Firstly, I support the Premier’s efforts to address the housing crisis. I believe he understands the urgency. However, he has ignored the simple truth that when the government tries to interfere with the Real Estate business, it only makes it worse. Tax deferment programs, the ALR, and other various attempts to undertake major development projects have historically failed to accomplish anything close to what was intended.
Mr. Eby’s current plan to buy old and obsolete apartment buildings in hopes of retaining affordable housing, is in my opinion, another example of the government unwittingly attempt to tamper with the Real Estate business. I am relatively confident that he came to this decision without any ideological agenda, but it seems to me this approach was influenced by those who do.
Spending $500 million of taxpayer money to purchase obsolete apartment buildings is not only a bad idea, but it’s also a road map to disaster. I’m of course referring to first, the windfall for the apartment owner and secondly the unavoidable shortfalls of maintaining old buildings, chock full of asbestos, wet rot, rust, and other deficiencies that come with old age. Forget for a moment that these buildings were built when building codes were, to say the least, unsafe; they will inevitably have to be replaced anyway.
In my opinion, government works best when it supports the private sector by establishing policies that protect the public interests and encourages economic growth.
I believe it is in everyone’s interest to redevelop old apartment buildings into new buildings that are modern and healthy and built to last. Through densification, we can replace existing affordable rental units at existing rates and add much-needed market units as well. The only obstacles standing in the way are Municipal development charges and levies, lengthy approval times, and the uncertainties of interest rate hikes and construction cost increases. All of which come under the heading of viability.
I am suggesting that Mr. Eby spend the $500 million on low-interest loans or grants or guarantees or equity to the apartment building owners in order to make the proposed redevelopment project viable. I am also suggesting that the government determines what is meant by the word “viable.”
I am an advocate for income caps. I believe that reasonable profit is good but huge profit at the expense of the public is bad. I also believe that the private sector should take more responsibility in ensuring that the public is protected from profiteers, and the public should take more responsibility in ensuring that the private sector is encouraged to expand.
Lastly, I believe it is possible to solve the housing crisis through cooperation between both the government and the private sector. A little trust can go a long way, especially when earned through fairness, equality, transparency, and the desire to succeed.
IDS GROUP is a real estate development management company based out of Vancouver. Their are-as of expertise include project financing, architectural design; project, construction, property, and as-set management; sales and leasing; land assembly, and investment. For more information, visit www.IDSgroup.ca