Unlocking Potential: Diversifying Requirements for Infill Housing in Winnipeg
The City of Winnipeg finds itself at a crucial crossroads in urban development. The current conflict revolves around the delicate balance between fostering growth and implementing increasingly stringent building practices to ensure the safety of its citizens. Recent regulatory shifts in the construction of new homes have presented challenges, particularly for small-scale investors looking to expand mid and low-income housing.
While the city's commitment to robust regulations is commendable, a notable oversight has emerged in the transition to these changes. The crux of the issue lies in the disproportionate impact these regulations have on small-scale investors engaged in building new houses on infill lots within already developed areas of Winnipeg. The expansive scope of these new mandates covers all new constructions citywide, but it exacerbates unintended consequences for those grappling with the intricate challenges of infill lot development.
In essence, the City of Winnipeg has introduced additional layers of red tape for housing construction—a move generally beneficial in most new developments. However, this well-intentioned measure poses significant problems in certain more developed areas, where investors seek to build on infill lots. The stringent requirements for building on infill lots result in formidable obstacles for an investor, hindering the potential advantages associated with this unique form of real estate investing. Throughout this extended discussion, we embark on a comprehensive exploration, drawing nuanced distinctions between constructing in new developments and on infill lots.
The objective is clear: to highlight the importance of diversifying requirements, ensuring a fair and equitable playing field for all stakeholders involved. This approach not only meets the mandate of constructing new low and mid-range housing but also fosters economic revitalization in specific areas of the City of Winnipeg.
Navigating the Process:
Embarking on the development of infill lots has become a notably costly endeavor. The once straightforward process involved tearing down a depreciated house and then typically constructing a 900 sqft – 1500 sqft bungalow, bi-level, or two-story structure on the site. Seasoned investors found the handling of demolition and building permits to be relatively straightforward and cost-effective. However, recent regulations have introduced a slew of additional requirements, demanding comprehensive plans not only for the new construction but also for the demolition phase.
Under these new mandates, the submission of demolition and new construction plans simultaneously has become obligatory. This poses a challenge for investors who may not be entirely certain about the most effective build but are eager to commence with the demolition. The unintended consequence is that vacant houses linger longer than desired, exposing them to risks of squatting and vandalism—a concern the city itself has urged property owners to address, and often penalized them for. In fact the City of Winnipeg now charges for a vacant building certificate and then also requires payment to remove it. This is not only very unfair to these property owners but discourages potential investors from investing in the area.
Moreover, the demolition process itself has given rise to a host of issues, with skyrocketing costs taking center stage. The city's insistence on approved contractors for demolition has created a bottleneck, and is fostering potential price gouging by those fortunate enough to secure a spot on the approved list. Unfortunately, the high demand for these contractors also renders them unresponsive, leaving investors in a frustrating state of limbo. With margins as thin as they are on these types of developments, the additional carrying costs associated with having to wait for a demolition company are a real concern.
Adding to the complexity is the requirement to prove the absence of asbestos before demolition. While acknowledging the legitimate concerns about asbestos, the question must be raised about its relevance to these specific demolitions. Despite the lack of scientific evidence linking the demolition of small residential houses containing asbestos to health conditions, this requirement has provided an additional avenue for contractors to inflate prices for asbestos removal. It's noteworthy that Canada continued to mine asbestos until 2011 and only banned its use in 2016, underlining the need for a balanced and commonsense approach to its removal. It also contributes to longer construction times resulting in an overall deterrence to have these properties removed in the first place.
Beyond the demolition phase, the approval processes have become increasingly convoluted, presenting a bureaucratic maze that consumes valuable time. In addition to a demolition permit, builders now contend with the necessity for a demolition plan, engineer-stamped plans, and a building location certificate. This means that demolishing a property is no longer a standalone task; it requires a preconceived plan for the intended reconstruction. The cumulative effect of these stringent measures is hindering progress at every turn and jeopardizing the potential benefits associated with infill lot development.
Unleashing the Untapped Potential of Existing Infrastructure:
In the City of Winnipeg, the areas conducive to infill lot housing are often those that would benefit the most from economic revitalization. Consider the dual impact of constructing a new house on an infill lot Not only does it involve the removal of a dilapidated structure, but it also facilitates the entry of families or multiple residents, injecting much-needed funds into the local economy. Furthermore, this process generates tax revenue for the city and utilizes already installed infrastructure, resulting in nearly pure profit on collected taxes. Additionally, it aligns with the demand for lower-income housing mandated by all three levels of government.
1. Revitalization for Economic Growth:
The potential for new builds on infill lots holds the key to significant revitalization. These constructions not only enhance the overall desirability of the streets they occupy but also act as catalysts for stimulating the local economy. Infill housing, typically priced higher than surrounding properties, presents an opportunity to invigorate communities, create jobs, and offer housing options in harmony with the existing character. How exactly you may ask? Lets consider the potential:
A. Enhanced Street Appeal: Imagine a once neglected street with aging, deteriorating houses. Introducing well-designed infill housing can transform the aesthetic appeal of the entire street. Modern, well-maintained homes can breathe new life into the neighborhood, making it more visually appealing and contributing to a positive image for the community.
B. Economic Stimulus: Consider a scenario where an investor decides to build a set of infill houses on previously vacant lots. This construction process itself generates economic activity. Local contractors, construction workers, and suppliers are hired, creating jobs and circulating money within the community. As a result, the local economy experiences a boost, with increased spending and income for residents.
