No room at the inn

Whitehorse's housing crisis means different things to different people. No surprise, then, that the solution depends on how you define the problem. For realtors and developers, it's a simple question of supply and demand.

Whitehorse’s housing crisis means different things to different people. No surprise, then, that the solution depends on how you define the problem.

For realtors and developers, it’s a simple question of supply and demand. Whitehorse and the Yukon government long ago fell behind their goal of keeping a two-year inventory of lots on hand.

Constricted supply has pushed up prices. A mining boom and cheap money, in the form of rock-bottom interest rates, have boosted demand.

The result is rising prices that threaten to squeeze out young couples seeking to buy a first home. The average price in Whitehorse is now just over $400,000.

That’s up more than 20 per cent from one year ago, while the average house price has more than doubled over the past seven years.

The lot shortage is also bad news for renters. A vacancy rate that’s just bumping above one per cent means landlords can afford to be picky.

Those who are rough around the edges have an increasingly tough time finding digs. Same with renters with small children.

And those who find a unit to rent are being squeezed financially. Average rent is around $800, up 17 per cent from over five years ago.

Businesses are worried. Many complain they can’t recruit new workers, because there are so few places for them to live.

Miners are flying in and out of the territory in stints, rather than buying homes, leading opposition parties to fret that we aren’t cashing in on the mining boom as we should.

If supply is the chief problem, the solution won’t come quickly.

The first part of Whitehorse’s next big, new neighbourhood, Whistle Bend, won’t be for sale until the autumn of 2012. Houses won’t be built and occupied there until the following year.

Many expect the problem to become worse before it gets any better.

City planners have scrambled to put lots on the market sooner. This week, city staff announced that development permits for 300 units have been released this year – a record breaker.

Some of those lots to be built on have been shoehorned between existing streets in Porter Creek and Takhini. Others are being developed in the new Ingram subdivision and downtown.

The city plans to release more lots later this year in Porter Creek, Crestview and Takhini North. But it remains to be seen whether that’s all enough to sate pent-up demand.

Whitehorse’s lot shortage didn’t happen overnight. It was a decade-long, slow-simmering affair that only became urgent in recent years. And because new neighbourhoods can’t be built quickly, it won’t be solved soon, either.

How did we get here? It’s a peculiar problem for one of the most sprawling cities in the country. Whitehorse is spread across more than 400 square kilometres, yet holds just 26,500 residents.

One-third of the land within city limits is considered too mountainous to build on. Take away First Nation land, greenspace and the oil-contaminated tank farm property and you’re left with few places suitable for development within city limits, according to planners.

But when Whitehorse took development responsibilities from the territorial government in October of 2007, it planned to have more lots open by now than it does have.

The proposed Porter Creek D subdivision would have provided 400 units, enough to meet four years’ demand. Infill in Riverdale would have added another 20 units to offer further relief.

But both neighbourhoods were nixed by community groups. Nobody likes seeing greenspace disappear, especially near their properties.

But these decisions carried a cost. And we’re paying for it now.

Mayor Bev Buckway should have taken a firmer lead and pushed these projects forward, said realtor Mike Racz. Instead, development plans became bogged down in public meetings dominated by naysayers.

“Every time the city tries to develop something, it gets shot down,” he said. “It just goes on and on and on. That’s why it takes five years to seven years to get something developed.

“Twenty-five years ago, when the government was a developer, if they wanted a subdivision in Riverdale or Porter Creek, one year they said, ‘This is where we’re putting a subdivision.’ The next year, the subdivision went in.

“They’re the best areas in town. There was no hue and cry over ‘my little beaver trail.’”

A variety of government policies have been blamed for contributing to skyrocketing real-estate prices.

The territory marks up the price of lots to match “market” rates. But there is no market; the government is the only seller. Whitehorse’s chamber of commerce would like to see this change, and to have the private sector play a bigger role in development.

But government markups don’t appear to play a big role in rising prices. A review of lot prices in Ingram last year showed the territory’s premium added several thousand dollars to the price of a typical lot.

Builders complain that stringent bylaw requirements also add to their costs. Front porches and buried power lines make neighbourhoods more attractive, but they also make homes more pricey.

And, while there may be a shortage of residential lots, there are plenty of vacant commercial buildings scattered around downtown Whitehorse. To address this, the city recently introduced new bylaws to serve as sticks-and-carrots to encourage the owners of vacant buildings to redevelop their lots.

The Yukon government is also sitting on a big chunk of property below the clay cliffs. The Whitehorse Chamber of Commerce wants the territory to move swiftly and build on the land.

But market forces alone may not be enough to make rent in Whitehorse once again affordable for the working poor. And it seems certain that the private sector alone isn’t able to help the Yukon’s hardest to house.

Ottawa once offered tax breaks to developers who built low-cost apartments. But those programs ended in the 1980s and 1990s. Without such an incentive, condos will continue to be more profitable to build than apartment blocks.

And more direct government involvement may be needed to put a roof over the heads of Yukon’s hardcore alcoholics. Advocates are calling for a supportive housing complex, as well as a downtown homeless shelter.

Contact John Thompson at

johnt@yukon-news.com.

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