by Aaron Pedersen
Emmett Hartfield, principal at Intelligence House
From 17 storeys above the street, the view looking east is amazing. You can follow 102nd Avenue until it meets 124th Street. On this misty March morning, you can only make out shadows of the downtown skyscrapers beyond.
Edmonton Mayor Don Iveson, along with city councillors Andrew Knack and Sarah Hamilton, wear white hard hats. They stand in front of a crowd of 90 dignitaries, as the concrete top of the still-under-construction West Block is completed.
The building, developed by Beaverbrook, is expected to have a mix of residences and businesses. A stop on the planned West LRT line will only be steps from the door, which will allow residents to hop on a train east to go see an Oilers game, or west to go, well, to the mall.
The mayor says that as Edmonton moves from being a metro of 1 million people to a metro of 2 million, this is the kind of “transit-oriented” development it needs. He promises that the city will do what it can to bring that LRT to West Block’s doorstep as soon as possible. And he says the city is at a real “fork in the road,” and projects such as West Block promote transit, promote urbanization.
Salima Kheraj, chief innovation officer for Beaverbrook Group said that the West LRT, which will connect downtown to West Edmonton Mall and head out to Lewis Estates, is a sign “that the city is growing up.”
The proponents of a transit-oriented-development located in a mature neighbourhood have every right to celebrate a city that’s growing up. We’re seeing it with downtown condo projects and new mixed-use towers that will make Edmonton the tallest city in Western Canada, with skyscrapers that shoot higher than those in Vancouver or Calgary.
But, as Edmonton shoots up, it’s stretching out at an even faster pace. The suburbs continue to grow. More and more people are choosing to settle further and further away from the core.
“In Edmonton, the suburbs will continue to grow,” says Emmett Hartfield, principal at Intelligence House, a firm that does extensive market research, consultation and sales in the real-estate market. “We’re not landlocked. We’re not a centralized workforce.”
Um, It’s Affordability
When it comes to urban living, there’s an issue that every major city in Canada faces. It’s expensive to buy real estate in the downtowns or near the downtowns of major cities. And while you can talk all you want about how living an urban lifestyle means you’ll walk more, be healthier, use a car less (or not have to use a car at all), these aren’t things that factor in when you go to the bank for a mortgage. And, with new financial stress tests that were introduced by the federal government in January, it’s even harder for a family to afford an infill home that’s priced north of $800,000.
“I’m a big believer that the major cities will become more and more expensive to live centrally,” says Hartfield. “So, it’s simply not feasible for the next generation to put down the money on a single-family infill home.”
“There’s an interesting conversation going on about affordability,” says Chelsea Whitty, an associate in Planning and Urban Design with DIALOG, the Edmonton-based architecture and design firm. “We are not in a market in Edmonton like there is in Vancouver or Toronto. But now is the time to think about affordability.”
Jim Brown, president of Sherrick Management Ltd, says that the city of Portland, Ore. is an interesting case study in cause and effect when it comes to putting limits on expansion and development.
A couple of years ago, Portland had the highest increases in real estate in all of the United States. It was a perfect storm: Lots of people wanted to move to Portland; ironically, many of them were Californians looking to escape the Silicon Valley real-estate squeeze. But Portland’s metro region, famously, has an Urban Growth Boundary, which limits how far out developers can go when it comes to developing subdivisions. Now, don’t go screaming about Portland’s green reputation just yet – the boundary has been expanded on almost 40 occasions since it’s been introduced. But limiting the outer ring pushed inner-city values through the roof.
Sherrick tested the idea that price is the major driver for housing decisions in a recent development, when it decided to price all lots the same. Would people rush to get the corner lots first? No. In fact, the decisions were so random it showed Sherrick that there really is no way to predict the market when cost is taken out of the equation.
The Stress-Test Conundrum
The federal government introduced new mortgage-qualification rules in January 2018, which includes a “stress test” to see if the prospective homebuyer has the financial resources in order to keep up with payments.
Hartfield said the industry consensus was that the change in rules was going to push people to the condo market; instead, what they’ve seen is a move towards renting.
“When the changes were implemented, our group estimated that it would wipe out 20 per cent of the buyer pool,” he says. “And, every increase in interest rates continues to wipe out more of that pool. The changes were made in order to cool the markets in Toronto and Vancouver, without thinking about the repercussions it was going to have in the rest of Canada.”
In fact, he said that, out of 600 deals made by Intelligence House in the last year, only 400 closed. One third of the deals fell apart because of financing issues.
So, as affordability becomes even more of an issue with the stress tests, mortgage-friendly homes in the ‘burbs become more attractive.
Hartfield said the stress test has revealed that many Canadians can’t afford what they thought they could.
“There’s not a lot of financial literacy out there,” he says. “People were buying what they can’t afford, or are shocked they don’t qualify.”
Renovate The Old Place, Or Get A New Home By The Henday?
If you’re not buying an infill home or a new condo, chances are that the home you’re getting in a central neighbourhood will require some work.
But, while there are magazines and television networks dedicated to renovations and redecorations, there is a silent part of the population that wants to move into homes that need no work. To them, a new house in the ‘burbs is attractive.
As well, Hartfield points out that renovations often don’t pay for themselves.
“Compared to the United States, renovations in Canada are quite expensive because of labour and material costs,” he says. “And you often don’t get out of it what you put into it.”
