Rental construction initiative on Saskatoon City Council agenda
Saskatoon city council will consider recommendations being brought forward by its Administration for a “New Rental Construction Land-Cost Rebate Program” at the next council meeting on Monday April 7, 2008.
This forwarded to me by a reader from the “Council Agenda in Brief.” (no longer available)
“City Council will receive a report from Administration recommending that they adopt, in principle, the New Construction Land-Cost Rebate Program and that Administration prepare an implementation plan by June 30. The program proposes a land-cost rebate to all developers of new rental units in Saskatoon, provided these units are constructed within 18 months and they remain rental units for 15 years. A further requirement is that 20% of these units be targeted as entry-level housing, and would also be eligible for an additional land-cost rebate. The rebates would be between 50% to 75% of land costs in return for an expedient delivery of new rental units. The program target is the construction of 1,000 new rental units within a two-year period. During the past twenty years, Saskatoon has had little investment in new rental unit construction, and this proposed one-time incentive is required immediately to break the inertia on new rental unit construction.”
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
There's 44 Comments So Far
May 14th, 2009 at 3:34 pm
If anyone takes advantage of this, I will gladly take a look at the units they make and give it a public stamp of approval if the units made ARE in fact affordable and of respectable quality.
Back to reality….
As far as I’m concerned, this will be warped and twisted into a way to get cheap & easy land. Following which all corners will be cut, and they’ll be converted to condos immediately following the mandatory rental period.
I don’t understand why they can’t make these rental units *forever*. If the buildings are being subsidized by public money as rental units, why should the people get a guaranteed ZERO RETURN on their involvement?
This smacks of greed.
May 14th, 2009 at 3:34 pm
Alex;
I understand your cynicism but c’mon. I would think that after 15 years of being rentd out it’s unlikely a lot of these units would be suitable for anything but revenue property. They will probably be built accordingly but it certainly seems like a positive step to me. Of course there will be “what ifs”.
Now if it comes to pass that a large percentage of Saskatoon’s city council winds up owning them I may smell something bad. But why not wait and see if you need to smack it with the GREED brush first.
Remember I’m from Alberta so I’m non partisan. This just looks at first blush like it may accomplish something.
May 14th, 2009 at 3:34 pm
would think that after 15 years of being rentd out it’s unlikely a lot of these units would be suitable for anything but revenue property.
Ken — have you looked at the condo conversions that are being sold in this town? All are former rental units, most built in the 60’s and 70’s, some older than that.
Some have been gutted and refinished, some are simply given paint and new flooring and sold as is, and some get less than that. Seriously; pigs and lipstick, all the way.
I have to get back to marking, but this is an excellent set of topics, Norm!
May 14th, 2009 at 3:35 pm
jrochest;
I understand your concern. And I will be the first to admit I’m not very educated on the Saskatoon market.
I think after this period of escalation is over that in 15 years it’s unlikely we will see the conditions that allow that kind of condo non conversion to be very markettable.
It pretty much takes a market where people are holding their noses and buying any way for that way to be profitable.
Remember the profit parade will end in Saskatoon like it has everywhere else.
I agree;
Excellent topics Norm; thank you.
May 14th, 2009 at 3:35 pm
Ken,
“Remember I’m from Alberta so I’m non partisan.”
Obviously you haven’t been around long enough to know that being from Alberta makes you arrogant, rude and greedy.
Alex is kind of like the “official opposition.” For some reason he has a need to rip everything apart and examine it with a skeptical eye. I can’t actually recall anything that he has ever approved of. It’s not always comfortable, and sometimes annoying but there’s probably some value to it.
Thanks for the feedback guys!
May 14th, 2009 at 3:36 pm
Ken,
And when they are turned into condos, then what? You have more rental shortages and you build some more, smaller apartments somewhere else after ignoring displacement for a year or two?
Good god, how much shortsighted rhetoric has to go around before people get the lesson: When the clawing for profits starts to happen, put on the brakes.
Profits take a back seat to the well being of others. The current situation with property as is evidenced by the United States and now Canada is nothing more than a loophole being exploited in the name of “good honest business”. It’s a war zone of wealth where the rich dwarf the middle class and poor dozens of time over.
It turns into a slaughter every time and yet we always end up confused when recessions and huge amounts of poverty turn up.
