Realtors...

Realtors continue to be my pet peeve of this industry.  Or one of my peeves.  Or maybe just the peeve that most deserves to be picked on with such irresistable frequency.  It is no secret that I consider the average realtor knowledge regarding redevelopment in the inner city to be bordering on 'childlike' in either its innocent lack of expertise, or negligent in its flagrant misinterpretation of site potential.  Sometimes both?

Despite best efforts to the contrary, Realtors continue to be successful thus have little incentive to learn anything about important topics, such as the houses they are trusted to market on  behalf of their clients.  

Today we have a winner, listing a newly redesignated RCG lot in Shaganappi (part of the mainstreets initiative).   Since multi family now means mega money and mega comissions, the listing is blessedly optimistic in its description.  It also contains some well placed weasel word, because, you know, possibly, the Realtor could be wrong about everything. 

Let us examine the facts in somewhat greater detail.  The '9000 sq ft lot could fit 6 units (subject to city approval).  Great ROI in a hot central neighbourhood.'  Ok, so what will these 6 units look like?  Take the 60 ft width, minus 8 ft for the side setbacks, leaving you with 52 ft, divided into 6, and this is what you get (yes, math is hard for our Realtor friends) = 8.6 ft.

Ignoring that there are minimum widths for homes in the RCG zone, does anyone actually think that 8.6 ft wide homes are a viable option for the builder?  The home built to this size would be among the skinniest form of human habitation possible, not unlike a jail cell.

Imagine that wonderful ROI if you go ahead and build 6 row houses that are 8.6 ft wide. That'd be an amazing economic opportunity. 

That $1600/month rent is sure going to be helpful once you buy this lot for nearly $900k.

Ward 7 Political Hypocrisy

Ward 7 is a collection of many great communities in the NW inner city plus the U of C and SAIT.  It has a real need to redevelop around the schools in such a way that reflects the need for student accommodation (I don't think it does at all in many communities near the U of C in particular).  Of all the likely places that new home buyers would like to be, the most prized locations in all of the NW tend to be found in Ward 7.  Some of the communities (such as Hillhurst/Sunnyside) have experienced considerable condo development pressure.  This ward is the home of the north hill area redevelopment plan for Banff Trail and Capitol Hill (the two communities immediately north of SAIT), a plan many years in the making and a big change from 1980's urban design ideas in Calgary.  This new ARP is bringing a lot of investment into those communities, and a lot of objection from longtime residents that want to prevent such growth as the ARP allows.

The area has been represented by Councillor Druh Farrell for many years (16 and counting, making her a poster child for Council term limits).  She's been a strong advocate for urban redevelopment and opposed to sprawl subsidies and also receives a lot of vitriol in the media.  

She is running again for re-election, along with many other challengers in the election next week.  Despite the ugly name calling, I think her record on redevelopment is sound.  She does not suffer from the political hypocrisy of her opponents on redevelopment strategies such as row house construction (the inner city bogeyman of 2017).

Ward 7 political fiction - aspiring politicians cry wolf about the need to cut taxes and disallow densification in 'our' communities.  The existing community residents (including highly anti-development biased Mount Pleasant) should control redevelopment - which largely means redevelopment should not be driven by market conditions, instead it should be based on the intangible concepts of character and quaintness and exercising control over others' property rights.

Ward 7 political fact - the easiest tax base growth option is row house or multifamily  residential redevelopment in the Ward 7 communities (tax per lot could grow from $4000 annually to $16000 annually with very limited expense to the City in infrastructure or amenities), this is a net tax base increase of $12000 every year per project, permanently. Given the City is desperate for money, significant redevelopment needs to take place or tax rates will only continue to rise.

Horrible land deals continue

The Killarney land sellers continue to dream of lotto winnings via selling old junk houses on 50 ft lots.  With the market now further imbalanced and the federal government continuing to meddle with the buyer mortgage rules, the risk of these redevelopment lots has never been greater.  Adding to this risk is the lingering recession, unlikelihood of significant improvements to the energy economy, and rising cost of building materials along with lots of new supply now half built throughout the area.  

I'd say now is not the time to be setting new record prices on 50 ft lots.  Is there a greatest fool out there ready to buy this one?

The $700k threshold awaits for standard Killarney building lots.  I'd avoid this property at such a horrible price.  It is hard to imagine this working out well for the builder.

Basement Pour

We are off to a good start in the week with a late tuesday evening basement pour.  Billy the cribber estimates 44 cubic metres and each truck only holds 7.  Since 6 trucks won't do it, they may use the volumetric truck to produce just the optimal amount.  Regardless of how they do it we can now work on getting the basement to the backfill stage and schedule more work

The pump truck has lots of space on the corner location and will fill the forms very quickly.  I have the remainder of the week nicely planned out - weather is not looking good though.

