Premier Gary Doer has hit upon a truth that should be self-evident to everyone interested in local urban planning: “Winnipeg is not an island like Singapore.”
To be more precise, the Republic of Singapore is a group of islands off the tip of the Malaysian Peninsula, but that doesn’t detract from the message the premier gave to about 130 REALTORS® attending the Manitoba Real Estate Association's annual meeting last Monday morning at the Holiday Inn West. “It’s not an urban island (like Singapore),” he added, “and you have to give people choices ...”
Doer used this analogy to re-inforce the provincial government’s decision to support Waverley West, the proposed 1,200-hectare development in the city’s southwest corner. The province happens to be one of the major landholders (another is the developer Ladco Co.) in the development that is still making its way through the planning approval process — something that has been maddeningly slow for those who recognize the dire need for more residential lots within the city’s borders.
“It didn’t make sense to me that the government should have a land bank in Waverley West,” said the premier.
Actually, the province has been a major landholder in the area for years. At one stage, the land appeared to be a white elephant because its book value wasn’t terribly high, according to the premier.
That situation didn’t last.
As the number of undeveloped lots with sewer and water access steadily decreased, land values rose accordingly. A quick glance at a recent WREN Vacant Land MLS® page shows what is called a “rare Southdale” 56-by-116-foot vacant lot in the city’s southwest listed for $89,900.
According to Paul McNeil, a land planner and regional vice-president of ND LEA Inc., which prepared a report on available lots in the city, the serviced lot inventory was 7,000 in 1993. That inventory dropped to just under 2,000 in 2005. What is now a significant shortage will be a depletion in 2007 without an infusion from such developments as Waverley West to meet demand.
Earlier in the year, McNeil told the WREN that the lot shortage has contributed to one of the fastest rises in land prices in Western Canada.
Canada Mortgage and Housing Corporation has projected that the average cost of a new home in Winnipeg and the surrounding municipalities will be $265,000 by the end of this year and $300,000 next year.
Despite the jump in new home prices, demand will not decline. CMHC is predicting there will be 1,700 single-family starts this year and another 1,800 starts in 2007. In fact, Winnipeg is the only Canadian city where demand is expected to increase in 2007. The only real potential brake on the local new home boom is the lack of serviced lots.
Because of all the above factors, the province can expect to make a tidy profit selling lots in Waverley West. After all, the projection is that there will eventually be about 10,000 single-family and multiple-family units developed in Waverley West.
Doer said 50 per cent of the profits from provincial sales of lots in Waverley West will go towards funding infill housing in the inner city and the other 50 per cent will be invested in city infrastructure.
Critics of Waverley West have constantly maintained that the proposed subdivision will detract from inner-city housing. But proponents such as the province, city, Manitoba Real Estate Association, Manitoba Home Builders’ Association and the Winnipeg Real Estate Board have been equally adamant that new serviced lots in the suburbs can go hand-in-hand with inner-city infill housing.
It should also be pointed out that rising home prices brought on by lot shortages have a detrimental effect on the resale market and the availability of housing to lower-income earners — a fact of life that infill advocates have failed to acknowledge.
McNeil pointed out almost a year ago that there are approximately 300 infill lots available for new home construction in Winnipeg and that falls far short of the demand in the marketplace.
“Infill housing has helped ... in older neighbourhoods, but infill is not capable of supplying the entire market demand,” he added.
McNeil said infill housing can only supply five per cent of the single-family demand and 25 per cent of the multiple-family demand.
“The MREA believes that suburban growth does not necessarily equal urban sprawl,” said Lorne Weiss, the chair of MREA’s political action committee. “We support a balanced approach to growth — suburban growth as well as infill housing. Suburban growth and infill housing are not mutually exclusive; they can work in conjunction with each other.”
That is exactly what the premier also believes and is employing suburban growth as a means to help out with inner-city housing.
“And, you have to remember that it’s about choices,” added Weiss. “People who want to live in the suburbs don’t want to live downtown. People who want to live in Wolseley don’t want to live in Linden Woods.”
Weiss said it’s an “incorrect premise that you can force people to live in a certain area. Infill housing has to be encouraged through positive not negative incentives. A suburban buyer and an infill buyer are not the same, and you can’t force them to be the same by limiting their choice.”
Which brings us back to the Premier Doer’s statement, “Winnipeg is not Singapore.”
The premier recognizes that Winnipeg is not an isolated landmass surrounded by water. In fact, it’s surrounded by 10 linked municipalities that are more than willing to have those dissatisfied with the land shortage in the city relocate and build new homes in their communities.
“Money and investment is very liquid,” explained Weiss. “If opportunities aren’t available for development in Winnipeg that support the lifestyle preferred by home buyers, they will look elsewhere. They will vote with their feet.”