Main Streets land use redesignations pass first and second readings

The two day long marathon of a public hearing ended with the main streets initiative passing first and second reading.  Third and final reading is booked for may 8.  

As mentioned previously on this site, I view the mainstreets changes to be allowing the trnasformation of some unloved and neglected areas in Killarney and other inner city neighbourhoods. I delivered this message to Council at the hearing today.  

Most of the Killarney residents that attended the hearing opposed the changes to 36 st.  In my view the change from r2 to rcg would be a welcome improvement.  The residents proposed changing the street from r2 to rc2 - essentially no change at all. Rcg continues to be seen as the urban bogeyman.   

Changes of this magnitude takes many years to process through city hall. What a relief it is almost over!  

Killarney Councillor Woolley moving the main streets land use amandments to the sw inner city neighbourhoods.  First and second reading passed, May 8 is the final vote.  It appears the amendments will be subject to further 'amendments' , I  am not really sure how significant the changes can be at this late stage.

The ugly underbelly of construction in Calgary - stucco coloured sand

My stucco crew is a great bunch of guys, lead by the super friendly Sam, a Lebanese import to Calgary.  He works very hard all season and spends some of the cold months in Lebanon (I assume living very well on his Canadian earnings).  

He was telling me about some crazy low prices I was hearing about for stucco.  He felt the prices I was encountering were impossible, and basically were his cost of materials only.  So to match that price he'd have to work for free.  I don't expect Sam and his guys to work for free so I am paying the usual price for stucco.

He said you could cut some extra corners if you wanted a lower price, but there would be problems.  He knows this because he spends half the year fixing poorly done stucco (for good money I imagine, more than the cost to do it properly).  He sent me a video of himself tearing off two year old stucco.  I am going to attempt to post this here.  It is amazing to see someone tearing off stucco with just their hands.  He explains that the company that did the job likely didn't use enough cement in the mix (because they wanted to cut some cost).  So they were basically applying stucco to the wall with wet sand!  Not surprisingly, it fell off.

I can't embed the video here.  But I can link to it

https://www.facebook.com/pg/integerhomes/posts/?ref=page_internal

This is the stucco falling off the wall.  Sam and his guys are tearing it out now and replacing it.  Cost to builder $30,000.  I guess the warranty is helpful to the buyer here.  Of course the original stucco company is nowhere to be found. 

NIMBY'ism Intellectualized

Another RCG re-designation failed at the council hearing today.  The applicant ran up against a common Calgary phenomenon, the more educated and civilized style of NIMBY'ism where planning principles are misinterpreted to masquerade the NIMBY'ism as legitimate community based opposition to a project.

The property in question is in Windsor Park, a nice inner city area with some really good spots to transition the R2 areas to a higher density.  The neighbours came up with all kinds of rationale to oppose the proposal.  What it really came down to is they just wanted any density or land use changes to be made 'somewhere else'.  As is common, 'somewhere else' is on a busy street far from their own property.  

The trend to view a row house project as an undesirable urban form is common among many community objections to RCG re-designations.  Since the RCG is deemed to be a lower grade of unwanted, character destroying land use, the community quickly attempts to assign all such applications as inapropriate unless located on the most marginal peripheral location in the community.  More often this is a street so heavily damaged by cross through traffic, commercial access points, bus lanes, trains, etc it is already considered defective and not really part of the community.  In this way the community can offer up a poster site for densification, as in, go there, to the spot we already don't care about. The idea to ring fence the 'good' parts of the community with 'undesirable density' is also a part of the community submission.  

I reject a lot of this as basic NIMBY'ism, however, what surprises me is the lack of thought put into some of the community submissions.  When the project opponents are questioned by Council, often they lack coherent answers to issues they haven't thought through.  The highly emotional and knee jerk dislike of a project is really all that is discussed thoroughly.  For example, a question from Council to the community was something like 'what is so wrong about having four doors, with porches, windows, etc facing a side street, yet having the unadorned flank of a semi-detached building in the same location is acceptable'.  To this question, no satisfactory response was forthcoming.

Only a few members of Council, and the Mayor are showing a consistent progressive voting record on supporting these minor re-designation applications.  I know where my campaign donations will be going...

Calgary has an endless supply of its own homegrown NIMBY talent

Custom closets

My semi detached project is moving along nicely. The finishers double booked themselves so spent the weekend finishing my first house.  The bulk of next week they need to be in Canmore working on a hotel.  With my kitchen delivery and install starting the following Monday they stepped up and stayed late to do the work. Thanks Umar, Raj and 'uncle'.  

