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.
Cooperation from the kids and we hauled out a full rubbermaid of fresh local apples.
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.
This is the department that takes credit card! The other demands a cashiers cheque.
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'.
Is this some sick joke from the parking authority? Despite the derogatory label, I am going to hang this from my rearview mirror - with pride!
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;
The result here is the building will use less energy than the code prescriptive building would require, yet offers some savings to the builder for material cost and assembly challenges.
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.
get some sunglasses before entering this property. this may be an opportunity to re-use those fancy eclipse glasses you recently purchased
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.
Atco is finished digging up my gas line and cutting it off. Next they will have to repair the asphalt surface that was cut up. Atco doesn't come quick to do these jobs, but they do come cheap!
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.
Pull off your wall control unit by removing one screw and pulling it out of the hidden bracket at the back.
Remove the wires at the back of the unit and touch the exposed copper part to the other wire, this shorts the circuit and acts as a jumper. In this instance, the door that would not open immediately opens. Put it back together and hope the problem is solved.
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.
This shows the inglewood map of the exclusion zone. I would not buy land here or recommend other builders buy land here if they want to build infills. While the rules can change, they can change a lot slower than a builder can bankrupt himself waiting.
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.
Welcome to Vancouver, the regulatory burden capital of Canada.
I'll be away for a few days to visit some bc bike trails. Unfortunately alberta parks are too heavily regulated to allow the type of biking that bc resorts enjoy. This has become a major tourism industry and whistler is the centre of the universe, particularly during the crankworx festival.
The work truck is well suited for hauling bikes. Unfortunately the bikes cost almost as much as the truck.
The Killarney community association has a subcommittee to deal with development issues. I joined this committee in 2016, because as a community member I wanted to ensure some of my views would be reflected on community policy toward house building. Clearly I have some issues with impartiality on certain projects (like my own), but I at least felt I could retain some objectivity on other projects that I have zero involvement with. As a volunteer committee, members of the real estate industry were, and continue to be somewhat welcome on the committee.
There were some troubling developments I observed at committee meetings. I attended a few meetings, and at one in particular the committee put forth a position to the City staff that the 1986 version of the Killarney Area Redevelopment Plan (the ARP), which is the guiding land use document, and very hard to modify (yet is completely and fundamentally outdated), should be revised and updated such that the date on the cover would be changed but little to no other changes would be approved of or even discussed. The idea was to further 'ring fence' the 'good' areas of Killarney while sacrificing the 'bad' areas.
If successful, the new 2017 ARP would then be a valuable and current tool to block any development. I found this a totally irresponsible, even untenable position for a committee dedicated to upholding sound planning principles could take. However, and surprising to some (perhaps I even surprised myself), I kept my mouth shut on this topic, rather than argue these points in front of the City staff, or complain to the board of directors about hardline biased positions being put forth as unanimous policy of the entire Killarney population, etc.
Later on one of my projects was making its way through the redesignation process, and the committee basically refused to even discuss the merit of my application, and someone on the committee was canvassing neighbours about it but only recording those opposed to the project and ignoring those supportive of it. I brought this up after some misinformation was spread about the project on an email list, and then I was banned from the committee, along with another member.
This was unfortunately some sort of stressful event within the executive, and the chairperson quit a month later. The board decided to rethink the committee, and launched a new process revising the terms of reference of the group. I sat on the subcommittee, and it was fairly productive and led to some clearer guidance on areas that I found questionable previously. I attempted to join the executive at the AGM, however it was declared that I had a conflict of interest and was ineligible. It was sort of annoying to me that I spent a lot of time on the terms of reference document, but couldn't be part of the executive of the committee, even though it was clearly written into the terms that I was eligible. If you declare someone to be in a conflict position, they should be notified of the precise conflict, but this didn't happen. At the time I had no outstanding project before the City in Killarney that would be putting me in a conflict position. Is it not true that every member of the executive owns property in Killarney, and if so are they not just as conflicted on that basis as I would be, with the exception that I just own more property than one parcel?