It’s like as if some people just don’t want to make the connection………
On the size note:
The size of condos going on the market now is disgusting. They’re apartments. What people call a “condo” in Saskatoon couldn’t be any further from.
How small will these subsidized apartments be now that the standard for what you can own in a condo has been effectively downsized one order of magnitude?
Then what? They get sold?
Where is a solution not going to be set up to introduce more greed in the future? Why can’t something just be designed to work for the people without orchestrating some amazing payout several years down the line?
If public money goes into it, especially the amount being flaunted about here, then the public gets a huge say in it. The best thing is to allow it to be apartments and should – down the road – the owners endure obviously unfair hardship, the public coffers can lend a hand.
That’s a good shared interest if you ask me because the owner of the property doesn’t go into it alone too!
Shared interest to me isn’t a bad concept. It’s when the deck gets constantly stacked against the people in the long term. It’s when so long as the short term looks good and handy, the long term can be whatever it wants…
Without the immediate benefit, these subsidized apartment buildings are nothing more than free infrastructure for the lucky greedy person who gets in on this.
If I were allowed to head up this development, I’d write in a plaque on every side of every building: This building and its property will never be sold as condos because that’s what the people paid for it to be.
Ken, let me say however that I admire the fortitude of any Albertan who has gone through the worst of that economy. I don’t envy them and it is my hope that anything I say goes towards dispelling this stupor libertarian values (in whole or in part) has people in these days.
I’ve spoken with many Calgary and Edmonton citizens and seen them endure so much. I’ve also seen some doing things I would never myself consider.
I’ll be in Calgary next week – not looking forward to it, I never like visiting the throne of greed.
Norm,
I don’t understand where the jump in common sense happens, but it seems to be some time before social values and just shortly before greed. There is this huge gap I can’t account for in the way free market idealists think.
I participated in an online Winnipeg-related forum a while back where they have a very pro free market contributor.
Some of his ideas were really good and very captivating. I almost never disagreed with him on where the governments were going WRONG in their involvement. It was his solutions and his new ideas that just seemed so radical because it was totally impractical.
They have no hope of playing out the way he envisioned them to because the variables just won’t coalesce into the outcome he envisions.
And that’s what I see here when I see rent controls and increased supply. I’ll say increased supply has a curve that almost fits the need, but it still falls short when considering who controls the supply. All you’re doing is duplicating the hardship in the market – unless of course you can increase supply by a quarter of the whole overnight
It’s like as if when we consider all these deep think tank theories, we immediately normalize out the human tendencies and urges. The faults of both the buyers and the sellers almost never factors in!? Be they virtuous, criminal or anywhere in between.
There are things I don’t rip apart and within the last week or two I have put out some positive responses. Do find them, I too can and have been persuaded, even by you!
But, please also remember, I still call a spade a spade. When I’m crunching a point, you can’t go one degree of abstraction deeper on a subject without incurring some kind of penalty of doubt.
An example would be statistics, or worse still, complicated theories with long projections.
It’s way better to look at the past and present for examples. That’s why I love that site I’ve been quoting:
http://www.zompist.com/libertos.html
There’s no distancing from the reality there. It’s all based on solid hindsight.
May 14th, 2009 at 3:36 pm
Ya well that’s about the fourth time you’ve dropped the link.
May 14th, 2009 at 3:36 pm
Poor Alex. I used to be anti-everything, and rage against the machiney too. But the simple fact is, you have to live in the society you reside in. In order to be happy and lead a fulfilling life, you must have some ’sunshine’ in your cloudiness. The whole gloom thing isn’t appealing to many folks. I truly hope for you that you have things that make you ridiculously happy, and that you are greatful for those things every day. I understand that this may just be a place to have fun and obsess a bit for you, but I hope you also have joyful things in your life. Your posts are frequent (I’ve been reading along for many moons with few comments), and rarely joyful. I hope your life is more joyful than your posts. I am honestly saying this not out of a shame on you attitude, but in sincere hope that there is happiness and joy somewhere in your grumpy seeming life. Sorry to interrupt the real estate blog with off topic stuff. I’ll quiet myself now.
May 14th, 2009 at 3:36 pm
Ringo,
I don’t think you could be any more condescending and off the mark.
