Comment 116699

By kevlahan (registered) | Posted March 01, 2016 at 15:21:22

There are very good arguments for why the land in question will increase in value dramatically (more than other land) in the next decade (LRT, GO, serviced waterfront land, influx of new residents, renaissance of Hamilton downtown and North End). This is not the usual situation of land value increasing incrementally.

The funding crisis in CHH and redevelopment of Pier 8 and Barton-Tiffany are two separate issues.

It might seem that selling North End land will solve the CHH funding crisis, but it clearly won't go very far.

At the meeting Councillor Collins claimed that it costs $200k to build a one-bedroom affordable housing unit. Since they want to build 400 units at Barton-Tiffany the $20-$40 million would cover much less than 1/4 to 1/2 the cost (since most units will not be one bedroom). So this doesn't even cover the cost of the new units they want to build, let alone transition costs for residents, remediation costs for the land or ongoing maintenance costs for the CHH housing stock.

Another option would be to enact inclusionary zoning and increase densities on Pier 8 to incorporate 15-25% affordable housing into the Pier 8 or other re-developments (Jamesville, 500 MacNab lands).

The consultants admitted this had been successful in Toronto, Mississauga and Halton and other Canadian cities but noted it hadn't been tried yet in Hamilton and probably wouldn't work because of low land values (based on historic transactions in the North End).

Again, they are discounting the probable steep rise in land value even though a Deloitte consultant present at the meeting told me in private that they know the $20-$40 million estimate is low and they won't have a good idea of the value until they put the property on the market. He agreed that the land will rapidly rise in value.

As far as I know, the option of the city leasing the land to developers (instead of selling) or developing the land into a mix of private/affordable themselves or in partnership with a developer was not seriously considered.

It is never a good idea to make long-term, irreversible strategic decisions to solve a short-term funding emergency!

Another factor is that the Federal and Provincial governments have signalled that they are finally willing to get back into the social housing business. This is another reason it would be wrong to make irreversible decisions about valuable city assets right now.

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