Developer Choosing a Loss
In the competitive world of real estate development, profit margins are everything. But one Vancouver real estate developer is saying that it is choosing to prioritize social responsibility over profit by voluntarily setting aside about 33% of the units in their latest project as more affordable homes, even though they are not required or incentivized to do so. This decision will result in a profit loss of 15% for the developer, but they believe it is the right thing to do. By creating more affordable housing options, this developer is not only helping to address the city’s housing crisis, but also setting an example for other developers to follow. It takes courage to prioritize social responsibility over profits, but this Vancouver real estate developer is leading the way in creating a more equitable city for all.
The Property
According to DailyHive, “Local developer Third Space Properties has submitted a rezoning application to redevelop 1926-1978 East Broadway, located at the southeast corner of the intersection of Victoria Drive and East Broadway — next to the Grandview Cut and the area’s Safeway grocery store.”
This proposed 6-storey rental building with retail will be next to Commercial-Broadway SkyTrain and an 8 minute walk from addy’s first property, the Trout Lake development that backs onto Trout Lake itself.
This will be a mixed-use building with 77 secured purpose-built rental homes, including 51 market rental units and 26 below-market rental units. In their application, Third Space Properties suggests they are voluntarily setting aside about 33% of the units as more affordable homes, even though they are not required or even incentivized to do so.
“We are foregoing more profitable alternatives and choosing to make a positive social impact in the community,” states their rationale, with a pro forma that shows the average rent of all homes will be $2,520 per month and the average below-market rent will be $1,840 per month. This represents a profit loss of 15% for this project. (via DailyHive)
Third Space Properties
According to their Linkedin profile, “Third Space Properties Inc. (call us “Third Space”) is a purpose-driven property investment, development and management company founded with a long-term vision to keep Vancouver thriving.”
Primary Return: Societal
addy Members are not new to this idea. The addy community has expressed their support in Discord and by putting their money where their mouth is by actually investing in affordable housing. The 100% Affordable Housing Development in Hamilton, Ontario that came onto the addy platform a few months back had over 1200 investors invest in the development with the knowledge that the primary return was a societal return, not financial.
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