At one time not so long ago, talk was of a great condo boom in downtown Edmonton. But that dream has not become reality. The pandemic changed financial realities for some buyers and for others it increased demands for bigger spaces. The Canadian Mortgage and Housing Corporation (CMHC) also took action to curtail debt loads of some home buyers. Adil Kodian, vice president of Rohit Communities, adds that with tightening mortgage rules over the last few years, many first time homebuyers were squeezed out of the market, disproportionally affecting the entry level apartment-style condo. At the same time, the CMHC created incentives to encourage affordable housing development. In this way, the condo boom became a rental boom.
While downtown Edmonton’s apartment-style condo market has been changed by policy and pandemic impacts, Kodian says the Edmonton townhome market sees growth. “Townhomes are a midpoint that actually is the ideal compromise between affordability and needs.”
In a post-oil economy where sustainability and 15-minute neighbourhoods are valued, townhomes may be the way of the future.
Townhomes — think Manhattan’s brownstones or Toronto’s brick rowhouses — have largely been an absent market segment in Edmonton. In 2019, the city’s Missing Middle Zoning Bylaw Review highlighted this absence and led to multiple zoning changes. Now, more than ever, developers have more flexibility to build diverse multi-unit housing options in neighbourhoods across the city.
Developers like Vida Nova Homes are building infill in the core where changes to the RF1 zoning, traditionally reserved for single-family homes — now make it possible to build multi-family housing on these properties (with permission). Jordan Seitz, Vida Nova’s sales and operations manager, says he meets many first-time buyers in their 20s and 30s, some with young families, looking to buy something new and central. “They feel like the value in the core of city will be higher over time.”
Bylaw changes with respect to secondary suites in higher density homes are sweetening the deal. Seitz says, “A lot of first-time homebuyers want a secondary suite to subsidize their mortgage.” In fact, the income from a secondary suite is occasionally the tipping point for buyers to qualify for a mortgage they otherwise might not afford.
Developers building infill in the core are also taking advantage of changed rules governing development of 50-foot wide lots. A single-detached home can now be replaced with up to four townhomes. While very controversial in some well-established neighbourhoods, Seitz believes much of the conflict can be mitigated with good communication. “You’ll get original homeowners who despise the look of infill properties, but it is a life cycle thing in real estate. Not all homes are built to last 200 years.”
And not all new development can be focused on older, well-established neighbourhoods where land prices can be prohibitively high. Rohit Communities’ Kodian says that the City’s focus on the “missing middle” is not only about location, but affordability in every location. This means building townhome projects in outlying areas as well. Kodian points out that many people in Edmonton do not work in the downtown core and have no need to live close to the centre (and pay more for the privilege). He believes that in the future our areas outside the core will be intensified, and it’s a vision reflected in Edmonton’s new City Plan.
Approved by council on December 7, 2020, the City plan dictates that 50 per cent of future housing development is to occur inside the Henday. Adding 600,000 new residents inside the ring will require greater density. But not everyone wants to live in high-density apartment style condos. Townhomes offer buyers a yard and front/back entrances, with a relatively low price point compared to a single-family detached. This is important, because while the city may want development to happen a certain way, developers like Rohit Communities must consider what buyers of the future will buy. “No amount of regulation will trump economics,” says Kodian.
Where will future Edmontonians want to live? How much density will they accept? What amenities will they demand with their purchases? This is a million — billion? — dollar question.
For the last 50 years, Edmonton’s townhouse inventory has offered a fairly economic series of features: 1,200-ish square feet, a small back plot of lawn, two or three bedrooms upstairs with an unfinished basement. This may be all set to change.
Kodian foresees that the townhomes of the future will meet a wider range of needs and price points than ever before. Imagine two-storey glass units with urban-chic style. Accessible units with elevators and attached garages. Tiny (500 sq. ft.) units to a sprawling 2,400 sq. ft. over three floors. Rohit Communities conceptualizes townhomes that will allow multiple family members to work from home. And, while townhome projects of the past had few amenities, expect new developments to have playgrounds and a lot more choice.
The townhomes of the future will serve to densify our city, achieve sustainability targets and fill the “missing middle.” They will also need to appeal to people from a broad range of lifestyles and price points. If they can satisfy both regulations and buyers’ demands, our neighbourhoods of the future will hold the kinds of population required to sustain the dream of 15-minute neighbourhoods, where we all happily meet our basic needs within a short range from home.
This article appears in the June 2021 issue of Edify
