Letter: Affordable housing is possible for Potlatch application

Tuesday, August 2 2016

Several people writing to the Sounder have expressed the opinion that the Potlatch proposal is a good deal, because of all the parkland that will be acquired, etc. Getting all the parkland would be great, but you simply cannot say if this is a good deal without knowing how much the proposal is worth to Potlatch Holdings.

The assessed value of all the lands involved is in the millions of dollars. The assessed value of the parkland will remain at what it would be as undeveloped land.

Just to make the point, suppose the developer is expecting to make $100 per $1 of assessed value off the deal. I know this estimate is way too high. 

I am just making the point that if the profit on this deal was that high, the community getting a paltry million dollars in parkland would not be a good deal. 

It is very important to understand that the increase in value to Potlatch’s holdings is coming almost entirely from the rezoning and rearrangement of densities. Potlatch doesn’t have to do much work to earn the increase in value.

So why shouldn’t Gabriola get a good chunk of the increase in value that accrues because of the rearrangement of densities? Realistically, I am guessing that, conservatively, with international marketing, and severe covenants on the 25 lots requiring attractive, expensive homes be built, that the undeveloped lots could sell for at least $300,000, and probably much more. 

So the developer expects to boost his property values. 

This doesn’t include the profits made from building the homes, and some other positives for Potlatch.

There is no question that Potlatch could easily afford to put aside 8 - 10 of the densities for affordable housing. I am well aware of how complicated it is to build affordable housing on Gabriola. It is also important to understand that affordable housing isn’t substandard market housing. It is housing built to code, that is subsidized. The subsidies need to come from somewhere, and a really good place to start is to expect developers of luxury, gated communities to tone down their proposals, and instead build some affordable housing in exchange for the density rearrangements that they require for the luxury project. There may be no precedent for this on Gabriola, but there certainly is a precedent in BC, for example, in Vancouver. Furthermore, from what I have been told there is nothing stopping the developer from volunteering to include affordable housing in his proposal.

Based on the dollar amounts involved in the proposal, Gabriolans should be insisting that Potlatch make up a new deal that includes a strong affordable housing component, possible at another site. With only 15 - 17 densities used for the luxury project, the lands east of Church Street could be added to the parkland (no home could be built on this land in any case, if the densities were transferred to affordable housing).

~ Peter Danenhower