Revolutionizing Affordable Housing: Yasushi Ohki's Game-Changing Solutions

Revolutionizing Affordable Housing: Yasushi Ohki's Game-Changing Solutions

Kelly Kennedy: Welcome to episode 156 of the Business Development Podcast. And on today's expert guest interview, we are chatting with Yasushi Ohki of Green Violin Y. E. G. And we are chatting about affordable housing, homelessness, and the future of housing in Edmonton. Stick with us. You are not going to want to miss this episode.

Intro: The Great Mark Cuban once said, Business happens over years and years. Value is measured in the total upside of a business relationship. Not by how much you squeezed out in any one deal. And we couldn't agree more. This is Is the business development podcast based in Edmonton, Alberta, Canada, and broadcasting to the world.

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And now your expert host, Kelly Kennedy.

Kelly Kennedy: Hello, welcome to episode 156 of the business development podcast. Today I'm bringing you an absolutely amazing Edmontonian. Today we're chatting with Yasushi Ohki. His journey began in the windswept prairies of Edmonton, where his passion for community development took root amidst the vast expanse of the Canadian landscape.

Armed with degrees in civil engineering from the University of Alberta and architecture from the University of British Columbia, Yasushi embarked on a multifaceted career spanning over two decades. His professional odyssey navigated the realms of suburban land development and civil service. From the planning departments of Strathcona County to the corridors of the government of Alberta's Ministry of Infrastructure and finally to the front line of homelessness in the City of Edmonton's Housing and Homelessness section.

Throughout his career, Yasushi's expertise has been underscored by a keen eye for urban design and a relentless commitment to addressing societal challenges. His tenure as a Director of Housing at Homeward Trust Edmonton Marked a pivotal chapter where he channeled his passion into tangible solutions for affordable housing and homelessness.

Now as the visionary leader of the Green Violin Community Development Company and the Rose Selo Affordable Housing Society and the Prairie Sky Property Management Corporation, Yasushi conducts a symphony of innovation and social impact. With each project, he strikes a resounding chord, orchestrating transformative change that resonates.

far beyond the borders of his beloved Edmonton. Yasushi, it's an honor to have you on the show today.

Yasushi Ohki: Wow, Kelly, thanks for that introduction. Thanks for having me on your show. I am super excited to talk to you about what all you just said means.

Kelly Kennedy: Amazing, because we're all wondering, and I know we chatted about that before, but I think the chat of affordable housing is just something that It's to me, it's just like a slang word out there.

It's a word that, you know, politicians throw around and nobody knows what the heck they're talking about. So I'm really pumped to get into that today, but you've done a lot. My friend, take me back to the beginning. You know, who is Yasushi Ohki? How did you end up on this journey?

Yasushi Ohki: Oh, good question. I think My parents came from Tokyo to Vancouver to be students and they just stayed in Canada.

So I was born in Vancouver moved to a very, at a very young age to Alberta and Edmonton. And so Edmonton's, My, my stomping grounds, my hometown, and it's where I focus a lot of my efforts. And those efforts are primarily around housing. And somebody asked me yesterday, how did I get into architecture and housing?

And I related a funny little story and it sticks in my mind. In grade three, we were doing an art project. project and my art project looked like a city. And the teacher said, Oh, you're going to be a city builder when you grow up. And isn't it funny how words like that stick with you? Now, I'm not saying that's the reason why, but it was something I just said related yesterday.

And and it's, I guess valid today because for as long as I can remember, I've been interested in designing my own house and then my own neighborhood and my own. City, I call it the Sesame Street effect, where ultimately what I want is a street where I, you know, open the front door and I'm comfortable.

I know my neighbors. I know where I'm going. I feel like I'm part of the community. And I use that language for green violin and what we're trying to achieve, which is continuing Edmonton on the path to becoming a place where you feel safe and secure and a great place to call home.

Kelly Kennedy: Yeah, no, for sure. For sure.

And I totally relate to that. I grew up in Spruce Grove and you know that community really felt that way, right? Like you weren't afraid to go outside for the most part. That city has grown a lot since the time I grew up there. But I totally get that like small town vibe and knowing your neighbors and there's something that's really comfortable about that.

And I think it's important. Everybody should feel safe in their neighborhoods.

Yasushi Ohki: Oh, absolutely. I'm going to fast forward to a neighborhood I recently lived in, which is the McCauley neighborhood. And I think this is where your question about what is affordable housing can really get started. But McCauley it's close to the downtown for those listeners who don't know.

It's just North of Chinatown. McCauley does encompass the business portion of the business district of Chinatown, but it's also where it's It's often called Little Italy or centered around the Italian center shop and Giovanni Kuboto Park. And I lived right off the park there. And my fun Sesame Street moment is when I go to the Italian center shop cafe and I sit in the summertime with a coffee outside on the patio in the sun, I can look to my left and my right.

And I know that We're all there enjoying the sun, the paper, the coffee. But there's one fellow who manages hundreds of millions in a foundation. There's another person who I know is the local homeless person. There's yet another person who could be involved in street activity, but really it's a level playing field because we're just enjoying our community.

And, and as rough as some people believe McCauley might be, or as, as desperate or challenged I found it to be a wonderful place that exhibited or expressed a lot of that friendliness and that community that I look for. And that's what I'm constantly trying to add to as I look, as I look at my projects.

And part of that is, are we stressed? Trying to make our housing arrangements work for us. Are we stressed financially? Are we stressed mentally because of security issues? Are we stressed because of neighborhood conflict or, or neighbors, or are we stressed because of the the cost of utilities going up?

