Sunday, October 23, 2011

Housing and the profit motive

Lately we've been pilloried in the press or at council meetings by a property owner and some other local voices frustrated by the city's unwillingness to approve a motel conversion to "affordable" housing.

On the surface, it's an attractive proposal; sprucing up an older hotel that the new owner bought in a bankruptcy sale to improve conditions for dozens of long term residents and securing a supply of housing for an underserved demographic - single men.

The reality is never so simple and council turned down the project for a number of good reasons.

When the bankrupt Traveler's Inn chain was being offered for sale, the city itself looked at a number of properties, a bold move on its own.  We hadn't before bought property to provide affordable housing and, given our caution with taxpayers money, we pursued only those that we thought we could secure at a reasonable price and could be easily converted to housing for some of our target demographics.  One is now filled with the very hard to house and another is a more challenging project to convert single units into more spacious family housing for our first nations community.

When we first entered the market, the economy seemed to be on the rebound and, apart from the city, private investors were looking to pick up properties in hopes of easy conversions to other uses.  Some of those bidding on properties may have over-reached and paid more than the true value, or failed to recognize the challenges of rezoning to fit their ambitions. 

The Douglas St. site lacks some necessary elements to support good housing and the property is not currently zoned for residential uses.  A real problem with the proposal was that the costs of improvements would have been pased onto existing residents in higher rents, arguably no better and prehaps worse than what they might get elsewhere in the private housing market. That's the difference between affordable housing and profitable housing.

While some may assume that the zoning is a minor challenge, the city's purchases met existing local zoning and avoided the costs and issues that rezoning may raise in the community.  Of particular concern for our city's future would be freezing the land use at the Douglas St. location; preventing a more thoughtful, appropriate conversion of the property to commercial and upper story residential and compromising plans for more transit oriented development along the corridor. 

At council, we often have to look at these longer term land use issues and weigh them against seemingly attractive short term fixes or favours for individual development to detour the threat of conversion to less attractive uses.

Victoria has done a lot of good work and has been partnering with numbers of players to create affordable housing and other options to help ensure that people who work in Victoria can also live in Victoria.  Nearly 800 units have been built or are in progress; a significant contribution to the fight against homelessness.  It doesn't mean though, that we are going to approve every proposal that comes through the door, and this one had more negatives than positives.

Progress on this key issue is steady and measurable.  Somewhere between the tent cities supported by some and the substandard or overpriced market housing proposed by others are the real solutions.  Those are the options we have to pursue and keeping up the momentum on that agenda is where council will be going over the next three years.

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