The construction of affordable rental units is one piece of the puzzle in addressing housing issues in the territory, say Yukon Housing Corp. officials.

Yukon Housing is defending its plan to subsidize up to 50 per cent of the cost of construction of new affordable rental units.

Its justification comes after the Yukon Real Estate Association and Yukon Residential Landlord Association argued this week that rental demand is being met in the city. They suggest the government's plan will create another housing crisis in the territory.

The organizations note the lengthy history of housing in Whitehorse.

They point out that many of the new condo units built in town in recent years are now part of the rental stock.

The government's plan, they said, will flood an already overloaded market with more units.

And that will have a major impact on those who have invested, paying full price for their units in recent years, adding rental stock who may lose tenants to the newer, less expensive units where proponents were only required to pay 50 per cent of the cost.

"You're destroying the marketplace,” Terry Bergen of the real estate association said in an interview Thursday.

He argues a rent subsidy program would better address the issue of affordable housing.

Both he and Sonny Gray of the landlords' association argue there are numerous issues with the subsidized program.

They wonder what will happen at the end of the 10-year period proponents have to keep rent at a rate of 95 per cent of the median market rent.

Bergen pointed to the possibility that the units could be condoized and sold at a profit.

"We would then be onto our next housing crisis thanks to the work of the government today,” the groups note

"All of the Yukoners who were hurt by this initiative will be investing their money elsewhere to avoid being punished by the government for investing in the Yukon.”

The groups have asked the government to halt the plan.

Michael Hale, the housing corporation's vice-president of operations, defended the plan this morning, noting the gap that exists between social housing and higher-end housing.

"We are targeting that middle gap,” he said, recognizing that while there are condos available for rent, they are in the higher price range that the target group is unlikely to afford.

While Yukon Housing has a rent supplement program for those with a lower income, Hale noted this is another way to address housing needs, arguing there is not one solution for all.

Yukon Housing is working with five potential proponents on projects that would see two projects built in communities and three in Whitehorse following an open process that saw more than 70 proposals come in, he said.

The project would see 75 bachelor and one-bedroom units open up in the city and 70 in the communities.

Full details of the proposals can't be released, as Yukon Housing is still in discussions with the proponents, Hale said.

Further details will be forthcoming once the projects have been approved.

"We've been very open,” Hale said.

Funding is coming from the Northern Housing Trust. For several years, $13 million has been available to stimulate the development of affordable rental units.

Hale also pointed out funding will only be provided for the construction of the units themselves.

Proponents are responsible for paying for the land, for example, and any other portions of the development that are not set to be affordable housing.

He noted if, for example, a development has a commercial operation on the ground level with affordable rental units on the upper levels, it would be up to the proponent to pay the entire cost of developing the commercial portion.

Hale also said the 10-year period where rent is based on 95 per cent of the median price takes effect from the time of occupancy.

It could take a couple of years for developments to be built, and that would put the rent restriction in effect until 2026.

The 10-year period is a fairly standard time period on such developments that help make it viable.

Kristina Craig of the Yukon Anti-Poverty Coalition noted today it's impossible to know what the market will be like in 10 years, and that this will provide certainty for the next decade.

"We believe we need that kind of housing stock,” she said, arguing it's well-known that without some investment, the private sector won't build multi-housing rental units.

A couple of years ago, a government effort to encourage developers to build affordable housing on the so-called "Lot 262” at the intersection of Mountainview Drive and Range Road drew no responses.

While there are many condos in town now, they are not meeting the needs of many, Craig said.

She acknowledged that this project alone will also not meet the needs of all renters, "but it's a start,” she said.

Like Hale, Craig believes it's one piece in dealing with the numerous housing issues in the territory.

"This may not be perfect, but it's long overdue,” she said.

See realtors, landlords groups' commentary.