New land policy might bury contractors

The city wants to overhaul its land-sale policy to stop speculators who flip properties for profit. It's considering barring contractors from snapping up more than one piece of land in a two-year period.

The city wants to overhaul its land-sale policy to stop speculators who flip properties for profit.

It’s considering barring contractors from snapping up more than one piece of land in a two-year period. It may also close the door on buyers who haven’t lived in Whitehorse for more than a year.

On top of that, the city may take a cue from the territorial government and introduce a financial penalty for buyers who don’t build or occupy the land within a year of purchasing it.

Critics say the policy rewrite won’t accomplish much and wouldn’t be needed if the city didn’t first create an artificial shortage of land in Whitehorse.

The city is hoping it can ward off speculative buyers who buy a piece of land, sit on it for a year and then sell it for an inflated price.

But the changes could strangle development in the city, said local contractor Jonathan Spinks, who has worked in Whitehorse for the last 14 years.

“It’s already difficult enough to find contractors in town,” said Spinks.

“(The city) isn’t winning by restricting and impeding the natural process,” he said.

The new land policy will only clamp down on contractors while still allowing one-time individuals to speculate on land, he said.

If the city introduces its new land-sale policy, he’ll either have to leave Whitehorse or cut staff, he says.

When the city sold off 15 lots in Takhini last September, there were a couple lots that were bought on spec, said land development supervisor Pat Ross.

“People weren’t planning on living in those homes and then sold them off with a 30 to 40 per cent profit margin,” he said.

With the current shortage of housing in Whitehorse, the city can’t afford to let people make investments on land and not build homes, say city planners.

But the current housing shortage has nothing to do with contractors buying up land and developing it, said Spinks. It can be chalked up to an artificial shortage of land created by the city itself.

“If there were 100 lots and 50 people wanted lots, there would be none of this garbage,” said Spinks.

“It’s totally the city’s responsibility (to supply land) and they’re now pushing the blame onto the big, bad contractors.”

Unlike other jurisdictions, the price of land in the Yukon is completely controlled by the city and territorial government.

“In other areas you can’t price your land out of line or you won’t be in business very long,” said local land appraiser Jim Yamada.

“In the Yukon we don’t have that competitive edge.”

If the city hasn’t planned well enough in advance to bring an adequate number of lots online, then demand for lots will increase and so too will the price.

“If you have a captive audience, like the city has, and a shortage of land – where else are people going to buy property?” said Yamada.

“The city could price land at whatever point they want because where else are people going to buy it?”

Councillor Doug Graham recognizes the city created the shortage of land along with the territorial government. “The lots for sale (on Grove Street in Porter Creek) are not worth $130,000 as much as I can fly in the air,” he said at Wednesday’s council and senior management meeting.

“How much did those lots cost us – $40,000 to $50,000? – because we’re profiting off of a shortage we’ve created.”

Restrictions on land sales may slow the number of contractors who buy up lots in city land lotteries, but contractors will always find ways around it, Ross concedes.

“Money will exchange hands on the side anyways,” he said. “Contractors will just get their friends to put their names in the (lottery) instead.”

And policing whether or not people have developed on their land after they have bought it is close to impossible unless you plan to set up cameras on their property, he added.

“YTG has had its own problems trying to enforce their agreements.”

Another roadblock the city may face is trying to market its land to individual buyers.

People who move to Whitehorse don’t want to buy a vacant lot of land, they want a home to live in, said Spinks.

Added to that is the fact that banks are making it increasingly more difficult to borrow money to purchase vacant land.

“Banks hate giving out builder mortgages,” said Spinks.

In his opinion, land speculation by contractors doesn’t happen as much as the city believes it does.

It isn’t in the best interest of a contractor to sit on a piece of land, he said.

“That’s what we do – we buy lots and build homes,” he said. “If a contractor were just to flip a lot he’d have nothing to do.”

The city plans to discuss the land sale policy at upcoming council meetings.

Contact Vivian Belik at

vivianb@yukon-news.com