Forget the stereotypes of money-hungry developers; we talk to the people who transform their ideas into our neighbourhoods of the future
By Steven Sandor | August 1, 2014
In the three years that Avenue has been conducting our Best Neighbourhoods survey, two things continue to be evident:
That the neighbourhoods that regularly finish at the top of our lists – Strathcona, Oliver, Westmount – are all older, established communities that offer easy access to central Edmonton.
Even though our readers identify the older, central neighbourhoods as the top places to live in town, new developments near Edmonton’s borders continue to sell.
So, this year, we made the decision to create a second survey, aimed at developers and homebuilders. We wanted to learn more about what they see – and what misconceptions people have about their business. We wanted to see how their visions for developments become the neighbourhoods of tomorrow.
Breaking the Stereotype
Salima Kheraj, a 2013 member of Avenue‘s Top 40 Under 40, is the senior project manager for Beaverbrook Developments. She’s heard the stereotypes more times than she can count: That developers are out to make some quick dough, want to flip land fast and don’t care about the legacies that they leave behind.
And that perception is hard to break. There is definitely a modern archetype of the developer as a swindler. Developers are often the villains in television shows and movies, where they try to hoodwink honest folk out of land so they can build shiny new developments. Think of the animated Disney-Pixar film, Up, when the elderly homeowner finds himself surrounded by construction workers who want to drive him from his place.
“We wish the public better understood that developers pay the costs for new development,” Kheraj says. “There is a perception that developers are just trying to make a quick buck, and that we don’t ultimately care about the neighbourhood, its longevity, the style of houses and what the costs of this are to the city. The perception is that we are only building what we want, and not what the market has asked for. That isn’t true. Yes, we have a business to run, but we do build what the market wants.”
She says that developers also have to pay the costs for up to four lanes of arterial roads that lead in and out of the new community, and they’re also expected to provide funding for transit services in new communities. Developers pay for the smaller roads, make sure trees are planted, build storm, sewer and water lines, provide school and park land and put up the telephone, power and cable lines.
Another land developer, who chose to remain anonymous, says that his firm can often sit on land for years before it’s ready for the graders to roll in. While the developer waits, it has to service the mortgage.
Why do so many people think that the City bears most of the start-up costs for developments? According to one developer, it’s because the City has built large-scale high-publicity developments, including Blatchford and Mill Woods. And because those were/are City-driven initiatives, the public feels that City Hall bears the costs to launch developments such as neighbourhoods in Lewis Estates and Terwillegar, as well.
The Ongoing Costs
The developer pays for the costs of the roads and sewers, but it does build to the City’s specifications. The City then inherits the maintenance duties and costs. And the developers say that, with a few tweaks of regulations and bylaws, more could be done to improve the livability and walkability of communities.
Developers and builders told us that the width of roads and setback requirements are challenges for them.
A developer told us that he’s often asked why there aren’t more townhomes with entrances right off the sidewalk, like you’d see in Europe or some other North American cities. For young adults on the go, not having to worry about maintaining a yard can be an attractive thing.
That developer told us that he’d love to see European-style row housing in Edmonton. When it’s done well, it can be attractive and creates a great sense of community – think of the European town square. But, to do that, the setback regulations would need to change.
According to Edmonton’s zoning laws, the minimum setback – the distance from the property line that cannot be built on – for most single detached homes is 7.5 metres, unless an attached garage faces a flanking roadway, when the setback can be reduced to 4.5 metres. Even row housing must have front setbacks that are 5.5 metres in length, which can be reduced to three metres on the discretion of the development officer if certain conditions are met.
“You can’t do certain kinds of intensification [increased density] developments in Edmonton,” says developer Doug Kelly. “On a corner lot, you need a three-metre side yard. In Vancouver, I’ve seen side yards that are just two feet wide, and they look just fine.”
