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.