Or even are we stressed because there's not enough greenery in our, in our lives and that whole climate action stresses that are coming on. So we can, we can kind of, Encompass all of those ideas into what Greenviolin is trying to do with the types of projects we're proposing.

Kelly Kennedy: Yes, yes. And you know what, you talked about stressors, and I think we're stressed about a lot of things.

Right? Like you said, name your thing. There's something we're stressed out about. I think as business owners, we're always trying to figure out what's next, and that stresses us out, right? But yeah, I totally, totally understand what you mean. And there's something to be said about being able to sit outside on a nice sunny day and just enjoy that moment, regardless of what's going on around you.

But, but I want to take us back here. Like GreenViolin, obviously you're trying to create some affordable housing solutions, but I want to spend some time here. On what that actually means because it has just become a word right like as we know in Canada, the cost of housing is going up and up and up and up and up, you know, interest rates are going up, people are just not able to afford homes and people are ending up homeless because they can't afford frankly the interest rate.

increases. People are ending up homeless because there's no place left to rent, right? Like rentals are pretty tough to find in this city right now. And I think, you know, for those that are fortunate enough to have them, amazing. But there's a lot of people that even if they could, they can't find a place to stay.

And so Man, like, I think it's such a big issue, and yet it feels like nothing really is being done. Am I, am I wrong in saying that? Because it does feel like affordable housing is just a word. Nobody really knows what it means. What does it really mean?

Yasushi Ohki: Yeah, what does it mean? So I'll take you through some government definitions because there's the federal standard of affordability, which is no more than 30 percent of a household income on rent or mortgage.

There's the city of Edmonton's definition of 80 percent of average monthly monthly rental rate. And 80 percent of that rate is called the maximum allowable rental rate. But then it's argued, what if rents keep going up and 80 percent of rent that's already unattainable is still unattainable. So how is that?

And then there's other concepts like rent geared to income, where for instance Habitat for Humanity takes only 25 percent of your monthly income as, as your mortgage payment. So it's geared to what you're making, no matter how little you're making. Then there's of course, income thresholds and then there's the poverty line and then there's minimum wage.

And then, you know, what Does it take to live comfortably? That's the question here. And, and that's why it's such a struggle to define affordability because aside from the definitions, each one of us is looking for quotes, a better deal. I mean, homeowners looking for, you know, how much more can a million dollars buy, you know, how much bigger can you get, or at the other end of the spectrum, you know, do you buy groceries or do you pay rent this, this I mean, they're both.

the same question of where, what do you value and where do you put your money for this transaction that's happening? And and so you're right, affordability is a buzzword and it resonates with a lot of people because we all react to it in a, in a similar way. It's like, we're looking for that better deal.

Kelly Kennedy: Yeah, and you know, I mean, like I come from, we have a big, big family. I were a six person household, right? Like it is expensive. It's expensive to live. It's expensive to buy food. My gosh, is it expensive to buy food? We are, we are experiencing inflation on a whole nother level than I have ever experienced in my life, at least here in Alberta and Canada.

And yeah, it is. It's like, my gosh, nothing is affordable. So let's just stop calling it affordable housing. Let's stop calling it afford. Like we need a better, in my opinion, we need some other help. Like just saying we need affordable housing is like saying we need to put a bandaid on something. But I think the problem is so much deeper.

It has so much more to do with the inflation of everything than it does about the cost of rent.

Yasushi Ohki: Yeah. And to address that Kelly the way Green Violin has been looking at it, and I'll just kind of go into the bit of a history of our organization. We're a nonprofit land developer or a housing provider.

And we're. In our fifth year now of our five year mission to innovate, demonstrate, and pilot new housing forms. But within that five years, we've had COVID, we've had a massive transition to online work and we've had a lot of conversations on affordability and what happens in post COVID recovery.

And within all that, The education that I've got in our housing needs from our advocates, our networks that I've joined, and from just coming up with ideas that just won't make it for Green Violin, we have evolved and we've pivoted into a space that I think will help you understand how affordability is discussed within the Green Violin realm.

Ready for this?

Kelly Kennedy: I'm ready.

Yasushi Ohki: All right. Like I said earlier, everybody's looking for the better deal. So, and we draw a line at those people who are doing okay. So we're not looking at, you know, how do we make suburban neighborhood more affordable? We're not looking at how do we get the average house price of Edmonton down below half a million again.

Like, we're not looking at those kinds of questions of people who are who are doing okay. Okay. We're also then not looking at people who are doing so not okay that they're without income, they're living rough on the street. Yes, we've touched on a bit of that because what we're trying to do is prevent people from home, falling into homelessness.

So we cannot avoid what homelessness is. We've had to analyze it. We've had to look at solutions to it just so that we know what that is. Other end of the boundary is and that's why that space that we're occupying is what I call the capable needy. So that's our seniors who are starting to age out of being able to afford rent on a fixed income.

That's veterans who are unable to work and looking for housing options. That's artists and others who have a fluctuating income and have a hard time supporting regular rental rents. It's also new immigrants or new Canadians or professional refugees. There's a whole class of people who just need.

a little bit more affordability so that they can pay those other bills like those utility bills that keep climbing or the gas prices that keep hitting us and, and getting caught up in the inability to sustain housing. So that's the chunk that we occupy. And, and students are a big part of that as well, which is why later on, we'll talk about student housing.

But for us, then there's a whole spectrum of what is affordability and affordability at the homelessness stage is just getting into shelter and not like a bed in a shelter room, but some permanent shelter location, whether it's couch surfing or finding roommates or living in your car some sort of shelter.

