Using market value to sell residential lots in the city is the only method city councillor Doug Graham knows of that will work.

Graham told his fellow councillors Tuesday night he doesn't like it, particularly since the city and the Yukon government are responsible for driving up the price of land by not keeping up with demand over the last couple of years.

City administration brought forward its most recent draft of a new land disposal policy for review last night during city council's committee meetings.

Something needs to be done to counter the ballooning prices for the sake of affordability for regular residents, Coun. Florence Roberts suggested.

She said perhaps blending the lower tax assessments for properties with the market value may be a way to bring down lot prices.

But tax assessments are only available after the properties have been sold, Graham pointed out.

"Well, we have to do something,” Roberts retorted.

Graham said by not providing a supply of lots in the last couple of years, the city and Yukon government have pushed property values up out of sight.

To think the city is now going to use those inflated prices as a benchmark for future sales is "horrible,” the councillor said. He added he can think of nothing else to anchor the city's revised land disposal policy.

Several issues were raised last night by members of council. They including trying to toughen up loopholes to prevent those with deep pockets from loading up the land lottery with a team of family and friends.

There were concerns about how the proposed policy guiding the purchase of commercial land through the bid process involves a last-minute decision by council if the bids came in within five per cent of each other.

The policy is expected to come back before council for a decision next Monday night.

In the most recent lottery for seven infill lots along Grove Street in Porter Creek, lots sold for between $120,750 to $130,200, depending largely on size.

Whitehorse picked up the lots for $230,000 earlier this year from the Yukon government, the original developer of Porter Creek.

It cost the city about another $420,000 to service and prepare the lots for market, for a total cost of about $92,000 per lot.

The lottery value of the lots was based on assessments by two local appraisers.

Coun. Ranj Pillai told his council colleagues he's fielded several phone calls in the last week from residents concerned that of the 158 applicants for the Grove Street lots, it appeared many were connected to the commercial real estate business.

Pat Ross, the city's supervisor of land development, told council it's difficult from an enforcement and administrative point of view to implement policies which prevent commercial interests from securing land in a regular lottery.

The proposed policy, he pointed out, does include the recommendation from council to introduce a new restriction which prevents successful lottery applicants from entering another city lottery for two years.

Applicants, under the new policy, must be Yukon residents for at least six months.

Coun. Dave Austin said he would like to see the city do something more to prevent the speculative buyers from picking up lots, then flipping them.

Mayor Bev Buckway said she does not like the proposal that provides council with the authority to override the policy of selling lots for market value.

If there's a policy to sell city lots at market value, then it should be so, without any wiggle room to change the rules for some reason or the other, the mayor suggested.

Similarly, Graham pointed out, there should be no involvement by the city's elected representatives in the bid process for commercial, industrial and mixed residential lots.

Under the proposal, if bids came in five per cent or less of each other, city council would have the ability to review the bids and pick the one it likes best.

If it's a bid process, the high bid wins, Graham insisted.

It should not be left to council to decide whether to sell the property to Moms and Pops grocery store or the much more lucrative tax base of a multi-family apartment complex, he said.

Graham insisted if Mom and Pop bid the highest for the commercial lot, they should get it – end of story.

Phase two of the city's Takhini North residential development is scheduled to be ready by the end of September, as is the Yukon government's new Ingram subdivision development next to the Arkell subdivision.

Ross said the first phase of the major Whistle Bend subdivision will most likely be ready in 2013, though the city is still pushing for late 2012.