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Urban Development and Proposals Discussion

CBBarnett said:

Insiders warn of crunch coming for Calgary rental market with prices expected to go even higher​

https://www.cbc.ca/news/canada/calgary/crunch-calgary-rental-market-1.6666994

Interesting article - echoes much of what we have been talking about on here for years. Rental demand is spiking and supply is a growing tighter and tighter - hopefully a trigger for yet more projects.
Click to expand...
Speaking from the developers perspective, this article is absolutely correct. A rental crunch is already here and rising rents and the prospect of it will keep rentals rolling in. CMHC top-up helps and more rental projects will certainly happen but financiers bullishness is still lagging somewhat as interest rates rise and compress cap rates.

I am a renter so feeling like I’ll get boned on the next rental increase and sure I won’t have better options. Frankly, Canada has absolutely screwed itself when it comes to matching up providing adequate housing and its immigration rates. I don’t know how we plan on housing everyone we are planning on coming in and sometimes it feels like a politically convenient way to keep older generations riding high on equity they’ve built. That seems to come at the expense of younger Canadians, existing renters and those new incoming Canadians, and feels like a bit of a scam. Anyways here is an article I think covers it as well, presuming it’s not blocked due to lack of subscription: https://theline.substack.com/p/jen-gerson-no-one-is-going-to-fix
 
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Calgcouver said:
Speaking from the developers perspective, this article is absolutely correct. A rental crunch is already here and rising rents and the prospect of it will keep rentals rolling in. CMHC top-up helps and more rental projects will certainly happen but financiers bullishness is still lagging somewhat as interest rates rise and compress cap rates.

I am a renter so feeling like I’ll get boned on the next rental increase and sure I won’t have better options. Frankly, Canada has absolutely fucked itself when it comes to matching up providing adequate housing and its immigration rates. I don’t know how we plan on housing everyone we are planning on coming in and sometimes it feels like a politically convenient way to keep boomers riding high on equity they’ve built. That seems to come at the expense of existing renters and those new incoming Canadians, feels like a bit of a scam. Anyways here is an article I think covers it as well, presuming it’s not blocked due to lack of subscription: https://theline.substack.com/p/jen-gerson-no-one-is-going-to-fix
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apple.news

Priced out of the GTA, real estate investors scoop up Calgary condos — CBC News

In recent years, the Calgary real estate market has seen a significant amount of investment from out-of-province buyers, particularly those in Ontario.
apple.news apple.news
 
Cyric said:
Great news about ONE, their BLVD project turned out pretty well. This also made me look up the Vibe project from Fram: https://framslokker.com/portfolio/vibe/

View attachment 442069
This image from the site is dated August 2022, not sure if this has been posted before.
Click to expand...
They also have this image on their website:
1669911770248.png

FRAM + Slokker | GTA Future Communities

View upcoming FRAM + Slokker communities and register now to be the first to know about breaking news, project developments, special offers and more.
framslokker.com framslokker.com
 
My takeaway from these recent articles on the shortage of rental accommodation is that it seems to be primarily about 'affordable rent'. Most of the newly built high rises in the Beltline for example, still have plenty of units available to rent but they probably don't fall into the 'affordable' category.
 
JonnyCanuck said:
still have plenty of units available to rent but they probably don't fall into the 'affordable' category
Click to expand...
Well, filtering exists, so new units while they may not be strictly affordable, they do contribute to overall affordability. There are partial affordable projects under construction today under a federal initiative: https://www.cmhc-schl.gc.ca/en/medi...ces and amenities in the Beltline community.”

The CMHC data which we should get in February will be interesting. Last year it showed big uptake in larger structures, which could be seen as a flight to 'quality' or amenities.

In the analysis of the state of the market in October 2021 vacancy had dropped city wide and in the Beltline despite 600 new units. That stat combined with:

1669912792638.png

means the new projects rented out.

In fact they commanded significantly higher rents as well, indicating substantial demand for high amenity/quality buildings.
1669912852351.png
 
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CBBarnett said:

Insiders warn of crunch coming for Calgary rental market with prices expected to go even higher​

https://www.cbc.ca/news/canada/calgary/crunch-calgary-rental-market-1.6666994

Interesting article - echoes much of what we have been talking about on here for years. Rental demand is spiking and supply is a growing tighter and tighter - hopefully a trigger for yet more projects.
Click to expand...
Interesting news ahead. Will be nice to see more of these kinds of projects popping up, but sad that it's because of a crunch that will mean higher rent prices. With the recent hike in interest rates, many owners will also see some crunch times. I've heard heard from some people in Toronto that have seen their mortgage payments spike due to their mortgage having to be renewed. When you're already stretched and you're home is over the million mark, a new rate that's much higher is quite the bite.
 