And for them, that's affordability, but that's not really the solution space. We're trying to occupy what I'm trying to do is apply my civil engineering knowledge, my architecture and my career as a land developer and coming up with ways of and. You know, a little spoiler alert, I do have a way that I want to talk with you, but coming up with ways of addressing those middle housing needs.

Kelly Kennedy: Yeah. Yeah. And, and like, I think the problem is, is that the inflation rate and the cost of living is going up so much faster than the pay than, than the salaries of the people who, who need to pay those rents. Right. And so you're right. Like that, that ratio that maybe should be 30 percent of household income is probably getting a lot closer to 60 or 70 percent of a household income.

Yasushi Ohki: Absolutely. The customers for land developers tend to be home builders. So I got very close to a lot of home builders. I learned how to build houses and on the side I've been building houses. So I've got a very good idea of The cost of housing plus green violins getting into the space of providing housing.

So we've got our finger on the pulse of costs and those costs are going up so quickly that it's scary. I mean, we've all heard of lumber prices going up or copper prices going up. And, and boy, it's hard to find a contractor because Edmonton's growing at such a pace and now to get a decent contractor, you got to pay more than market rates.

And. Looking at the price of let's take an example of a backyard housing or garden suite, as it used to be called, and I was hoping to build a garden suite you know, with a one bedroom above a two car garage for, in my mind, under 100, 000. And yesterday we went through the costing exercise and a bare minimum unit is 150, 000 right now.

Yes. And, and so that's, that's like 50 percent more than what I originally thought. And that price is not too old. That was just three, four years ago, during the middle of COVID, we built a garage and, and we figured, boy, if we put a unit on top of this, it's not going to be any much, much more. And to give you an idea, we built the double garage double car detached garage for about 25, 000.

And it had some extras. It had extra attic space and it had large windows and whatnot, but we figured we could build a suite above it for under a hundred thousand total. Well four years later, no, it's closer to one 50 for, for super bare bones. And to get anything decent, fancy or condo equivalent, it was going to cost close to 250, 000.

Kelly Kennedy: Wow. Wow. I'm not going to lie, dude. That's scary.

Yasushi Ohki: That it is scary. It's scary for a builder as well, because in order to finance that and then to rent it, that means rents are just going that much higher. And then there's that double whammy of not just inflation, but interest rates having gone up. So, whereas I was using a number closer to, say, 5 percent a year for interest rate, if you put 7.

5 percent into the equation, suddenly, You know, your 800 a month becomes 1200 a month or okay. I didn't do the math on that correctly, but you know what I mean? It's just getting higher because of the cost of money. And as a builder to be able to justify in my proforma a rental rate that carries my financing costs, it just, it's.

Pops it up over what what I was hoping to be at.

Kelly Kennedy: Totally, totally. And, and, you know, people have to remember like a builder isn't just building houses for the hell of it. Like they have to have some type of profit and it's not their fault that the cost of materials is going through the bloody roof.

And so it really does put it into a situation where, like, I worry about home builders not being able to sell the homes they're building.

Yasushi Ohki: Oh, yeah, right now there's a market, luckily, but it's not a market where everybody can play into, like you mentioned earlier, historically, what about that romanticized image of the one income family that has enough to have a family car, vacations and a good lifestyle and education for the kids?

What? Is that looking like today? Is it even possible today?

Kelly Kennedy: I don't think so. Honestly, like, me and Shelby have talked about this plenty of times and we're like, you know, we're making more money together than we've ever made, than our parents have ever made, and yet we still struggle to get ahead. It's like, holy crap, you gotta make a lot of money to get ahead in Canada.

Like, it's crazy. Mm hmm.

Yasushi Ohki: Oh, it is crazy. So then what's the solution? You know, the, the career that I had in land development was taking care of people who were already okay. So again, I, like I said, I'm not playing in that environment, in that sandbox anymore. I'm looking at how do we get people who are struggling into a place that they're okay at.

And, Thank goodness, City of Edmonton has come up with a few opportunities for Green Violin to make things happen, make the equation work, as I say. And the un, the immutable part of the equation is income. Like we can't demand higher income, although a lot of us chase, you know, a better job or better opportunities or try entrepreneurship so that we can catch up with the cost of living.

But for those who don't have the opportunities to adjust their income levels, how do you work with that as a constant and, and so what the city has done is allowed for densification to their new zoning bylaw, which was implemented January 1st of this year, 2024.And that's been a huge burden or a barrier that's been removed for green violence, because now we're able to take market price land and through densification.

Get that land price, the market price. Amortized over more doors or split up over more doors, or as my economist buddy says, it's fractionalized market land price. And as a, as a little example the new zoning bylaw allows for up to eight dwellings on a single lot. Granted, you know, provided the lot is big enough, that means we could take, for instance, a 400, 000 lot divided into eight and the per door cost comes down to 50, 000 a door, which is a huge help in getting to affordability.

The second thing that the city did, and this was a couple of years ago, they removed minimum parking requirements. So as a developer to have X number of bedrooms or dwelling units, you had to have an appropriate number of parking stalls, say 1. 2 for every dwelling. And if you're logged in, you have to have an appropriate was just too small.

You couldn't get all the parking that you wanted in order to justify the density. And the city worked hard to get that minimum parking requirement removed. It's just at the developer's discretion now, provided we have the accessible parking stalls required by the national building code and that's been a huge help. An example of that is an apartment proposal 26 micro suites. Would have in a previous era required so many parking stalls that we would have to elevate the apartment and put stalls and underground parking. Now we get away with five in the back alley and we're servicing people who are using LRT and public transport.

