No changes to speculative housing program

Lisa
Lisa Goudy
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City manager Matt Noble speaks at the March 31, 2014 executive committee meeting.

Executive defeats three motions to amend, to cancel and to change the program

Executive committee defeated three motions regarding the speculative housing program.

The program was created in 2001 with the intention to encourage contractors to purchase residential lots to build new homes. On Monday, executive committee had a discussion about whether the program needs to exist or if it should be amended.

In a report from planning and development services, it said city administration was in favour of continuing the program with two amendments.

The proposed amendments were to limit the number of lots a contractor can have at any one time to three lots and to have all deposits in the amount of 10 per cent of the purchase price no matter the projected value of the dwelling.

“We found that some of our developers were tying up property and keeping other people from buying it. It just seemed like a good business move to say three would be fine. That way one person can’t take 15 lots, good ones and force other people to take other lots,” said Matt Noble, city manager. “It was purely a recommendation based on better business practices.”

Originally the speculative housing program and the former show home program allowed contractors to buy lots with a $1,000 deposit and to have a tax exemption of up to two years or until the dwelling was sold.

The show home program was cancelled in 2012 because it wasn’t being used. At that time, the speculative housing program was changed to allow for a deposit of 10 per cent for a dwelling with a value of more than $280,000 or a $2,000-deposit for a dwelling with a value of less than $280,000.

At Monday’s meeting, members of city administration said all homes built through the program have been valued at more than $280,000.

Coun. Heather Eby moved the recommended motion but it was defeated.

Luhning then moved to cancel the program.

“(Noble) already alluded to (the) unfairness of the program really for builders hanging onto lots for a certain amount of time and for a very small, small price,” she said. “I think it’s time for us to eliminate this program completely.”

Swanson agreed with Luhning’s position. He said over the last decade, he’s tried to delete the program on two occasions.

“I think it’s been a bad program from day one,” he said. “I don’t think the City of Moose Jaw should be in the financing business for home contractors ... I think it hasn’t proven very successful and actually probably detrimental.”

Noble said city administration doesn’t believe the program was fair to everyone, but it helps smaller contractors.

“There are times where communities are able to attract large groups of people who are interested in doing business in the community and developing,” said Noble. “Then there’s other times where you have smaller, home-based developers because everybody else walked away. So having a program like this still allows the small home-builder to have a bit of an advantage.”

However, Luhning’s motion was defeated.

Next, Boyle moved to table the report pending consultation with the Moose Jaw Construction Association, the Moose Jaw and District Chamber of Commerce and the Moose Jaw Real Estate Board.

“I would like to get the opinion of the association itself … (to ask) do you even want this?” he said. “That’s my hang up on it.”

Boyle’s motion was also defeated.

Follow Lisa Goudy on Twitter @lisagoudy.

Organizations: Moose Jaw Construction Association, Moose Jaw and District Chamber of Commerce, Moose Jaw Real Estate Board

Geographic location: Moose Jaw

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