C. Increased Property Values: When new, higher-priced infill houses are introduced to a neighborhood, they often lead to an overall increase in property values. The surrounding properties can also experience appreciation as the neighborhood becomes more desirable. Homeowners, in turn, may see the value of their investments rise, contributing to a wealthier and more financially stable community.
D. Community Integration: Infill housing can be designed to complement the existing architectural styles, ensuring harmony with the neighborhood's character. This thoughtful integration fosters a sense of community and cultural identity. The introduction of new residents to these homes can lead to a diverse and interconnected community, strengthening social ties.
E. Local Business Opportunities: The increased population and economic activity resulting from infill housing can attract new businesses to the area. Local shops, cafes, and services may find a growing customer base, further contributing to the vibrancy of the neighborhood. This, in turn, creates more employment opportunities and helps sustain local businesses.
F. Crime Reduction and Community Safety: In the aftermath of the COVID-19 crisis, certain areas appear to have experienced a sudden rise in crime rates. Introducing infill housing can play a crucial role in revitalizing these communities and fostering a safer environment. The construction of new homes is likely to bring increased community engagement and a sense of pride, dissuading criminal activities. With more residents actively invested in the well-being of the neighborhood, there is a natural deterrent effect on crime. further contributing to the positive transformation of the neighborhood. In this way, infill housing may become a much-needed catalyst for breaking the cycle of increased crime that may have emerged during challenging times such as the recent pandemic.
By considering these examples, it becomes evident that infill housing has the potential to trigger a positive cascade effect, bringing about both physical and economic rejuvenation to urban areas. This not only addresses housing needs but also fosters a sense of pride and prosperity within the community.
2. Meeting the Demand for Low-Income Housing:
Affordability through Smaller Size:
One of the inherent advantages of smaller infill lot constructions lies in the reduced size of the houses. The smaller size allows these homes to be priced at a much more attainable point for lower-income owners or renters. The emphasis on compact, well-designed living spaces not only aligns with the financial constraints of a broader demographic but also contributes to a more diverse and inclusive community. It is relevant to remember however the lower the price point the thinner the margin for the investor. A city that wishes to promote development of existing areas should focus on incentivizing.
Multifamily Zoning Opportunities:
Infill builds often occur in areas already zoned for multifamily use, providing a strategic advantage for investors. The existing zoning regulations in these areas facilitate the construction of duplexes and other multifamily residences without encountering the zoning restrictions common in new developments. This alignment with multifamily zoning not only streamlines the construction process but also directly addresses government mandates for increased housing. By incentivizing small investors to focus on infill lots in these pre-approved zones, the city can effectively support the development of multifamily residences, meeting both market demands and governmental housing objectives.
Tax Benefits and Multifamily Housing:
The city stands to benefit substantially through tax revenue. Firstly, property taxes for a newly constructed home are significantly higher than for a dilapidated structure. Moreover, the potential for multifamily housing on infill lots enhances results in higher taxes collected for the City. Furthermore these taxes are being collected without having to contribute to any new infrastructure such as roads or water & sewer lines, these are already in place. This dual advantage not only contributes to the city's financial health but also aligns with broader housing goals.
Supporting Small Investors:
The majority of infill projects are championed by small investors, individuals who are often deeply rooted in the local community and committed to its improvement. Their engagement transcends financial considerations, reflecting a personal connection to the neighborhood. By endorsing these small investors, the city taps into a wellspring of local insight, vital for decisions that positively impact the community.
Additionally, small investors bring a level of flexibility and adaptability often challenging for larger corporations to replicate. This adaptability ensures a nuanced approach to development, one that seamlessly integrates new constructions with the existing neighborhood fabric. For instance, a local investor may be keenly aware that potential renters are looking for a 2 bedroom house with an in-law suite in the basement for aging parents. They can build this house with these specifications to meet these kinds of specific demands. These investors can be agile, responsive to community dynamics, and inclined to explore diverse housing options, fostering a more inclusive housing landscape.
Encouraging small investors in infill projects not only bolsters real estate development but also fuels localized economic distribution. The profits and benefits generated are more likely to circulate within the community, supporting other businesses and initiatives. This localized economic impact not only enhances community resilience and sustainability but also aligns with a forward-thinking urban agenda that prioritizes community connection, adaptability, housing diversity, and economic empowerment. It represents a strategic move towards building a thriving and resilient urban environment.
While the benefits of infill housing are evident, the current stance of the city seems to lack an understanding of its intricacies. Overcoming this challenge involves educating officials on the benefits and implementing incentives for small investors to construct these types of homes:
In essence, fostering a deeper understanding and actively supporting infill housing construction can position the City of Winnipeg as a proactive force in sustainable urban development, economic growth, and meeting the diverse housing needs of its residents.
The City of Winnipeg finds itself at a critical juncture in urban development, where the potential of infill housing to drive sustainable growth, economic revitalization, and meet diverse housing needs cannot be overlooked. Despite the challenges posed by stringent regulations, the benefits of infill housing, from enhancing community appeal to fostering economic stimulus and meeting demands for affordable housing, underscore its pivotal role. The city's current stance appears to lack a nuanced understanding of these intricacies, emphasizing the need for education and incentives to support small investors and streamline the development process. By embracing the potential of infill housing, Winnipeg has an opportunity to not only build a thriving and resilient urban environment but also to send a progressive message of commitment to community improvement and forward-thinking urban development.
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*The framework of this blog was constructed with OpenAI technology and edited by Dwayne Grantham P.App, CRA, JD.
