We've got a little demo on the go at the semi detached site. It always amazes how hard it is to build something yet so easy to take it down.
We've got a little demo on the go at the semi detached site. It always amazes how hard it is to build something yet so easy to take it down.
We've got our regular survey company mobilizing to start the stakeout next week. They forwarded me the stakeout sketch, which is something I have yet to receive on previous jobs. It shows much of the key information used by the excavator.
With all the puzzle pieces assembled we are ready to start the build. First up is the demolition inspection and we are pursuing the foundation permit with likely delivery later this week. I'm keeping my fingers crossed to get this poured before the winter heat season begins.
The fence going up is usually a sign that construction will begin soon
We've been waiting on a grade slip so we can apply for the BP on the Killarney duplex project. That just arrived, so that means we can get started. I have tried to book some crews, but it was hard without definite answers on schedule. With this last piece of the puzzle I think we can make some progress.
Having completed a little budgeting work on some upcoming projects, I ran into some really alarming cost differences over the previous project that was built using largely early 2017 purchased products.
In order to do some apples-apples comparisons, I looked at actual billing from the invoices. A piece of type x drywall, commonly used in many party wall and garage framing areas was then purchased for $17.41, and was quoted today for $30.50, ouch that is almost double. This is from government policy regarding trade tariffs. What a sick joke the government is perpetuating on the home buyer and building industry!
The other ugly price increase is on OSB, a very common building material. The 4x8 sheet used to sell for $12.95, quote today $25.75. The fire rated stuff is a further $10 more, which has always been a contentious issue as a particularly egregious gouge. I am hopeful that these rates will drop with the end of the endless fire season in B.C. If they don't or this is as much a product of US lumber tariffs causing production cuts and higher costs for Canadian builders, building houses is going to be a lot more expensive.
A sane person might think that, given the recession is still ongoing, taxes of every kind are going up, and more business obstacles are being applied to the building industry that the government would enact some business friendly changes? Unlikely given the current political situation we are in.
A little progress this week. The city has issued me a demolition permit for the Killarney house.
While useful, what I actually need to get, a basement permit, is hung up somewhere in the black box downtown as the city is late issuing the grade slip. I'll be continuing efforts to get the rest of it untangled otherwise I will be facing some real delays and monetary damage. Strangely enough someone I spoke to at city hall basically admitted they screwed up. I asked for $2000 rebate on my permit fees as compensation for the city error and she laughed. Not likely to happen.
This issue of city responsibility for its mistakes is interesting. I've had city staff threaten me with a $10k fine for putting a rut in a poorly graded alley, and I've been fined for not having paperwork at an inspection despite that document being almost impossible to produce. The city is very eager to impose monetary damages on a builder, but immune to compensating the builder for its mistakes.
this isn't actually a building permit it is a demo permit. It will be a miracle if I can get a partial permit this week on the duplex project.
I recently became curious about the level of involvement of the owner in a complex inner city redevelopment project. As the builder of a growing number of these as of late 2017, I tend to internalize whatever the cost and time investment is to complete the pre-construction planning work without any way of quantifying it. Perhaps if I was doing this project for an investor or client I would be a lot more motivated to track the hours involved in getting to the finish line (the finish line - getting all necessary permits - is actually the jobs' starting line, and I am not there yet on my rowhouse project, but I am oh so tantalizingly close EDIT - 99% complete as of September month end).
The rowhouse has been a particularly nasty, lengthy, and costly process, here is a sen-chronological list of the key events:
At this point in the project I have no way to estimate how much time is personally invested in the permitting process. For 500 hours (which I have undoubtedly done already, maybe more), the cost of this in billable consulting time to outsource it would be significant, but also the fees to do this spread over entire year of low level aggravating work is not worth the effort for a consultant. I was discussing a small survey job with a surveyor recently, (billable rate is $180/hr plus expenses), so as the project owner if I was to charge myself out (to myself) in this example at 1/3 of the surveyor fee I would have incurred a $30k bill. There is no way any client would be able to fund my contribution to this project at a wage level commensurate with my impact on the project for a tiny three unit rowhouse.
To date, my effort to get this project permitted has been, at times, approaching the maximum of what I can realistically contribute while still running other jobs. I have had to mobilize countless resources and relationships to operate efficiently, or even just to know what to do in a process without an instruction manual to follow. And I am still way late, over budget, and extremely frustrated. Those three conditions are a lot better than bankrupt and exhausted, but I am far from pleased with the multi year marathon where there is nothing yet to show on site.
