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New finance rate stabilizes housing projects

Two per cent appreciation over long term



Whistler council has approved a new appreciation rate for future employee housing projects designed to bring some stability and affordability to the price-restricted market.

Any future projects, such as Rainbow, will now be tied to the Consumer Price Index or CPI, which is targeted at two per cent over the long term.

The rate will allow for conservative appreciation of the employee housing units.

Whistler Housing Authority General Manager Marla Zucht explained to council Monday night that retaining affordability in the housing is of paramount importance.

"Return on investment is of secondary importance," she said.

This is the third rate of appreciation used by the WHA.

Some projects, such as Barnfield, are tied to the prime rate and have been appreciating annually at a rate of 1.5 per cent since 1998. Others, such as 19 Mile Creek, have been tied to the Greater Vancouver Housing Price Index with annual average increases of 6.4 per cent since 1998.

There is a concern, explained Zucht, that because of the strong real estate sales in the Lower Mainland this accelerated rate could threaten affordability of the employee housing units tied to this housing price index.

In a Whistler 2020 workshop in August stakeholders agreed on a recommendation that would set a fixed rate of return at 1.5 per cent. This was canvassed to owners and waitlisters and a small majority opposed it.

"The prevalent direction from those that opposed was that they would prefer an appreciation formula that fluctuated with inflation and was more representative of what was occurring in the economy," wrote Zucht in her report to council.

Zucht said the CPI is an objective outside index, which is a direct measure of inflation. It mirrors slow and stable growth.

She said the housing authority will be monitoring the CPI and capping the appreciation if it goes above 4 per cent.

Mayor Ken Melamed asked if the rate could be retroactively put onto employee housing projects as the units come up for sale and are sold to new owners with a new formula.

Zucht said that would create a different playing field within projects, which may not be desirable.

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