First Person: Tim Regan

As a developer who lives in Whistler, Tim Regan has a vested interest in the wellbeing of this community.

He has called Whistler his home for almost 15 years. This is where he is raising his young family and where his business, Vision Pacific, is thriving in the construction of award-winning high-end homes.

He takes time out of his busy schedule to coach Atom hockey and he writes and performs children’s stories at Myrtle Philip School.

"This is my home. There is no other place on earth that I would rather live," he said.

Two years ago he presented the community with a chance to build a large employee housing project. He spent a lot of time, energy and money on the project but it ultimately it was turned down.

Devastated and drained by the whole experience, he was ready to throw in the towel. But the community rallied behind him and since then, he’s been plugging away at new options to do his part to help solve Whistler’s critical housing problems.

Regan compares Whistler to Manhattan. Both areas are places that people want to be. Both command high real estate values, the difference being that Manhattan had the foresight to create a large number of rent-controlled units which has somewhat sheltered local residents from escalating real estate prices.

Whistler however is still struggling to meet its housing needs.

Regan talked to Pique Newsmagazine about his failed development proposal, the future of restricted housing deals and the current economic forces at work in the real estate market.

Regan: The original Whistler 3 project had a 10-acre lot in Whistler Cay, 10-acre lot in White Gold and an 18-acre lot in Cheakamus North (between Millars Pond and Spring Creek). The original plan was to increase the zoning on the White Gold and the Whistler Cay sites by 13 lots to pay for 500 employee-restricted beds on the Cheakamus North site, as well as provide the much-needed connecting road between Millar’s Pond and Spring Creek.

The project collapsed when we were told to move the high-end market lots from the White Gold site, place them on the Cheakamus North site and make White Gold into employee housing. We were unable to make the economics of this switch viable and the deal collapsed.

Regan: I put together the deal because I thought it made a lot of sense. As a member of the community I knew we were desperate for some employee housing and as a developer I thought instead of building five homes on 38 centrally located acres, which is all the sites were zoned for, it would be better for everyone to increase density and provide a community benefit.

Regan: Developers are always in a position where they are negotiating a deal. They are offering to give something to get something in return. In Whistler, a critical part of that negotiation is employee housing. We built up the front-end of the community first but we never caught up with the infrastructure.

Regan: In the end we all do. Increased density comes at a cost. However, as a community I think we need to do a cost benefit analysis on the deals that present themselves. If the community gets a large gain and the cost is reasonable, it is probably a good deal. I call these the "big hit projects."

Regan: I think the municipality should seize whatever opportunity they can negotiate. We need to build a full range. The focus for the last couple of years has been more towards the dorm and townhouse style. The Housing Authority has very successfully delivered these two styles of housing, and I think the community needs more of them.

I do, however, think Barnfield is also a great project. We helped our office manager, Jennifer Patterson, build her house there and I am in the neighbourhood often. It has a great sense of community and life. I find the people there are charged up and I have often said I would like to live there myself. So with this bias in mind I think the next style of employee housing should be similar to this form. In the end I think all forms are good, we just need to make sure that they always stay affordable.

Regan: I think that would be the most unpleasant job imaginable. Deciding who gets to stay and who does not. Some of my closest friends in Whistler are living in employee housing, so from my standpoint I think the scanning process is working. We will never be all things to all people. We have to get the most value from the people we choose, as they are the lifeblood of the community.

Regan: Because I love living here! It is the best place on earth in my mind and I want to see it stay that way. I have been so involved with employee housing because I see it as a critical component of our future. I have friends who I coach Atom Rep hockey with. These are dedicated coaches that give an enormous amount of their time to kids in the community. If they have to spend all of their time commuting then we as a community lose them. People who perform community services are fitting it into busy days and if two hours of their day are spent commuting than nobody gets the benefits of their gifts.

Regan: The original Whistler 3 deal is no longer in existence. The Whistler Cay site reverted back to its original zoning and we are currently in the last stages of doing a deal that we hope will put the White Gold site into the municipality’s hands. The only property that has not been resolved is the Cheakamus North site. Right now it’s zoned for an estate lot and it would be my wish to do a mix of employee housing and market lots and put the connecting road in.

