My relationship to secondary suites began before I did. Ortona is a town in Italy that Canadian forces liberated and my parents were resided in the adjacent town of Fossacesia. WW2 left the area in ruins and it held little promise for a young couple to grow a family. When a relative sent news from Calgary and partly due to their fondness for Canadians, they set sail for Halifax. Arriving in Calgary with a few dollars to their name, they discovered accommodation was scarce and at a premium. They found a makeshift suite in the attic of a two storey home offered by a fellow immigrant. It was sparse and barely insulated, but in relative terms from the war-torn area they had just left, they were very happy to have the accommodation. My Mom would comment later in life that while living in that hobbled suite, they had some of the best times of their life.
Sometimes adversity is a blessing. During the war my father was interned in a prisoner of war camp, but the experience had taught him to speak and write English. As a result Dad got on quite well here and ultimately sponsored many of the Italian immigrants who wanted to start a new life in Canada. My parents would often share their suite with new arrivals until they landed on their feet and before long they were able to purchase a home on Child Avenue where I began my life. We always had a relative or friend living in the basement of that home which helped them all get started financially – it was just the perfectly normal thing to do.
A few years passed and my parents purchased a lot where they built a new home. It was a traditional raised bungalow perched high above Bridgeland with a walkout basement and a separate entrance for a secondary suite. At first we lived in the suite while my Dad finished the larger main floor area. In those days you paid for things as you had the money, so it took some time to build and pay for the home but in the meanwhile the suite provided comfortable accommodation. Once the main floor was finished we moved up and they set out to rent the suite. With no shortage of new immigrants moving to Calgary the suite hosted young couples from France, Denmark, Germany, Poland and Italy. As a child I was a curious participant in every activity around our home. I’m sure that I was mostly a nuisance to our tenants, but I always participated in their activities building or fixing everything imaginable. I fondly recall rebuilding engines, a ski-do (from scratch), and I was always made to feel like I was a big help. These wonderful people who resided in our suite became a part of my life and extended family. Outside our home our immediate neighborhood was almost entirely a community of new immigrants; Italian, Austrian, English, German, Polish blended with First Nations. We never thought twice about helping each other for any matter whatsoever. And it was more than perfectly normal to have a suite or let a room to someone who needed a place.
My parents always charged below market rent, so most of our basement renters stayed until they saved up a down-payment for their own home, which they all did. After they moved out we would see them nearly as often, as they frequently stopped by on weekends for dinner and a friendly game of cards.
In time, as the family aged, my parents preferred more privacy and the suite lent itself to teenage independent living. It was also a handy place for a rock-band to rehearse while shutting out those pesky parents. At times it just remained vacant, but always available for extended visitors or a returning child. Later still it would have provided perfect accommodation for a caregiver for my parents.
You see, I’ve always had nothing but good, positive experiences from secondary suites. To me they are a device that enables us to interact positively and directly with our neighbors – helping one another as we naturally would. It connects us and weaves a tighter fabric into our community. Suites provide adaptable spaces that can serve many purposes and extend the utility and value of our homes. (Did you know that the latest trend in home building is adaptable design?) They extend the life of our residence as an investment, allowing for greater return. They allow a new home buyer to purchase a home worth $200,000 more for the same monthly cost due to the rental income. They provide facility for people aging in place, saving both the resident and our government the cost of health care facilities. They provide affordable housing for new immigrants, students, temporary workers and caregivers. They provide elderly a resident eyes and ears to help look after the place (and help boost their retirement income).
When we look at affordable housing we often imagine a housing continuum from most to least affordable. It begins with shared accommodation and boarding houses (mostly extinct now); then secondary suites; apartments, townhomes and finally single family homes. Today, Calgarian’s have a dire need for affordable housing. With the cost of building at an all-time high it seems improbable that we will find a solution to construct apartments or townhomes that are affordable. If this accommodation does not exist, then the increased cost of living is passed on to employers and ultimately consumers and taxpayer – so we all pay or we simply don’t attract new workers and immigration and the accompanying burden this places on our economy.
