Heat...finally

What a relief to turn on the furnace. The basement is far too cold to be insulating right now. With the furnace running I should be able to warm it right up and get it thawed out and dry so we can insulate.   

Using the pipe wrench and turning on the gas for the first time is one of the most satisfying milestones in a project.  

 

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Igniting...but gas isn't on.  Need to turn the valve back to the 90 degrees position.  

 

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And the furnace fires. Sometimes this seems like the home builder equivalent of launching the space shuttle.   

Major Land Use Redesignation Public Hearing - April 10

I just received a formal notice that the City will be going ahead with the public hearing for the mass land use redesignation of large areas of the SW inner city such as Killarney, Shaganappi, Roscarrock, Richmond and Glenbrook on April 10.   

At the hearing Council will vote on the redesignation, and if this passes (I think this is likely given the level of scrutiny and consultation thus far), transform some sections of these communities along the major routes.  The hearing will introduce new land use options that will allow modernization and development previously not allowed or even possible.  The Mixed Use district is the key change here, but also a large area of row housing and condo building will be possible.

I plan to attend to show support to this initiative.  It is really encouraging to see the planning staff have made a contribution to the rigid land use system in Calgary.  This sort of effort takes years to navigate city hall.  Hopefully this passes and the staff can continue these initiatives.  There are so many areas with outdated land use in Calgary and many Area Redevelopment Plans that were designed when the City was half its current size and ideas on planning much different.

 

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Drywall delivery crane

A second delivery of drywall through the second floor window on a snowy morning.  The crane truck provides a major productivity improvement over hauling drywall by hand.  

 

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Spring Melt Down Exposes Treasure

The first warm week we have had since the deep freeze always reveals some hidden treasures, generally the trash and scraps left by all the trades who'd rather toss a coffee cup on the ground than in the bin.  

With much trash exposed, I was able to do a quick site clean this morning rather than wait until it gets really muddy and even more unpleasant.  A full truck load was collected and driven around back and deposited into the bin.  

Every project is the same when it comes to sloppy waste handing practices of the trades, with varying degrees of effort by some that at least try and clean up after themselves.  And every project I vow to crack down on the worst offenders and somehow nothing really changes.  Next project will be different...

Every time I clean up after the people I am paying to clean up after themselves, I do wonder about the unproductive use of my time.  Shouldn't I do some more meaningful work than trash, like hiring crews, finding land to buy, etc?  For whatever reason the trash just seems to be a more compelling task than high value work.  With the site mostly clean, I can now return to other stuff on my agenda, like submitting comments back to my design team for my upcoming townhouse projects.  Progress on this will be announced soon.

The truck is full of soggy waste products, ready to go in the bin.  The new truck and backup camera are super useful when approaching the bin with a load of garbage.  

The truck is full of soggy waste products, ready to go in the bin.  The new truck and backup camera are super useful when approaching the bin with a load of garbage.  

$150 Property and Inflation in Calgary Real Estate

Yesterday a nice development property sold in Montgomery for $501k.  This is interesting because the clueless realtor tried to list it for $425k and double end the deal by bringing in her own buyer to offer the asking price.  By listing it (her flaw here - if what she was doing was legitimate - I think that is debatable) she immediately received another dozen offers, so she was no longer able to earn both commissions by doing that hour or two of work.

I actually offered $475k, I figured why not see if I could get a quick offer accepted and figure out later how to develop the site. There must have been a bunch of better offers than me because we never heard back from the selling agent.

This land deal is a classic example to show the disconnect between the government fantasy of inflation statistics, and what is observed in the economy today.  This property sold in 1949 for $150.  Using the government inflation calculator, that $150 is supposedly only worth $1605 today.  $1605 today may get you a months rent, but it certainly will not buy you land in the City.

In reverse, the $501k today was supposedly worth  $47k back in 1949.  I think it is fair to assume that $47k in 1949 had vastly more purchasing power than $501k does right now.  For a half million  dollars, a person can only get a condemned shack in Calgary. In 1949 a nice development property could be acquired for only $150.  The buyer of that montgomery land in 1949 could have bought entire neighbourhoods if he had access to $47k. 