So yeah, we don't need the car. Plus we're finding our millennials are just not drivers or interested in driving. They seem to be going into the multimodal concept of whether it's power scooters or electric bikes or, or just biking in general or LRT very resourceful and economizing in a huge way.

So that parking minimum parking requirement being removed was huge for us.

Kelly Kennedy: Yeah, no kidding. And is that kind of what you envision for the future of infill in Edmonton is that primarily that will be the model moving forward?

Yasushi Ohki: It's maybe not the vision for Edmonton, but it's certainly green violence strategy or formula.

So if the first part of the formula is fractionalized market land price, and so that means we're not looking for government handouts or we're not looking for cheap land, be, you know, thanks to incentives, we're buying market price land. So we remain within the market. The second thing is we're reducing square footage.

Of our units so that we can address those rising construction costs. And there's a sweet spot where beyond which, if we make it too small, it gets expensive again. So now we're, that's where we're looking at the tiny house movement where you know, the bathroom doubles as. the the study because of a movable wall or, or the kitchen space is only used when we're cooking.

And then it's then a study or, you know, piling up of spaces. Once we get into the gymnastics of tiny houses, it gets expensive again, but there is a sweet spot and we believe we've found it. So we're going to demonstrate it this year using our, Our version of the tiny house called base camp, and that's where we've got an economized footprint to reduce construction costs.

And that's this number two point of our, our affordable formula is getting back to the starter home, getting back to paying for paying market prices, but only for what you need or what you can get away with needing. And the micro suite movement really showed that we can minimize and still enjoy our lives in the city.

Kelly Kennedy: Yeah. Yeah. And I, and I think that makes a lot of sense. I guess where I kind of struggle with it is, is that it starts to kind of make you wonder, cause like when you're growing up, you want to buy a full sized house. You want to live, you know, the Canadian dream, right? Like people want to come to Canada because Canada is beautiful.

We have opportunity. We're the land of opportunity. We're the land of freedom, right? We have lots of beautiful mountains and, and I don't think that people think about it and it's like, on some level, it kind of sucks. That's the way that we have to go to keep up with this rising inflation. Because I think what you're doing is amazing.

I think it's incredibly important, but I think it's incredibly important because of a sucky situation.

Yasushi Ohki: Yes. And the even worse situation, and some people make the decision to do so, is to not build equity or not have savings by putting money into the landlord's pocket as opposed to putting it into your own equity.

So our model now, whereas perhaps when we started, we were looking at affordable rental units. Our model now is that we are looking at affordable home ownership. And that home ownership allows for, to address what you just said, the stepping up into the next version of the house. By having the equity to put into that next one.

And hopefully it's commensurate with your salary increases. So you keep growing your house with the size of your income. So that you're not sticker shocked when you're trying to get into your first house. Yeah,

Kelly Kennedy: yeah, no, totally, totally. And I totally see that. Like, otherwise you're absolutely right.

We're going to have an entire generation of people. Who are surfed, essentially, right? Like that's what's going to happen because nobody can afford to buy a home. So I see what you're saying from the standpoint of this has to happen because we have to give people an opportunity to go up in the world.

And this is the stepping stone.

Yasushi Ohki: And I agree with you. It sucks that we can't jump into the first big house. It sucks that, you know, Previously, we could have bought a 1950s large house for an economical amount in a mature neighborhood. And now those opportunities are fast disappearing. Yeah, and it's the realities of how our, you know, our Our environment is growing up, even as we're pulled by our nostalgia of, you know, wanting to ride our bicycles with the banana seat down the street to the 7 Eleven and getting a slurpee and hanging out with the friends.

I think all that is still possible. As long as our expectations on the size of housing and how we start into it is appropriately tempered.

Kelly Kennedy: Well, and I would argue that those old neighborhoods, like you said, those 1950s style houses, at this point, those mature neighborhoods, they're still beautiful.

And honestly, some of the nicest homes that we've driven by in Edmonton. In my opinion, have been infills on those old, beautiful neighborhoods with the gigantic trees and the nice parking. Right? Like, I love that. I think it's, I think it's needed. I think it makes so much sense. And I think that what you're doing by saying, look, like the reality of the situation right now is people can't afford a half a million dollar home.

They just can't because they're still working at 50 a year salaries. They can't. Fight off that bullet and still live and pay their bills and eat right. So like I totally see what you're saying and why it has to be this way. And I think that what you're doing is very commendable.

Yasushi Ohki: Yeah, and it's not for everybody.

I totally understand that. But it, it is. Is going to address a certain segment of need. And once that need is satisfied, then we can move on to other needs. And no, one thing that we're doing is taking one of those 1950s houses. That's at the end of its life. As a matter of fact, just a few hours ago, I was touring in one at Spruce Avenue and just.

Coincidentally, there seemed, there was a handy homeless person who was squatting in the basement. We didn't realize it. We smelt something burning in the house, and there was a little fire that he had built in the bathroom, and all sorts of mayhem ensued. But it was a demonstration of, here's a 50s house that's on the market for sale, not, you know, it's, it's vacant, so it's been squatted in, and it's not in a condition of renovating, which was why I was there.

However The other reason I was there is it would be an ideal place to build the three cabins on a single lot concept, a very inobtrusive way of getting three senior neighbors to live together. I call it the golden girls project, and it's almost like a co op or it's like a, it's a multi multifamily unit.

That's a bare land condo perhaps, but it's a way of enabling a senior. Or a person in the neighborhood to live in a minimized square footage and, and continue living in the neighborhood without having an overbearing presence on, on the neighbors and still maintaining that, that cozy feel of our, our nostalgic image of what a streetscape could be like.