There isn't really such a thing as a custom closet. Every closet is different, so everything must be cut to fit.   This is half of the master closet.  

Mudroom progress is very nice.  This is the sort of family oriented feature that is extremely practical (and costly) to include in the project.  Generally the rear door is the primary entrance to these homes, so a few hooks on the wall isn't nearly sufficient given the variety of clothing, boots, hats and gloves that need to be rotated in and out each season.  This need for practical storage with the family in mind is why I have meaningful closet space at both entrances to this type of project.  

'Finishing is starting'

The finishers are working their first full day today.  Doors and window casing are first to be installed.   

On these smaller inner city jobs it makes a lot of sense to get the trim and door work done before the cabinets.   Usually the only place large enough to set up the tools is where the kitchen island sits.  

I like to use the Berkeley style door.  It seems to be the most popular style these days. I also like the simple flat doors but I've been told they are too boring.   

I need an investor!

When buying project sites, you can look at a hundred of them and they will fail for whatever reason. Usually too small, on a hill, bad access, wrong part of town, etc.  Here is a great 1:100 lot.  Anyone want to buy into an exceptional project? 

This listing is screaming 'buy me' 

I'm willing to deal with 'problem properties'

The house was rough but livable, I met the owner at the property a few times last year. He agreed to rent the house back from me after the close. I changed the close date to be earlier than I wanted because he was going to run out of money and the utilities were all being cut off.  At that point he was looking at being left homeless and without any income. 

I let him stay in the house for free for six months.  I figured at least this would mean I wouldn't have to shovel snow or pay utilities.  Eventually he got sick and was involved in some ugly family issues. He vacated unexpectedly and some members of his family sold all the house furnishings and pretty much left junk everywhere. Eventually the neighbour complained and I had to clean up the yard.

These are the type of properties I can buy. In doing so, I provide a service other people wouldn't do.  I sort of get bothered by the attitude you find in some community associations about builders, including my own.  There is a common view that the builder ruins community character and offers little benefit. The community association wouldn't do a thing to help this person out - I wrote a huge cheque for the land and had to deal with the aftermath. 

If you know of someone in this type of situation you may need to contact a cash home buyer. They can make some of the problems go away by paying a fair price without conditions for a house.  The market is good right now for sellers.  It is harder to find people willing to sell than it was last year and prices are up. 

This nasty pile of junk is gone, moved temporarily into the garage.  When we do the demolition it will all get hauled to the landfill.  The landfill is the builders best friend when dealing with low value trash.

Vagrancy issues

The state one of the properties I bought last year has finally gotten bad enough my neighbour is calling to request I clean it up.  It looks like a trash heap that's for sure. I've got some time tomorrow to deal with it. My plan is to move all this crap into the garage.  When the excavator comes he can haul it away. The inside of the house isn't much better. A cat was living there and someone was feeding it. Eventually the cat perished and it remains in the basement.  This was ok during winter but I don't plan on going back inside again.  Allowing people to salvage valuables from the house has been a real waste of my time. I need to get this place bulldozed soon.   

The yard isn't in great shape. I was going to rent this house but I was only able to have that cat as the tenant and it used the house as a litter box. Time to get another demolition quote. 

Finishing begins

With the arrival of the material we can announce for certain that finishing is ready to begin.  Since I have the schedule organized pretty tight we don't have many days to lose. The finishing trades can get busy quick and I know this is looking to be a busy year.   I need to ensure my site is ready when the trades have space allocated. 

The stack of doors is ready to go.  Umar and his crew are going to have to work hard to meet my schedule.  I am pretty confident, those guys like to work.

Attic insulation

The drywall crew was back for one more job, blowing the loose fill insulation into the attic cavity.  We are putting at least r40 in there, the new code is requiring r50, so we will be very close to what that depth of fill is.

Tomorrow we are accepting delivery of the finishing package, and more exterior work is planned for the front of the building.  The schedule is proceeding nicely almost with a momentum of its own creation.  Sounds like time for me to update the schedule and predict more accurately when I will need the tile!

Jiggi is a multitalented guy.  Here he is running the blow in machine.

The loose fill insulation is now installed into the attic cavity. 

Picking paint is painful

Every project I attempt to find the ideal shade of paint. The task seems to be getting no easier.  For the semi I have collected many sampled, brought them to the houses and viewed them again in the actual light of the room they will be used in. 

