Whitehorse Daily Star

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Lars Hartling and John Streiker

Developers plan 11 townhouses over three years

The city will return tax dollars to two local developers, provided their proposed 11-unit townhouse project goes ahead as planned.

By Stephanie Waddell on September 16, 2014

The city will return tax dollars to two local developers, provided their proposed 11-unit townhouse project goes ahead as planned.

At its meeting Monday evening, council approved the major development incentive for Lars and Neil Hartling. They are proposing to build the rental units at 20 Chakawana Lane in Whistle Bend.

The Hartlings will be granted back the amount they paid in property taxes on improvements to their land each year for a decade.

This marks the second time council has approved a major development incentive which is available to property owners who develop a minimum of 10 rental housing units which must remain as rentals for at least 10 years.

Any granted funds must be returned to the city if they aren’t kept as rentals under one owner.

The grant caps out at $500,000. It’s also available for developers who:

• build a downtown mixed-use development with at least 25 residential units or a downtown multiple family housing project with at least 30 units near an off-site amenity like a trail or park;

• provide a downtown mixed-use development with underground parking and an off-site amenity;

• develop a mixed-use building in a commercial parking garage zone; or

• provide a minimum of 10 supportive housing units owned and operated by a registered non-profit group.

The incentive was developed to encourage development and improve the housing shortage Whitehorse has been experiencing.

While the rental vacancy rate has improved since the incentive was adopted, council members were quick to voice their support for the Hartlings’ project.

Members pointed out while the vacancy rate has eased a bit, it remains difficult for renters to find affordable housing options in the city.

“We do have a problem,” Coun. John Streicker said, after stating he’s happy to see a development come forward that makes rentals a priority.

The incentive is an opportunity for the city to show support for the private sector to take a risk in developing housing, he said.

Mayor Dan Curtis, along with councillors Dave Stockdale and Kirk Cameron, echoed Streicker’s comments.

They noted it’s great to see investment in the city, especially for rental housing.

They also pointed out the tight margins there are for developers building rental units.

As Lars Hartling pointed out in a presentation at the beginning of last night’s meeting, a good cap rate (the difference between the operating income and the capital costs of a building) in the south is considered between four and five per cent, while a nine-per-cent cap rate would be considered bad.

This project is expected to come in with a cap rate of about 17 to 19 per cent.

“This is where the development incentive helps,” he said.

The tax grant will help bring the cap rate down, he said, though he’s unsure exactly how much the rate could come down with the incentive.

Lars raised the difficulty in bringing rental units to the market.

When a project is built and not sold, he pointed out, the developer often has a long-term mortgage vs. putting cash into a project and getting it back quickly after it’s built through the sale of the unit.

Responding to a comment made by Cameron last week on the issue, Lars said he would be happy to keep communication open with the city and discuss how well the incentive works, as well as housing issues from the point of view of a developer and landlord.

The incentive won’t come into effect until after 10 of the townhouses are built, likely in approximately three years, with the project planned to be phased in over three years.

Comments (9)

Up 4 Down 1

Josey Wales on Sep 18, 2014 at 4:38 pm

Hey BnR...Five generations eh? I tip my hat to you and your kin whom had a chance to enjoy the freedoms our Yukon used to offer. Envious actually of that actually, as IMHO up until very very recently we here in the Yukon "were" amongst the most free and happy people in the country...maybe the entire North America.
I cannot reference that one, just a feeling in me ol' bones.

For shame I had to witness the nanny state infect us here to the epic levels it HAS.
To your many more generations of (hopefully) happy Yukon genes to come.

....ol' Josey tips his hat to you BnR, really I mean that.

Up 9 Down 0

BnR on Sep 18, 2014 at 2:28 pm

Josey
Newbie? Naw, 5th generation.
Ag lease? Now that is something I wish that I had gotten into, instead of assuming that it was indeed FOR agriculture rather than for speculators to get rich on. Or for ag leasers to grow hay on for other ag leasers to feed their horses....

Up 8 Down 2

Josey Wales on Sep 17, 2014 at 7:26 pm

Hey BnR...okay I promise.
That said BnR if you think my post is so fiction like, peruse CoW building permits at CoW site.
If you think the "land" issues here are also bogus, to that I say welcome to the Yukon. Calling my post what you did, I can only "assume" you are one of our many newbies? If I'm wrong on that, perhaps you're one of "those" who did very well with an "ag" lease, a 'crat or just yet another that dislikes ol' Josey and my POV.

Land issues here are real, as is the epic greed levels from our overlords.
Thanks for the criticism, till next time BnR...OJW

Up 5 Down 3

bobbybitman on Sep 17, 2014 at 6:05 pm

This tax break is an extremely minor give-away compared to the block-buster that Yukon Housing cooked up and Brad Cather's shot down in flames. My guess is that these people are planning this as a legitimate investment and found whatever little give-aways they could to offset expenses. Face it, the COW is reaping a lot of cash from these people with inflated lot costs, building permits, and taxes.

Also, this program has been on the books for many months and anybody can access it.

In short, I wish the developers well, and success in their project.

Up 4 Down 9

BnR on Sep 17, 2014 at 12:47 pm

Josey Wales
If you are going to subject us to your conspiracy rants, please try to make them coherent and based on at least some semblance of fact.

Up 19 Down 2

Hugh on Sep 16, 2014 at 10:48 pm

And the rich get richer!

Up 20 Down 3

Bob Loblaw on Sep 16, 2014 at 4:25 pm

Why in the hell is COW lining the pockets of developers with public money?

Up 26 Down 7

Josey Wales on Sep 16, 2014 at 4:05 pm

I see...keep your subjects in their place forbid home ownership via social engineering projects as this. Great for Lars to tap into a freebie of sorts, increasing his profit margin.

Folks I see Whistle Bend as a social project, and they have yet to begin really...experimenting I mean.
Here is an insane idea...stop treating our Yukon and CoW land as we are in Japan and outta land...hence the absolute GREED in how the land pimps...land pimps that seem to be our overlords.
Why in the hell is land priced as it is here? Absolute political greed/interference in allowing us permission to live on crown land/CoW turf.
Building permits based on a percentage of your homes value?
A never ending land struggle for its use, dictated to us by political blowholes/overlords...for shame.

Drop the greed and allow us to build our own DAMN houses, building our future not lining developers pockets in any way.
The cycle of land lunacy WILL continue, Poo Ville will be an eco/socialist engineering lab funded by all.

Up 36 Down 6

BnR on Sep 16, 2014 at 3:09 pm

If a business plan/model makes sense, financially, then it should go ahead. If it's iffy or risky, don't go ahead. For the City to return tax dollars to enhance the developers bottom line is not, IMHO, a path to go down.
This is not a philanthropic exercise by the Hartlings, this is about making money, and that's where it should fly on its own merits. If we want to start subsidizing builders, then that's where we need to take a long hard look at non profit housing by any of the various layers of government.

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