I have counselled numerous aspiring inner city builders to avoid multi-family projects. It is way too much risk and work, and the amount of experience and financial resources needed to tackle a project is getting increasingly onerous. I have another multi family project in the pipeline (with its own saga, some of which has unfolded concurrently), after these are done I am very much reconsidering this type of work. The hurdles and roadblocks being annually implemented by the City are going to shrink margins and harm many projects. Builder beware!
Browsing the project files collected to date may offer a better sense of what has to be compiled to get this type of project permitted. The documentation work is substantive, someone needs to deal with version control, and stay on top of the filing and archive it all. This is work far removed from someone who is supposed to be building houses.
I had a call from an agent in my network about a new listing two lots to the south of my former threeplex build in the Richmond community of SW Calgary. If purchased, it would be the identical size and shape and land use category as my former project and can only be rebuilt as a threeplex. I briefly considered purchasing the opportunity, but after some rudimentary analysis (which nobody could possibly be more prepared to undertake than me), taking a pass appears the best option.
This land deal is a rare opportunity to redo an identical project in the same location as one I have recently finished. It has a high degree of predictability for every stage of the process from planning to marketing of the finished homes. You could say that, compared to anyone else, I have a nearly omnipotent view of every possible angle of how this project would unfold. I have the plans, the budget, the specs, the knowledge of buyer preferences from open house feedback of the identical project, even some ideas on where I could economize and do the build more efficiently. Essentially, I have a level of insight into the project that cannot be replicated by any other person without access to my files and experience in managing the build. And I won't be doing it again. That should be a pretty strong warning that the project economics are marginal and that speaks directly to the land value and non-building related cost of small multi family building that are driven higher annually by the City.
There are just way too many reasons to not purchase the property, and hardly any good reason to buy it. Here is a large but not exhaustive list of reasons not to do it:
It sort of comes back to the poor economics of small multi family building in Calgary. Small multi family, in my view, is the single best way to rebuild the inner city in a manner that best respects local livability, affordability, and efficient use of existing land and infrastructure. Unfortunately the City views small multi building as a cash cow to be milked, and as such, marginal projects such as this one are just made less and less viable each year. The building code changes and City policy classify a threeplex as a commercial project, and all the additional cost and effort associated with that can only be divided among three townhouses. The City decides annually to take more than it should upfront in fees (offsite levy, asphalt degradation, DSSP water release controls), or adds costly, restrictive policies that provide no value to the clients but a lot of cost and effort to overcome (such as shoring requirements on excavations or landscaping requirements that make little sense like requiring coniferous trees on a small yard, need for a condo registration, visitor parking and garbage bin requirements that don't fit, side door access requirement leading to many grade problems, the list is very long and painful...).
This is another site I will monitor and, eventually, it will sell and I will take a look at who buys it, what they paid, and observe the eventual rebuild. It will be interesting! Good luck to the buyer!
The family was out harvesting apples at the 32 st future project location. The backyard features two highly productive apple trees with many hundreds of apples ready to eat.
Hopefully this week will feature some good news about the upcoming semi detached project, we have a few obstacles yet to overcome to be able to pull the building permit. Stay tuned for updates here.
Today's progress was getting the threeplex building permit submitted and passing the initial screening at the counter by the safety codes officer. As per the recent trend, that permit cost another $11k, that'd be about $22525.62 in permitting 'losses' over the past week, but who's counting?
Are we at the end of the permit phase on the threeplex? Seems so, there aren't any permits remaining to be applied for (that I am aware of). These so called 'soft costs' are accumulating quite substantially right now. I've yet to account for overall preconstruction costs to date, so I will arrange a date with my bookkeeper and get it sorted out. The costs incurred before starting work are now getting to frightening levels. If there is one benefit from these upfront costs it is perhaps the barrier to entry to building will grow such that there will be less competition for land. Of all the building costs, nothing remotely compares to the high price of land, and it has escalated substantially in 2017 (a year with rising rates and flat economic conditions in Calgary).
Look no GST on building permit fees - that seems to be another opportunity to raise tax that the government is overlooking.
The City loves to make 'policy' changes internally. Of course these changes are not publicized in any way and once made, are 'final', and are not negotiated with those who are on the wrong side of the new arrangement (always my wallet is the victim here).
The changes always end up with the builder paying more. The clerk at the other end of the deal is always just the powerless representative of the bureaucracy and has no authority to exercise any discretion, and the manager isn't available when you are there to pay the fee. The math to do these calculations is non negotiable, and is structured that the City collects the most possible.
I am going to try and get this one knocked down a little, because it is so outrageous, but I think I may be screwed. I leave a little money in the budget for construction contingencies, but I didn't have any money set aside for getting gouged before we even started digging the basement.
