Back to ’90s stagnation for downtown if development incentives not renewed: experts

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This article was published 22/09/2017 (2928 days ago), so information in it may no longer be current.

Downtown residential development will come to a screeching halt if the city and province fail to renew incentives to offset the high cost of such projects, a report obtained by the Free Press warns.

Without incentives, the gains made in the last 15 years could be replaced by a period of stagnation such as in the 1990s, the report suggests.

The Special Report, prepared by the University of Winnipeg’s Institute of Urban Studies for CentreVenture Development Corp., analyzed demographic and housing market factors that influence the need for further incentives.

It concludes that unless there are government incentives to replace those that expired in September 2016, downtown residential projects won’t happen because most developers still view downtown development as risky due to higher construction costs.

“Without the incentive-based programs, we feel that investment in downtown residential construction — the backbone of the current rejuvenation strategy — (is) likely to stall, resulting in the loss of hard-won gains,” it says. “This is a scenario we saw in the 1991 to 2001 period that was marked with significant depopulation and disinvestment throughout downtown.”

The report says government incentives are needed to help reduce development costs and keep home ownership and rents affordable for lower-income groups who are most interested in living downtown — millennials, seniors, immigrants and Indigenous people.

The report was authored by institute director Jino Distasio, assistant director Scott McCullough and research associate Ryan Shirtliffe.

The three authors and CentreVenture president and CEO Angela Mathieson said during an interview that a tremendous amount of new and diversified residential development has occurred downtown in the last decade.

They cited the conversion of Main Street’s Bell Hotel into supportive housing for homeless people and the 102-unit University of Winnipeg Commons housing complex, which includes premium, market, affordable and rent-geared-to-income suites for professionals, students, families and singles.

They said most of these developments wouldn’t have happened without the $100 million in tax increment-financing incentives provided through programs such as the Downtown Residential Development Grant Program, the Live Downtown Program, and the Sports Hospitality and Entertainment District TIF program.

All three programs are funded by the city and provincial governments.

McCullough said since 2005, the incentive programs have resulted in more than 2,500 new residential units being built, and more than $3.5 billion in large-scale investment in downtown buildings and infrastructure.

“That’s a hell of an investment for a place like Winnipeg over the last decade-plus,” Distasio said. “We haven’t see that in probably a century.”

He said it wasn’t that long ago downtown had a population of about 10,000 people. Now, thanks in large part to the incentives, it’s hovering at just under 17,000.

“But I don’t think we’re at the point where we can take our foot off of the accelerator in terms of helping out and being a partner in growth,” he said.

Mathieson agreed.

“I don’t think we’re at the point where we can take our foot off of the accelerator.” – Scott McCullough

“It’s fragile. It would be a roll of the dice, in my opinion, to stop supporting the types of projects that have been undertaken in the past 10 years.”

She said the city and the province have both been provided with copies of the report, but haven’t had time to respond. I’s too soon to say if they would provide new incentives for downtown residential projects.

Mathieson said she hopes to have an answer from the two levels of government within a year.

“In construction, you’re always looking three or four years ahead. So while we’ll see a lot of construction over the next three years in the downtown, we shouldn’t be lulled into thinking it’s never ending because to get that project to start four years from now, we have to start (planning) today. Otherwise, you’re going to see a lull (in activity), and what we don’t want to see is a lull.”

Winnipeg Mayor Brian Bowman would not say whether the city is prepared to offer more incentives.

He said there’s no question the incentive programs have fuelled the record investment and population gains downtown, and that Winnipeggers want to see that trend to continue.

But he said the provincial government is “facing a new fiscal reality, and we appreciate that. So making sure that strategic investments in programs make sense for their plans, as well as for ours, is really going to be the key,” he said.

“We’ll work collaboratively with the province to see what both levels of government should do.”

The provincial government didn’t return calls from the Free Press.

murray.mcneill@freepress.mb.ca