Tuesday, August 04, 2009

Nanaimo Affordable Housing

"Affordable" Housing
Costs $500 Sq. Ft. To Build?

With the usual political fanfare last week the 'affordable' housing project on Bowen Road was opened for all to see what a wonderful job is being done for those in a low income situation.

I have some experience in the construction business and was curious to read that providing 20, 500 square foot, one bedroom apartments cost $4,600,000.00 to build on land which is leased from the City and on which development cost charges were waived. This means without allowing anything for land cost, these units cost $234,000.00 each to provide. If you are to include a land cost of $15,000.00 per unit the total for each unit is now $249,000.00 or $498.00 per square foot to build.

To put that in perspective at $500 per square foot a 2,000 square foot house would cost $1,000,000.00! I am sure you would find that a tough sell in the Nanaimo market.

I realize that costs have gone up considerably since I was in the business back in Ontario but nearly $500.00 per square foot is still pretty steep for what is being billed as affordable housing. I would presume this means there are not gold plated taps, heated towel bars, heated toilet seats, saunas or spas or fireplaces or such like which would of course drive the costs up considerably. However, one thing which caught my attention was the fact the parking lot was not paved but rather was finished with brick pavers, which are considerably more expensive than asphalt.

For a simple comparison I looked into the price of new units in the trendy studio/na project being built on Chapel Street. While these units do vary in price considerably depending on your location in the building etc. there is a brand new 623 square foot one bedroom condo advertised for sale for $207,000.00. If you consider this is a 'for profit' project which the owners expect will provide them a profit, the price of $207,000.00 would be expected to reflect more than the bare construction cost.

A quick Google search of Nanaimo condos turned up some of the following listings which are currently on the market:

Baron's Road 2 bedroom condo $144,900.00.
Ninth Street, Ocean view 3 bedroom condo $186,900.00
Uplands Dr. 1 bedroom condo $154,900.00
Harwell Rd. 2 bedroom condo $182,500.00
Wills Rd. (on Long Lake) 2 bedroom condo $189,900.00
Songbird Place 2 bedroom 2 bath condo (upscale) $204,000,00

These affordable units on Bowen Road at $249,000.00 far exceeds the cost of anything I found listed in Nanaimo with most well below $200,000.00 and that includes some 2 or 3 bedroom units. Considering the project on Bowen Rd. is not wheelchair accesible and the Nanaimo Affordable Housing Society says: "the project is for single adults only between the ages of 19 and 54 and there will be no supports offered outside of normal landlord services." there appears to be no reason why these units are so far above what else is available in the market.

The government (I don't know which department) subsidizes the rent in these units with the net result being a tenant will not spend anymore than 30% of their income on rent which includes utilities. You would think if the end goal is merely to provide affordable housing for people on low incomes then purchasing condo's on the market and subsidizing the cost of borrowing would still be giving the taxpayer a better bang for the buck than building housing at a cost of nearly $500 per square foot.

A Suggestion For The Real Fifth Estate

Perhaps one of the provinces esteemed fifth estate, you know a REAL news journal could do some serious investigative reporting as to the reason these units cost nearly $250,000.00 when much larger units are available for as much as $100,000.00 less. I doubt if either of the local print media have the will or resources to do some serious digging on behalf of the average taxpayer. I myself am just a simple blogger who would not be taken seriously by any level of government expecially agencies with their own agendas and turf to protect, (not to mention salaries).

A few questions that could be interesting would be how much of the $4,600,000.00 actually went to the cost of construction of this project. For example how much money found it's way into the hands of consultants etc.? How much does the Nanaimo Affordable Housing Society collect for 'managing' this project? How much have they earned to date overseeing the project from concept to completion?

Finally, if the private sector were tasked with providing one bedroom, 500 square foot apartments how many could they provide with a budget of $4,600,000.00? I am going to go out on a limb here, but I am certain they could deliver far more than 20 units, in fact it would not surprise me if they could double the number of units.

So, how about it fifth estate, are you going to do some real journalism, or just rewrite press releases?



  1. Every Nanaimo Citizen should see this blog post. I was a Drywaller for years and I have worked on $5 Million condos, on a ski mountain, with 28, 2-3 bedroom units, a fireplace, appx 600 sq ft. possibly more. How can they justify a building like this costing 4.6 million dollars, when similar projects have been completed on a much more stringent budget? The answer is simple, its the city... think of it like this. Go to a high school and look at the tables and desks around the institution, do they look like they would cost $500 a piece? Well, maybe, but I would NEVER pay that much for a table that belongs in a dump. I have the same feeling towards these "affordable" housing units.

    Bravo great post.

    R Thompson - Ernest and Lee Gifts
    Nanaimo British Columbia www.ernestandleegifts.com
    (blog finishes Nov 20!)

  2. I can't believe our tax dollars are being spent with little or no accountability. Or can I ? We should all be knocking on the doors of those responsible for this and all reckless spending of OUR cash.
    This sort of practice goes on and on, we will do nothing to stop it and that is what the powers to be rely on.
    Mick Baldwin Nanaimo


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