In our 35 years of consulting and brokerage, we have never been retained by a municipality.
We have completed over 700 feasibility studies in Canada and our clients are typically apartment developers, hotel developers, shopping entre owners or office owners who are looking to pivot to apartment development.
The Town of Shediac, N.B., contacted us to do a feasibility study on apartment development. They wanted to be proactive and create a plan to attract developers to build purpose-built rental housing and affordable housing in their community.
We found it particularly interesting that a municipality was taking the lead on enticing developers to their area to build purpose-built rentals and affordable housing. Shediac saw the need and looked for a way to fill it.
Our feasibility study focused on the demographics of Shediac; identifying the existing renter type, the future renter that could come there, and then creating a policy to encourage development.
We met with Mayor Roger Caissie, Deputy Mayor Jean-Claude Bertin, Director of Economic Development Danny Pellerin and Councilors Paul Boudreau and Janice Cormier.
This group of town officials were proactive in taking the steps to understand how developers think and what the municipality can do to help solve the need for housing in their community.
Our recommendations to Shediac
Our advice was that the easiest and cheapest thing available for the Town of Shediac to sell to developers was speed and the ability to super fast-track applications for development.
One way developers measure their returns is the equity multiple of their development.
Any mechanism of facilitating and speeding up land development is likely to increase a developer’s equity multiple and so a municipality that can offer faster application processes can be attractive to a developer who is open to new marketplaces in which to build.
Another recommendation we made was regarding unit size. We highlighted the reasons why purpose-built apartments are generally larger while affordable housing generally needs to be smaller.
We also recommended areas in the town that would be best for purpose-built projects and locations that would be best for affordable housing.
We were able to base all these suggestions on both economics and demographics that we researched, as well as information the municipality provided us – it was a collaborative effort between our research team and the representatives of Shediac.
Additionally, we talked with town staff about the lack of coordination federally, provincially and municipally for the stacking of programs.
Every city and province has a different program in place to address housing issues, but we need a standardization of these programs in order to make the story and pathway clear for developers to build affordable housing.
Raising a hand to developers
By contacting us to learn more about the industry, the Town of Shediac has effectually raised their hand to developers.
Taking this step effectively communicates the following: “We, at the Town of Shediac, have taken the time, trouble and expense to learn about your industry and we welcome you here. Developers in Atlantic Canada, by choosing to consider Shediac, you’re going to come to an educated and motivated city hall that welcomes you here and wants you to build apartments in our fast-growing community.”
It may be an understatement to say that this is not the typical scenario regarding the development of apartments and affordable housing.
We appreciated working with the municipality and recommending actionable strategies that will get housing built.
The more municipalities across Canada recognize their unique role in attracting quality apartment developers to their communities to solve their housing issues the faster we are going to see solutions.
Our annual conference (June 16-17, 2022) will address these issues in greater detail at our session entitled “The Political Landscape and Public Sentiment Towards Apartment Development – Actionable Strategies/Advice.”
We have made it our goal to bring municipalities and developers together to create solutions!