Victoria developer gets plenty of bang for her buck
On March 1, with no media fanfare, a new below-market apartment building quietly started accepting tenants.
The 52-unit building at 21 Gorge Rd. E. marks a new beginning for the site, which housed the notorious Capri Motel until its demolition in 2009.
For developer Alanna Holroyd, its successful completion proves rental housing can be achieved with only modest capital grants and no ongoing rental subsidies.
She named the building Loreen Place after her mother, Loreen Vandekerkhove.
“She was raised poor and she remembers it quite well,” says Holroyd, who created the non-profit Greater Victoria Rental Development Society in 2009.
She secured a $9.8-million loan to construct the building with only $740,000 in grants up front.
“In the business world, that is unheard of,” she says.
Traditionally, developers have needed to raise 50 per cent of the cost to get a loan.
Touring through one of the unrented units, Holroyd proudly points to the wide, white baseboards. “We really put thought into if we’d want to live here.”
Her desire for a beyond-the-basics facility has fuelled a good-humoured tug-of-war between Holroyd, the idealist, and her business partner, Kaye Melliship, the pragmatist.
“We’re going to reduce some of the extras in our next building,” says Melliship, executive director of the Greater Victoria Housing Society, which manages and co-owns Loreen Place.
“You have to be very realistic about the cost of maintaining the building.”
“But then it wouldn’t be so nice!” argues Holroyd.
With a grin she adds: “See how we work well together?”
Holroyd won the argument when it came to including features such a light above the tub (good for shaving, she says) and large garden beds in the interior courtyards.
“She even petitioned for in-suite washers and dryers,” Melliship says with an exasperated smile. On that final point, she put her foot down.
So far, 17 of the 52 units have been rented, and it turns out the rooms with the views aren’t the ones in demand.
All the cheapest, courtyard-facing units have been signed for. It’s a clear signal of where the biggest shortage lies in the rental continuum.
To be eligible to rent at Loreen Place, tenants’ household gross income can’t exceed $65,000. It targets low-to-moderate income earners – a wider mandate than most “affordable” housing projects.
Rent for two-bedroom apartments ranges from $875 to $1,300, making it not far off the average for Victoria. Throughout the metropolitan area, average rent was pegged at $1,000 in October, 2011, according to the Canadian Mortgage and Housing Corporation.
Over time, however, rents at Loreen Place will drop, as the mortgage is paid off.
“It will just get cheaper and cheaper,” Melliship says.
“It sounds like a great project,” says Tom Durning of the Tenant Resource and Advisory Centre.
“I hope other municipalities take note of that.”
While municipalities often don’t have spare land, they can encourage rental housing in other ways, such as through rezoning, he says.
“They can do density bonusing, they can ease parking restrictions. It’s not just a monetary thing,” he says. “In a case like this, you’re getting a 52-unit project and all they needed was a little bit of start-up money … Why can’t we do more of them?”
Holroyd is working on just that.
She has submitted a rezoning application to the City of Victoria to redevelop the Friendly Inn, right next door.
“We still have to ask for construction financing, but it’s nice to have something where they can kick the tires and see that the building actually was produced with only $740,000 in capital.”
Did you know?
• As of October 2011, the vacancy rate in the city of Victoria was 1.8 per cent, compared to a regional rate of 2.1. See related story.