You do the same thing that countless others do. You buy into your own disagreement and assume that because of it I’m somehow flawed.
Don’t give yourself so much credit – from what I’ve read – you’re a poor judge of character.
May 14th, 2009 at 3:37 pm
Alex;
Alberta is a beautiful province with as unique an economy and culture as all the other provinces. Unfortuneately I think there has come a time when people of below average means will not be able to afford to live well here.We tend to vote for well meaning but short sighted leaders. Given the wealth that was offered them and ultamately the province as a whole, I don’t think they did anything differently from anyone else.
Alberta is a great place to be a young man (or woman I think). It is vibrant, optimistic, opportunistic,and yes caring in its way.
I sincerely thank you. A lot of times when I’m considering your posts it forces me to view things in a more positive way and balances me. Sometimes we all need that.
Your point of view is appreciated.
May 14th, 2009 at 3:37 pm
Crap I’m not getting into this one…
May 14th, 2009 at 3:37 pm
“They’re apartments. What people call a “condo” in Saskatoon couldn’t be any further from.”
Alex, it is hard to take you serious when you don’t even know the definition of a condominium.
May 14th, 2009 at 3:38 pm
Good point Charles. “Condominium” is a form of ownership which can be applied to pretty much any type of real estate. There are apartments, single-family homes, and commercial buildings which are structured as condominiums.
May 14th, 2009 at 3:39 pm
Charles,
It’s hard to take you seriously at all. Far be it for anyone to develop a standard impression of what to expect when seeking a condominium. Now we have rules of expectations creeping into the process. Is nothing sacred?
If people complained about the only affordable condos being small and slightly larger ones being disgustingly out of pace in terms of square foot price….
What then? Just tell the people that “hey, I guess it ain’t for you!”
What’s for anybody these days when standards and expectations don’t have a bearing?
These are some pretty dirty tricks that keep the people suffering running around in circles of guilt and self-doubt.
Give me a break, man.
May 14th, 2009 at 3:42 pm
While that IS the definition of a condominium I think what Alex is trying to point out is, they are really just apartments that have been sold individually. I too find it silly that they be called anything else, they ARE apartments that are owned.
The sad thing is, people who an apartment get offended when somebody calls it an “apartment”. ‘No, it’s a condo, I bought it.’ Well that doesn’t make it any less of an apartment, sorry. A rose by any other name would smell as sweet. A crappy apartment by any other name, such as “condo”, would still just be a crappy apartment.
My friend in Regina lives in a very nice condo block, seperate outside entrances for each unit, only one other floor atop the lower one. These are real condos IMO.
May 14th, 2009 at 3:43 pm
Ha ha, ok, as far as I know a condominium is a legal description… but this debate seems a little silly…
Anywhoo I applaud the Council for trying to get the ball rolling on building for purpose-built rentals. I am curious to see more details.
Background info on why investors have grown to favour condo development over rental buildings:
RENTAL APARTMENT OWNERS AND DEVELOPERS:
Stayin’ Alive in the Condo Age
OCTOBER 2006
http://www.gwlrealtyadvisors.com/gwlra/CNTAsset/Rental%20Markets%202006%20Eng.pdf
May 14th, 2009 at 3:43 pm
callum,
You are a model of reason today.
Thanks for this report. I look forward to reading it.
May 14th, 2009 at 3:44 pm
The only reason why callum seens so reasonable is because he is mocking us.
You can’t act above something as a form of denial. I’ve seen condominiums in the past and these apartments are not condominiums by any standard.
If you’re just going to resort to apathy letting legal descriptoins pave the road for you, go for it. You have already made clear your love of the lack of standards the system affords you.
You sound almost as bad as my last landlord in Saskatoon. He liked to stick to the books and rely on the cold and outdated rules to protect him. It was a clever game he played treading the line very closely to preserve his bottom line.
If it wasn’t clearly written out as an obligation, he took the liberty to interpret it as cheaply as was possible.
So, callum, yes. Your lack of desire for people getting something worth their while or having any hope of fulfilling honest expectations only highlights the need for rent control.
I hope the renters in Saskatoon get their long overdue justice against what is clearly a group of people who want to interpret for themselves “quality of life” of others for their own gain.
A hearty round of back scratching in a blog won’t deny that you can observe all this TODAY.
