JASPER COMMUNITY HOUSING CORPORATION REGULAR BOARD MEETING MINUTES Approved APRIL 18 TH, 2012 Minutes of the regular meeting of the board of directors held April 18, 2012 Present Peter Waterworth Chairman Councillor Brian Skehill Director Councillor Brenda Zinck Director John Ogilvy Director Leanne Pelletier Administrative Officer Jim Webb Guest, representative from Urban Life Management Absent Chad Gulevich - Director Call to Order The Chairman called the meeting to order at 3:40 Additions to the Agenda None Approval of the Motion by Brian Skehill that the Agenda be approved as presented Agenda FOR AGAINST #10/12 4 Directors 0 Directors Approval of Motion by John Ogilvy that the Minutes of the March 21st, 2012 regular Minutes of the Board meeting be approved as amended. January 12 th FOR AGAINST Meeting 4 Directors 0 Directors #11/12 New Business Discussion with Jim Webb, Representing Urban Life Management Peter Waterworth welcomed Jim Webb, representing private developers Urban Life Management to the meeting. Peter indicated that the board is exploring different models to determine how to
create viable housing options that would improve and increase the housing stock in Jasper. Mr. Webb s input, from a private sector perspective would be appreciated by the board. Introduction and Developers Concerns Mr. Webb noted the 3 properties owned by Urban Life Management in Jasper are Yellowhead Apartments, Aspen Gardens and an area in Cabin Creek. Urban Life has developed and owned these units since inception; their long standing involvement in the Jasper rental market gives them a vested interest in Jasper s housing situation. Proper maintenance and reasonable rents have been their priority, ensuring a positive reputation amongst renters. Mr. Webb indicated four factors private developers must consider when determining the viability of building in Jasper. The first is a lack of land available to build product on. The second is economics, although it costs more to build in Jasper than elsewhere the market only supports lower rents. Rising interest rates and a lack of government funding are other economic factors. The third is profitability; while rents stay low, operating costs increase. He cited the example of tax assessments rising 84% since 2005 while rent has increased 25%. The fourth factor to consider is demand; he noted that his building managers assert that there are constant inquiries for rentals. Urban Life s vacancy rate has not been impacted by the 18 new co-op units. Urban Life Management has explored developing their land in Aspen Gardens and Cabin Creek in the past, but the above factors as well as the possibility of the Patricia Circle redevelopment going ahead have been concerns. The Aspen Garden location was seen as the most viable, potentially accommodating 9 units. Condominium Units Mr. Webb asked how many more units would be built as part of the Caribou Creek Co-op, concerned about potential impact on the market. He also asked if the cost to develop was higher than expected. John indicated he believed there would be 42 more units built. The cost to develop will be higher than expected due to the size of the units, 3 and 4 bedroom units will be the norm. While the final sell price was higher than predicted, the units remain reasonable by Jasper standards, more attainable than affordable. Mr. Webb explained that Urban Life Management (ULM) would not be looking to produce condos to sell; they are only interested in the rental market. A difficulty for developers producing rental units is the fact that they are unable to recoup any revenue until the first renter walks through the door, as they are not pre-selling any units. As a developer with land and existing income, ULM could add on to the affordable, rental side of the market. Mr. Webb has read the Housing Study and understands the need for housing in Jasper.
JCHC Objective Mr. Webb inquired as to the mandate of the JCHC. The role of the JCHC is to determine the housing needs of the community and facilitate development that responds to the needs. It was explained that Parks Canada will sell at a reduced price 4 parcels of land to the JCHC to develop non profit housing, some being staff accommodation. Housing Authority Bylaw Mr. Webb requested more information about the Housing Authority Bylaw. The Housing Authority Bylaw was a response to two large entities requiring SAU s in order to receive building permits. Approximately 30 units will be required. The bylaw would provides a means for developers to meet requirements as well as a means for the JCHC to get capital to leverage funding. It was noted that the need for government funding was very real, but the future of funding opportunities was uncertain. Mr. Webb asked how the local businesses have responded to the Bylaw. The board explained they have indicated a desire for contributions to be recognized as equity. Jim queried whether the Municipality had any money to fund any other housing. No municipal funding exists at this point, due to the demands on the capital budget. Build out in the commercial zone was discussed. The JCHC is working on the premise that SAU s required for Parks Canada development permits and purchased through the Housing Authority Bylaw would partially fund new development by the JCHC. With a commercial cap in place and a minimum amount of commercial space left, the board was considering if there would be enough revenue generated by the bylaw to fund development. Potential for Development Mr. Webb inquired if there was any housing to be developed in the future, besides the co-ops and potential redevelopment of GA, GB, GC and FV. Hearing there was not; Jim confirmed he would discuss with his colleagues the theory that there are development opportunities in Jasper. He indicated they have delayed any development plans since 2009; factors included home prices dropping, one rental vacancy, John Day building new units and the co-ops. They did not want to over saturate the market; Jim felt oversaturation is less likely following his discussion with the board. Jim cited the Jasper Community Sustainability Plan as a source of information for developers. Leanne provided him with the latest copy. The demographic of people looking for properties was discussed. Leanne indicated there was indeed still a shortage of beds in town, citing the waitlist for MPL and posts to Jasper Buy Sell and
Trade. Foreign workers with young families and seasonal workers are in the most need of appropriate housing. The rent cap for this demographic was discussed, for the private developer the lower rents in Jasper make profitability an issue. Based on co-op waitlists and business survey results Mr. Webb surmised that if 50 units were constructed they could be filled almost immediately, as 30 of those could be SAU s. Appropriate Accommodation The board is faced with determining a building plan and deciding what to build on Parcels GA, GB, GC and FV. Of concern are the conditions in which some of the seasonal and front line workers live. Sub-standard accommodations exist because of the captive market. Quality accommodation could reduce the turnover of seasonal staff and offer opportunities for businesses to keep management personnel. The board is looking to partner with employers who appreciate quality living arrangements for their staff. Peter inquired if ULM would be able to develop at a rate that would provide something attractive to employers and staff, moving people out of sub standard units while maintaining profitability. Jim will investigate the economics of pursuing this type of development. It was noted that the response from ULM could be a good bench mark for the JCHC, possibly affecting policy making. Cost to Develop ULM s replacement cost to build an 1100 square foot townhouse in Edmonton is estimated at $110 square foot, the same structure in Jasper could cost upwards of $195 a square foot (not including land). While the issue of land has been solved, cost to ULM or the JCHC to develop are high. ULM s advantage is market position and available land. Mr. Webb indicated nine units in the Aspen Gardens area could be constructed quickly and filled with tenants immediately upon completion. A nine unit development would take into account the aesthetics of the neighborhood and not impact negatively the rental market. Jim estimated a cost of $150,000 per unit. The board is interested in the comparability between Jasper and Edmonton when developing a townhouse unit. Available Lands In response to Jim s question regarding available land the board explained that there are no lands available except those parcels to be purchased by the JCHC. Land housing Parks Canada staff accommodation was mentioned. It is currently underutilized and in the future Parks may be looking to restructure it. It was recommended that Jim speak with a representative from Parks as there may be a possibility of working with them to create high density units.