If you walk through Glenora or Westmount, you’ll notice that the cars are parked on both sides on the street and there’s usually just barely enough room for one car to squeeze through, even though most of the streets are two-way thoroughfares. It’s a natural deterrent to those who’d want to speed and shortcut through residential areas. But in newer areas, the streets are much wider. And many of the developers told us they don’t think the wide roads are good things. They see more and more drivers speeding through neighbourhoods.
It’s more than a safety thing – it’s a cost thing. It costs the developer more to build a wide road than a narrow road. And the costs are passed on to the homebuyer. More pavement means it’s more expensive it is to maintain – and more likely there will be potholes in the spring.
But the city told us that there are many operational reasons the regulations call for wider roads in new subdivisions. It isn’t just about giving emergency vehicles room to pass if there are parked cars on either side of the road. Wider roads make for easier and more efficient snow removal – and “collector roads” also need to be able to handle city buses. Jody Hancock, the former director of development, planning and engineering with the City’s transportation department, says that, in new developments, streets are planned with a balance in mind.
“We want to make sure they can handle the traffic flow during the a.m. and p.m. peak hours, but that away from those times that the roadways don’t allow for excessive speeding through a neighbourhood.”
The city now looks at neighbourhood plans and forecasts how busy the new streets will be – and then recommends the road widths according to those predictions. The city is currently piloting the new Complete Streets program, which allows for a lot more flexibility in planning roads – moving the city away from rigid standards. So, in the future, we won’t see hard and fast one-size-fits-all rules.
A homebuilder told us that his company wants to embrace the City of Edmonton’s The Way We Grow and The Way We Green plans, which were released in 2010 and 2011. But, he said that “we are waiting for the codes and bylaws and support to reflect these values.”
And, that same builder explained why so many new communities still have the cookie-cutter feel:
“Time for processing and navigating the approval and permitting process costs money, and that highly regulatory environment restricts our ability to be innovative and build better neighbourhoods. Sometimes, it is not that we don’t want to change, it is that we literally run out of time to figure out how the municipality will accept change and resort to doing the status quo because it’s less risky – for both the municipality and the developer.
Approaching a municipality with an innovative idea is very difficult and frustrating. It’s more time-consuming, risky and doesn’t necessarily produce a greater return. It would be more helpful if municipalities welcomed us when we propose something different. If politicians want us to be more creative in the way we build communities, they have to be willing to accept some of the risk involved in doing so.”
Rich Westren, senior vice president of Edmonton communities for Brookfield Residential, says that developers are looking for ways to be smarter about building infrastructure, to make the most efficient use of that infrastructure and to respond to the demand of the market and what new homebuyers want. The less infrastructure that’s used to service a community, the lower the maintenance costs for the city.
How it Impacts the Homebuyer
Because streets are so expensive to lay, they have a big impact on the homebuyer. If you are in the market for a home, your share of the road-building cost is based on how much of your lot fronts onto the road. So, narrow lots wouldn’t bear as much of the road construction costs.
Narrow lots could also be the way to increase density in Edmonton’s established neighbourhoods. In 2013, developer Doug Kelly bought a 50-ft. wide lot in the King Edward Park neighbourhood for $275,000. The goal? To split the lot into two – and then build two 17-foot wide homes through homebuilder, Kirkland Homes Master Builder.
Today, those two homes are occupied. They sold two weeks after going onto market. But Kelly and Kirkland Homes Master Builder’s general manager Matthew Kaprowy had to fight to get the project approved.
After the land was purchased, the application to subdivide the lots was rejected because it didn’t fit into the bylaw at the time. That meant that Kelly had to go to the Subdivision and Development Appeal Board (DAB). When he got there, he was told that a duplex would be a better fit than building two freestanding houses. Kelly showed the board a picture of what he called “another ugly duplex” and asked “so you’d rather we built this?” That argument convinced the DAB to allow the splitting of the lot.
Each house has two-foot cantilevers on the sides of the building. They allow for more dining/kitchen and closet space in each house. With the finished basements, each house has 2,400 square feet of living space.
“Some people said, ‘Wow, that’s a narrow house,” says Kaprowy. “But our clients were from larger metropolitan areas, where these kind of developments are common. To them, this was normal.”