Much of the increase in apparent value of land is attributable to the banking system making money available by introducing it into the economy through loans.  With the vast increase in currency digits the land is trading for in 2017 vs. 1949, you have to wonder what it will be worth in 2049.  In another 20 years will a decent development site in Calgary cost over $1M?  If so the government is going to have to push that minimum wage a little higher than $15/hr, or we are going to run right out of credit worthy buyers.

This title also came with that gift from the past, the restrictive covenant.  These are a pain to get removed and can cause serious headaches to the purchaser.  The covenant on the lot prevents, among other things, raising fur bearing animals, and building anything more than single structure on the property.  To use the lot for row housing, the ultimate best use, the covenant will have to be taken off by a lawyer who must appeal to a judge.  It is amazing to me that sellers don't bother to do this prior to the sale.  It could improve the selling price significantly if they could provide a real property report and a clean title.  More than like the seller of this was an elderly person who was nearly taken advantage of by a dishonest realtor trying to double end a deal.  The market ended up getting the seller another $76k for his retirement (no thanks to his useless snake-agent who still got paid).

I'm not sure how this blog post turned into a diatribe against realtors as it was supposed to be about the banking system creating crazy inflation numbers for Calgary property.  Here is shot of the title transfer from back in '49...

The Shouldice family sold a lot of property super cheap back in the 40's.  Old Man Shouldice would be turning in his grave if he knew that a $150 plot would get a half million dollars 70 years later.  You'd have to be a mad hatter to sell …

The Shouldice family sold a lot of property super cheap back in the 40's.  Old Man Shouldice would be turning in his grave if he knew that a $150 plot would get a half million dollars 70 years later.  You'd have to be a mad hatter to sell land for the 2017 equivalent of $150 in 1949 today.

 

 

 

Gas Meter Arrives - convenient heat for interior work is almost available.

The common theme of this project has been to get the underground utility service work done early. This means when construction progresses to inside work, I can provide the environment for all the trades to work effectively. The surest way to alienate your crew is to have them arrive to a jobsite that isn't ready, and from insulation onward some heat is essential.

Natural gas connection takes months to apply for, dig underground into the lane, and install the meter (the final step).  The meter will not be released until the plumbing inspection is passed.  So the gas connection can't be made to the furnace until house passes all the inspections required at the pre board phase, this is a huge amount of work. 

The gas service provider may offer a temporary heat setup that allows access to gas early.  I don't bother with this because I can get my furnace running soon enough to avoid the fees of a winter heat hookup. Thus far we've had a terrible winter but my site hasn't really needed heat until this week (it isn't possible to heat a house that is not insulated).  We started this project in November (basement work), so it has taken until March to be ready for gas - and everything has gone smoothly except for weather delays.  This is where the less experienced builder will run into trouble.  It I hadn't already done the preliminary work to get gas, we could be weeks or months away.  

A few small hurdles remain to have the furnace operate.  We need power to our electrical panel (we are relying on the pole near the  lane for power). The furnace is hard wired to the panel. It can't be connected to an extension cord without some effort. We have a plan for this and hopefully tomorrow it will be done (or the next day).  The furnace condensate line needs connected into the floor drain, and a temporary thermostat supplied. If this isn't done the condensate will spill all over the basement floor in a large puddle. I've got the mechanical contractor booked to do this tomorrow.  

The taping crew will be pleased to see heat inside - this will ensure they prioritize my job over other projects.  Often the trades will preview a few sites and select the project that looks most ready.  By being the most reliable contractor in terms of delivering these services, you can get to the top of the list.  While I claim to be the person in charge of the schedule, the trades often prioritize their own business needs over the builder - so the most attractive site gets the best service.  

So now that I have shared a few more secrets about inner city project management, we can look ahead to some warm and happy trades finishing my inside work.  This is the stage of the process where a large amount of funds is needed to keep moving ahead.  I have to pay the major part of the bills for the plumbing, electrical, exterior work, insulation, drywall, and deposits on finishing material.  Over the next month the cash burn rate will exceed $100k.  

