Thorunn Howatt
Northern News Services

Yellowknife (Mar 20/02) - The only way to solve a housing shortage is to build more homes, but enticing developers to bring their hammers North will take some special tactics.

New Age Construction's Rod McCarthy is pre-fabricating building structures inside the company's shop. - Thorunn Howatt/NNSL photo

That's where the territorial government, the NWT Chamber of Commerce and the city of Yellowknife come in.

Municipal infrastructure was high on the agenda during a trip last week where private business people, as well as Yellowknife's mayor, met with Prime Minister Jean Chretien in Ottawa. The group wants $200 million from the federal government to help build roads and housing infrastructure. Also in the works is a study that could shed some light on a housing solution.

"The chamber of commerce is partaking in a study in conjunction with the city of Yellowknife, the government of the NWT and CMHC (Canadian Mortgage and Housing Corporation)," said the chamber's Maria Mathews. The study is complete and results should be compiled by the end of this week.

The study and the trip to Ottawa resulted from concerns that migration to the North is grinding to a halt thanks to a housing shortage. The CMHC is forecasting less than one per cent rental vacancy this year and it expects housing starts to double from last year's 93 new homes. But city lots are few and far between, and high-priced -- running anywhere from $65,000 to $80,000.

"We as a government want to encourage people to move north. We need to increase our population," said territorial Finance Minister Joe Handley.

The territorial government has some initiatives that will entice builders to build more homes in smaller communities, but the plan doesn't apply to Yellowknife.

"We certainly do not want to get into either long-term subsidies or disrupting the private market," said Handley, but he suggested the territorial government's financing of lot development is a possibility.

But the GNWT could finance the city for lot development. The city would then turn around and sell the lots to homeowners as houses are built. "At least the lots would be available. Right now the lots aren't available," said Handley. Another way to keep lot prices down is to skip water and sewage and use truck service.

The territorial government is hoping to get its hands on about $2 billion rumoured to be coming available from the feds for infrastructure development in the country. And that made the trip to Ottawa timely.

Of course, a major obstacle to accessing the federal funds is the surprise census result released last week. While everyone expected a population increase, just the opposite happened -- at least according to Statistics Canada. Handley, for one, doesn't believe the figures, though.

"How could we have zero vacancy if we had lost all those people?" asked Handley.

One of the problems could be workers rotating in and out of the North who call the South home.

"If we can't attract people to live here then we have to penalize them elsewhere," said Handley. He was referring to the possibility of a payroll tax applied to people who don't call the North home.

The current government initiative is to promote growth in small communities, not just Yellowknife and other larger centres.

For now the government has set up four programs to help developers get building.

It plans to finance up-front costs for developing building lots in non-tax-based communities. When the lot is sold, the developer will repay the costs.

Second, the government will increase financing available above the CMHC insurance maximums. In many cases, CMHC will only insure about 65 per cent of a home's value.

The territorial government will help finance up to 90 per cent of the cost. The government will also provide business advice to companies that want to get into housing.

"And fourth, we want to look at some flexibility in assisting with model homes," said Handley, explaining that pre-fabricated or packaged homes could be a solution to the housing shortage, "Where people could try out new ideas in construction."

As for Yellowknife, it looks like the housing crunch will continue to be chipped away at by the private sector.

The NWT Chamber of Commerce hopes for another excursion to Ottawa within a month.