Too white, too dark, too beige, too yellow etc.  I may have it narrowed down now to a handful.  In this situation buying a small sample may be worth doing.  This is a smarter choice than buying 5 gallon pails and deciding it isn't going to work  

Narrowing down the paint selection to a handful from a lot... 

Wall Prime

The painters were in early today making best use of the sunny Calgary spring to prime the walls. They use a medium dark primer that best highlights drywall defects.   After the finishers do the doors and trim work the walls can take a bit of a beating. We do the first Touchup after the finishing stage.  

The paint crew is priming the walls in both houses today.  

$43,738

'EVERYTHING IS NEW' - boldly claims the listing description.  If so, then obviously the builder of the house is remitting the GST to the Canada Revenue Agency as I do when I sell a house.  You simply take the purchase price and divide by 1.05, that gives you the portion of the sale that goes right to the government, this is a big number today given the high cost of homes.  Or is there a way to get out of this costly tax....

In a recent blog post linked here:

http://www.integerhomes.com/blog/2017/3/10/gst-fraud-in-the-renovation-industry

I provided some fairly definitive evidence on how the builder featured in the Kilkenny listing down the street from my house was either intentionally, or (unlikely), unintentionally evading the GST on a 'deemed' new house renovation project, and the selling agent had zero clue about tax rules related to this transaction.  Now that the house appears sold, we can figure out how much tax the builder is not paying the Feds.  By my estimate, the number is $43,738. 

A bothersome issue is both realtors party to this transaction are benefiting by earning a commission on the tax portion of the sale, ($43k).  In a proper transaction, the realtors would have a commission calculated based on the after tax, not pre tax portion of the sale.  The realtors together may be receiving an extra $1312 in payment thanks to the builder not reporting the tax.  I believe this makes the realtors complicit in this matter, they are supposed to be professionals, they have a supposed code of conduct, yet they don't know, or don't want to know the rules regarding GST on new houses.  They'd prefer to collect a percentage on the entire deal, knowing that if the builder actually had to pay the GST as per the tax rules, they'd not only receive less, but the entire deal would be in jeopardy because the GST is such a punitive measure that would destroy the business model of the renovator (he'd lose 5% of his entire deal value, and that $43k could be a large portion of the profit).

I've asked a Real Estate Practice Advisor with the Real Estate Council of Alberta (RECA) for a comment on this transaction.  I provided the relevant documents to him, and will follow up now that we can identify exactly what GST is not being paid.  I am trying to get the scope of his comments to be narrowed to something that is truly in the jurisdiction of the RECA.  I am not asking RECA to rule on if this house is 'deemed' to be new by passing the 90% test of substantial renovation.  We know this is a fact.  My question is distilled down to just the commission issue.  RECA - is it acceptable that a realtor is accepting a commission paid on the portion of the sale that should be remitted to CRA as GST on the proceeds of the sale?  Upon review of the fine print related to the RECA mandate, it appears it considers transactions outside of its jurisdiction. Who knows if RECA will be able to give me any meaningful answer to my questions about the GST evasion.

It will be interesting to see what the response is from RECA.  There is no way this RECA organization would be quoted that realtors under its supervision should receive a commission of over $1300 on the GST portion of a sale that is incorrectly calculated to be zero when it should be over $43k.  I think what they will say, is that the builder should be responsible for calculating the GST.  If the builder calculates the GST incorrectly, then that means for sure the commission on the deal would be wrong.  If RECA responds in such a way, I will reply back as follows;

• the realtor must advise the client that GST must be paid on this type of transaction otherwise the realtor is not performing as a professional  
• the realtor cannot remain silent in a case where they are the benefactor of an unearned commission - that violates the code of ethics (by knowing that the GST must be paid, but accepting a commission on the GST portion of the sale anyway)
• Once the builder is eventually caught for evading GST, will the realtor be forced to repay unearned commission?  Essentially the realtor is in possession of money owned by the Government.  

This is an interesting case because this renovation is so definitively a case where it exceeds any threshold a reasonable person would have to re-classify the house as new, and we know that the CRA has a lower hurdle than a reasonable person does on this topic.  The realtor as much as spells this out in all capital letters in the listing.  'EVERYTHING IS NEW', well if so send a cheque to the government for over $43k...

