Comment 39113

By More roads (anonymous) | Posted March 24, 2010 at 16:51:29

canbyte..."Fix the 'why' and the problem goes away, no?"

People are not stupid. As long as the city teaches developers that they will eventually hand out tax payer money (as they did with Lister), why risk hundreds of millions of your own money?

Instead of subsidizing private redevelopment, the city should just tell the world it thinks core real estate is undervalued and that it is going to buy as much as they can. If property owners knew that the city was serious about this, they would start asking more for their own properties. The result is that land values would rise.

According to MLS, there is a piece of land on 180-188 Wilson St that is on the market for $179,900, or $21.83/sq.ft. In Toronto, a similar sized piece of land, just south of College, sells for $1,680,000, or $168/sq.ft. If you were looking to make a large capital investment, would you want to do that in an area where property values have remained stagnant over the decades, or where they are in high demand?

That is the problem the City of Hamilton has had for the past few decades, it has bought into the myth that downtown Hamilton is a bad place to invest. By doing this, they have told other investors that Hamilton isn't just temporarily undervalued, it's actually a bad place to invest.

Ask yourself this, if we believe that downtown Hamilton can be just as great a place to live as downtown Toronto, then doesn't it make sense to buy this downtown land right now. If the city could buy this land, then either sell it back later at a profit, or lease it out for redevelopment, the public will stand to make millions, if not billions in capital gains.

As long as we beg developers to build here, we send a signal that we are desperate. If we buy when everyone else is selling, eventually people will wonder why we have such confidence and they will jump on the bandwagon. Don't discount the power of confidence.

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