We have a solution to affordable housing that exists today and costs little to implement. The answer has been right under our nose and yet somehow we have buried it, creating new rules that confuse and class existing suites illegal. And through nothing short of NIMBYism we have restricted the development of new suites. There is no question that the suites need to be safe and we would never argue on issues of safety, but somehow claims of unsafe suites and parking have been grossly exaggerated. A vocal minority has helped perpetrate these urban myths without substance and stymied an open debate where we lay the facts on the table. This issue over secondary suites now appears to have become a political dilemma for Councillors and we owe kudos to those who have shown leadership on this issue. Our City needs this accommodation and any outstanding issues can all be easily addressed but we all need to give our politicians the permission to do the right thing. The right thing now is to legalize suites in all zones. To appease the residents in single family zones, simply adding the provision that in existing single family areas suites shall be allowed only in owner occupied homes settles the score. Calgary is one of the only Cities in North America with such a restrictive secondary suite policy. It’s time we progressed back to our heritage, where suites are embraced as a vital and necessary part of our community.
Courtesy of Ward 9 GianCarlo Carra:
Recent snowfall has caused damage to many trees throughout the city, leaving tree debris on both private property and City property.
All three City landfills – Spyhill, Shepard and East Calgary – are accepting tree debris from the snowstorm at no charge until further notice. Customers arriving at the scalehouse should identify that they are bringing tree debris and must not mix the debris with any other waste material for it to be accepted free of charge.
Alternatively, tree debris can be cut into 4-foot pieces in length and stacked beside waste and recycling carts to be picked up with regular collection or at a later date, depending on our resources.
To help keep regular garbage and recycling pickup on schedule, and to avoid damaging City equipment, we ask that Calgarians do not put tree debris in their blue, black or green carts.
Calgarians may notice a disruption with City services such as power outages in City facilities and delayed garbage and recycling collection due to tree debris blocking back lanes. We thank Calgarians for their patience as City crews work to manage all effects of the recent snowfall.
Please be safe as many drooping tree limbs still pose a safety threat. We continue to work on a debris management plan and will communicate with Calgarians later today how we will be proceeding. At this time, we are still focused on emergency response to fallen tree debris on roads and impacts from power outages throughout the city. Safety is our current priority.
See more at: http://www.calgarycitynews.com/#sthash.SYUB20dR.dpuf
The City of Calgary continues to respond to restore City infrastructure and facilities and crews are working around the clock to get things back to normal. Please visit the one-stop page of ongoing updates here, (which is also available from a yellow banner on calgary.ca).
Other updates are available including:
The Calgary Real Estate Board reports statistics that indicate we currently have six weeks of available single family inventory (Feb 13/19). The last time I recall our inventory of homes this low was in 2007 and everyone was discussing the critical state of the market. Of course this is a snapshot in time and we will not run out of homes to sell (while we had 447 sales, there were also 612 new listings that week), but it is an indicator of the status of our market, the relative level of inventory and an indication of a buyer or sellers market. In fact, one could assume that the actual level of inventory is even lower due to a CREB rule which does not enforce true reporting of status on their mls system (we don’t know how many homes are actually sold, as clients may instruct to retain an active status while under contract). So without over-analyzing this data, the bottom line is this: The market clearly favors sellers and if you were thinking of selling your real estate in the next while, there may be no better time than now. We are negotiating record prices for most inner city real estate and even some suburban and acreage properties are selling that have been sitting on the shelf for many months. Where to start? Contact us to get a current state of the market assessment of the value of your home with no obligation and you will be armed with all the facts you need to make an informed decision. Who knows, you may look back in a year or so and marvel at your genius.
Arthur C Nelson’s book “Reshaping Metropolitan America” is a enlightening read that lays bare the facts, trends and demographics that will shape real estate in North America. The data targets the year 2030 and describes in detail how our urban environment is destined to appear in the future and identifies opportunities to leverage positive change to create more vibrant, sustainable urban environments. The take away for me was how much obvious data we have that pretty clearly defines our future environment, how near this future scenario is in relative terms (2030), and that planners, builders and developers are still constructing developments that will be obsolete before the time that these homes requires a new roof (say 15 years). This to me, reeks of opportunity for any astute developer who is willing to change their mind.
If you accept his theory, and its hard to dispute the data, then here’s a synopsis of the opportunities that are presented:
- Developers need to invent new products and financing tools that meet the needs of financially strained households.
- Rising energy costs will drive the demand for locations that provide live-work opportunities.
- Multifamily Development will be transit-centric. Single use commercial centers will be converted to mixed use.
- Boomers will downsize to condos in walk-able neighborhoods.
- Urban redevelopment is shifting to the suburbs where vast supplies of asphalt provide attractive opportunities for re-purposing.
A New Community Planning Paradigm
The large detached homes on large lots, miles from the urban centers that were once highly valued, will become so out of fashion that they may become our next affordable housing supply. Segregated land use has given way to mixed use development. The automobile is no longer the transport of choice and from all of this some major new planning themes emerge:
- Sustainable and Healthier Communities is a topic unto itself focused on increased residential density, integrating transportation and land use, providing car-free areas, locally owned stores, walk-able neighborhoods, and accessibility. Design communities to link humans to nature including open spaces, and constructing high performance buildings and district energy.
