7 minute read
Affordable Housing is Really Unaffordable
BY SHANE WENZEL
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You will recall during the recent federal election all of the parties attempted to outdo each other by presenting as one of their key election promises to build millions of affordable homes over the next few years. If the elected Liberal Party keeps all their other election promises and platforms that affect housing costs, there will never be an opportunity for owning affordable homes anywhere in Canada in the future.
In addition, unless local governments make an effort to connect the suburb communities that have evolved due to new family formations with their inner cities, they will miss out on turning the suburbs into part of a unified economic base through a tax-sharing plan. Notably, on average, about 40 per cent of jobs are located 10 miles and beyond from the core downtown business district.
Promises to build millions of more houses make it seem as though politicians are fighting hard to keep the dream of home ownership alive, when in reality that is not a meaningful goal. There is no easy way to fix the current housing crisis in Canada for a variety of reasons. The reference is more appropriately “unaffordable housing.”
Take Calgary’s local market for example. Just gaining approval for development can range from five to seven years. However, this process can be sped up somewhat by the developer paying upfront costs up to $1.5 million for the City to dedicate staff to shorten those processes. This is followed by another three years to develop and install the infrastructure in readiness for any housing. Readiness for occupancy can then possibly be as far out as 10 years from beginning to build out stage. Also unknown to the public is that all servicing infrastructure, including sanitary, water, storm servicing, sidewalks, roads, local pathways, and parks are front-funded by the developer – not the City of Calgary. In addition are all the fees for development and building permits.
With no certainty to investors from a business perspective from day one of planning to approval to proceed, it is difficult to attract and keep investors with the costs increasing over the process. As a result, over the past 10 years we have seen capital understandably leave the city for elsewhere.
While onlookers might logically think that the continued increased costs of housing are due to increased cost of supplies, the biggest issue faced by industry today is available skilled manpower. Little has been done by a variety of institutions to encourage youth to enter the skilled construction trade industry. Hence, the infamous supply and demand issue has evolved. This inability to find skilled workers has increased the cost of homes exponentially. Unfortunately, regardless that approximately $11 million was invested by 11 developers and homebuilders into SAIT trade programs some 12 years ago, a changing of the status of SAIT from a college to university has seen those programs effectively put on hold or disappear.
Simply put, homes have now become too expensive for those who need them.
“Promises to build millions of more houses make it seem as though politicians are fighting hard to keep the dream of home ownership alive, when in reality that is not a meaningful goal.”
Shane Wenzel is president of the Shane Homes Group of Companies. Follow him @shanewenzel on Facebook, Twitter, LinkedIn, Instagram and YouTube.His column is written for the Alberta Enterprise Group, @AEG on Facebook, Twitter and LinkedIn.
Annual Veterans Funding Drive
Canadian Legacy Project was formed in 2008 with a goal to develop and support programs for our Canadian military veterans who are having a challenging time transitioning back to civilian live. The national charity is volunteer directed ensuring funding get to those who need it most. Due to COVID demand for their PTSD support programs, food programing, education and housing supports are at an all time high, and funding is at an all time low. The need for support within the veteran community is ever increasing and Canadian Legacy Project continues to do everything they can to ensure the needs of our Canadian veterans across Canada are being met. (#82478 8202 RR0001)
It is their mission to develop and fund programs that are not currently being offered, or that are underfunded by Veterans Affairs. In parallel to this, as a registered charity they advocate on behalf of, recognize and celebrate our Canadian veterans. As well as educate Canadians about our veterans and the sacrifices they have made standing on guard for country.
PREPARING THE NEXT GENERATION
WHERE WE CAN HELP YOU AND YOUR FAMILY
Shawnalynn Perron
Preparation initiates from the first generation business or wealth creators. Expecting the next generation to mature and understand the significance of what they will be managing or inheriting if they are unaware of what exactly it is they are inheriting, is not realistic. It’s like gifting a child a bicycle and expecting them to know how to sit on it, balance on it and ride on it all at once. You need to start one step at a time – it is a process, not an event. This article aims to outline some steps to help your families start preparing for a wealth transition event
3. DEVELOP A ROADMAP FOR EDUCATION
Through collaboration and discussion, you can learn about where skills may be lacking or where family members might excel. Identifying the gaps will help develop a list of where education will be required. Depending on the nature of the family’s assets, different skills may be needed.It does notmean buy the latest financial book for dummies and mandate everyone read it. Education is for everyone including the first generation. Topics can include:
• Understanding personality types • Conflict resolution • Budgeting • Investment management • Leadership • Strategic management • Industry specific research
1. STOP KEEPING IT ALL A SECRET
We need to stop keeping family wealth a secret. The next generation may not know all the details but when they reach a certain age they already know the family has money. They can understand discrepancies between their lifestyle and friends at school or the communities around them. Now, we am not suggesting you tell a 14 year everything about the family wealth, but they need to start learning that money comes with responsibilities. Keeping the family wealth a secret creates a sense of distrust and that can be destructive when it comes preparing the next generation to live out your succession/legacy/estate plan.
Come talk to us about how you can best start this conversation.
2. CALL A FAMILY MEETING
When you start treating your family wealth like a business and creating new formalities and structure, it can help all members start learning and preparing for what is to come. Learning to listen and work together on topics such as fiscal responsibility, determining educational requirements, and prenuptial agreements can help the family align its values so everyone has a common understanding of intentions and expectations. In addition, trusting your family members with the financial information can go a long way. Knowing that the first generation is trusting in and providing the next generation with confidential information can create maturity, a sense of responsibility and engagement that might surprise you.
Together, we can design your first family meeting agenda. Engage our firm as one of your stops for learning financial literacy and investing 101.
To prepare is to make ready for something ahead of time for activity, use or purpose. When you start your estate planning process you are doing just that. Traditionally, we think this is complete when we sign the Will. We disagree. When you decide to draft a Will, you are committing to preparing all the members involved and impacted by the Will for the eventual outcome, whatever that is. It is everyone’s responsibility to make sure the wealth transition is successful. More importantly, having the family involved in the process can help strengthen and develop a more appropriate plan so unintended consequences do not result.
Through thoughtful conversation and planning, we can help you and your family navigate this process to help achieve a successful wealth transition. Contact our in house Trust & Estate Practitioner at perronteam@cpwm.ca or call at 403-705-1200.
