New Westminster offers $4M worth of free land for affordable housing
Advocates say sky high land prices are major barriers to building low-cost housing
On full disability and in a wheelchair, New Westminster resident Aaron Pietras has only $375 a month in his budget for housing.
In the Lower Mainland, housing advocates say finding an accessible place for that price on the market is "virtually" impossible.
But with a stroke of luck, Pietras was able to get into one of the city's newest affordable housing projects at 43 Hastings St. last year.
The development wouldn't have been possible without the free donation of a plot of million-dollar land from the municipality.
"That's significant given the costs of land in the Lower Mainland and really made the project viable," said Janice Barr, CEO of the non-profit Community Living Project, which built and operates the facility.
The project was such a success, the City of New Westminster is looking to do it again.
It's requesting proposals for another affordable housing project on Fenton Street. The successful bidder will get the four plots of land worth around $4 million "at no charge."
The city will also pay for additional expenses like a building permit and development approval.
"There are people here who previously didn't have housing who now have housing to stabilize their lives and they're part of the community. And, as a city, we really feel that that's really important," said John Stark, New Westminster's supervisor of community planning.
However, depending on the offer it gets from non-profits, the city said it may choose to offer a free 60 year lease, instead of a permanent donation. Each deal would include mandatory conditions to provide affordable housing.
The price of a plot
Providing free land is a relatively new push for the City of New Westminster, but other levels of government are increasingly looking to their own land holdings as a housing solution.
The City of Vancouver called providing city-owned land to non-profits and government agencies a key approach in the quest for affordable housing. The province of B.C. was also on board with using publicly-owned land to create more affordable housing.
With property prices sky high, incentives to build affordable housing are becoming increasingly crucial to woo developers, said Michael Mortensen, who advises developers under the Liveable City Planning banner.
Even private developers struggle with rising costs which makes choosing to build affordable housing a difficult option, he says.
"People have misconceptions about how much profit developers are looking for," Mortensen said.
The profit difference compared to a condo project is huge, according to Mortensen. He says most developers are looking for a 15 per cent return on costs, whereas rental properties usually average around six per cent net yield on capital invested.
He says it's already tough to get those returns with increasing costs and accepting a lower profit margin can make it harder to secure financing.
Private versus public land
But while leveraging publicly-owned land to create more affordable housing is something all levels of government seem to agree on, giving it away for free to private developers isn't something many of them are keen on.
For the current provincial government, it's a hard no.
"Public land belongs to the people of B.C. and should benefit them, not wealthy corporations," said the Ministry of Municipal Affairs and Housing in a statement.
Andy Yan, director of The City Program at Simon Fraser University, agrees.
He pointed to the Little Mountain housing development site in Vancouver as a cautionary tale.
The provincial government sold the land to private developer Holborn Holdings Ltd. in 2007 at a fraction of the assessed value.
Years later, the demolished social housing units the company promised to replace are years away from completion.
"When the BC Liberals chose to sell off public land, in many cases for less than the land could have been worth, they gave away control and the opportunity to use that land to provide affordable housing for people," said the Ministry of Municipal Affairs and Housing in its statement.
Mortensen says private developers are still a key part of the housing solution.
"When you have the creativity of the development industry and partner with them ... we can produce more housing. We can do it at virtually no cost to the taxpayer," he said.
'King of the world'
Aaron Pietras said finding an affordable place to live has made a huge difference in his life and allowed him to have true privacy for the first time.
"I feel like I'm the king of the world right now," Pietras said. "It's like a weight's been lifted off my shoulders."
But while Pietras felt lucky to have his new home, he said accessible and affordable housing for others with disabilities is still hard to find.
"It's very challenging you know," he said.
Treading Water is a series from CBC British Columbia examining the impact of the affordability crisis on people in Metro Vancouver and across the province, including the creative solutions being used to make ends meet.
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