May 14th, 2009 at 3:44 pm
Good on the city for taking steps to encourage development. Rather than taking from individual owners to subsidize rental properties they are taking from everybody to subsidize them, definitely a step in the right direction.
Alex, we’d all agree with you if your were right…
May 14th, 2009 at 3:45 pm
Some of these condo conversions might not happen as planned, if the housing market begins to turn.
As soon as they don’t look profitable, they won’t get built. If the developers begin to suspect they will have trouble selling the units, the whole thing will stop. Calgary, Edmonton and many other cities are now way over-built with condos. Obviously this isn’t a problem in Saskatoon, but I’d guess it won’t have a chance to become a problem. The bubble will begin to deflate before then.
The economy will be fine, lots of jobs etc, but the housing market is very close to the end times for YoY gains. Lots of it will end up back in the rental stock or never leave that stock to begin with. This move towards condos is about 2 years too late.
As was pointed out on other threads, the selling prices forbid their use as rentals, so they aren’t much good for investment anymore. $2400/month for unit that could maybe rent for $1500? Doesn’t make much sense. Future re-sale? Go ahead and try it, but that’s a very dangerous chance to take now. Other markets in Canada are flooded with inventory that someone once figured (not long ago) would be an easy flip.
May 14th, 2009 at 3:45 pm
exCondoguy,
I think you have it right. I’ve said it before, but we are quickly approaching the end of “year over year” gains. This little “boom” has pretty much run its course and we’ll start to see conditions improve for home buyers and renters in the months ahead.
May 14th, 2009 at 3:45 pm
Norm:
You will be paying for that land cost rebate multiple times and for centuries. Think CPR and the railroad. The similarities are mind boggling. Talk about dropping your drawers.
re: conditions improving – not a chance. If my town is any indication you guys are only starting to scratch the itch. Wait till pre-sales run out of cash, don’t get completed and they come back for the extra $100k to finish them. No government bail outs for that one. We may have invented this problem but like the weather we’ll send it along your way.
re condo definition. we have it down to the middle of any four walls more than 6 inches above the ground
A new twist:
About a year ago a local law office came up with “air space”. No condo, no strata in traditional terms – just air space. In theory this eliminates some of the issues associated with common property in the building, but mostly the rights of residential owners versus the commercial kids. Think harmony. It has a lot to do with who pays what for which service. Because we’re nice and in the Olympic spirit we’ll send that over too.
As for converting these soon to be 15 year old puppies into condo’s. No question about it. That will happen. Unit size? Think big prairie shoe-box at $700/foot. Add a bit of heritage paint, swanky new laminate flooring, some trim, a little re-branding as the new “Estavan” and Voila – deluxe with cheese condo. For 1st timers, a Special 50 year mortgage offered by the soon to separate Quebec teachers trust. Wine cooler is optional. By the way, they will line up in the street for the chance to buy one.
If I were a developer and this package was offered to me I would be all over it. This rebate package is a key to the bank. What government bone head came up with this?
May 14th, 2009 at 3:46 pm
Larry,
I love your crappy attitude
and you’re more unpredictable than I am. Didn’t you throw this very idea forward as a potential solution a few months ago?
I understand that it’s probably not ideal but we have working people sleeping in their cars and they’re ready to do some public lynchings of landlords. Isn’t this just an attempt to find the way to market value for a particular purpose? They’re not scurrying to put up apartment buildings here and we really do need some fast solutions.
May 14th, 2009 at 3:46 pm
Larry parrots in some senses (not all, sorry Larry, I don’t want to tarnish your image by agreeing with you too much) what I said. Although I can’t agree any more with what he warns.
I’m failing to understand why just because a left oriented individual says something that they must be disagreed with on principle.
Jake,
Birds of a feather: See the previous paragraph.
May 14th, 2009 at 3:46 pm
OK I’m in… : )
You all have such interesting points of view and I love reading all of it. With my half-dead brain at the moment even if I understand one teeny thing you all say I’m considering that a bonus for me.
Larry you make some excellent points.
exCondoguy I believe the peak will be this (early) summer. But what the h-e-double hockey sticks do I know? hehe. For some reason I just think that we are still in the hype stage of it all, nearing the end though. And I think by summer’s end the novelty will wear off. Bad terminology but nevertheless my view of the hype. The chance to scoop up cheap real estate has ended so what’s left here to do? I’m dreaming but hopefully we can get back to a life that is similar to what was once unique in Saskatchewan but one year ago.
