The Klondike Development Organization officially broke ground on a new affordable housing development at Sixth Avenue and King Street in Dawson City on Monday.
The non-profit organization plans to build a two-storey building with six one-bedroom apartments of around 480 square feet and two 600-square-foot two-bedroom units. It hopes to have people moving in by next July.
“We’ve been at this for about five years trying to get this to happen. And we’ve had ups and downs — at parts we thought we weren’t going to succeed,” said the organization’s president, Brian Stethem. “And it’s finally come to fruition. It’s sort of weird. All of a sudden it’s happened.”
The new development has been a long time coming. Back in 2013, the News reported that the organization was working on a feasibility study for a 20-unit building. At the time, it was hoping not to rely on government funding.
Now, that number has been scaled back to eight units and the bulk of the funding is coming from the federal government. The project was recently awarded $900,000 from the Canada Mortgage and Housing Corporation, through the Yukon Housing Corporation.
The organization also has a $570,000 mortgage guaranteed by the City of Dawson. Stethem said it would have been impossible to get financing without government backing.
“We’re a non-profit. So our cash flow is a little non-existent,” he said. “So it makes it difficult.”
The total cost of construction is estimated at $1.47 million. Before construction can start, workers will have to finish relocating several cabins on the property that belong to the owner of the Triple J Hotel.
Stethem said the development isn’t intended to be social housing. Instead, it’s meant to serve those who can pay market rates, but who can’t yet afford to buy property.
Rent will likely be about $900 for the one-bedroom units and $1,275 for the two-bedroom units. Stethem said the plan is to free up low-cost housing elsewhere for those who need it.
“I mean, potentially we could take 10 or 12 people out of the housing market, which frees up 12 places somewhere else,” he said.
The units haven’t yet been claimed. Project manager Mark Wickham said he thinks they will be awarded in a lottery sometime after Christmas.
He said a local contractor will build the new apartments, and the building supplies will come from local suppliers.
Affordable housing is a perennial issue in Dawson. Official statistics from April 2016 show that Dawson had a vacancy rate of zero for units with two to four bedrooms, and of about seven per cent for one-bedroom units.
Wickham said Dawson’s population has grown by 14 per cent since the Klondike Development Organization began working on the issue in 2009.
“It’s been growing faster than Whitehorse for the last five years,” he said.
Many people don’t even bother putting themselves on the social housing wait list, he said, because it’s so long.
And the quality of the available housing is spotty, Stethem said.
“In Dawson, you can pay $500 to rent a shack without any services.”
He said many people only rent out rooms for part of the year, and other places aren’t livable in the winter. That means people end up moving around a lot.
Wickham said it’s just not economical for private developers to build new housing in Dawson.
“We had an appraisal done for the value of this building. And it’s worth less than the cost of building it,” he said. “So as a private investor … you’re not going to do it, right?”
Still, this isn’t the only new affordable housing project in the works for Dawson. The Chief Isaac Group of Companies, the business arm of the Tr’ondek Hwech’in First Nation, is planning a 14-unit complex at the corner of Queen Street and Second Avenue. It’s also not expected to make money.
Dawson City Mayor Wayne Potoroka said this new development is “fantastic.”
“Increasing housing options in a town that’s desperate for them, it’s pretty crucial,” he said.
Potoroka said even established professionals are affected by Dawson’s housing crunch.
“It’s our Dawson City Music Festival producer, teachers, health care professionals, instructors at the School of Visual Arts,” he said. “These people are critical to the social fabric of our town. And they’re having a difficult time finding a place to live. So this gets us on the right track to addressing that problem.”
But neither he nor the Klondike Development Organization thinks these eight apartments will solve Dawson’s housing woes.
“Do I think we’ll still be having the exact same conversations about the shortage of housing and the impacts this time next year?” said Wickham. “Absolutely.”
Contact Maura Forrest at maura.forrest@yukon-news.com