 

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Atco is a very reliable contractor.  While they are a huge bureaucracy to navigate at times, they stick to the schedule.  There is actually some really important information contained in the photo about setbacks between the gas meter and a combustion source. Our fireplace exhaust is just to the left of the photo.  The vent on the regulator needs to be one meter from the fireplace exhaust. This one was cutting it a little close, but ok.  These are the paranoia inducing moments you don't think about when you have houses under construction because changes from this point on are really painful. 

2 lb foam

The type of spray foam we are using in the joist ends and cantilever areas is called  a 2 pound foam.  This is a closed cell type of foam that is impermeable, so can insulate a space without a poly barrier.  

The foam does such a good job of tightly sealing hard to reach areas and the underside of plywood where you want to avoid a cold floor.  There does not seem to be much other choice than to use a spray foam if you are trying to achieve a comfortable interior.  In the example below we are even sealing in the warm air duct in the bedroom above the front entry.  

 

With 5 crews on site the builder needs to stay out of the way

As expected, the warmer forecast for the week has brought out all the crews. This makes for a tricky site to manage, with parking and access to the power pole at a premium.  We had:

1. electrician making last minute repair 2. insulators putting in batt insulation in second house 3. spray foam operator prepping and starting in basement 4. drywall crew boarding upstairs in first house 5. central vac install finishing (to stay ahead of insulation).  

As the project manager, it is best to stay away and let the job progress. There will be plenty of time later to deal wit the aftermath of that much work going on.  Making sure the cleanup gets done and cheques get written seems to be the primary work of the builder right now.

 

Board is going on quickly.  As more levels are available to board the crew will ramp up and hang the drywall even faster

Board is going on quickly.  As more levels are available to board the crew will ramp up and hang the drywall even faster

This heater is enough to create tropical weather upstairs.  May also be hot enough to melt your cell phone if you were to take a closer photo.

This heater is enough to create tropical weather upstairs.  May also be hot enough to melt your cell phone if you were to take a closer photo.

Why Builders are so Secretive

The inner city market is highly competitive, and every builder is looking for some kind of edge over the competition.  At the retail level, the buyers  only see the polished end product, and they could not possibly know who put together any given design concept.  

The builders tend to need to do interior design work quickly, but this leads to some really awful interior selections.  Perhaps a better way is to go view the show home of the most spectacular home you can find and 'imitate' the finish package?

I am certainly not innocent when it comes to this. I like to tour some of my favourite builder show homes so I can see what they are up to.  Because the trends tend to trickle down from the most expensive neighbourhoods, it is easy to ensure any property is very up to date or even ahead of the trends by visiting a few million dollar show homes.

I was visiting today at my friend 'Paul's' project.  He is a very prolific builder and plans to finish 12 houses this year.  I couldn't help but notice the virtual knockoff of my prior townhouse project interior design.  He used the same cabinets, counters, and the hardwood and tile were just a shade off.  What happened is he liked my show suite so much he took photos and copied every element as closely as possible.  

 This works both ways, I have adopted a few of his trades as well as offering him some options for design that he hadn't used before.  On at least one instance he has basically reneged on a land deal that had reached the legal phase, so I had a huge grudge against him after that.  My position was that he scammed me out of a handshake level land deal and wasted some legal work.  Hopefully Paul has some more trades I can use to improve my costs or procedures.  I met his house cleaner today doing the prepossession cleaning job, and took his phone number.   So in the end it is ok if Paul rips off a few of my design ideas.  Eventually I will return the favour...

  

Here is my master bathroom from the 2015 design project built and sold by early 2016.  The original design work was done courtesy of yours truly.

Here is my master bathroom from the 2015 design project built and sold by early 2016.  The original design work was done courtesy of yours truly.

Here is the project Paul finished in March 2017. Every feature of this bathroom is similar.  Tap, countertop, tile backsplash, cabinet doors, etc.  It would not have been more similar if I had done it myself.  Maybe I will change the …

Here is the project Paul finished in March 2017. Every feature of this bathroom is similar.  Tap, countertop, tile backsplash, cabinet doors, etc.  It would not have been more similar if I had done it myself.  Maybe I will change the locks before Paul gets to walkthrough my current project (that is going to be impossible because we are using some of the same trades).