Kelly Kennedy: Yeah, no, for sure. For sure. And like I said, it's, it's going to happen. I guess one of the challenges that you must be facing as well is that rising cost of the land in general, right? Like whether you're going to infill this area or not. Like, how are you able to essentially buy, buy the land in, in Edmonton?

Because like, the city's not getting any bigger, right? If the houses are there, you're still paying whatever that land cost is. How are you able to mitigate that cost as a developer? I get what you're saying about splitting it up, but I imagine that that rising cost of that land must be hard to deal with too.

Yasushi Ohki: Oh, yeah, we see a near future where our plan is not going to work because the land cost gets too high. We can continue on it, but we won't be able to get to the population that we want to get housed. We're going to jump into the next level of, of a housing where a person now has to commit to a higher mortgage or a higher rent payment and still get paid.

A smaller footprint, that's, that's where we're going. But I see a sweet spot in the next five years. So if this five year mission was to innovate, demonstrate, and pilot, the next five year mission is to ramp up to make a difference. So we take our successful models and we apply it over the next five years, which is a bit of the timeline that we foresee before lot prices get too high.

And we have to pivot again to our next, next model.

Kelly Kennedy: Yeah. Yeah. Okay. Well, you've taken us into kind of what you're doing. Can we just go into a bit of a deep dive as to what is Green Violin and what is the long term goals of that organization?

Yasushi Ohki: Oh, absolutely. So I set off with Green Violin. I had three different phrases I would use depending on which group I was talking to.

So first I would say having been in land development, taking farmland and creating the suburbs I understand that there's a certain segment of profitability that's out there and very necessary for our city to operate, whether it's through taxes or through a, a population increase to support our economy.

But that was a good education for me for when I got into the city of Edmonton, which was very research and policy heavy at the time. And I understood the needs of Edmontonians not being met by the outer ring of developers. And that's where we were looking at infill. So that's why the language that I use today is primarily infill in mature neighborhoods.

How do we make use of infrastructure that already exists, whether that's my civil engineering background on not expanding the infrastructure, you know, continue, you know, into miles and miles of nothingness? How do we utilize what we already have, whether that's roads, sewers, water, or even school infrastructure, transportation?

All those things are available when we do infill. So that's the exciting part for me. But also what I realized is if we take the profit line out of the equation, and I know we can't do it for our contractors because it's how they make a living. But if we can do it for landowners who don'tcapitalize on the escalating upward movement of land prices.

If we maintain like book value of land, what does that look like? What if Green Violin had a portfolio of call it 2020 priced land that we were working through without inflating that price of land, what would that look like for affordability in, in the future? So that's, that's one thing that. We started off with, and so the language that we use there is taking profit out of the equation.

That's why we, we incorporate it as a non profit. That's why we try and capitalize on the language of being a non profit and looking at covering costs. Yes, but not profiteering from just virtue of land becoming more and more valuable. Like you said, they're not making any more of it.

Kelly Kennedy: That's right.

That's right. How does that work long term, though, as an organization, because as an organization, you have to take some type of profit in order to grow. If you want to continue to do this. Can you explain to me how that works?

Yasushi Ohki: Oh, yeah, absolutely. So there's buying land at previous dollar values. In other words, 2020 dollars.

bought a lot of land. Another way of looking at it is we keep an equity stake in the land. And I'm going to explain this in a minute. It's called the shared equity model so that we keep up with the rising price of land. So the shared equity model say A project costs 80, 000 all in, just as a number, but the bank comes and appraises it at 100, 000.

It's like, oh, it's a tiny house. It's worth 100, 000. My cost is only 80, 000. I've made a paper profit of 20, 000. But I turn around and instead of pocketing that paper profit, I put it back in as a mortgage down payment for the homeowner. Thank you. So the homeowner sees 80 percent or 80, 000 as their capital commitment.

Green Violin stays on the title as a 10 percent or 20 percent in this case, equity owner. And we maintain our position on titles so that it, so the property only trades at 80 percent of market value. Although it doesn't, Take away from anybody because really it's at a hundred percent. It's not as if it's low income housing, or it's not as if it's depressing the, the, the price of land values in the neighborhood, it's just that green violin has maintained a equity stake in the land and continues to roll it forward to future purchasers of the land.

So I call that perpetual affordable home ownership model, or in other parts of the country, it's just called shared equity.

Kelly Kennedy: Okay, like, it sounds really nice, but like, do you, that sounds like hard to do, like, I feel like on some level, and I get that you're doing it to help the community, but I feel like on some level, couldn't you help the community more by taking that 20 percent and reinvesting it in Green Violin?

Yasushi Ohki: Great question. And here's what I want to quote innovate and demonstrate is that we can find a lender that will take the fragmented 10 percent shared equity in our portfolio and let us leverage that into other projects. So yeah, without cashing out, we're hoping to access the equity that we're building up in our portfolio.

Kelly Kennedy: Amazing. I love that. That's awesome. Okay. Cause that's what I'm wondering. I'm like, I'm like, how can you take that? Because to me, that doesn't sound beneficial and you continuing this organization, but that makes a lot of sense. Okay. So that's awesome. And I want to spend some time specifically in development.

You're the first developer we've had on the Business Development Podcast in 156 episodes. And you have, you've over 20 years in it. So I want to spend some time with you on what is it like? Like, take us back to, was it starting Ohki Properties? Was kind of your first venture or foray into land development?

