The employee housing townhouses at Nita Lake, which are two years overdue, are on track again after council raised the benchmark price for development.
"Were seriously concerned if we do not increase (the benchmark price) these units just wont come on," said Whistler Housing Authority General Manager Marla Zucht, during her presentation to council.
Mondays approval means the Nita Lake developers, who were trying to build units at $175 per square foot will now be able to build them for $192 per square foot.
This is the second raise in the benchmark price this year. In January council moved the benchmark from $155 per square foot to $175, the first change in almost a decade.
Developer John Haibeck said Tuesday he was pleased with councils decision, which allows them to proceed with the 44 employee townhouses.
Originally only nine of the townhouses were going into the WHA inventory for sale to the waitlist, which has topped 520 separate applications. The remaining homes were to be rental units managed by the developer.
With the agreement to increase the benchmark price Haibeck said the developers have now agreed to hand over all 44 townhouses to the WHA. The homes are expected to be ready for sale by October 2006.
The other employee housing site associated with the project, two apartment buildings targeted for seasonal employees, is still under review to determine if that is the right product for the employee housing market.
At $192 per square foot Haibeck said the developers would just recapture their costs of construction and the soft costs such as the design.
"We make no money on the employee housing," he reiterated. "We break even on it."
The WHA has reviewed the developers numbers and agrees that $192 per square foot allows them to just break even.
The Nita Lake project, which was approved in 2003, includes a "boutique" hotel, 14 single-family homes and employee housing. Shortly after approval, it was put on hold as the developers battled a lawsuit brought on by a nearby resident. The lawsuit was eventually resolved and the development moved ahead slowly after encountering financing troubles.
In the meantime, construction costs and labour costs skyrocketed. Recent work on the athletes village and the Rainbow development has indicated that $175 per square foot is an unachievable rate to develop employee housing.
"Id rather produce some units at $192 than none at $175," said Councillor Gordon McKeever as part of his rationale for the approval.
Most members of council echoed this sentiment.
Councillor Ken Melamed expressed some reservations about the increase. He said: "a deal is a deal" and explained that council gave Nita Lake three additional market houses in exchange for employee housing. But he too approved the increase.
The change in the benchmark price will affect two other projects in the pipeline which should deliver employee housing, namely the Shoestring Lodge redevelopment and the Holborn redevelopment of the tennis club.
"Really it is bringing the benchmark price much more in line with what development costs are at today and thats what we keep hearing," said Zucht, following the council meeting.
Councillor Caroline Lamont said the WHA did not come to the decision lightly. She also said they believe the lower benchmark price was the reason why developers werent coming forward with new proposals.
While the recent change is a step in the right direction, Haibeck said in reality the benchmark price has to get much higher to make sense for developers.
"Basically if they want affordable housing the next councils going to have to deal with it and realize that $192 doesnt even come close," he said. "To get it happening its going to have to go I think closer to $300 per square foot."
And while he praised this council for their work, he cautioned Whistler in the way it does business by asking for too many demands from developers. Those demands bring added costs, which simply get passed down to the consumer in the end.
"They want affordability but they dont understand theyre their own worst enemy in terms of adding the more they demand the more the cost goes up," said Haibeck.
"(Ive) never seen anything like it in the 14 cities Ive built in and Im not alone in that."
Councils approval means the sale price for wait-listers will increase. A new 1,000 square foot employee house will now cost $192,000 instead of $175,000.
Zucht does not foresee a problem with the increase. Units in the popular employee housing projects 19 Mile Creek and Bear Ridge resell at $220 per square foot. These units are often sold within the first 10 people they are offered to on the waitlist.
"Theres still a strong uptake," she said.
The benchmark price for ownership employee housing will be adjusted annually based on the increase in the Consumer Price Index.