THE FORGOTTEN LINK FOR GROWING CANADA’S HOUSING SUPPLY
Through the roof! Pun intended! This week, StatsCan released the most recent information on Building Permits for Canada, the Provinces, and by Metropolitan regions. https://www150.statcan.gc.ca/n1/daily-quotidien/241112/t003a-eng.htm. From September 2023 to September 2024, the value of Calgary’s building permits rose an astonishing 31.9%! What that means is that Calgary’s Planning and Development department has been working 110%, and in a year with the largest public hearing we’ve ever had (regarding zoning changes to allow densification). Sometimes we’re tempted to gripe, but today we’re tipping our hats to those hard-working folks!
Much has already been written about red-tape and permitting processes. But suddenly everyone is paying very close attention to the least sexy aspect of new home building: do we have access to enough water-sewer-gas-electricity for Project X?
A roof over our heads is great, but we all learned this summer that flush toilets, water for cooking and cleaning, and showers are also great! The Calgary watermain break of 2024 was truly a “blessing in disguise.” Alberta leaders and experts were already deep into the process of planning for water sharing and conservation in the case of a severe drought (which we mostly escaped) in Southern Alberta. Then we saw the grand water escape of June 5, 2024. No more “what if” scenario’s –the crisis is here! However, now politicians could justify the tremendous expenses required to dig deep (sorry, another pun intended) into better water redundancy and capacity for the Greater Calgary Metropolitan Region. We just proved to ourselves that water is indeed a priority. And all of this infrastructure growth needs to happen yesterday, in many other municipalities that are still recovering from Covid and/or Alberta’s most recent recession.
Why should real estate investors care? We simply cannot take water, or the other utilities for granted. Broken or aging water pipes? That’s a significant expense if the issue happens on private property. What if we’re not developing? Well, one of our projects is a simple secondary suite conversion. But wait, the main house water shutoff valve is corroded. No problem, we’ll just ask the city to temporarily shut off the water at the property line. But wait, Calgary has outsourced this service to a private company –so that will be a 4 week wait. Um, pardon me? But after the wait … there’s more! The city shutoff is damaged so badly, the water cannot be shutoff – and there is no definite timeline for repair?!?!
Oh yes, it goes on.
Electricity? We have also waited months for power pole upgrades within the last year. Enmax and Fortis have some very talented people—but their schedules keep getting obliterated by the summer wildfire situation.
In this province, many homes still use gas for heating. The ATCO website states, “there are 6 simple steps in getting you the natural gas service you need.” https://gas.atco.com/en-ca/products-services-rates/new-services-changes/new-natural-gas-line.html. And they even provide a portal for clients called “QuickConnect.” Fabulous euphemism, but sadly untrue. We are now 10+ weeks into waiting for a simple gas tie-in for a garage suite. Not kidding.
We choose to believe that all of the companies, politicians and tradespeople involved in providing these essential utilities are doing their best. Skilled engineers to design, and workers at all levels to implement the upgrades to our existing utilities are all stretched to the limits of time and budgets. Minister Nathan Neudorf is in charge of the Ministry of Affordability & Utilities; in our opinion it is genius to have both of these issues under one portfolio.
Our builder colleagues are already aware, but today we need to share these significant challenges with our other colleagues –who might not realize the lengthy (and sometimes expensive) delays that can and will happen as Calgary and Alberta continue to grow. Housing supply is so much more than 4 walls a roof.
