Posted by yongeblood
I read a couple of recent articles in the newspaper that reported on a possible plan to include affordable housing in most/all new developments. Sounds like a great idea, since integrating different economic statuses has been proven effective; see St. Lawrence Market (and the opposite idea ineffective; see Regent Park).
Okay, but then developers say that’s not fair, whine whine, etc. It might not be fair to them, but it’s my understanding that development is a fairly lucrative business. Especially when you’re building condos that are sold before construction even begins. Hell, I could theoretically afford to build a condo if I make $35M in revenue before actually building anything.
So the developers say that the revenue lost by having some cheaper units will be passed on to the rest of the buyers. And I think they say the same thing when regulations force them to build green roofs or any other “inconvenient” extra expense.
To me, on one hand, fine. Either the buyers pay a bit more, or the government has to subsidize the affordable housing / green roofs / other, which comes from taxpayers anyway. You can’t really force the developers to lose some profit because of our equity agenda.
On another hand, this seems underhanded of the developers. Even if governments say, for instance, ‘1 of every 3 buildings you do must be affordable housing, and it must represent 20% of all units’, then they will sell units from the other 2 for more money to compensate. So if we make developers contribute to affordable housing, the costs are just passed on to others anyway.
So the government almost might as well build it themselves. But why should they be responsible for building housing that probably generates a net loss, and not be in the lucrative part of the business? Seriously, can’t the City of Toronto develop its own land, with mixed income housing, and actually generate itself some profit? There must be some reason… I’m guessing there’s a law on conflict of interest, except that it would allow the city to provide more social services, which seems too beneficial to ignore as a possibility. Seriously, whose interests are at risk, other than developers? The city would just be competition.
Maybe the city gets a tax from development, and that’s why they’re ok with the status quo.
…hmm, maybe those taxes are ALSO being passed on to the other buyers. Now I think that the tax developers pay is effectively 0%. I might be cynical, but perhaps with good cause!