The Yukon Chamber of Commerce voiced concerns this week about the government's decision to cancel its affordable housing initiative in Whitehorse.

Earlier this week the government announced it was awarding funding to two rural development corporations to develop affordable rental units in Carcross and Carmacks, but due to criticisms of the project by the realtors association and the residential landlords association and a shift in the market landscape it was cancelling the project for three successful proponents in Whitehorse.

The chamber's key issue is that the government cancelled the request for proposals process right at the end, explained Rich Thompson, the chair of the Yukon chamber.

"When government lets RFPs, because government spends so much money in the territory and it's such a big part of the economy, there has to be a high level of trust in the RFP process,” he said.

"This notion of going out with a request for proposals, having businesses spend substantial sums of money in response to those proposals and go through a nine-month long process, frankly, and end up with the process being overturned because the debate is happening after the fact instead of out front is certainly something we want to see stopped.”

Thompson estimated the development of bids for the project could have cost companies upwards of $50,000.

He noted the chamber is aware of division between its members regarding the affordable rental housing project itself and whether it would have been an effective way to increase affordable housing stock without significantly impacting the market.

From his perspective though, it was the option with the fewest flaws.

The initiative would have seen the government pay 50 per cent of the cost to develop affordable rental units through its remaining Northern Housing Trust monies.

There will always be some concerns when government intervenes in the private market, said Thompson.

But affordable housing is an issue that likely won't be solved without it, he said.

The initiative chosen by the Yukon Housing Corporation would have stimulated development of affordable rental units, he argued, whereas a program that would see certain renters receive rent subsidies wouldn't necessarily result in the building of new units and could put upward pressure on rates impacting those who don't qualify for government assistance.

Thompson is also the CEO of Northern Vision Development, one of four companies that made it through the government RFP process.

NVD was offered $3 million from the government to build its proposed project before the government cancelled the initiative, but turned the funding down.

Thompson explained the company didn't feel the $3 million, less than they'd bid for, was enough to make the project economical.

"This was not a project where the money was given out willy-nilly and developers were going to run off like bandits,” he said.

"Our main concern is that once a process is started, it should not start and stop …. If you want trust in a process and you want businesses to actually be competitive and submit bids there has to be a belief at the end of the day that there will be a winner or winners and that those winners will actually see the project move ahead.”

Brad Cathers, the minister responsible for the Yukon Housing Corp., noted this morning that the Yukon Chamber of Commerce did not take a position during the last few weeks regarding what it thought the government should do concerning the RFP process, but that many of its members, who had not participated in the original consultation on the affordable rental housing initiative, had raised significant concerns.

Cathers argued that just because government would have liked to hear those concerns earlier doesn't mean they should be ignored.

In a release earlier this week the government explained its decision to cancel the project by referencing concerns from the realtors association and the residential landlords association.

But Sonny Gray, the president of the Yukon Residential Landlords Association, told the Star earlier this week that he was "surprised” when he heard the government's decision.

While he said his association had raised some concerns about the initiative, it had wanted some adjustments, not for the whole thing to be scrapped.

"We were pretty adamant that there needed to be some tweaks … to make sure that the plan wasn't affordable in title only,” he said, suggesting the units should have been attached to a persons income to ensure it benefited those most in need.

The association, he said, was concerned developers turned landlords would take the easy route and rent to friends and employees who might not necessarily need a more affordable rental price.

He also worried that the 10-year requirement for capped-rents gave developers an opportunity to turn their units into condos and reap a substantial profit off the backs of taxpayers who helped cover the cost of development.

Still he felt those concerns could have been addressed without cancelling the project.

Cathers said that is certainly not what the government heard from other members of the association, suggesting they wanted to see the project scrapped.

At this point the realtors association is the only organization that has spoken out in support of the government's decision to the Star.

By AINSLIE CRUICKSHANK

Star Reporter