Exterior Envelope Begins

Given that we've been able to start insulating and drywalling the semi detached project, I have a renewed sense of urgency to get the exterior envelope sealed up.  I'm working with a new crew that comes highly recommended by a builder I have met working in the same part of town.  

It has been too cold to begin the soffit, fascia and house wrap effectively, but the guys were out today as it was sunny and had warmed up somewhat (to -11C).  With the balmy forecast some the crews who havent been working much may play a little catch up and get a lot of work done by putting in some long days.  Even the seasonal time change is working in our favour.

Lined up for the work week (seems like it is already well underway as of Saturday night);

  • Exterior metal work - this is the soffit, fascia and trough.  Once we get into spring and it starts to rain this will give us some control over runoff and we need this work done before the stucco component anyway.  Side benefit is the pigeons can't get in the attic and make a huge mess
  • Exterior envelope - the tyvek will be sealed around the building, acting as the air barrier.  This will really help seal the interior from wind and moisture penetration, as we can't afford to get any moisture in our insulated stud spaces any longer
  • Plumbing - there is a small amount of plumbing to do that can be finished up prior to any drywall covering our pipes
  • Electrical - we have a small electrical failure to remedy before we cover it up
  • Spray foam - this is booked for Monday morning and is essential to be done before we can do soffit or drywall in many areas 
  • Drywall boarding - this may be done on one side in the next few days, likely beginning on the second side
  • Gas meter install - this is quickly becoming a priority, fortunately I have got it booked (just don't know where we are in the priority lineup - hopefully near the top.  The crew that installs meters can do a lot in one day, but they don't give you a time)
  • Hardwood consult - we have one of my suppliers coming out for a site visit.  This is going to play a key role in finishing the stairs so a site visit is always helpful (plus they measure)

I will be on site with some pre-arranged meetings and to take some progress photos.  At this time it makes sense to revisit my schedule so I can remain a step ahead of site progress.  I need to make a contract with the finisher and order the interior woodwork, and possibly finalize my decision on the painting contractor.

 

The pump jacks are the essential tool to reach the hard to get to areas on the second floor.  These are much more efficient than rigging up pipe scaffold.    

The pump jacks are the essential tool to reach the hard to get to areas on the second floor.  These are much more efficient than rigging up pipe scaffold.    

Drywall begins

Given the delays are all weather not labour, my drywall crew decided to start anyway.  For example, the ceilings can start before the spray foam in our joists and cantilever areas.  

With a heater rigged up they are hanging drywall in t shirts upstairs while the lower levels are freezing.  Here is a shot of the insulated wall, sound barrier in party wall and the drywall going up.

 

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GST fraud in the renovation industry.

INTRODUCTORY NOTE TO BLOG READERS This blog shouldn't just pick on realtors for unethical behaviour.  If realtors show occasional snake like behaviour, then the builders and renovators are dinosaur sized snakes when it comes to ethical matters.  Today on the blog we will feature a very common form of gst fraud that the government is seemingly taking a very lenient view on in Calgary, and highlight how the renovators and realtors work together to perpetuate the scam.

The Canadian Revenue Agency (CRA) controls the taxation of new housing. This agency loves taking huge lump sums from Construction project transaction, a massive source of revenue for the government given housing cost today. While all new housing 'recycles' old land into new taxable product (which I view as unfair, particularly for inner city projects), the same is even true for comprehensive renovation as I will show in the documents attached below.  

If a renovator 'substantially' changes a house and meets the significance test of 90% (a major gut level reno), the CRA requires gst be paid on the ENTIRE sales price because in its view, the house is now 'new'.  In Calgary, renovated houses of this magnitude can cost between 400k up to millions +$.  By not remitting gst to the CRA, the renovater is evading a huge tax ($20-$50k would be most common).  Having to pay the gst on the full sales price likely would ruin the economics of many projects, I can see the government taking a full half of many renovators margins on larger projects.  Of course the renovators, or house flippers as they are now known, detest this rule, because the land is such a  big portion of the value, they have to pay a massive amount of gst on a bigger reno where the land value is in excess of $550k.  From what I have found the renovators tend to 'play dumb' on this issue, and either pretend that no matter to what extent the renovation is completed, it is never 'substantial', or they will just say some blanket statement such as 'renovated houses are used so gst does not apply to the sales price'.  The CRA has of course published documents to dispel these myths about renovated houses.  

