minimum of 30 affordable rental units on the property.

The only two bids received both asked for additional funding to help pay for the affordable housing, and were thrown out.

The lot has since been divided into two and sold.

Yukon Housing’s current affordable housing plan is “fundamentally different” from what happened with Lot 262, said Hale.

The Lot 262 plan involved attempting to sell a parcel of land with strings attached, while the current plan is offering a capital infusion for non-profits and private developers who have their own ideas about how and where to best develop affordable housing, he said.

“It’s putting ideas on the table.”

Yukon Housing was not involved with the planning for Lot 262.

The fact that the current project has received 22 proposals is very promising, said Hale.

“It’s a remarkable number. Obviously there is lots of interest.”

In the coming weeks a committee will go through those expressions of interest and formally request proposals from up to 10 of the groups.

Critics have argued that the deal is quite generous for developers while asking for little in return.

Hale says the opposite is true, and that this partnership arrangement will allow taxpayers to get $26 million in value out of their $13 million investment.

“It’s not an answer for everything that’s challenging with housing, it simply isn’t. But, it’s something we could target, where we knew we could attract other people in and double the amount of housing that we can conceivably get out of this $13 million.”

NDP Opposition housing critic Kate White said she is happy to see the government pushing for affordable housing, and that it is “just about criminal” that the territory has sat on the federal housing money for as long as it has.

“There are many people who are renting far above what their incomes allow, and that’s because, I would suggest, we don’t really have an affordable housing market. We have a housing market that’s incredibly tight, which then drives up the prices, and that’s where we’re at right now.”

She wants to know why developers must only commit to affordable rates for 10 years, she said.

After that, rents could be jacked up, or units could be sold off as condos, possibly removing them from the rental market altogether.

In the legislature last month, Brad Cathers, the minister responsible for Yukon Housing, responded to that question by saying that it is challenging to predict what the housing market will look like 10 years from now.

Contact Jacqueline Ronson at

jronson@yukon-news.com

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