City of Winnipeg to offer $10K to Exchange condo buyers
City concerned developers are souring on further investment in region
City of Winnipeg is enticing people to buy condos in the Exchange District by offering a $10,000 forgivable loan.
A report, passed by a vote of 13-3 at city council on Wednesday, recommends the loan as a way to attract more residents to the Exchange/Waterfront area and breathe some life into a stagnant Downtown Residential Development Strategy (DRDS).
The report outlines concerns developers are beginning to sour on investing in those areas.
"The first units under the DRDGP came onto the market in late 2011 and have been marketed through 2012. Unit sales since inception have been lower than expected with many completed units remaining vacant and the development community is skeptical about further investment," according to the report. "A result is that six additional projects approved under the DRDGP may not proceed."
Ross McGowan, CEO of CentreVenture, the city's arms-length downtown development agency, said the way the loan works is that anyone who stays in their condo for at least five years won't have to pay the money back.
"It would be a forgivable loan that we would register on your property," he said. "This is not intended as an investor flip. We truly want people to buy and to live in the downtown."
He expects, with more than 450 condo units available in the Exchange, the program could add 1,000 people to the area. And that, he said, could make setting up retail and grocery stores more viable.
Martin Maykut manages Qualico’s Streetside Development Corporation. He said the type of people interested in moving downtown are young professionals, eager to shop and work near their homes.
"The most interest downtown has been the first-time buyer," said Maykut. "They’re walking to work. They’re going to the new restaurants and bars. They’re using the amenities and being part of truly creating that downtown neighbourhood."
But some units come with high price-tags — edging toward the half-million-dollar mark.
Besides that, real estate agent Bill Thiessen says there are multiple barriers for people moving downtown.
"People are coming and saying, ‘Oh, it’s beautiful. I love the suite,’ and then, ‘OK, where do I park?’" said Thiessen.
Couns. Brian Mayes, Russ Wyatt, and John Orlikow were the only councillors who didn’t think the incentive plan was a good idea, with Orlikow saying the city is further subsidizing buildings it has already subsidized.
"I personally believe if the market isn’t there then those developers have to lower their price," said Orlikow.
He added a lot of the condos were developed through incentive grants.
"I do wonder if we aren’t helping out some developers who might have misjudged the market," he said. "I can’t prove that, but I would’ve liked to see the money spent in different ways."
Coun. Jenny Gerbasi said she likes the plan because it will create tax dollars. The city isn't giving away money but actually creating revenues in the long run, she said.
Coun. Justin Swandel agreed, calling it money well spent.
The city will spend an estimated $2.5 million on the grants.