What can be humorous when viewing the listing description published by the realtors is that they want to market the magnitude of the renovation as a sales feature, not downplay it for tax purposes.  So what you will see is often the realtor will undermine his or her own clients position on the gst issue.  This is the scenario we find ourselves in regarding the Kilkenny property we feature today on the post.

There are two listings in my area that are actively evading the GST. I found both of these listings by looking around for five minutes on the realtor.ca website. One project is just a block from my house and I have watched it get renovated, knowing from the start that this would be perhaps the most comprehensive renovation I have witnessed (I was right this reno took six months).  This was not a routine project. They replaced all the 4 inch exterior walls!  They even added an addition. There is almost nothing left of the original home once you start removing exterior walls.  This project exceeds the definition of significance by a massive margin.  The realtor even boasts of the changes to the house in the listing description using similar language to the CRA in how it defines significance. 

I emailed the realtor and asked if the price included gst.  The response was so typical of a realtor ' this is a renovation so gst does not apply'.  I wonder if the realtor is totally ignorant of these matters or is just acting unethically to help the renovator evade the tax.  I've considered publishing a screenshot of the listing, realtor response and the CRA bulletin on gst on this site.  Would this infringe on privacy of the individuals involved?  Do those acting to evade the tax need to be shielded from scrutiny?  In this case my blog post is useless without sharing the info of the parties involved.  I'll post up the info later so my blog readers can get a good look at the pervasive unethical behaviour we see in the realtor-renovator world today. Maybe the CRA will read my blog and crack down on tax evasion.  The government could collect millions more by doing some routine screening of this stuff. You wonder why they don't bother. 

UPDATE 1: Here is the listing 

 

 

Great job Shirley!  you just showed in your description that this project is a substantial renovation when you use words like 'completely rebuilt with 2x6 construction'.  Do you know that your builder must pay the government almost $50k of…

Great job Shirley!  you just showed in your description that this project is a substantial renovation when you use words like 'completely rebuilt with 2x6 construction'.  Do you know that your builder must pay the government almost $50k of gst on this build?  

UPDATE 2 So now we have shown the listing, we can show the CRA bulletin directly related to these matters

So now everyone can read the fine print and decide for themselves if the above project is a substantial 90% renovation as defined by CRA.  I'd say this is a 99% renovation.  By my calculation of how much work was done, plus the addition, t…

So now everyone can read the fine print and decide for themselves if the above project is a substantial 90% renovation as defined by CRA.  I'd say this is a 99% renovation.  By my calculation of how much work was done, plus the addition, this house is brand new.  By value of what was preserved from the old house it would be reduced to the excavation work, basement and water/sewer/gas/electrical connections (all depreciated from 50 years ago) and some partial lumber and framing material.  I don't see how you can argue this builder is not evading tax.  

Update 3 Just for fun I asked the realtor if the property asking price was inclusive of gst given that it was a new house. Here is the reply from the realtor assistant.

Great job Steph, you sure don't know the rules!  I guess this realtor must also be an accountant, she seems to know a lot about taxation.  This is just another buyer beware moment, in terms of beware the advice the realtor gives you becaus…

Great job Steph, you sure don't know the rules!  I guess this realtor must also be an accountant, she seems to know a lot about taxation.  This is just another buyer beware moment, in terms of beware the advice the realtor gives you because it is so often inaccurate.  The realtors involved in this listing have no knowledge of the rules regarding new house taxation.  Are these the type of people you want representing you in a transaction where they can earn a $15k commission? 

Subdividing? Get ready to pay

One of the unexpected costs a builder may encounter when working on a semi detached project is the fee to subdivide.  