- Tearing up the Parking Lots and rebuilding Paradise – the single largest opportunity for developers to participate in rebuilding sustainable, mixed-use communities.
- Transit Oriented Developments are a leverage point for future successful urban centers
- Reforming Land Use Regulation allows developers more latitude to construct mixed use developments and higher density developments where appropriate.
- Make Accessory Dwelling Units (Secondary Suites) Legal
- Eliminate Social Engineering through incentives to home ownership, allowing rentals an equal footing (mostly applicable to the US but a fair warning for Canada)
- Level the Home Purchase Playing Field to eliminate any discrimination in financing condos v/s single family homes (again, fair warning).
- Eliminate Social Engineering through Exclusionary Zoning. Urban areas overly restrict housing types and lot size etc with the effect of steering lower income households into the few jurisdictions that allow high density housing and away from others.
- Instill Permitting Discipline that restricts over-building more than the market can absorb in times of oversupply.
Its is hard to dispute the data which describes how out of sync the current trajectory for our future urban centers is with our future needs. We could gripe about the discord or marvel at the opportunity. Builders and developers need to stop building yesterdays housing in outdated community models and start building energy and space efficient housing in communities with mixed use and walk-able amenities. Make provisions for a secondary suite to house an extended family or allow a senior to house a student or caregiver that would allow them to age in place. And our Civic and Provincial Governments needs to allow this development and remove the barriers that make it illegal to innovate and build new housing models. If not, the home you build today may be obsolete before it’s time to replace your roof.
With national forecasts citing an overheated market in decline and calling for a further correction in real estate values, it’s curious to watch the Calgary Real Estate market out-perform most every other City and region in the country. Much of this performance is due to the hang-over from the recent run of strong net in-migration, due to a buoyant job market in Alberta. The question is when will the hang-over end and will Calgary succumb to the negative national trend despite our favourable geography and oil economy?
Calgary employment growth for 2013 is forecast to decline, yet remain positive at 2.3% with net migration for Calgary expected to slow to just over 15,000 over the next two years. This steady stream of new residents has fueled an increased demand for rental accommodation resulting in an apartment vacancy rate under 1.3%. This all points to a positive, yet somewhat reduced pace of activity that fuels the Calgary real estate market.
With the recent surge in rental activity and subsequent increase in rental rates one could be tempted to purchase rental property based on the recent higher returns, but are these rents sustainable for the long term? We advise that any rental properties are evaluated using conservative rent estimates especially those based on furnished rentals. Also note that vacancy for furnished rentals is similar to that of Hotel properties (in the 20-40% range) so don’t be fooled into using unfurnished vacancy rates and applying these to furnished properties, despite our current hot market. One exception could be buying rental properties that have a high component of land value, especially in inner city communities. These properties could derive good income from the building for many years, yet the land value may surpass its’ income value, if the trend toward inner-city community development continues.
Farmland also has potential as a solid income producing vehicle, but be sure to know what you’re buying. While crop rents have increased dramatically (proportional to crop prices), soil types, local geography, irrigation and overburdened crops all have a profound effect on the return a farmer can extract from a section of land. Again there may be other exit options for farm land such as future development potential or subdivision to smaller parcels. This can yield large returns but not for the faint of heart or uninitiated. If you are not the expert, be certain to obtain expert advice (the cost of which could yield you the best return for your investment).
One of the best strategies today for those who already hold real estate is to optimize your investment. That means reducing your operating costs and improving efficiency of the property. Some of the greatest benefits can be derived from reducing the energy requirements and greening your real estate. This not only reduces your consumption and cost of energy, but also improves the desirability of your property. Green Calgary offers a valuable home audit that provides excellent advice on greening your home and reducing its energy footprint. With the cost of solar electric continuing to decline we are now coming into an age that photo-voltaic systems are becoming cost effective. It won’t be long before you may be asking “how much energy does this property generate and how much income does it produce?” Don’t overlook these possibilities and the potential value of solar exposure when evaluating your next property.
Overall, it appears that the market may reduce from a rolling boil to a slow simmer over the next few years which calls for a return to a more sober, long term view of any real estate investment. Reducing operating costs could help you weather future bumps in the road, and exploring alternate exit strategies can add tremendous value if the need for Return Of Investment becomes more important than the need for Return On Investment.