Shaganappi Fourplex is ready to submit

The land I purchased last year in Shaganappi on 32 St. has been subject to a fairly lengthy design process.  Somehow the revisions of the design seemed to drag on and on and we continuously encountered tricky details to overcome.  Now, basically my end of the design phase is finished.  We get to submit it to City Hall and see what happens.  This is what I'd classify as a big time discretionary process vs. a single detached or semi detached project.

We made the plans to the absolute best of our ability, and within many (or most) of the requirements, but we undoubtedly are going to get some lengthy feedback from the planning department.  The first real feedback you get from the City is in the form of a 'detailed team review (DTR)'. It is hard to predict what will be contained in the DTR, but it will be guaranteed to be long.

The last DTR I received was for a threeplex, it was about 12 pages long, and highly intimidating to the applicant.  It always seems like the worst report card you got in school.  Anyway we distilled the DTR down, all 12 pages of it, into about 4 comments that needed addressing to allow us to proceed.  This is part of what I call the 'madness' of City Hall.  Based on the DTR you generally encounter some unexpected stuff to overcome, but the strange part is the presentation. You'd think the City doesn't want you to build based on the DTR.  You'd assume that the City is not the biggest beneficiary of the DP process that leads to building (it is).  Once built, the City will receive a massive tax windfall in perpetuity, all kinds of fees that ratchet up every year for no good reason, and meaningful work to keep the bureaucracy spinning along and all the staff gainfully employed.

One of these days I will post a DTR so the general public can see what it is like to try and get a project approved in Calgary.  Until then, here is a screen shot of some of the work that has gone into my fourplex.  

Far to much detail here to show in a blog post. We may need to make a website just for the construction and sale of the four townhouses.  

Taping With Jiggi Part 5: Ceiling Texture

We have come to the end of the taping project, as far as what we can show in photos.  The skim coat is complete and the walls are ready to get a final sand. The final sand will not be done until after the ceiling texture is complete (this can be a messy process, drips, overspray, etc).

The first side is getting textured today, the second side the day or two after the first.  With this done and the sanding ready to go we can get the walls primed, then the interior door and trim package sent out (next week).  

The 'lo cost texture' van arrives, fortunately they selected the front yard to back the van in rather than the mud of the rear.  This is a three man crew and they work fast.  These speciality services tend to be the quickest in and out jobs.  Not a lot of creativity in the company name other than the spelling of 'low', but we are happy to see them anyway.

They drape the house with a masking roll and light poly.  This keeps all the mess of overspray off the walls.  The first step is to spray the ceiling with a priming paint.  Next they will spray on a heavier texture material and trowel it down, thus the name 'knock down'.  This replaced the old popcorn ceiling texture that has become very unfashionable.  

And here is the finished product.  

I won't be collecting any more texture photos or shots of the guys sanding walls.  A 5 part series on drywall is likely enough to bore all the blog readers.  Next week we can move on to some more interesting topics.  

Another Semi Detached Project

I am currently in the very early planning stage of a new project.  Looks like I will be building a semi detached project on 26a St SW.  This is another great Killarney location.  This will be a great follow up project to my 41 St semi.

Here it is - the next semi detached project site.  We may be able to start this in the late summer  (if all goes well with the planning).

Taping with Jiggi Part 4: Second Coat and Ceiling Corners

Jiggi and crew is working on the second coat of drywall compound, this is being applied to all the ceiling and wall joints, and the outside corners get their final coat.  Prior to adding compound to the walls, they gave a quick sand to the walls to smooth the dried areas.  They also use a long tube like tool to add compound to the outside corner, and a second pass is used with the flexible angle tool to finish the corner.

This tool is applying an even layer of compound to the outside corner

This corner has a thick layer of compound applied.  It will be spread using the angle tool, and this finishes the corner.

This wall has recently received the second coat on the corners and joints.  The middle joint is troweled with increasing sized trowels, from 10 to 12 inches.  This feathers the joint out more so it doesnt have a bump.  This will get a third coat, the skim coat after it is dry.  The ceiling will not get another coat because we are using a knockdown finish, rather than a level 5 painted finish on this house.

Jiggi has to do the ceilings so he is strapping the stilts back on. Jiggi says he will be done by monday, so we can book our painting crew to prime the finished walls.

Comments on the insanity of City hall

In a recent post, I discussed how I was threatened with a $10-14k bill from the roads department at City hall regarding damage to the alley behind my project.  While I could accept a minority of the blame here, based on bad judgement of my contractor driving down a soggy alley at a time they should have been more careful, the City over reaction is so typical of how it operates.

