Right step

The provincial government has taken a step in the right direction by formally announcing that funds earned from future sales of land in new subdivisions it owns will be directed toward the inner-city through its Neighbourhoods Alive program.

What the announcement by Premier Gary Doer has the potential to do is remove some of the criticism arising from the fast-tracking of the new Waverley West subdivision in southwestern Winnipeg. Waverley West went through the approval hoops rather quickly when compared to other development proposals, and critics assumed that was because the province happens to be a major landowner.

In fact, Manitoba Intergovernmental Affairs Minister Scott Smith took the unusual step of announcing that the provincial government would not be seeking approval from the Manitoba Municipal Board for Waverley West. With that hurdle quickly cleared, it was then up to the city to approve the subdivision which will see some 13,000 housing units built over the next 25 years to house about 30,000 people.

The fast pace of the approval process provided ample ammunition to critics who began to question the motives of the Doer government which they perceived as simply wanting to add a hefty chunk of change to its coffers while abandoning the inner city in favour of suburban development.

But, the announcement this week by Doer helps to silence these critics. The NDP have not given up on the inner city and they are making what could become a significant investment in the area’s future.

The first step is $1 million from the sale of land in the Royalwood subdivision with the promise of more to come. When land in Waverley West starts to sell, the amount should increase substantially based upon the province being a major landholder in the subdivision.

Doer said there has been some success in the inner city because of funding by the three levels of government — municipal, provincial and federal — but there is more work to be done. He’s right and bringing more money to the table is good start. The fact money channelled into inner-city neighbourhoods also involves participation by community groups has helped the projects already completed successful. 

It also helps that the Doer government has expanded the scope of the neighbourhoods receiving funds to now include St. Matthews, Daniel McIntyre, Centennial, West Alexander, North Portage, Dufferin and St. John’s. Earlier neighbourhoods targeted for funding were Spence, West Broadway, William Whyte, Point Douglas and Lord Selkirk.

Now that the inner city is receiving greater attention, perhaps critics of so-called urban sprawl will soften their reactions to the announcements of more subdivision land being freed up for development. Just as there’s a need in the inner city for more funding, there is a need  in the suburbs for more land for development.

Canada Mortgage and Housing Corporation announced this week that single-family starts in Winnipeg fell by 41 per cent when compared to May 2004, the largest year-over-year decline for any month since February 2000.

“With most major subdivisions in the city close to being sold out,” said Dianne Himbeault, CMHC’s senior market analyst for Manitoba, “selection of lots is very low, developers are facing critical timelines to bring smaller pockets of land on stream to be available this construction season, and land in new major subdivisions will not be available until next year at the earliest.”

Manitoba’s home builders have been warning of a serious land shortage in the city’s most popular areas such as the southwest and southeast. They had earlier predicted the available serviced lots would be used up by the end of the year, but the pace of construction brought on by high demand is making the situation more pressing.

The shortage coupled with high demand has driven up the cost of purchasing a new home to record levels, approaching the $250,000 mark. The shortage has also depleted the number of existing homes on the market which in turn has driven up the average price across the city to over $148,000. An existing home is traditionally the first home owned by a young family starting out. If the price goes too high, it will take this option out of the equation.

Fortunately, mortgage rates have again decreased, which means that first-time home buyers are still able to gain a toehold in the market. Low mortgage rates mean that steadily rising prices for homes become less of a factor in terms of affordability.

While selling land in the suburbs to help home buyers and home builders, the government will have the funds to help  inner-city families become homeowners. That’s how the system should actually  work — to help as many people as possible.