This is a fee structure largely controlled by the City, so it can charge whatever it deems appropriate.  Thus far we were billed $1174 from the City to do whatever it must to to draw a line down the middle of a lot.  we also got hit with a surface improvement to repair the old curb cut from the driveway.  That was about $3650.  So we are paying about $5k to the City plus our surveyor costs. 

For the $1174 if you get the right person on the phone you can pay by credit card. This is the easy way. For the surface improvement, you must get a bank draft, then walk it over to the third floor cashier.  This can be a half day wasting experience.   

I have never understood why the City has so many payment requirements that occur at intervals over the life of the project. It can require many trips to City Hall, finding parking, lineups, etc, and even worse when you have to get a bank draft. What is wrong with a cheque?  If it bounces, it isn't like the City won't get paid eventually because they control the subdivision.  I've tweeted the mayor before about red tape for inner city builders. This would be an easy fix (take credit card or even better - online pay). 

 

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Curbs are expensive.   

How Cold is Too Cold?

We know the answer to our question of how cold is too cold for construction (right now).  We are going on about two weeks of miserable conditions and this has impacted the project in many ways. 

Right now we need to wrap the building and complete the soffit, fascia and trough. We also need to spray foam our cantilever and joist end areas. All this needs to be done before we insulate otherwise we risk moisture getting in the walls and trapped being the vapour barrier. Given how cold it has been moisture in the walls hasn't been a real concern. It has been the debilitating cold that is preventing work. The spray foam truck can't operate in these conditions and neither can our siding crew.  We can't turn the furnace on because we are waiting for the gas meter and we can't turn the furnace on until we seal the building anyway.  Sneaking in the shingles was about the only exterior task that worked in my favour. At least when the snow accumulated during the last five storms melts next week, it will run off the roof, rather than inside the house.

The Monday forecast is looking great. Let's hope this is the end of the cold as we need to make some progress.  

 

  

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Where has the chinook been all March?

Why Is It So Hard To Buy Property Right Now?

As mentioned in some previous postings on this site, the recession is over in Calgary inner city property (if we even really had a recession I didn't actually identify it).  While it can be hard to sell some properties in some segments, the buying end is very tight.

I often wonder who is actually doing the buying.  Is it people looking to store excess cash in property with seriously negative monthly cash flow (I'm actually doing this twice over right now and it isn't particularly gratifying), or people with such a long time horizon that they don't need to make logical purchases?  Obviously the builders are stocking up on R2 and multi family sites, but I don't know if this explains the lack of current supply.

Market psychology plays a role, it seems like any time values are rising, potential sellers decide not to sell as they'd prefer to wait and see further gains.  Yet when values are dropping, you see lots of new supply as sellers try and exit property on the way down.  If people were rational actors, they'd sell into strength and buy into weakness as the market cycles.  I have found the last couple purchases I have made were basically from people who needed or wanted to sell, and the market cycle didn't play a role.

I was browsing the Globe and Mail and came across a chart of foreign buyer interest.  There appears to have been a huge spike in interest in investing in Calgary from Chinese buyers after the Vancouver tax was brought in last summer.  Relative to Vancouver and Toronto, quality property in any part of Calgary is a comparative bargain.  If we see more Chinese investor activity in Calgary then expect land values to stray further from what the fundamentals would indicate are fair value.  

Blame China?

Blame China?

Pre-Board Inspection - major construction milestone

I booked what is known as the pre board inspection today, this is perhaps the most significant of the City inspections needed to construct a new house.  While there are a few preliminary inspections for underground work, sewers, etc, the pre board inspection is the 'big one' in terms of the amount of work to be reviewed all at once.

Here is a list of what is inspected at the pre board phase:

  • Electrical - all wiring in the house is exposed and can be examined easily by the inspector
  • Plumbing - drainage, venting, water lines and other elements are looked at
  • Gas - a pressure test is shown to the inspector to show the connections are not leaking
  • Fireplace - the install and mainly the venting of the fireplace is inspected
  • Mechanical - the furnace, ductwork and return air installation is reviewed
  • Building - the structure, engineered work, soil bearing report and sulphate test, radon gas penetrations, fire barrier and many other minor items can be reviewed here

This multitude of inspections can be helpful to identify any of the countless mistakes or omissions the builder can encounter during the construction process.  Each year a few changes are encountered and the interpretation of these new rules can be a puzzle to deal with.  A recent example is the introduction of radon gas leak prevention, we had some issues here to be dealt with before we can start the drywall.  Another change was to the electrical install for in floor heating has to be done differently than last year.