I always love hearing your point of view Alex : ) It often crosses my mind that you must be one very caring person. Unfortunately half the time reading your posts is (for ME) like reading a different language. I find you say everything “backwardly?” “not plainly?” I can’t find the word to describe it… I know some of you can! haha Anyway I enjoy reading your posts : ) and I’m glad you keep posting even though no one seems to agree with you most of the time…
When I understand what you are saying I agree with you often : )
Too bad no one came up with a new name for apartments that are converted into condos right from the beginning… maybe we could call them condoments? Then we could put them on hot dogs?
I think that what the city is doing is admirable. If they did nothing we would complain (and have). They don’t have many options – they’re not developers. I commend them for stepping up to the plate and doing what they probably see as the only thing that they can do amidst this chaos.
One thing that KEEPS BUGGING ME… what is “affordable” housing? What is “entry level” housing? How and who defines them?
I once asked Coun. Myles Heidt why the city has developed so many 30-35 ft wide lots that only allow the development of *** boxes (sorry) with no garage, no yard to speak of (if you are lucky enough to get a lot with alley access and build a garage), and the bonus of the ability to hop from rooftop to rooftop or maybe whisper a rumor to your neighbor from your window to theirs. Well that’s not how I posed the question but hey… : )
He responded that the city developed lots that small to ensure that “entry-level” housing be built.
The problem is that at the time, 2 years ago these houses were going for upwards of 180K – is that “entry level?” I guess it doesn’t matter, they all sell anyway. I could never understand why these houses would sell when at the time you could pick up a 70’s bungalow, “complete,” with a garage for 100 – 140K. Some needed upgrades, some did not. Location, location… ?
My point is that although the city has provided MANY incentives to developers (the above is only one of many), the developers will set the price. So even though they provide the incentives, isn’t there a chance that although UNITS will be built (OK, might), they won’t help solve the problems we are seeing because they will be super expensive anyway?
May 14th, 2009 at 3:47 pm
Anyone who rents, at any level at all, is “low-income” and undesirable.
Anyone who makes an individual income of less than 100,000 a year is “low-income” and undesirable.
I’m assuming, cynic that I am, that any such rental units would be 400 square feet and go for around 1,000 a month. The low income ones would be 250 sq ft and rent for 850 a month.
May 14th, 2009 at 3:47 pm
jrochest,
Why not, eh? So long as nobody corrects the misinterpretations, let’s use them while they’re lucrative.
May 14th, 2009 at 3:47 pm
Shannon,
Entry level housing is usually homes which are priced towards the lower end of the market range. Smaller lots, smaller homes, less expensive fixtures and finishing, fewer upgrades.
Affordable Housing is normally subsidized to some extent and is supposed to be offered below market prices to families that qualify. Builders that take on affordable housing projects will work with CMHC to set prices.
You are correct that in any kind of a privately funded project, the developer will be able to set the price. However, the hope here is that 1,000 new rental units can change the dynamics somewhat. If you can ever get the rental stock back to a place where renters have some serios options in the market place then you move back towards balance. Empty, un-rented units are a drain on profit so landlords offer incentives to entice renters to choose their units. Generally, when you have far fewer units than people who need to rent, prices can easily be increased. When you have fewer renters than units for rent, prices can go down. When it’s closer to even, you have some balance in the market.
May 14th, 2009 at 3:48 pm
My post doesn’t really have anything to do with Rental Construction Initiative, although I am glad City Council are taking an active interest in this issue, being a lifelong renter. I’m more or less commenting on the state of the market here, from a lifelong renter and “former” potential homebuyer’s point of view.
I think you will find that CMHC is trying to slow things down somewhat in Saskatoon (even if they don’t actually admit to such things). We had an offer in for a 250K+ house. I don’t want to identify the actual property out of respect, so I’ll keep the details to a minimum. We had to overbid (by 8%) to get the house, as there was a lot of interest in it. It was subj to financing, although it was well below our pre-approval, we still had to go through CMHC as we didn’t have 20% down. CMHC came back with an appraisal on the house of 30K BELOW the house’s list price, based on square footage and the MLS listing.