Cribbers are back

The cribbers arrived and started putting up the forms and ties.  They intend to finish tomorrow and pour after the thanksgiving holiday.  Long weekends tend to arrive at inconvenient moments that disrupt the schedule, especially when planning concrete delivery.  Strangely enough this project wasn’t supposed to be poured until after my row house basement.  I ended up swapping my place in line to get the semi detached cribbed first since it received permits so much earlier.  The row house will have to take its chances with the weather later on.  

Another sunny fall day and forms are going up. Fortunately the construction site is on the way to school so short visits are easy.  

Work begins

Once we pour concrete I tend to start the clock on time to build.  Footing pour is a good date to note down for the real start of build the house up out of the ground.

The mud will still be setting as we start placing forms tomorrow.  No more concrete is available until Tuesday given that Monday is a holiday.   

It is growing season in Killarney right now

Any person observing Killarney right now cannot avoid noticing a construction project is ongoing now on almost every street.  While we are still in this lingering recession, the builders have collectively decided to press ahead with a lot of projects so that it almost appears as if there is a Killarney mini-boom.  This is more an outcome of a spring season where inventory was short (because everyone slowed down new project development in 2016 rather than some massive economy improvement).  The accelerated pace of this building is likely a surplus of new semi-detached product next spring, which may create a favourable buyers market.

Another interesting market update is from my real estate brokerage who comment on these inventory trends.  After a glut of product during the recession, the new townhouse supply has really started to balance.  It could be a good time to be producing townhouses again after three tough years.  

Despite this less than great outlook, I have to get my semi detached built for the spring market, so we are forging ahead.  Here are a few shots of the recent progress.

Here is the footing recovering nicely from getting snowed under.  Amazingly the last of the slow to fruit raspberries and strawberries continued to ripen throughout the blizzard and remain delicious. We will see a bumper crop of Killarney houses growing through the 17-18 winter season, but this is surely the end of the fruit. 

October is municipal politics month for Calgary

The municipal election is full on right now in Calgary.  As a ward 8 resident, I have taken the opportunity to review the platforms of both main candidates, I have met them both, and observed them at the Killarney community run debate over the weekend, plus on the radio replay of the CJSW debate.  

Unfortunately the efforts made to get to know the candidates hasn't made my decision any easier.  The specific development issues I am most interested in don't get any real discussion during campaigns.  The motherhood statements and mantra about the need listen to residents about development issues tends to be vague and dissatisfying.   

Here is the truth about development decisions.  The local councillor only has one vote, but all of the decision making authority is in the council and I believe they look to the local councillor to take the lead on contentious local applications.  The local councillor does not have a lot of time to meet unengaged community members during the term in office.  At a hearing where the real decisions happen may be the only time new, and now highly emotional and motivated potential voters will see their councillor do anything that is meaningful to them, and they are absolutely wanting to see 'their' councillor vote down an application from a builder.  

The councillor (who wants to get re-elected) is highly aware of how the next time the voter is reaching to drop off his or her vote in the ballot box, the vote is likely going to be highly influenced by what happened during that one council meeting that the voter attended.  This explains why the councillors are so influenced by the Calgary brand of NIMBY'ism that is such a prevalent force in political decisions relating to micro site land use applications.

So, what option is the builder going to use to try and get the decision to go in favour of a project? An option may be the  terribly corrupt campaign finance system we have.  The rules of donating to politicians in Calgary is so dismal and open to abuse that it actually provides a way to level the playing field from the rampant NIMBY'ism that impacts a lot of political decisions.  The builder only has one vote in an election, which is totally insignificant.  If some campaign finance cash does not help to level the odds, it wouldn't be spent.

One of the local councillors released his campaign donation list, and the other has chosen not to. I found a review of the list to be an eye opener.  If this is the way to get stuff done in Calgary I need to start spending a lot more money!

Here are your ward 8 candidates.  When reviewing the donor list a few of the funding sources were not exactly what I'd expected, but very insightful.

Building Permit Fee - how much to expect

The City of Calgary fee structure for building permits would be interesting to compare to other jurisdictions.  It is not known to me if the fee is based on cost recovery, or if the City runs a deficit processing these permits.  

To me, of course, the fee is too expensive. I think it should be outsourced.  I don't think the City needs to police building permits, especially now that it requests an engineer oversight for almost everything.  I don't think there is enough value to the customer to justify the fee.  I do think that some oversight is warranted to review plans, but I don't think it needs the office space, administration, pensions and benefits that go along with City staff.