Edit: Nevermind, reading this a bit closer, I think it is just a new shed to store garbage bins.... a bit of a misleading description.

A new one for the Downtown West End:

It looks like it is replacing this old, terrible building, but the downside is it doesn't look like it includes that parking lot adjacent to 11th Street SW:
www.google.com

Google Maps

Find local businesses, view maps and get driving directions in Google Maps.
www.google.com www.google.com
1669918025251.png
 
JonnyCanuck said:
My takeaway from these recent articles on the shortage of rental accommodation is that it seems to be primarily about 'affordable rent'. Most of the newly built high rises in the Beltline for example, still have plenty of units to rent but they probably don't fall into the 'affordable' category.
Click to expand...
Building new supply doesn't bring supply of low-cost units relative to old units, except under very unique scenarios. New construction will always be more expensive and the rents will be higher as a result.

Where Calgary screwed up is it under-built apartments and had fairly anti-apartment (and pro-SFH) development patterns and policy from 1930s - 1990s. This led to a lack of supply of those old, depreciated units that would be much cheaper than brand-new ones, even if they periodically undergo renovations. Having fewer older developments also means it's easier for the Boardwalks and the Main Streets to accumulate enough of the market position they can control the lower end of the market. Continued population growth, limited overall apartment supply, and an increasingly powerful cartel of landlords create the conditions for increasing low-end rent.

What brand new units do is give supply to people that are able/willing to pay more. These people then don't compete for lower-quality units as much against those people that can't pay more - it's why most evidence suggests that building new units in lower income areas don't, on their own, raise rents in the areas around them. Over time, new buildings become old and age/maintain/deteriorate into different qualities, which in the long-run creates supply of all types of prices and qualities.

Of course, this is all only relevant to the market component of housing - easy to forget 10 - 30% of the population will never achieve an income that allows participation in market-based housing supply at all, even in the cheapest rental apartment. As Calgary trends towards the large-city Canadian average, expect to see our non-market requiring population increase faster than other segments.

But a further question - why did we screw up with so little apartment supply historically?

It's a few factors as @Calgcouver highlighted and in the article they posted, but a few of the big ones for me are based on bad assumptions:
  • For many decades, we under-estimate how much growth is actually coming in relation to existing supply. I don't think Calgary (or any Canadian city) really has the local dialogue that reflects the magnitude of what's going and realities of housing. It'll fluctuate, but Calgary needs 8,000 - 10,000 units to support growth every year, for the foreseeable future (meaning for decades and decades). The scale is the issue - imagine tearing down 4,000 SFH per year to replace with 2 units skinny infills? And that's 1 year; you need to do that every year! That's 80 * 100 unit apartments blocks every year, forever; 8,000 SFH, every year, forever. Reality will be a mix of all those unit types - but it's the scale of change where collectively we underestimate just how much housing is needed each and every year.
  • Assumption that ownership and SFH lifestyles are the defacto "choice that everyone wants, always" - forgetting that this has never been particularly true in Canadian history, nor could be because "what everyone wants" and "what it is possible for people to afford" are two different circles that don't overlap much in a venn diagram.
These two categories of bad assumption result in incoherent policies at all levels of government - essentially we made it difficult to redevelop low-density, SFH areas at higher densities because these assumptions told us that people only want low-density SFH areas and should have them (so we should protect them and not change these areas) and demand really isn't high enough anyways (there's not actually a problem, so why bother). The result is a inefficient distribution of housing types in much of the city - limited supply of the type, age and quality of housing that would work at a cheaper price point.

Meanwhile, we made it super important give ownership to everyone - which at large, is a very good thing to create and distribute wealth - but failed to acknowledge it's not possible/desirable to achieve ownership for everyone and our interventions to boost ownership have deminishing returns once high levels of ownership are already achieved. Canada has one of the highest % of ownership in the world, but have been capped at about 60-65% ownership for 2 decades, despite absolutely massive attempts everywhere in policy to make it more affordable to more people.
 
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CBBarnett said:
Where Calgary screwed up is it under-built apartments and had fairly anti-apartment (and pro-SFH) development patterns and policy from 1930s - 1990s. This led to a lack of supply of those old, depreciated units that would be much cheaper than brand-new ones, even if they periodically undergo renovations.
Click to expand...
They did indeed. It's one of the reasons I hate to see some of these old dumpy apartment buildings go, though far from perfect, we don't have a lot of them compared to other cities and they do offer a cheap housing alternative.
 
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