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Affordable accommodations on the Peninsula
Much debate continues around the issue of affordable housing on the Peninsula. Although the proposed development on East Saanich Road near the Airport is a small step in the right direction, it hardly goes far enough, given projected starting prices of around $400,000.
A few new development properties in Sidney have also been moderately priced and are selling well despite a generally sluggish market. Sidney’s new zoning bylaw also provides a supportive framework for more affordable housing. This should, over time, bear fruit.
What is surprising is that no developer has yet been really creative in attacking the affordable housing issue head-on, while at the same time gaining a competitive advantage in the market.
The Peninsula real estate market, with its significant proportion of single seniors and younger commuting workforce seems the right demographic for new, smaller units in the 400-to-500 square foot range. Brentwood and Sidney in particular, would seem ideal locations for such units. Many small-unit projects have been offered successfully for some time in Vancouver, and a few have since surfaced in Victoria.
New units of this size could offer attractive prices in the $200,000 to $300,000 price range, opening up opportunities for many potential buyers currently excluded by high prices. With today’s exceptionally low mortgage rates, these smaller units could be as affordable to buyers as many rentals.
The commercial tenant has an equally difficult challenge today. In Sidney alone, some 40 commercial properties are now sitting vacant. Recently, one or two vacancies have been added monthly. The Town of Sidney, as well as various business groups, is actively pursuing various initiatives to attract more visitors as a means of supporting local business. However, it is time for landlords to also help solve the problem.
Property owners must awaken to the economic struggles of their commercial tenants and adjust rents to reflect business realities. Having a $25 triple net rent per square foot in a lease may be great on paper, but does little good when the tenant’s business folds and the space faces many months, or even years, of vacancy. Of benefit to both landlord and tenant, rents need to be moderated to provide occupant businesses a reasonable chance of long-term success — thus stabilizing tenancies.
All of us can do our part to help ensure our local communities thrive. We should do our utmost to shop locally, supporting local businesses — thus allowing them to prosper while keeping our community vibrant and welcoming.
If local developers, landlords and we residents respond to these challenges, there are straightforward solutions for both the affordable housing issue and those faced by the hundreds of commercial tenants on the Peninsula. Let’s work together to see these solutions begin to emerge in 2013, for the benefit of commercial property owners, their business tenants, and the community at large.
A retired corporate executive, enjoying post-retirement as a financial consultant, Peter Dolezal is the author of three books. His most recent, The SMART CANADIAN WEALTH-BUILDER, is now available at Tanner’s Books, and in other bookstores.