Regan: Thirty 5,000-square-foot estate homes have been built in Whistler, 10 of which were marketed to the international community. There are currently 3,000 lots in Whistler. Therefore estate homes make up one-third of one per cent. To suggest that these homes have caused Whistler to become unattainable is ludicrous. We’re faced with a much bigger problem and that is that there currently is not one home in Whistler that is affordable. The 800-square-foot A-frame that is falling over in Alpine is a trophy home due to the value of the land it is sitting on. If any of the current stock sells at today’s pricing and then gets rented back to employees, the owners would have about $70,000 per year of cost of capital to make up in rent. A four-bedroom house would need to charge out at $1,458 per room. This is before taxes or maintenance. Clearly we need another housing solution with a lower cost base and whatever gets us there should be explored.

Regan: The buyers of these homes have options: they can choose to spend their money here or elsewhere. If they do choose to spend it here and they feel welcomed in the community, they will be the economic engine behind social philanthropy like the library. They have more money to give so they will give more. This model has been documented in every sustainability study ever written, and proven out in every community these buyers have ever lived in. They’re paying the same taxes but they’re not putting any demands on the services. The municipality needs the revenue from these homes.

Another advantage of having high socio-economic individuals move into the community is that they will have investment capital to spend in the community. They will create opportunities for the community that we will not have without them. Personally, I was willing to spend my time and resources on a financially low-yielding community housing project because as a member of the community I knew it was critical.

Regan: Presently the highest paying and biggest employer in Whistler is the construction industry. Arguably it is the backbone of the Whistler economy. These buyers have enhanced our industry by providing budgets that have allowed the construction industry the ability to pay more to its skilled workforce. They in turn spend their money in the local economy.

Regan: A $5 million home just sold this week, but it’s true the homes aren’t moving very quickly. The high-end market in Whistler is in its infancy. Last year it saw three sales over $5 million, while Aspen saw 85. We do not have an established market. At the same time, locally, I do not think we are putting our best foot forward in attracting these buyers. The rhetoric for the last two years has been sounding a lot like "us and them." These buyers are not going to be interested in investing into a simmering class war. They will go to a community that will be accepting. Another major hurdle is the schooling system. They have issues with the under-funded schools, under-paid teachers (indexed to the cost of living) and class sizes of 35 kids.

The 5,000 square foot maximum on houses, notwithstanding the size of the lot, does not allow the construction industry to build the homes these buyers are looking for, like the 6,800 square foot home template in the big U.S. resorts.

And obviously on a global level the bursting of the dot com bubble and fears of a Middle East conflict have left buyers a little skittish. People are being more cautious with their money.

Regan: Whistler has seen a steady escalation in its land prices over the last number of years. The challenge outside of affordability is that the land cost increases forces the owners of the land to build a nicer house. The model in most areas allows for a relationship of one-third for the land and two-thirds for the building. If you were to use Alpine for this model, currently you would pay $800,000 for a lot and then pay $1.6 million to build the house. This would put the cost base of that house before profit at $2.4 million. The problem is that a house in Alpine currently will not command these dollars. This same ratio applies to the sales price of a house: cost of the land, plus cost of construction, plus reasonable mark up. The problem in Whistler right now is that people are charging the increased cost of the lot but the house that is sitting on that lot was built for a lot price that was worth a third of what it is now. The land has gone up faster than the value of the houses so right now there’s a discrepancy between the value of the land and the value of the house. Buyers are coming in and they find it hard to justify its value. Although these discrepancies in the ratios do not apply unilaterally to all products on the market, the entire market place suffers for it.

Regan: I think the only thing worse than real estate prices going up is prices going down. At some level I think the market is going to correct itself or stall for a while until the economics start working. In the meantime a mass level of affordability is likely never going to return to the valley so we all will need to pull together and come up with some creative ideas to keep our community intact. No matter what the findings of the new sustainability plan are, I imagine every outcome is going to require rent-controlled housing. Every opportunity that presents itself and makes sense should be embraced as quickly as possible.