During the current election, it would be interesting if a candidate announced a platform to outsource this departmental function.  I wonder at the likelihood of this policy ever catching on in an election where nobody can really suggest any cuts at City HQ.

So it looks like we paid a $7500 fee to process the BP and fund whatever inspection function is taken on by the City to review a semi-d build.  What would it cost a contractor to service this permit, archive the records, conduct inspections, etc?  Could an independent group of small businesses achieve the same permit inspection function at a lower cost to the builder?  

Footing stakeout, soil bearing report, and cribbing package delivery

By some miracle, everything this week went exactly as scheduled.  I can't recall the last time this actually happened.  Despite the unexpectedly accurate scheduling, I've still failed to get my footing poured before the winter heat season hits us on Sunday.  

In these photos, the survey crew is back to hammer pins in the ground at key locations for the basement walls.  They've also marked the height of top of footing, this dictates how deep the footing will be.  If the excavator does a rough job, a significant amount of extra concrete could be used filling in low spots, or even worse, the footing could be inadequate if there are high spots.  Just as the survey crew left, we saw the lumber yard show up and drop off a large pile of wood and rebar.  Very productive morning, we just need that soil bearing report and we can start the footing.

Multi-part series the DSSP 6.0

The title of this post should be, who is the smartest builder.  That award once again goes to XXX Homes (XXXH).  They've earned this by constantly being the builder that evades costly city requirements the most successfully.  No other builder has the ability to do what XXXH does, and that is find work arounds to the most absurd and costly city requirement, the storm water restrictions contained in the DSSP.

One of the most admirable qualities of the XXXH approach is to gain a huge competitive advantage by avoiding expenses that have no benefit to its customers.  How exactly they do this remains somewhat of a mystery.   The plan prepared by XXXH's contractor is one that would not be approvable by any other builder (such as me). It offers massive cost savings.  I'd estimate that XXXH is currently saving around $30k, and as much as $75k vs other (less smart) builders (like me, I guess I am currently in the dumb builder category).  

Looking at the XXXH approach, which I have done, involved having my own consultant pull the XXXH file at city hall and research it for hidden loopholes in city policy that we could also exploit.  Unfortunately we didn't find any contained in that plan that could not be explained by extremely generous and overly favourable interpretation of the rules (yes some even bordering on totally egregious misinterpretation).  Yet when the time comes to submit a plan, no other builder will get the same latitude from the city. Very puzzling.  

Here is a current open excavation at the XXXH site. They have simply connected pipe, later to attach to the downspout, to a single catch basis that is recessed in the front yard, that also acts as a overflow pond in the event the flow restrictor at the outlet backs up during a high flow event.  The puzzling feature of this design, which is not explainable, is how the entire garage roof water can flow 100 ft to the catch basin (over or under poured patios?).  I, along with other sane observers, would say it is impossible for this to occur.  This is the genius in the XXXH approach.  While its plan is not viable, it is cheap, and saves a lot of money.  The implications of this economization is far reaching and even goes as far as permissible square footage and transaction price advantage for each saleable unit.  

And here it is, XXXH has executed another project that no other builder is allowed to by the city.  This company will save, by my estimate, $250k this year on this one workaround.  Names have been changed to protect the guilty.

Excavation complete

With a full day of digging and dry conditions, the excavation work is done.  Next up is more survey work and the footing prep.  I have a good crew for the cribbing work and expect it to be done quickly. While the project is a few weeks later than I would like to have started work, it is much better than last year when I was unable to dig the basement until Nov. 21.  So we have almost two months of easier weather to work in, and I'd like to take advantage of that as we get into the build.

Fall colours visible from the 26a st excavation  

Utility trench and excavation

Progress at the semi-d site now includes the install of the water utilities to the property line, and the completion of the excavation.  With the hole dug out, we can bring back the surveyors to mark the location of the footing.  The rest of the basement job after the dig tends to unfold in a highly ritualized manner.  The specialized crews are able to come in and take care of business in a way that only people that have done this 1000 times can perform.

As has been the norm during basement projects, the builder during this phase can watch from the sidelines and get his cheque book ready.  To some degree it is a race to get the basement backfilled because that removes a site hazard and potential collapse of excavation walls.  The neighbouring property on this site has had his downspout placed the the worst possible location, so we are moving it (some rain is in the forecast and we want to minimize the chance of sidewall caving from water, the leading cause).  We are also planting the utility pole and getting ready to connect temporary power.  The bad news is we lost our opportunity to get the concrete placed before the seasonal price increase of Oct 1.