Another mistake I made with this transaction is I felt like I had to go through with it in order to get my permission to proceed with the job in before the long weekend. By doing this I was able to give the permit to my contractor along with the deposit. If I delayed, I'd risk further losses by missing my window to get the underground work in before the season ends. So now that the City has the money, it will be even more reluctant to revise the fee. I may have been better off to try and fight the fee before paying, or just making a better effort to get around it.
Unfortunately my parking permit expired at the site of a project that happens to be inside the K1 parking zone. A new set of rules is in place that has a lot of obstacles to getting any kind of parking permit, I was lucky to qualify for anything. Apparently I am now in the lowest class of parker imaginable, a small step up from 'slum lord'.
Last year the City introduced an energy code to new construction. The killarney project I am working on now will be my first project permitted under the new rules. At the time it was a very confusing change, because the new requirements came with little guidance on how to comply, yet significant technical skill may be needed to adapt to the new code. Now that some time has passed, the process seems to be working itself out into a routine practice, where the builder has two options:
1. Apply for the BP by adopting a checklist of energy related items. This route is quick and easy but overly rigid. It doesn't take into account the way the builder wants to assemble the building, and there are some real costs associated with compliance. This is called the prescriptive approach. Frequent readers of my website will note that I don't like government checklists, so, that leaves us with option 2.
2. Conduct an energy model, and adjust the performance of the building to comply with the energy code. This introduces the complexity, cost and time of doing the model, however the benefits are significant to the builder and likely the client as well. Much more flexibility is found in the performance based model. Essentially what you must do is create a conceptual building, and determine its annual energy use. The same building is tested with different performance elements, and these are selected by the builder, and as long as the annual energy use is lower than the conceptual building, the project can be permitted.
After some brief deliberation, I selected the performance based approach, met with an energy model consultant, and the work was done. I have included a screen shot of the outcome of the model. However, what most people would be interested in is the changes that I was able to select in the building envelope and mechanical systems vs adopting the prescriptive checklist.
Essentially the changes amount to the following;
I've found that getting all the samples together to make a coherent package is the easiest approach to an exterior. Before this is possible, a person needs to a) know what type of material is suitable, b) identify suppliers, and c) narrow down the countless options given the market segment and predicted buyer preferences over the next year or so when the project comes to market. This is as much an art as a process, but of course gets simpler as the number of completed projects increases.
It was time to narrow down the choices for the upcoming Killarney semi detached project, and also the threeplex rowhouse (but this is a totally different concept we have yet to finish). After considerable back and forth, second guessing, trips to new suppliers to investigate new options and some elimination of materials I have come to a final exterior palette.
I have a very nice natural stone, a dark stucco, and a new metal siding that has come to the market very recently (Alberta made even), all of these are new and different choices than I have worked with before. Overall this is an extremely nice package. These selections are unique and will stand out in what is going to be a very competitive spring 2018 in Killarney.
All of the exterior selections are relflected here. Stone, stucco, siding, shingle, soffit and fascia.
Preparing a house for sale is a lot of work. I have done it many times, and getting the details right is a lot of effort. Even the final clean up of my new houses is a major undertaking and very costly. There isn't a lot of point in going to the trouble of preparing a house for sale if the interior decoration is completely hideous. I was browsing a Killarney area property currently on the MLS and noted some bizarre interior decoration.
This paint work could be rehabilitated for a small amount of money. That minor investment would go a long way in making the house more marketable. I am surprised the realtor would not offer this advice to the seller, or maybe the realtor did and the seller just wants to list anyway. It is hard to imagine this house getting the most value given its condition.
It is always surprising to me when I am waiting on an approval, it seems like it takes forever and then when the approval arrives, it is possibly back-dated if the City hasn't update the website.
For the new Killarney duplex, we have approval dated August 18th, and there is an appeal window until September 7th. I am just seeing the approval today, the 22nd, as I was wondering why we had yet to receive notice. We applied for the DP June 8th, which was a good move, because we didnt close on the land until July 25th. All of this effort is structured to avoid time/money losses due to having an expensive site sitting idle without permits. DP permitting time at the City on a very straightforward DP was about 2.5 months, this is about as fast as I have ever had a DP approved, so I am pleased.
The next step is submitting the BP, we have a lot of this work done already. I have approved the drawings from the design company, I have sent them to the lumber yard for the layout work, and I have arranged with both an engineer and modelling company to do the technical work necessary.
I will highlight the outcome of the modelling work in a later post, but I can say we chose to go with the performance based approach to allow me to select the efficiency upgrades necessary to meet the code, rather than adopt the checklist. Outcomes include a triple pane window upgrade and some thoughtful insulation detail.
