The Globe's new Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter, Tara Perkins, and others. Read more on The Globe's housing page and follow Tara on Twitter @TaraPerkins.
Condo buyers in Canada's major markets are paying more money for less space these days, but what if a home in Cambodia was thrown into the mix?
Ian Gillespie, the prominent luxury developer whose company Westbank Projects Corp. is behind projects such as the Fairmont Pacific Rim in Vancouver and the Shangri La's in Vancouver and Toronto, has signed on to an initiative that will result in 395 homes being built in Cambodia and given to families who are currently living in shacks in a garbage dump community.
It works like this: Westbank has committed that for each condo that's bought in its new Vancouver House building, it will pay $2,900 (U.S.) for the creation of a small house in Cambodia. Westbank will pay the funds out of its marketing budget, based on the idea that it won't have to spend as much promoting its new condo units if buyers are attracted to the initiative.
The initiative is the brainchild of Pete Dupuis, and it is based on the model of TOMS Shoes, the footwear company that gives a pair of shoes to someone in need every time a customer buys a pair.
Rewind back to 1990, and Mr. Dupuis (a Vancouverite) was starting his masters' thesis around the same time he and his wife had three kids in three years. But the real estate agency that he and his business partner Sid Landolt had created, S&P Destination Properties, was taking off, selling units for high-end developers around the world. So Mr. Dupuis gave up writing his thesis.
When the financial crisis hit, business slowed dramatically, and Mr. Dupuis decided it was finally time to write it. So he was spending much of his time as a student in 2010 when he and Mr. Landolt boarded a flight from L.A. to Vancouver, and found themselves sitting next to Blake Mycoskie, the founder of TOMS.
"The way the seats went, I ended up sitting next to Blake, this young nice hipster guy, cool guy. I tell him I'm in the real estate business, but I'm a student studying social entrepreneurship," Mr. Dupuis recalls.
Mr. Mycoskie told him all about TOMS, and Mr. Dupuis thought there was no reason that the shoe company's "one for one" model couldn't be applied to real estate.
The result is World Housing, which is Canada's first Community Contribution Company. It's a social enterprise, but it's set up as a for-profit, with a charter that says any money it makes must be reinvested back into the organization. Mr. Gillespie is the first developer to sign on to the idea, and to commit to it for an entire building.
It tested its concept last June with a project in Hawaii, which resulted in 50 homes being built in Cambodia. World Housing partners with a non-government organization that was already working around the dump. Recipient families must meet criteria including that the parents are making an honest living.
The houses are basic. There is a common wash house with two toilets and a hand basin with running water for each cluster of about five homes. "Seventy per cent of the people that receive a home have never used a flushing toilet before," Mr. Dupuis says. "They're literally coming out of a shack… "We will hook up to the city power so they've got power, and in cases where there might not be reliable city power we put a solar panel on the roof," he adds. "And there's a rainwater collection system…And I'll tell you, the one thing that they get that drives them to a state of total excitement, a locking door. The minute you have a locking door you can accumulate assets."
Mr. Dupuis says the next area World Housing will turn to is the Smokey Mountain Landfill Community in the Philippines. "There's officially 220,000 people living in the slum, and that's the government number so the true number is probably around 500,000, and there's 33,000 people that go to the dump every day to survive."
On this end, someone from Mr. Dupuis' team will be in Toronto in two weeks talking to condo developers to try to get one to sign on as the next project for the initiative.