For example, the majority of heavy traffic in an alley is the City owned garage and recycling trucks, plus lighter traffic from residents. The alley was susceptible to rutting because the gas company has to dig a couple huge holes in the middle of it to expose the gas lines.  

I had some heavy equipment in the alley, but this was when the street was solid with frost, so no damage was done (hauling out waste bins, etc).  I won't have any more traffic in the alley until we put the garage in from here on - we have very few deliveries left that can't be from the front.

While the City cost to operate is so bizarrely inflated, it gives insight into how it functions.  The City runs an operation with little regard to cost or value.  It is a very blunt instrument.  It seems like it will take any possible avenue to bill (exploit) as much as possible in an arbitrary way if they can find someone to blame, and bill.  The best way to avoid this is to stay as far from any dealing with the City as possible.  If the City would spend $14k to fix ruts in an alley (needing, graders, loaders, material, labourers, signage, street closures, managers, an engineering bill, etc), you wonder how much other routine City business must cost.  No sane person would think fixing a few ruts in the spring time in an alley could cost that much.

One factor here is how crazy it is to blame someone for damage, but then not allow them to fix it.  It is against the bylaw to operate on City property.  The alley is a City owned property, so only specially certified contractors are allowed to work on it.  So on the one hand the City is saying you need to fix the alley, yet at the same time the alley is not allowed to be fixed.  

At this point we went ahead and fixed the alley despite concern that fixing it could be worse somehow.  Maybe the City would come back and say the wrong type of crushed material was used and it needs removed (we used 25 mm road crush as we were told).  Or the City will decide to come and fix it anyway, even though it is already dealt with.  

A lot of this issue was created by the neighbours who like to complain about everything.  If the complaints cease now that the alley is fixed, it is unlikely anyone from the City will make further trouble.  Let's hope this is the end of the issue and we can move on with our work on the inside of the house.

The gravel truck departs and the alley is patched up looking better than it has in years. I am hopeful the nightmare of alley damage and restoration is over and my bill will be reasonable (delivery of road crush and bobcat time).

Managing away potential disasters

With the spring thaw, the alley is getting muddy and rutted.  Cutting into the alley to install gas lines doesn't help, the areas the gas was excavated and re-compacted has become soft. The neighbours like to call the city and complain, they are very good at this.  The city inspector came by and suggested that if the city has to fix the alley they would run up a bill in the region of $10-14,000 to 're-engineer' and compact the alley, bring in loaders and graders, etc.  

Ideally they'd blame me for this and send a bill.  I have no intention of being held responsible for this, nor is that cost reasonable to grade the alley and lay some gravel.  My case wasn't helped by some really bad judgement of the siding crew.  While the city crew was visiting the city the cube van was stuck in the mud in the back yard.  What sort of judgement is involved in parking on a muddy thawing yard in a huge rear wheel drive van. 'Was OK on saturday' was the response. You can't manage everything in this business, but we will be banning anyone from the rear yard from now until it dries out.

This is what not do do in the spring.  This truck has no business being in the alley.  Fortunately another builder had the bobcat down the street and pushed the van out.

Taping with Jiggi Part 3: Coating the walls

Jiggi is back on his stilts coating the walls and ceiling.  He has a large trowel in hand, and a hawk (this is a flat surface to hold the compound).  The hawk doesnt hold a lot of compound so he loads it frequently.  Unless you have tried to fill joints, you may not appreciate how hard it is to do properly.  

This is the drywall hawk.  What a strange name for a tool.  

Jiggi  is evenly spreading compound using the finishing trowel.  Not sure what size he is using, could be 12 -14 inches. This is where the skilled hands show off their work.  This task is a lot harder than it looks, and needs to be repeated countless times to fill every joint.

As we approach the finish surface that we can paint, it is possible to see how much compound is applied to the wall.  The upper half is wet, having just been troweled on.  The lower half of the wall is an exposed corner bead. The wide coat of the wet compound feathers out the edge making for a very nicely finished smooth wall.  

Jiggi and crew promise to be done this week.  I think this is an ambitious schedule, because they need to do a second coat and sand of the walls, plus the ceiling texture can't start until they are finished.  They have booked the ceiling texture crew for friday and saturday, so it must mean they are serious about having the job done.  The next step is priming the walls, and we had another crew to do this.