At this point in the project I am of course itching to start the concrete work while the weather is good, and get it to lockup phase. With some rough schedule in place, I need to make some calls to my framer (the framing is the key to this job getting to lockup in a timely fashion).
With the movement lately toward increased fees and charges for everything, especially from the City, it is strange to comment on the project elements that are actually still free. These freebies surely are the last bastion of free stuff that is given to the builder, and the item most likely to be changed.
One of the most surprising free services is the disconnects. The City water department doesnt really charge to cut out the water meter and remove it (despite the $4250 deposit you must provide in advance). Enmax does not charge to physically remove the meter and the wire to the power lines, and atco does not charge to disconnect the gas service. Atco is renowned for its costly monthly fees. For example, if you look at a gas bill, the Atco charges are generally around 50$ per month for delivery and administration, despite the gas consumed being valued at only 10-15$.
Yet, Atco will dispatch a three person crew to your site, with a machine, cut up the alley and patch it all and remove the gas meter for free. Thanks Atco, you may be the last free service I will enjoy for remainder of duplex project.
My wife reported a garage door failure, and demanded service while she drove away in my truck with her car 'trapped' in the garage. Generally these types of service requests flow to me first, and it is hard to escape being not just the builder but also the husband. My main tactic on these issues is to at least attempt a few simple repairs and do a little google research prior to calling in for warranty support, or paid repair work.
In this instance, the chamberlain or lift master guides did not appear to be able to solve the issue, the fault code that was blinking at me was not something found in the troubleshooting guide in the manual (which I conveniently located).
Having exhausted my handyman options, I called the 1800 line, and was given a new strategy. It involved basically pulling off the wall control unit, and shorting the two low voltage wires that power the wall unit, thus forcing a reboot of the opener. This was actually successful and service call and associated cost has been avoided (for now - lets see if the fix lasts).
The warranty on these new garage openers is for 5 years on parts, labour for 1 year only. Since hardly anything breaks in year 1, the warranty is fairly meaningless on appliances such as openers.
Here is a photo of how to do this work, it is very easy for any person to tackle, I was able to do it while on the phone with the 1800 technical support person.
Often when dealing with a property seller you can get a sense of the lies they tell you to try and make the property appear more valuable than it really is. This is a very dangerous situation for the builder because he or she likely needs to get some land to start planning a future project, and a sense of haste can be very costly as the seller lies may not be unearthed until too late.
In a recent conversation I had with a seller, they had a nice 50 ft lot in Inglewood that has some potential to be a really nice duplex. I was contemplating purchasing it, but I had this strange feeling that the land was subject to a possible restriction against subdivision and rebuilding.
After some searching, I encountered the details on the airport exclusion zone in Inglewood. This prevents subdivision of property within a large portion of the community. After downloading the map, sure enough, the property was dead centre in the middle of the exclusion zone. Purchasing the land there could be a disaster for the builder. During my conversation with the seller, he boasted of the great development potential of the site, and how good it would be to rebuild a duplex.
Later on, when we chatted again, I tried to see if I could catch him in a lie, because possibly the seller was not aware of the airport issue, so perhaps he was worthy of the benefit of the doubt. I mentioned the topic of inability to subdivide and the seller claimed 'he could work around that,' which is total nonsense. Having caught the seller in a blatant lie, it makes a lot of sense to assume there were other lies also yet to be uncovered from this seller.
This is just another of a long string of examples where land deal opportunities bring out the worst traits from the seller. This seller also didnt want a realtor involved. Perhaps he was involved with a local realtor previously, who knew the area ( and couldn't possibly not know about the problems with the land), so he also wanted to make sure the buyer would be as ignorant as possible of the airport conditions? There is very little recourse to seller lies in land deals, this is partly why they are so prevalent. At this point in land deals, you must assume everything the seller says is untrue. And this is an unfortunate truth of inner city land dealing today.
The tiresome irate commentary on public art seems to distract the populace from meaningful debate on real local issues.
For example, we have a highly skewed and regressive property tax system that incentivizes sprawl over urban living, and city hall fees and policies that make it extremely hard to redevelop areas that are starved for investment and declining in population. Each year the city increases fees on inner city building while debating whether or not to allow green field sprawl in areas so far from a fire station that sprinklers would need installed in houses to compensate.
Yet much of the pre election debate relates to a roadside art price that cost each of the 1.25 million Calgarians about 40 cents each.
this art piece is reminiscent of bridge piles. Regardless of how much money was wasted on this installation, much deeper issues face the city, and these won't be debated during the election.