Developers' Responsibilities for Improving Affordable Housing

In the last few posts, we’ve given our thoughts and completely unsolicited opinions on how the government and NPOs can better pave the road for a smoother ride to affordable housing.  Today, we turn that sharp wisdom on ourselves. How can we, as a private developer, do a better job of serving the public when it comes to building more affordable housing?

Well, it’s a tough question.

Construction companies are in business to make money. If we take too many actions that hurt that ability, we lose the trust of bankers, stockholders (if we’re publicly traded), and clients. Ultimately, we would have to find another line of work. We at ENM and most other private developers, do put a lot of effort into pursuing social housing projects. We also understand that we are often portrayed as public enemy #1 when it comes to the issue regarding the lack of affordable housing. One way to change this perspective is to simply take less profit, but by doing so we would no longer qualify for traditional banking.  We think a better way to frame this is: we can take on a little more risk and a little more responsibility for advancing affordable housing projects.

How does that look, you ask? It means we need to have more of a willingness to partner with the government and other organizations to share costs and expertise on these kinds of projects. We took aim at the lack of capacity of NPOs for navigating all the complexities of the housing market, but we often suffer from the same problem.

Our project manager Daniel Greenhalgh’s recent collaboration with Habitat for Humanity provided some insight into these kinds of collaborations.  “It’s no one’s primary job at ENM or any other construction company to be a social housing policy expert. We do often lean too heavily on the NPO to handle the logistics and the consensus-building in communities.  If we took on the task of training some of our staff in directly assisting NPOs with these complexities, it would do a lot to simplify and streamline the construction of affordable housing.”

Just as governments designate special criteria and funding for affordable housing, we as developers can do the same. We can increase the amount of up-front funding we’re willing to allocate for affordable housing units. As mentioned in a previous post (NPOs role in improving affordable housing), banks require us to show at least an 18% profit on any financing they give us for housing projects. If part of that financing comes from the government with no such restrictions, we have to be ok with taking less over a shorter period of time, and more willing to see the bigger picture of improving the economy in which we function. 

The problem really comes down to this – housing, in an ideal world, would not become inflated by speculator investments.  It wouldn’t be a means to multiply an inheritance.  Stable, affordable housing is essential to the functioning of a society, especially in a dense, diverse city like Vancouver.  But since 2001, incomes in Vancouver have gone up 11% while housing prices have risen by a staggering 172%.

There’s an extreme imbalance here, and because our industry greatly benefits from this, we need to be willing to do more to tip the scales back towards the middle class.  We can’t be asked to sacrifice our solvency as a business or as an industry, but we can be more willing to designate units in market rate housing developments as affordable.  We can be more willing to accept certain levies on developments with no affordable housing units to help create an Affordable Housing Fund.  

We can be more active in lobbying for incentives that will make it more feasible for mid-size developers like ENM take on the construction of social housing, and more willing to pursue these incentives once they’re created.  These kinds of efforts will ultimately increase our success as a business and improve the communities in which we all live.