Conclusion Mr. Webb thanked the board for having him attend, and indicated he had a clearer understanding of the mandate and goals of the JCHC. He suggested the Board contact him with any questions he could answer from an investors point of view, as Urban Life Management has a vested interest in the community and aims to be a positive corporate citizen. Discussion today clarified what was coming onto the market and from a private sector investors point of view he sees that there may be opportunities to do business in Jasper. He inquired as to the general mood on Council towards private development, it was explained that because the Municipality does not have land use jurisdiction it is Parks Canada that private developers answer to. ACTION Mr. Webb will bring back to his colleagues the idea of constructing a 9 unit townhouse building in Aspen Gardens; if they are onside he will determine the cost per unit and share that information with the board. Business Arising from Previous Minutes Housing Authority Bylaw-Rent Equity For Developers TD Bank and CIBC both provided answers to the question of whether developers could consider their shares as equity. Both banks referred to the issue of resale and market value. Developers could not sell their share at a profit, so they would have at best a depreciating asset. This led to discussion about whether shares would be capped, and if the JCHC should allow shares to be sold between developers. The board recognized that allowing developers to sell shares could lead to shares being bought at a lower cost than the $15,000 initial buy in due to depreciation and inflation. The board is left with the question of how easy it is to sell the idea to developers and employers. The board recognizes that there is a demand for housing, but with the commercial cap almost reached, the developers the JCHC is looking toward to fund the construction through the bylaw may not exist. Discussion raised the following questions; are the JCHC s housing projections accurate, does the board have a firm grasp on what type of units
are needed and, and are the Parks Regulations providing the mechanism to build what is needed. License of Occupation Ed Latka Attending JCHC Meetings Item deferred until Cathy is present. The board declined Ed Latka s request to attend JCHC Board meetings. Leanne shared the emails she had exchanged with him in regards to SAU s and his demand for a definition. The board was happy with Leanne s response. It was pointed out that if the JCHC did not exist, the business developers would have to meet parks requirements and supply bed units, at a much higher cost than the $15,000 the JCHC is proposing. The board will not be rushed into a model in order to provide equity shares to a developer. ACTION Peter will approach Mr. Latka at the PDAC meeting and inform him that the board is not convinced the Housing Authority Bylaw is a model to pursue and he should only assume that he would have to meet in full the requirements as set out by Parks Canada. He will also inform Ed that the board feels his attendance at meetings is not necessary. Leanne will follow up with an email. Potential Units- Commercial Development Cannot determine until PDAC meeting results Other Business Laurie Rodger approached Peter regarding the guarantee for Caribou Creek Co-Op. He suggested increasing the size of the second phase to 18 from 13. Peter sees a potential issue with phase 3 as there would be little to secure against. That amount of exposure, if prices rise significantly from the predicted price could be unfavourable. Also, Mr. Rodger interpreted the agreement with Parks as meaning the price was fixed. Peter suggested this was not the case, instead the price is fixed at the point at which it is first sold. Four factors support increasing the size of Phase 2. You can minimize risk by building more at once, keeping building costs down and recouping from the sales process quicker. Secondly, keeping building costs down gets rid of the guarantee quicker. It would increase the housing pool earlier allowing the JCHC to see the effect on the rental market. Lastly, it would allow a neighborhood
dealing with an abundance of construction and disruptions the opportunity to be restored to normality a year earlier than anticipated. Peter asked Laurie to confer with the bank and Parks to see if they would support the change in phases. Laurie has confirmed they are on side based on the above arguments. Of interest to the JCHC is the effect of adding units to the housing pool sooner than expected. Monitoring the effect of a substantial number of bed units into the market will give the JCHC a clearer picture of housing needs and more certainty as far as market sustainability. Next Meeting: May 16 th, 2012 3:30pm Agenda for next meeting: will depend on PDAC, and Council s decision regarding Caribou Creek development. Housing Authority model will be shelved for the time being. Adjournment: 5:10pm