The good news is the semi-d project received all of its permission to proceed.  This is a relief to me since I had already booked spray foam installation for this week (Wednesday), giving me just one day to react and correct any failures.  

Since the pre-board inspection is such a large milestone, it is a good time to review how long it took to get to this level of completion since framing started (Dec. 20 - March 6).  This 77 day period is a reasonable pace given we have had a nasty winter and we started just prior to the holiday period.  Backing out weekends and holidays and serious cold snaps our 77 day period is reduced to more like 47 work days.  This is a good pace to frame, plumb, wire, pipe gas, shingle, install windows and doors and stairs, furnaces and ductwork on two houses.  If we were a little luckier with the weather we'd have more exterior work done and likely be insulated and starting drywall right now. Based on my earlier schedule we are about two weeks behind.  Lets hope the next interior phase is more controllable, we get the heat on, and finishing work can really get going.

  

Early Pre-Sale at the Semi-detached Project

There is a lot of a anecdotal evidence to suggest the calgary inner city market is doing fairly well as we move through and hopefully out of the recession. 

We can add a little more to the recovery case by announcing an early sale at the semi-d project.  Thanks to our team at newinfills.ca for assistang with the deal and our new clients.  They will be getting a great house this summer.   

 

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Roofing Begins

After a few extra days of snow and harsh cold, the roofers were able to get the roof shingles delivered and the ice and water shield installed.  The membrane applied to the entire roof surface protects the wood against moisture, and the ice and water shied in the valleys and along the perimeter prevents damage from possible ice damming.  

Once it warms a little more the shingles will go on and we will have a much drier interior. This is good news because we need to get into the next phase of the project as soon as we can.  

 

City Initiated Land Use Re-designations (The Main Streets Initiative) - A Transformative Event?

The inner city builders have had major difficulty in acquiring development property in the SW and NW locations where infill building is in greatest demand.  This is as an issue of artificial scarcity versus a true shortage of space.  There is and will continue to be plenty of land, but up until recently there has been a massive disconnect between the type of development land in demand, and the type available given the land use regulations.

In large part, the development land that comes available is locked into a tightly defined land use district, RC2. This is basically a land use that allows single homes and semi detached homes, nothing else is possible.  Over time this has led to a real shortage of move up type properties that are larger and more family oriented than condo apartments (lots of those, endless supply), and pricey detached homes (young families can rarely afford these - also good supply, particularly during the recession).  The multi-family zoned land has been at times virtually impossible to purchase, and inventory non-existent, or only listed for sale at pricing levels that would make the land seller the sole beneficiary of any future redevelopment proceeds (and this shortage really feeds into the realtor behaviour regarding the sale of development property for multi family projects).

While a huge amount of R2 semi-d development has taken place, including by yours truly, the overall land use of communities has really become archaic in the context of a changing city.  You could argue that the builders are now designing homes just to comply with city bylaws in the multi-hundred page zoning bylaw.  It appears that the city plans examiner is the end customer of the house based on where design effort is directed, rather than an actual family that wants a home in the inner city.

I think this Council has, more than any previously, latched on to this huge disconnect to the type of City that currently exists, and the transformation that has to take place to welcome the next one hundred thousand, or even half million Calgarians.  Under current demographic and growth pattern, Calgary would just sprawl endlessly in an anonymous, poorly serviced, culture deficient wasteland of suburbia, with some isolated pockets of exceptional livability.  And based on the cost to service these distant communities, the City would go broke while getting bigger.  It seems that the future development needs to be a net positive to the City, rather than drain the taxes out of the desirable areas to subsidize a kind of hamster wheel car based sprawl that brings in more traffic and dilutes the capacity of the entire transportation network.