Are Suburbs Really Suburbs?
Another reason that the suburbs continue to grow is, well, to a lot of people living in them, they aren’t the suburbs. People live in the southern reaches because they also work south of the river, or in Nisku or Leduc. People who live in the west end may work at or near West Edmonton Mall. Edmonton simply isn’t a city where the suburbs empty out in the morning as everyone heads downtown, then fill up again at 5 p.m. when everybody gets back.
Sherrick Management Ltd. developed the Ambleside neighbourhood on the south side, and Brown said that Sherrick found, anecdotally, that a lot of the homebuyers who moved into Ambleside didn’t work north of the river. Many headed from the southwest to the southeast. Many worked south of the city. And there were Fort McMurray workers who wanted to be close to the airport so they could commute to work.
Edmonton City Council approved the western route for the Valley Line LRT expansion in 2016. When completed, the surface rail line will connect Lewis Estates to the downtown core.
Meanwhile, Edmonton Transit unveiled a new strategy that will see a totally rebuilt bus network go into service by 2020.
Edmonton Transit director of planning Sarah Feldman says there will be fewer routes, but the new routes will be more direct. Some people will have to take longer walks to their stops, but the buses will no longer go through circuitous, ride-extended jaunts through winding subdivision streets. There will also be “rapid” routes that connect areas that don’t have access to LRT, and “crosstown” routes that connect east to west and north to south without going through downtown – a recognition that not everyone needs to travel to the core.
“We know we won’t get this network right on the first shot,” she said when the plan was announced in March.
There will be no new buses or additional budget, the reimagined bus routes will be the product of a major reallocation of existing resources.
One thing Feldman confirmed was that the city wouldn’t be providing new routes to suburban neighbourhoods. Previously, developers would pay to build bus shelters and for the initial service to come into their new subdivisions. But, that won’t happen anymore – again, as the city is not looking to add to its bus fleet.
The Missing Middle
DIALOG, the Edmonton-based architecture and design firm, recently consulted the city on the status of its mature and established neighbourhoods; that included bus tours of 205 neighbourhoods built pre 1995.
“Mature” is the term that is used for neighbourhoods built before 1970 (think Glenora or Westmount). “Established” are generally considered to be fully developed suburban areas.
What’s interesting is that neighbourhoods that were considered suburban in the 1980s and 1990s are now looked at as “established” neighbourhoods. And they face many of the issues that we talk about in core communities; how to bring new families into the neighbourhood, how to make sure the community is walkable and has the key services residents need.
“There’s a continued sense of community in our core neighbourhoods; there’s a history there and a culture that people want to honour,” says Jill Robertson, principal and landscape architect at DIALOG. Robertson says neighbourhoods that were built in the 1980s and 1990s are also competing with the new subdivisions. It’s not just a case of the new suburbs attracting people from the core; they’re also drawing people from the more established suburbs. People can choose to live in older neighbourhoods right around West Edmonton Mall, or buy new homes just another 10 minutes west in Lewis Estates.
“How do we get young families to move in? How do we give people the ability to ‘age in place?'” Robertson asks. This is a question for both the core and those older ‘burbs she calls the “missing middle.”
The Blatchford Challenge
Mark Hall is the development manager of Blatchford, the city’s development on the old City Centre Airport lands. He’s been monitoring housing costs downtown and in the city’s established neighbourhoods, and he agrees that the majority of infill projects aren’t affordable.
“We know that there is a lot of demand to live downtown, but that a lot of people simply can’t afford it,” he says.
But, can Blatchford, which promises dense housing, walkable neighbourhoods and a carbon-neutral building policy, bridge that gap? Hall thinks so. “When you look at the makeup of the project, the least-dense option will be townhomes. Then, we move to medium-and high-density projects, and they tend to be in the more affordable range in the marketplace.”
As well, the city has deemed that a minimum 10 per cent of the project be made available as affordable housing.
Hall says the City, which is acting as the developer on the project, has received expressions of interest from 27 different builders. That’s more builders than available parcels of land.
The City will spend the remainder of 2018 talking to builders about their visions for the project.
“We’ll ask them, ‘which of the areas are you interested in?’ and ‘What would you do with it?'” he says. “We aren’t simply looking at it as a transaction. We’re looking at building partnerships with builders who will help us towards the community we want.”
The Urban Village
Greg Christenson is wearing a white hardhat and is showing off the progress made on the Village at Westmount, an 80-unit development built across the street from Westmount Shopping Centre.
Christenson is a big booster of creating what he calls “urban villages,” no matter if they’re located in older neighbourhoods like Westmount or in the suburbs. When Christenson Developments’ project is completed, seniors will live within a 400-metre walk of the Westmount transit centre and the mall, including grocery store and pharmacy.
Basically, build residential nodes and allow businesses to flourish nearby. Allow residents the ability to walk to eclectic services and not need to haul across town. Have seniors residences in these urban settings, so the kids can walk over to visit mom and dad and their parents can live independently, but aren’t isolated.
And the more services a hub has, the less people need to get in their cars or take transit across town.
“It eliminates the commuting culture of freeways and even LRTs,” Christenson, the company president, says. “Why build a $2-billion LRT when you can build mini villages? Everything won’t be dense, but people can walk in their neighbourhood.”
This article appears in the August 2018 issue of Avenue Edmonton. Subscribe here.