Now, many months later, the new planning committee appears to be reformed, and has met, though I was not aware of the meeting. There is a new executive that was put in place at the June AGM. There are a bunch of projects that need attention from the community that have been slow to progress, and in the case of the sarina project, put on hold by the City until the community can get mobilized again. There are a few other RCG redesignation applications making their way to the Calgary Planning Commission, including the one I discussed in an earlier post at 26a St, and another on 26 ave. I think this new committee will function better than the old one, but it remains to be seen what it will do. I may or may not be able to attend these meetings, but one interesting element of the new terms of reference is that committee members can issue a minority opinion, if there is a vote, or some diverging comment from the board. This could be a major improvement to the process where the community issues written correspondence to the planner, or to the Council, and the correspondence implies unanimity on development issues.
Stay tuned for another Killarney update once some progress is brought to my attention.
One of the odd and puzzling features of new home building is the relative cost between windows, and window coverings.
Right away you can conclude one thing, windows are a reasonably priced, essential component of the home and provide tremendous value to the occupant. Window coverings, well, these are fairly useful, they block out the summer sun and offer privacy on demand. But the price of window coverings is atrocious.
Relative to windows, the coverings themselves cost about the same as the window. The widow manufacturer has a huge operation, delivery trucks, has to manufacture and assemble glass sealed units with low energy coating and costly gasses inside the sealed units. The window covering company just needs to assemble some fabric and plastic and hang it from the window frame. There are no codes for window coverings that are remotely comparable to what a window manufacturer needs to comply with. The window covering does not get exposed to harsh weather, or have to seal the interior of a home against the elements.
One must wonder how this has come to be. I think it is because the blinds companies have tremendous markup on the products, and somehow have convinced the buyer of a new house that the blinds are worthy of such a large investment. I'm all in favour of blinds purchases, however I will be looking for some major discounts next time I try and source some window coverings, especially since I know how much the windows cost!
Here are some really nice blinds!
Today we are going to show another example of how the chronically cash strapped City of Calgary is leaving millions of dollars of annual revenue on the table each year. I am going to suggest a number of reasons why this is the way it is, and propose some possible solutions.
First, the issue is one of equitable distribution of property taxes so the City can provide the services it deems necessary. Council is required for political reasons to hold property taxes low, and has over the years done a reasonable job of this. However, I have noted some trends in inner city taxation in the area I know best, so we can just look at Killarney for the specifics.
The City has advanced techniques to track and adjust property tax levels on individual sites, and quickly adjusts values upwards when it chooses to do so. I have had properties under construction or recently completed be hit with immediate and major tax increases. This is puzzling when older properties see little annual assessment changes despite large valuation changes.
I have come to believe the reason for this is the City wants to avoid antagonizing older, possibly senior, and likely vocal complainers with politically incorrect tax hikes. It does not want to be seen as the Council that oversaw massive takes hikes to 'vulnerable' seniors, pensioners, those on fixed incomes, etc. The issue seems to one of optics rather than equitable sharing of tax.
Here is an example of a massively undertaxed home in Killarney, valued by the City at only $535k.
I met the owner of the property. He and I had a long discussion about the community. He mentioned he had bought the place 20 years earlier for about $180k, had little interest in moving, and often spent his retirement at his cottage in BC. This doesn't sound like the prototype of a senior hurting for cash. For this property, I have estimated the tax at $3475, and I believe it should be raised, along with the assessment, to an annual tax rate of $4870, an annual increate of $1395. This is just one of many examples of older homes being massively undercharged for taxes.
This is a cut and paste of how the City assesses property tax.
Property assessment is a value placed on a property for municipal and provincial taxation purposes. The City of Calgary assesses each property annually to distribute fair and equitable taxation. The estimated value of each property comes from the measurement, analysis and interpretation of the real estate market and is governed by the Municipal Government Act. This process is based on mass appraisal models that are an expression of how supply and demand factors interact in the real estate market.
Your annual property assessment reflects the estimated market value (the amount it likely would have sold for on the open market) of your property based on the valuation date of July 1 of the previous year, as set by the Municipal Government Act. Real estate market conditions may change from the valuation date to when you receive your current assessment. Market changes that have occurred since July 1 of the previous year will be reflected on the following year’s assessment. Following the assessment notice mailing, there is a 60-day Customer Review Period in which you are able to contact us with any questions you have.
To determine market value, we use one of three approaches to value:
END
If the City was actually assessing property accurately there would be equitable distribution of taxation. What we have now is a very skewed situation where older houses are under assessed, and newer houses are accurately assessed. I will revisit the property highlighted above and see if favourable market conditions over the past year have resulted in more accurate appraisals on these older homes (I doubt it).