Obstacles remain in place to growing Calgary smarter.  The biggest issue is the individual community area redevelopment plans (ARP).  These map and policy documents basically lock in a land use from when Calgary was half its current size and ideas were very different on neighbourhood design. The ARP has become a very valuable tool to stop any kind of change, even sensible changes.  Many areas with redevelopment potential would decay under the confines of the land use allowed in an ARP, and many outspoken community residents would resist any change to the ARP through a contentious public hearing process (I know all about this too).  Updating an ARP is a difficult process, many in the community want to just change the date on the cover page and use that new ARP to continue to block redevelopment perpetually.  

The City planners have become way too smart to get bogged down in multi-year ARP reviews.  Instead they brought in a process called the Main Streets Initiative.  This allows re-designation of major chunks of communities along important routes, and it brings in new mixed use districts not previously in existence in Calgary.  The mixed use district is perhaps the greatest deficiency in Calgary today based on the restrictive bylaws of the past.

The biggest winner from the mass re-designation of communities along the main streets could be Rosscarrock and Shaganappi, followed by Killarney and Glenbrook (not much of change at all to Glenbrook, which is unfortunate, because some of the heart of Glenbrook is truly hideous).  There could be some major redevelopment investment in these communities, just from the introduction of the new zoning classes.  I believe this could be a transformative event in these communities during the next upswing in the economy.  This new land use will provide massive new development options within the existing communities and attract major dollars to revitalize some pretty ugly places, using new planning ideas and concepts.  Areas of decayed old bungalows that were not good redevelopment sites could see mixed use and townhouse projects, and a boom in row housing and affordable rental and retail housing can now happen.  I am a huge supporter of this initiative.  I am almost shocked at how quickly this is moving, and how little I knew about this project up until the last month or two.  I likely misspent almost $15k re-designating a property within the new map area to be re-designated by the City anyway.  It was like the City Council did not even know it was going to be re-designating areas that another department already had created detailed new land use maps for.  Very bizarre, and the community fought as hard is it could against re- designating one lot in November, just to find out in January that 100's more would be changed in an identical way? Given the level of opposition to one tiny property, you'd think that 100x this amount of change would be met with an angry mob outside City Hall? Hasn't happened yet. 

You could say the City kept its maps pretty quiet.  Just last summer I attended a meeting on this initiative, but no real information was provided to the Killarney Development Committee.  The map availability shows just how significant the modernized land use will be to these communities.  If this effort works its way to a Council Vote and public hearing, I will be there to show some support.  Here is a map showing some of the potential transformation that can take place along the 17 ave and 37 st corridor.

      

The grey areas are mostly R1 and R2 zones, and some are in really rough shape.  the brown is R2, the purple is MC1 (think 4 level condo), the Tan and Blue (not shown here) is Mixed Use Commercial of varying intensity (commercial main floor…

The grey areas are mostly R1 and R2 zones, and some are in really rough shape.  the brown is R2, the purple is MC1 (think 4 level condo), the Tan and Blue (not shown here) is Mixed Use Commercial of varying intensity (commercial main floor, housing on upper levels), and the Yellow is a row house district. This is one of three new maps distributed by the City. If this passes, I am predicting this will transform these areas (for the better), over the coming decade.   

Finishing Selections continues

I have recently put some more energy into finalizing some of the finishing selections.  It is nice to have the material selected and possibly even ordered once the drywall stage of the project is beginning.  Delays and back ordered tiles are really common in the summer months.  The Italians are notorious for not working at all during the summer months, so it is almost impossible to be certain tile deliveries will be possible during July and August.

Fortunately this project won't run into those issues, we've got another project to start this summer so we need to get the semi-d wrapped up by then.  I have selected the kitchen cabinetry, countertop, appliances, flooring, tile and even some lighting already.  We will be in good shape to prepare a very attractive show suite.

 

If you narrow your floor tile options to four from hundreds, it makes for an easier choice

If you narrow your floor tile options to four from hundreds, it makes for an easier choice

I've looked at all the options and am using the same cabinet pull as last time - no reason to switch.

I've looked at all the options and am using the same cabinet pull as last time - no reason to switch.