One at a time
Progressive solutions can help alleviate Winnipeg’s rental housing shortage
As many of you know, rental housing in Winnipeg is hard to find – and good, affordable housing is even harder.
Rental housing in Winnipeg is of great concern for many Winnipeggers, especially with vacancy rates below one per cent. According to Our Winnipeg, Winnipeg’s long-term blueprint, the city will need 83,000 more housing units over the next 20 years.
Ongoing solutions to Winnipeg’s housing shortages include community sponsored initiatives, tax increment financing and the construction of social housing.
These are all good proposals, but I wonder if the province could also try what I would call the One Building At A Time (OBAAT) initiative.
This could be done in conjunction with the other initiatives, and involves simply building rental housing downtown and then selling the building to a private company at market rates.
Now I realize the market rate approach will not add to the much-needed supply of affordable housing, but it will help to increase the supply of housing in general.
A greater supply will eventually lead to a decrease in rental rates, or at least will give renters more choice. OBAAT would immediately increase the number of residents in the downtown.
The main reason I think this might work is that the province, despite having a deficit, still has access to cheap credit.
Also, depending on the size of the building, the province wouldn’t have to finance the endeavour too long, since OBAAT’s intention is to sell the project upon completion.
Furthermore, this investment has a far better chance of return than a stadium loan does.
Normally, the private sector steps in when market conditions are as favourable as they are in Winnipeg (stable economy, low vacancy rate, relatively cheap credit).
But there is a lack of large, market-rate apartments being built downtown, allowing an opportunity for the province to step in.
Now, you might be thinking: “What about Vancouver and the South East False Creek development?”
The False Creek development was built to house athletes for the 2010 Winter Olympics. The City of Vancouver was forced to become the financial backer for the project when the previous financier backed out.
According to Gary Mason of The Globe and Mail, Vancouver is expected to lose at least $50 million on the project plus another $180 million for the land given by the city but not paid for.
However, OBAAT is smaller in scope than the False Creek development, thus limiting the financial risk.
Winnipeg also has a steady rental and real-estate market, whereas the False Creek valuations were based on Vancouver’s pre-recession real-estate prices.
The major drawback for OBAAT is the temptation to build uninspiring and energy inefficient buildings. This province has already tried to be a developer once, leaving us with non-geothermal Waverley West, which is a major concern for proponents of OBAAT.
Therefore, if the province decides to undertake this initiative, it would have to add to the streetscape instead of diminish it, and commit to some level of environmental standards.
These two priorities should not vastly alter the financial benefits of OBAAT, since good design is not necessarily expensive, and good environmental practices are often financially beneficial.
In conclusion, OBAAT is not a full solution to the immediate housing crisis, but it certainly could be part of the province’s larger housing strategy.
Lucas Redekop is a mature student at the University of Winnipeg with an interest in civic discourse. He lives in West Broadway.
Published in Volume 66, Number 5 of The Uniter (September 29, 2011)