Where’s the Sprawl?
Beaverbrook’s Kheraj bristles when people use the word “sprawl” to criticize new developments.
“Edmonton does not have sprawl. We have contiguous growth. Edmonton’s suburban communities are more dense than some of the inner-city neighbourhoods,and we grow quite compactly in comparison to other jurisdictions. Our industry is one of the biggest drivers of the local economy, and new growth in Edmonton only makes the local economy healthier.”
Brookfield Residential is active in 11 cities throughout North America, so Westren has seen what real sprawl looks like (we’re looking at you, Los Angeles). He agrees that, in Edmonton, “sprawl” is a word that is often misused.
“Sprawl is unmanaged growth,” says Westren. “It’s pockets of development that leapfrog, leaving gaps in development. But growth in Edmonton is well-managed. When it comes to government and developers, we are more aligned than even we realize. New communities are three or four times as dense as the band of communities that were built in Edmonton from the 1950s to the 1980s. The 50-foot-wide to 70-foot-wide lots don’t happen in the new communities. Of the 11 communities we are in throughout North America, I would say Calgary and Edmonton are the most dense.”
Edmonton City Councillor Michael Walters takes the “sprawl” definition another step further. He says that Edmonton does indeed have sprawl, but the communities that are perfect examples of it can be found in the ring of neighbourhoods that came to rise after the Second World War and before 1971. Glenora and Crestwood come to mind, along with Ritchie and even Walters’ own neighbourhood of Aspen Gardens. These communities, with huge 50-foot or even 75-foot wide lots, aren’t dense. They aren’t diverse – they don’t have a lot of townhomes or apartment spaces. Downtown is surrounded by many communities that were designed to be suburban, not urban, in nature.
It’s easy for residents of mature neighbourhoods to bemoan sprawl. It’s easy to blame developments to the south and west. But, sooner or later, Edmonton will need to deal with the sprawl within these mature neighbourhoods.
Infill and the NIMBY Crowd
The problem, according to Kelly, is that the majority of Edmonton’s established neighbourhoods are zoned as RF1, or single-family residential, which doesn’t permit the splitting of lots.
Kelly says if the established neighbourhoods were slated as RF3 – ready for infill development – the headaches would lessen, more lots would be redeveloped, and there would be more infill choices for homebuyers. And, with more infill properties on the market, prices would be stabilized.
How hot is the infill market? In the same King Edward Park neighbourhood that Kelly bought the 50-foot lot a year and a half ago for $275,000, a 50-foot knockdown lot is now priced at $400,000. Factor in demolition costs, about three months of waiting time to get development and city permits, construction costs – and infill is priced out of the range of the first-time homebuyer.
And that’s not what Kelly or Kaprowy want to see.
“In my estimation, there are 100 mature neighbourhoods in the city,” says Kelly. “But only three or four are designated RF3. So that means there aren’t a lot of lots available, so prices go up.”
“We estimate that there’s 80,000 50-foot lots available in established neighbourhoods,” says Kaprowy. “Imagine what could be done if we could split those into 160,000?”
Kelly hopes that the city will convert the older neighbourhoods, but it needs to be all at the same time. If council approves a plan to convert them one or two at a time, Kelly says it will continue to keep available lots scarce, and drive up prices even further.
Westren says a balance must be struck between infill and developing the “greenfield,” that is, the outer undeveloped areas of the city. For example, an infill lot can cost $400,000. A suburban lot, which has no demolition costs and a more streamlined zoning process, can be had for less than $200,000. So, already, for those looking for starter homes, infill can be prohibitively expensive. So, new developments and infill must play off each other; making sure enough lots are available to keep the housing market from spiking as a whole.
Coun. Walters has made an official inquiry to regarding infill: He wants to know just how the city’s mature neighbourhoods compare to the new developments in terms of density. Remember that 35 units per hectare is the magic number, nowadays. In many of the older communities, the number is less than 20 per hectare. Walters wants to know what would happen if the city simply changed all of the RF1 neighbourhoods to RF3.