Yasushi Ohki: Well, I would have to say it goes way beyond that. When I came back to Edmonton from UBC and a bit of stint in Japan doing international business translation, I guess what I found was the first place of employment, Qualico, so big shout out to them for giving me a start, it's. Easy to do, easy to say, as long as you have the capital to do it.

So, making the offer to buy a quarter section of land, and then hiring the consultants, which is, was my project manager job. Hire the urban planners and the stand techs of the world, the civil engineers, to design the roads and the sewers, and then managing the capital. trades and the contractors to build what we did and then subdividing it and dealing with the city on subdivision and zoning approvals so that we have a titled piece of land that we can sell to the home builder.

And then putting together a marketing plan so that we can quotes work through our land phase by phase. And, you know, if you've gone to any show home parade, you're familiar that there's a select group of builders who have access to the lots in that phase of the subdivision. Yeah. They make their pre commitments to the developer so that it helps us finance that phase.

And we help them look for buyers by promoting the neighborhood and promoting the parks and all the amenities that we are building into the subdivision. And, and there's really no difference at that scale. And then to the scale that I then spun off, which was buy a vacant lot, build a house and sell it.

So basically buy low, add value and sell at market is, is the formula. Yeah. And it works as long as the land and the cost of construction are still in alignment with what the market's willing to pay. And as a good example, the reason we got out of it, which was my house building buddy and I, we're going to start up a house building company with all the knowledge that we have We found, we bought land, we demolished the house, we built the house, and then the market price kept dropping.

It was a time when the economy was slowing down and we held on to that house for about a year because the market couldn't pay us what we paid for, for the property. Yeah, and we were getting very close to just breaking even. So that's the unfortunate side of the formula is it's not a guaranteed thing and that rising land prices affect the formula, rising construction costs affect the formula, much like the garden suite.

I just, I started off talking about the costs are going up to the point where the market just can't take it anymore. And whether it's. Oh, it is. It's, it's a huge risk for the big players like the Qualicos of the world, and it's a huge payoff when the market's good, but it's also a huge risk for the one off builders and developers who want to put something in their backyard or who want to undertake improving your streetscape by buying out a derelict house and improving it.

Kelly Kennedy: Oh my gosh, yeah, it's a lot to think about, like it almost makes you, like for me, I would look at that and say too many variables, right? And they're completely out of my control. Like why, man, it makes me take on a whole new respect for home builders.

Yasushi Ohki: And, you know, those with experience, like myself and my construction buddy, we got out of it because the risk was too great.

Yeah. And, and it was about that time that I realized if there was a formula that could be adjusted, where, where are the variables that we can start manipulating to get back to affordability? And, and one of the variables was exactly what my partner and I changed, which was our. Profit expectations. And we were gearing that down to darn near zero.

And it was getting dangerous for us. So.

Kelly Kennedy: Yeah, it's pretty hard to exist as a business with zero profit. It just doesn't work very well.

Yasushi Ohki: But then, but then if we look at the the cost of our, our product land costs, can we get that down? down any further. And we decided we were already looking at abandoned properties, derelict properties, and the most economical neighborhoods to build in.

So we couldn't push that down any further. And sellers of that land just weren't going to accept land below, too much below value, like we would negotiate. So there wasn't any room to move there. So then we looked at our contractors and our contractors had exactly the same thing to say. They have bills to pay families to support and they just can't get their prices down.

So the, the quotes grinding the contractor doesn't really help in, in our.

Kelly Kennedy: No, no, because the other side of it is, is that they have to live too. They have to make some type of profit so that they can also continue to exist. There is a bottom dollar for everybody. And I think the risk that you have to ask yourself is if I'm getting that bottom dollar, Am I getting, am I really getting value or like what's being cut?

How much is being cut for them to offer this low dollar?

Yasushi Ohki: Exactly.

Kelly Kennedy: I spent a lot of time in oil and gas. And I remember in the 2015 downturn, companies were just buying work. And I genuinely mean that. They were buying work at cost to keep their labor group going. Because when you have a machine with a thousand people operating, you can't not have work.

And so there were situations in that time where people were bidding projects at literal bottom dollar just to keep the lights on, just enough to keep the lights on and keep the employees paid because if they don't have employees, they no longer have an organization.

Yasushi Ohki: Oh, yes. I've seen that so many times throughout the years on.

What does it take to keep the lights on? And that's why you see home builders that, Hey, where did they go? You know they had to close shop because they couldn't keep the lights on. We're getting news of certain big home builders that are considering. That's it. You know, it's been a nice long run, but we just can't keep up with this kind of pricing.

It's a difficult place to occupy because it's not a sure thing. And yet housing, what could be more sure than people need a place to live?

Kelly Kennedy: Yeah, 100%, 100%. And you know, we talked about this briefly before the show started, but Edmonton specifically over this last winter has experienced a massive homelessness crisis.

We've had multiple tent cities. I think they've been raided a couple times. But, honestly, my heart goes out to those people. Like, in my mind, every human should have a place to live. And it's just, it's sad that we have such a high homelessness population in a time where a few years ago, the goal was to completely eliminate it in this city.

Yasushi Ohki: Absolutely. And whether it's the engineer or architect in me, I've got this little pet portfolio of projects called the shelters and they're just to give you an idea, the fundamental need, I believe is security from Predators, Animals, and the Climate. So comfort is kind of like a priority in terms of what the human need is.

Comfort being security. Is it safe? Is it secure? And if we can answer that fundamental one, I've got a few projects again, pet projects, we haven't seen them happen, but they're shelter solutions. To give you an idea, one was 3D printed concrete igloos. Perhaps a interesting mashup of words, but bulletproof, climate proof and easy to build, but no washroom in there, no kitchen in there.

Everything is communal outside of this. It's the concept of the village where we have individual living units, but then there's communal cooking and communal washrooms or cleanup spaces. Our other idea is the concrete teepee. It's part of our 10, 000 teepees proposal where we go out to the nation lands and we recreate the village concept of a place to sleep, but a common place to eat.

Now it's the teepee shape based on, our partners design, which are indigenous partners. But it's Totally contrary to the, to why that shape has grown up. It's not a nomadic take down immediately and put back up again. Housing shelter solution. In our case, we're using panelized, lightweight concrete and recreating a historic form, but in a modern material that allows for fireproof, bulletproof shelter solutions.

Kelly Kennedy: One of the things that I guess, okay, and I think as a society, as a culture, as Americans, as Canadians, I think we have to just accept that homelessness is a part of our society. We can't just pretend it doesn't exist. And I think we try to just do that and say, Oh, we feel horrible for those people. Then we wish that they weren't in that situation, but there's nothing we can do about it.

Like the reality is a choice like that could be done where you just say, look. We're probably not going to eliminate homelessness. You know, no matter how ambitious we want to be with this, it's probably not going to happen. At what point can't we just accept and say, look, a portion of the society is probably going to be homeless.

We can't do anything about it. We don't control the factors that led them to that situation. Let's just accept. That unfortunately for some people that's the way it is and let's build them some igloos. Let's build them some stone teepees and just accept the fact that that's the way it is but hopefully give them a better standard of living than living completely rough on the street.

Yasushi Ohki: Oh, exactly. We can't give up on a solution at all because the solutions do exist. It's just that perhaps it's not part of the fabric of our city. Perhaps it's not part of our zoning bylaw or perhaps it's not part of the political agenda. There's a whole number of reasons why we can't get to simple solutions.

I mean friends and I, I guess, get together and say, what are some solutions? And one of the radical ones was, why don't we just get a bunch of wrecked vans, put them in a parking lot, and you can have a van life parking lot full of people living there. The idea stems from driving by all these RV parking places or storage units.

And we can count like a thousand RVs sitting in a field and. Boy, isn't that housing that's instantly available? So the solutions are out there. It's just a matter of how do you bridge between what the city's growth and society's expectations are, and how do we accommodate them? And Kelly, I'm so glad you mentioned this because one of the ideas that permeates through green violin projects is.

How do existing neighbors welcome new neighbors, whether it's our indigenous partners welcoming colonialists back in the day or settlers, or whether it's existing neighbors who want to maintain a certain fabric in their communities and resist any type of change to that. The question is also how do.

Different income levels welcome each other. One of the projects I was involved in said, we don't want lower income people in our neighborhood. And I'm like, what, like the people who are in the service industry, who are the, perhaps the babysitters or the lawnmowers youth that you depend on or the snow shoveling that goes on.

And when you put it into that context. People start to understand that part of a robust and healthy community is having a good demographic and that demographic comes with a multi strated income level. So I think in a way we have to welcome even the very lowest of the income earners or the furthest end of the spectrum, I should say which is no income at all.

And how do we accommodate. The value that they could create. I really appreciate Howard Lawrence, who does ACE which is abundant communities Edmonton, because he says, let's look at everybody as an asset. And when you start looking at even the homeless as an asset, you start thinking of different ways of being able to involve there.

Participation in community and thereby maybe come up with a solution, whether it's shelters or maybe it's a settlement or whatever it might be that helps to perhaps enrich the community or neighborhood in some way.

Kelly Kennedy: You know, you've been involved in the government, both federal or provincially and municipally.

You've, you've, you've been in the rooms where these conversations have happened, right? What are, what are, what is the conversation around the homeless? What is the conversation around how do we help these people? Are they happening on a provincial and a municipal level? Like, I guess to me, we just always hear these empty promises about how we're going to solve these problems, and then nothing, it feels like nothing ever happens.

Yasushi Ohki: Oh, I know that's, it's such a frustration, isn't it? And it's a frustration that echoes through the administration of whether the province or the city in Knowing that there's policies in place that make it difficult to make decisions contrary to those policies And and that's unfortunately how our societies have to maintain order is through regulations and policies and, and setting up expectations on behavior.

And it's difficult to break that fabric, I guess, that exists on how we do things around here, because exactly like you said, there's a lot of talk and the other side of the equation are the elected officials and what they have to say in order to maintain a, a comfort level with the voting population that they can maintain Their position in in elected officialdom but at the same time, following through on a lot of the promises that they've made the classic thing of have you have you over promised something or have you done a conflicting set of values that you've put out into the into the public?

How do you control what you've said with what you're going to do? And indeed, how do you do? Manage the economy and society at the same time trying to balance what you believe might be right for them and to feed that into your administration who has to follow through by creating those policies that you agree on.

I mean, it's, it's a complex system and it's, it's often frustrating for all players involved that it's, it's, It's mired in rules and having to follow process and, and, and the zoning bylaws, a great example that they were able to cut through a lot of the problem areas and come up with a new set of rules that is actually going to make a difference.

Kelly Kennedy: Yeah. Yeah. And I think like, you know, I mean, as a citizen, as just the Another person in Edmonton, it's really hard to understand what are all of those, like, what is all the red tape? What are all the challenges? Because unless you were working in the government, unless you were, you know, working municipally or it's hard to understand, like, I don't even remotely begin to say that I understand even a little bit about what it takes to run a city, what it takes to create community, what it takes to help homeless people.

But to me, as a human, I can say that I want to help homeless people, I want to live in a safe community, I want to have services available to me, and I think that everybody who lives in this community should be entitled to those same services.

Yasushi Ohki: Absolutely. And that's, that's a really good segue into one of the other organizations.

You mentioned RoseCello, and we're rebranding it into more of a foundation. Right now, the working name is the Edmonton Affordable Housing Foundation, and it's a place where we can aggregate that Joe Public Concern, the average person, as you say, who wants to make a difference and collects those donations, whether it's land or monetary or even volunteer support and channel that towards making a difference outside of the political environment so that, so that as a citizen, we can actually start addressing concerns.

And in my neighborhood McCauley, there were so many organizations and committees and, and concerned citizens doing their own thing that was making a huge difference that it was really encouraging to see that there are possibilities, call it grassroots or call it neighborhood level, or call it just concerned citizens wanting to make a difference.

And, and one way I want to channel all that energy that's out there is to, is to create a formalized. Foundation where there's a single purpose call it affordable home ownership that's going to make a difference in a measurable way and that people can see their contributions actually going to something that is, is impacting their neighborhoods.

Kelly Kennedy: That's really interesting because coming from somebody who's had to do a lot of negotiation with, with the government, with municipalities, that you say the power can be right in your own neighborhood. If you don't wait for the government to change it, if you want change, find a way to make change on your own.

Is that kind of what you're trying to say here?

Yasushi Ohki: Oh, absolutely. And it is, it is risky. And you do stand out. And when you do stand out, you become a target. And it's risky, not just politically, but also for those in the neighborhood don't, who don't share those views, perhaps. But it, it's, I think within chaos, there's opportunity.

That was a great phrase. And I love using it because people say, well, you've met with so much opposition. Now what? And I'm like, exactly now what we know what our assets are. We've done a little inventory. We know what the landscape is like, how are we going to strategize to move forward with it? So, and one strategy that we do have is the village in the city concept.

So going back to densifying and small footprint, we're proposing of putting in Eight tiny houses around a community building on a single lot in Edmonton. We believe it's gonna fit all the zoning criteria. It fits the neighborhood requirement for some sort of space where they can live communally. That isn't to say it's it's co housing.

It just means to say it's a compact, neighborly way of socializing and working together. And if this works in one demonstration, well, again, the next five years, we're rolling it out and hopefully providing more neighborhoods with places like a village in the city.

Kelly Kennedy: Yeah, no, that's, that's very, very exciting.

You know, that really takes us to the end of our show today, Yasushi, but I want to chat a little bit about, I know there's lots of people listening who are like, this is amazing. We like what you're doing. We would love to help. What are some of the ways that people can help Green Violin and your various initiatives?

Yasushi Ohki: Well follow me on my social media, which is Green Violin YEG, and there I will start giving updates on what we're doing to get our projects in the ground. And there you can communicate with me. And I do get a huge amount ofh, communications that I try and keep on top of, but it allows me then to see who my supporters and advocates are and to slot them into areas of their expertise where we can work together.

together to move that needle forward on affordability.

Kelly Kennedy: Totally. And obviously I know you're not for profit, but. Is there ways for people to invest in what you're doing? Because what you're doing doesn't happen without money.

Yasushi Ohki: Absolutely. And that's where the foundation comes into play, where the foundation then becomes the equity, the shared equity holder.

And the people who have, you know, donated money will be able to see their equity, helping others and, and rolling forward, being leveraged into more and more housing. It's a way of being able to, to connect their dollars to real solutions. And that foundation we're just working on setting up the legal framework of it.

And it's going to coincide with the end of our five years. So January of 2025 is when we roll over into the new start. And by then the foundation's in place. We're looking at getting charitable status as a society. We're looking at having a portfolio of tiny houses and community developments to move forward.

And we're also looking at ways of land banking, holding on to properties at today's prices, so that we've got five years worth of supply that we can work through. And if that means some of your listeners are willing to, Put in money and hold on to it for for land holdings. And then they could put it into our land holding company, which was Prairie Sky Property Management.

They mentioned earlier and and holding on to it. And the value to them is not just as a donation, but we've seen that by buying land today, Using market value in the future has enough of a spread that when we quotes buy it back from the land owner, they've made a marginal profit on on their investment while doing something good for the community at the same time.

Kelly Kennedy: Okay, cool. So it really will be a win win scenario.

Yasushi Ohki: All right, now the only way forward out of this is we've got to let the market win, we've got to let the investors win, and we've got to let the people who need housing win.

Kelly Kennedy: Amazing. I love that. If people want to get a hold of you, what is the best way?

Yasushi Ohki: It's my email address, which is yasushi.ohki@greenviolin.ca. I believe you can put that up on your website, but The other way is just text me. My text is always running full, but it's 780 868 3555. My triad can be available and open to anybody who wants to communicate with me.

Kelly Kennedy: Amazing. I will make sure that this is available.

So if you're hearing this, you can hop on over to our show page and you'll be able to find everything for Yasushi. It was amazing having you and thank you for the work that you are doing with Green Violin.

Yasushi Ohki: Oh, thank you for having me on your show, Kelly, and letting me explain a little of what I do.

Kelly Kennedy: Very cool.

Until next time, this has been episode 156 of the Business Development Podcast, and we will catch you on the flip side.

Outro: This has been the Business Development Podcast with Kelly Kennedy. Kelly has 15 years in sales and business development experience within the Alberta oil and gas industry, and founded his own business development firm in 2020.

His passion and his specialization. Is in customer relationship generation and business development. The show is brought to you by Capital Business Development, your Business Development Specialists. For more, we invite you to the website @ www.capitalbd.ca. See you next time on the Business Development Podcast.