Rather than taxing long term residents who have enjoyed a massive windfall in property value, the City like to charge builders and new buyers more. Builders are an easy target because they are a group that nobody really likes, is fairly small, and would garner little sympathy from the public when discussing taxation rates, and even if all the builders in the City voted, it would have zero impact on an election.
New buyers are an easy target too, because if someone can afford to pay the high cost of inner city housing, then surely they can pay more tax than the neighbour who's lived there for thirty years. New buyers have less justification to complain about tax because they could choose to not buy the house. Long term residents seem to get a tax discount by the City because they could possibly be forced to move if taxation was too high (I don't think this is true, but again, it is optics not reality that matters).
My solution to this issue is fairly simple, first the tax system needs to change to better reflect use of expensive infrastructure, and congestion fees on roads such as Deerfoot and Glenmore would be a fine place to start. Second, inner city areas need more accurate appraisals. Third, inner city areas should get some discount vs outlying areas that have huge needs for police stations, fire halls, roads, arenas and schools, so this would soften any impact of accurate appraisals on long time home owners. I do realize this will never happen, so perhaps this is a completely pointless discussion.
END
Surprisingly little of the homes built in the postwar Killarney bungalow era of the 50's and into the 60's and 70's is worth salvaging today. I removed all the old growth 12 inch fir planks off a recent house I was prepping for demo and today I salavaged the copper water lines that were conveniently exposed in the basement ceiling. I have a new formula for the value of these older homes. The house structure is worth a negative number, to arrive at that figure, subtract what you can take out of it in salvage, subtract the asbestos related fees, and then the demolition. By the end of that equation the house is likely worth a negative $15k. That suggests the property would be worth more vacant than with the house still standing.
This is all the copper recovered from the Killarney house.
68 pounds of copper earned me $166.
That was a reasonable amount of labour to collect $166 of copper pipe. Perhaps about three hours total plus drop off at the scrap metal shop. Unfortunately the copper is all I have determined to be worth saving, the rest of the house is nasty. The house will go to the dump and be very expensive to dispose. Even worse will be if we find asbestos in the drywall and flooring.
Collecting the valuable copper pipe was the good news, likely the demolition and asbestos fees will be an additional $10k, and possibly a lot more. Next time I buy a house I'd like the seller to take it with them and just leave me the land!
With the completion of our final of two homes on the 41st project, I was able to have the photographer return and take some pictures. The staircase is a highlight of the project, and many favourable comments were received.
We couldn't have a show home or open house on this project, partly due to time constraints, and partly because my houses are selling too quickly and they tend to be sold while they are unfinished. Instead of an open house, I will post some photos to my website on the semi-detached page, and here.
EDIT - this is old information and out of date. Mid block Rcg rules are changed as of 2022. These changes enable more development options in mid block locations.
The City experiment with the rowhouse zone continues. I think the planners are getting some negative feedback from the builders. I think the planners should have asked the builders before they went ahead and created the rules for the zone, because I doubt planners have a sense of marketability of homes.
The problem with RCG mid block lots is it only really allows super skinny stuff to be built, and the builders wont build that because they are paranoid, justifiably, that nobody will buy 14 ft wide townhouses.
It just so happens that 50ft multiples of land are not wide enough for three units, and 100 ft of land is no better for 6 units. To a builder, building 6 unsellable units is a major blunder. There are other zones that would allow a 100 ft mid block parcel to create 8 really good units, rather than 6 really skinny ones.
One of my favourite builders, rndsqr, has created a diagram showing this problem and presented it to the Calgary Planning Commission. I have pasted in the diagram here. Thanks rndsqr for putting forth such a sensible position.
This diagram shows how 6 skinny units wont work in a 100 ft parcel, but 8 units arranged differently would be great. It also highlights how on 100 ft, if a corner is accessible, the 8 units can be achieved. rndsqr has built that layout in the NW on 20 ave, designed by intertia. rndsqr and I are sharing intertia for design work on these projects. I am getting so tired of rcg related matters I am contemplating quitting townhouse building and pursuing simpler semi detached projects. I have two townhouse projects to build in my inventory, and these may be the last.