“We need our neighbourhoods to be hubs,” says Walters. “They are places where we live, and we are able to do some of the things we need to do. We accept that, in a city, that you can’t get all your services in your neighbourhood. But going to the park, school and some shopping. But, to do that, we need diversity in housing choices.”
But it should be noted that parts of Glenora are protected by the caveat placed by James Carruthers more than 100 years ago. That caveat enforces 25-foot setbacks and prohibits multiple-family dwellings, to ensure that Glenora would continue to be an exclusive residential neighbourhood into the future.
In RF1, because the older houses sit on big lots, buying in prohibitively expensive for young families and first-time homebuyers.
The effect? The residents of the community get older. The kids turn into adults. Without a new generation of families buying into the community, playgrounds go empty and schools go from full to being on closure lists.
Walters says that the city’s numbers show that in the mature neighbourhoods – built before 1971 – there are 114,000 fewer residents under the age of 40 today than were there in 1971.
Think about it. Even though Edmonton’s population has doubled since the early ’70s, the under-40 population in the mature big-lot neighbourhoods has shrunk.
We all know the stereotype: The cool hipster family buys the historic four-square house in Westmount; they have two kids and a dog, go to the farmers’ market, ride bikes and transit. But, for every one of those, there are dozens who are moving to houses in suburban areas. They can’t afford the down payments or mortgages to live in the older neighbourhoods.
Walters believes that, by allowing developers to start infill projects that promote density and diversity, housing prices will remain under control and more people can choose to live in mature neighbourhoods. There will be more kids on the streets and in the schools.
“If we did it, we wouldn’t wonder why the schools are closing and the playgrounds are empty and why the strip malls are derelict,” he says. “But right now a lot of these neighbourhoods have no amenities, no kids, the schools aren’t being used and they are expensive. The best possible future is that infill will give us more housing choices.”
How does it begin? Walters says that the focus must be on building more seniors’ units around the city. He says seniors would be more likely to want to sell their homes if they could find housing in their neighbourhoods, so they could still see their friends, go the same stores, walk in the same parks. But being shipped to another part of town isn’t attractive, so the houses don’t sell – and neighbourhoods don’t turn over quickly enough.
Walters and Coun. Bev Esslinger are leading Elevate, a program that will identify a school that could potentially be closed in five or 10 years, and working with that community to identify the changes needed in order to keep the doors open. And infill ties in with that. It’s about creating the environment that ensures the school thrives.
The city’s Infill Action Plan is currently at the draft stage. But it calls for making it easier for homeowners to create garden and garage suites, and to encourage the subdivision of lots, as long as they don’t go less than 25 feet wide each. Basically, it would make Kelly and Kaprowy’s split a common practise.
Developers told us the next trend we’ll be seeing in the housing market will be shaped by Baby Boomers looking to downsize. Their kids have moved out, and they’ll want to move to smaller, more manageable homes. As more and more seniors lead independent lives, the demand for downsizing will increase.
“In years to come, downsizers will make up 50 per cent of market,” the developer told us.
It’s a wonderful formula for infill, isn’t it? Being able to build smaller, urban homes in areas that need renewal seems prudent. And one developer said there are opportunities for infill that even the most hardcore urban advocate hasn’t thought of, yet. For example, what would happen if we could transform some of our alleys into pedestrian or one-way thoroughfares, with front doors facing out to them? In the newer neighbourhoods, garbage pick-up is done curbside and driveways face the street. The alley is a peculiarity of old Edmonton. What would happen if every Edmonton resident was converted to curbside servicing – that is, no garbage pick up in the back alley? The alleys could become places of infill, at least in areas where there’s room to work around the back yards of other residents.
Westren says that, of the communities Brookfield deals with in Canada and the United States, Edmonton and Calgary are the most progressive centres, with focuses on denser developments. He says that dense developments that would get approved in Edmonton still meet opposition in comparable American cities, like Denver, where big-lot suburban building is still in vogue.
Selected results from our 3rd annual Best Neighbourhoods survey: