Sunday, February 22, 2009

Olympic Village Fiasco

Vancouver Sun


When private developers want special zoning allowances from City Hall, they throw in social housing units at no cost to the tax payers. They build the units at the lowest cost, the most efficient way possible.

The Olympic Village social housing concept was ill-conceived because Millennium (the "developer") did not have financing nor the land to build anything, using the Olympic name and the project to leverage financing from Wall Street hedge funds, and then throw into the mix the unnecessary and inefficiently built "Green" features, the bottom line of red ink, over-budget, and perhaps even behind-schedule would be almost certainty.

It's simple arithmetic. Build luxury condominiums at a huge profit, to support the largest number of social housing units at the lowest cost per unit possible. The Olympic Village philosophy is apparently the opposite - build luxury condominiums at minimum profits, and ask taxpayers to subsidize luxurious social housing.

A simple solution to the current mess: sell all the units at cost or rent them at market value. Save whatever money is left over and build the next social housing project properly. Cut losses and start over. Stick to one object in the Olympic Village project - meet the obligations for the IOC - not the luxury market, not social housing. Try to please too many people, and you end up pleasing nobody. That's exactly what happened.


Add in the approximately $40 million in free city land and you can pretty much count on Olympic social housing costing $595,000 apiece, or about $540 a square foot. That’s at least double normal cost.

As you might expect, our Olympic social housing is something to behold. I viewed a south-facing, one-bedroom on the ground floor, with 12-foot ceilings and panoramic windows looking out onto a street 100 metres from the water.

Its exterior was sheathed in what my guide described as “Swiss pearl” panels and etched glass.

The pad I had my eye on was the epitome of green living, too. It’s “LEED Gold,” meaning “thicker walls, high performance glazing, solar shades, ‘hydronic’ or water based heating, a radiant heating system and green roofs.” There are even sky-gardens, plots on the roof to grow veggies as you take in the view.

All of those “elements” add $32,000 a unit, according to a city report. That’s about $180 a month to the taxpayer, if the city financed it over a 30-year mortgage at today’s rates.

Now, I’m not suggesting we don’t need more social housing in the city. A healthy society invests in helping less fortunate. But the budget was blown sky-high on this one.

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