The shallow sewer in this part of Killarney - no chance of avoiding a basement lift station.  Maybe the city can use some of the huge fees it is taking for off site levy's to redo some ancient sewer lines?

One last fee...

The City came through with another fee to authorize installation of the underground utility work at the threeplex site. This fee is specifically allocated for storm water improvements, note this is a different fee from the offsite levy for water and wastewater.  Hopefully getting this fee paid will be the absolute end of fees on the rowhouse project.  

This should be the final fee for the rowhouse project.  I am concerned that 2018 will bring some new and increased fees, further damaging the case for building multi family housing in the inner city.

Demo begins

We've got a little demo on the go at the semi detached site.  It always amazes how hard it is to build something yet how easy to take it all down (when you have the right tool).   

Survey stakeout sketch

We've got our regular survey company mobilizing to start the stakeout next week. They forwarded me the stakeout sketch, which is something I have yet to receive on previous jobs.  It shows much of the key information used by the excavator.

The notes in red are the cut lines that are transposed over the basement shape.  The bullseye points are where stakes will be hammered in the ground.  The stakes are offset from the hole so that when working, the machine does not destroy the markers. The excavator will make the hole larger then the actual shape of the basement because the cribbers need to walk around the perimeter to set their forms.

Almost ready to start

With all the puzzle pieces assembled we are ready to start the build. First up is the demolition inspection and we are pursuing the foundation permit with likely delivery later this week.  I'm keeping my fingers crossed to get this poured before the winter heat season begins.  

The fence going up is usually a sign that construction will begin soon

Grade slip arrives

We've been waiting on a grade slip so we can apply for the BP on the Killarney duplex project.  That just arrived, so that means we can get started.  I have tried to book some crews, but it was hard without definite answers on schedule.  With this last piece of the puzzle I think we can make some progress.

This grade slip shows the excavator where to place the trench for the sewer hookup.  With a huge tree in the way, the city has allowed us to trench in a place that should work for everyone.  I can also use the slip to get some fees paid to the city for permitting the road cut for sewer and water hookup.  This slip features a storm connection, so that will cost me approximately $9000 vs using a sump pump to the surface.  I am still puzzled why the City requires this, but there is no way to avoid it.

Frightening price increases for the duration of 2017 for basic building material?

Having completed a little budgeting work on some upcoming projects, I ran into some really alarming cost differences over the previous project that was built using largely early 2017 purchased products.

In order to do some apples-apples comparisons, I looked at actual billing from the invoices.  A piece of type x drywall, commonly used in many party wall and garage framing areas was then purchased for $17.41, and was quoted today for $30.50, ouch that is almost double.  This is from government policy regarding trade tariffs.  What a sick joke the government is perpetuating on the home buyer and building industry!

The other ugly price increase is on OSB, a very common building material.  The 4x8 sheet used to sell for $12.95, quote today $25.75.  The fire rated stuff is a further $10 more, which has always been a contentious issue as a particularly egregious gouge.  I am hopeful that these rates will drop with the end of the endless fire season in B.C.  If they don't or this is as much a product of US lumber tariffs causing production cuts and higher costs for Canadian builders, building houses is going to be a lot more expensive.

A sane person might think that, given the recession is still ongoing, taxes of every kind are going up, and more business obstacles are being applied to the building industry that the government would enact some business friendly changes?  Unlikely given the current political situation we are in.

Was 2017 already the 'good old days' for buying supplies?  Aren't the good old days supposed to be a long time ago rather than the same year as we are in now?  Seriously though, I knew when I got started last fall that it was a good time to get a project in the ground for building costs.  This fall is the opposite and the atrocious fees and costs are ruining my budget.

Demolition ready to go

A little progress this week. The city has issued me a demolition permit for the Killarney house.  

While useful, what I actually need to get, a basement permit, is hung up somewhere in the black box downtown as the city is late issuing the grade slip.  I'll be continuing efforts to get the rest of it untangled otherwise I will be facing some real delays and monetary damage.  Strangely enough someone I spoke to at city hall basically admitted they screwed up.  I asked for $2000 rebate on my permit fees as compensation for the city error and she laughed.  Not likely to happen. 

This issue of city responsibility for its mistakes is interesting.  I've had city staff threaten me with a $10k fine for putting a rut in a poorly graded alley, and I've been fined for not having paperwork at an inspection despite that document being almost impossible to produce.  The city is very eager to impose monetary damages on a builder, but immune to compensating the builder for its mistakes. 

this isn't actually a building permit it is a demo permit.  It will be a miracle if I can get a partial permit this week on the duplex project.