Thursday, April 7, 2011

If it ain't broke don't fix it

I respond to the article in today's SP (April 7/11) on the city's Land Bank lot draw. Saskatoon may be the only, or one of a few cities, that has a Land Bank. I believe the purpose of the Land Bank was to allow the city to control the growth and development of the city and to aide in keeping land prices reasonable to its citizens.

Working from recollection, the city, using tax dollars, would access a parcel of land, service it and then put lots up for sale. The lots were priced based on land acquisition cost, servicing costs, administrative costs, etc. and then increased by 10%. Monies recovered from the sale of lots were then used for the next development with the small profit margin allocated for social and affordable housing projects. The lots were sold on a draw system, which included allowing citizens to participate and buy their own lot along side both small and large builders. Seems like a good system that allowed for everyone to participate.

For a very long time the major builders/developers have opposed this system. They want first dibs on tax-funded developments. They didn't want any lots going to Joe Public, and they wanted rows of choice lots allocated to them. And there is nothing that prohibits them from jacking up the price of these lots purchased from the city on re-sell to a prospective customer.

The one good argument large builders have is the cost of construction when they are building a row of houses side-by-side. Sending in the backhoe to dig six basements in a row is cheaper than sending the backhoe to several sites spread out. Call it assembly line construction.

But how does the small builder grow his company if he can't obtain the lots to build on? Major builders access and develop their own land as well as lots purchased from the city. Small builders cannot afford to do that.

There has always been the threat that large builders would take their business elsewhere if changes to the Land Bank system are not made. Strange to think that any large business would want to leave a city touted to be the fastest growing in the country with a thriving economy.

Perhaps all lot purchasers should be required to build on these lots within a certain time frame and that the lots cannot be re-sold for substantiallya higher cost to a future homeowner.

Saskatoon is a city built on small business. It has been the backbone of this community since its conception. I hope Councillors will remember that before casting their votes.

Or will they only remember those builders who wrote $249.00 campaign donation cheques.


  1. I don't see the need for any changes either Mistress. This appears to be a power play by the Big Boys in the industry. If all the contractors are pre-approved as the article indicates then no one should be given preferential treatment when it comes to Public access. Your concept that it is cheaper to build a bunch of homes in a row may not be all that convincing but if indeed there are savings I don't see any being passed onto the home buyer. This just makes the big businesses more profitable. The small builder gets screwed or nailed which ever tool the city is using. I have never liked the idea of the land bank in the way it manipulates the market place. There was a time when lots would stay open for years on spec. Confed is a good example of that. The land bank needs to be open to all if big companies want more lots let them break up into smaller subsidiaries and get more spots in the cue.

    Changing the system now is not what is in the consumers best interest.

  2. Good call on this one, Elaine.


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