We pled our case to CMHC by providing them comparable listings for Saskatoon, as the house was good value for money (in Saskatoon’s market, anyways).
In the end, we put more equity in, and our bank convinced CMHC to come up to list price, and CMHC agreed to insure the mortgage at list, but not a penny more. We went back to the owners and explained what CMHC were saying about the house, provided them with all the paperwork from CMHC, and said they wouldn’t insure a mortgage for more than list on this house.
After all this, however, the owners chose to put the house back on the market, rather than sell to us at list price. I’m not dissing them for this decision, I understood their decision from a sellers point of view, trying to get more money out of the house. Now they are stuck with it (CMHC keeps records, so they won’t insure a mortgage above their initial 30K below list appraisal). Now I see that the house is off the market, unfortunately they played the bidding war game, and seem to have lost, albeit only for the timebeing. They will have to re-list and wait for someone with a cash only deal (or with at least 20% down).
I know of at least 5 or 6 places offhand that have had this happen.
I think CMHC are trying to do the right thing to keep people from getting gouged, however, they are keeping people like us from owning a home in favour of investors with cash (who don’t need to use CMHC). We bring in a family income of 6 figures, have little to no debt, but just don’t have the downpayment at this time, which we totally accept personal responsibility for. We decided rather than having our hearts broken again, that we are out of the market here. We should own a house, and give up our nice apartment to someone who desperately needs it, but we are unfortunately staying in the rental market.
I believe this is a major problem that is contributing to Saskatoon’s low rental vacancy rate, as I look in our apartment building, there are a lot of young urban professionals who make obviously decent money (driving mostly brand new cars, well dressed…etc) that should be homeowners, but are currently renters.
May 14th, 2009 at 3:48 pm
Shannon,
I’m with you on a REAL definition of entry level too. Entry level is a joke when you have to have 2 people pulling in pretty good wages to get a place in stabbsville (ave a-z).
Entry level to me is a step up above ‘people that can’t afford to buy at any level at the moment’…but yeah it would be nice to see actual expectations of what an entry level buyer would look like…(must make annual salary of $85,000 a year and no debt – just throwing the figure up because it’s probably that ludicrous).
I also wonder how many new ’small’ lots are being placed…I also wonder why the city doesn’t have a WHOLE area dedicated for JUST these small lots….nothing worse than going in willowgrove etc surrounded by 1700 sq ft bohemiths and there u build your smaller house where your house would be in the shade all the time…lol.
i just wonder a lot.
May 14th, 2009 at 3:48 pm
Hey Norm,
When I was younger it most definitely was a Crappy Attitude. I now like to think of them as senior’s moments .>)
Yes I did suggest something along this line of thinking. Some days are better than others. But then again, nobody listened before. I’ll have to be more careful.
Alex – you and I agreeing on something – a new low! .>)
Shannon – just call them Attached. But condoments has a cache about it. Suggests something HOT that you pay for tomorrow if you know what I mean.
Another senior’s moment — Let’s get all those rusting ATCO trailers out of the oil patch and set up a trailer city until this all settles down. One of those is larger than most “entry” level homes. Now thinking as a “green” realtor. If you jack em up you can even have your garage underneath. Re-use and recycle right!
We got some guy suggesting that we convert shipping containers to studio suites and just stack-em up 10 high. Durable to be sure but a little cramped I think. Although, they have been known to pack 50 new “Canadian friends” in them for transport.
As before we’re happy to share and send some over. Failing that, just highjack the trains and pull a few off the rail cars.
Some basic infrastructure for water and sewer and we got a mini portable town that can be set up anywhere. Alex will like this: It’s not perfect but it’s better than having people freezing in their cars.
It also buys time to figure this mess out as opposed to a knee jerk reaction to gain some votes.
Must be the ocean air that brings such clarity – .>)
May 14th, 2009 at 3:48 pm
Larry, last summer we dropped in on a guy who was building his home from shipping containers in Victoria. The place was mostly complete when we saw it.
Didn’t get a chance to go inside, but he noticed us gawking and we talked with him for a while and took some pictures. He said it was about 150/ft to build, doing much of the work himself.
It’s on an odd shaped lot without much street frontage, so not that suitable for a traditional type of house. Pretty cool place. http://www.zigloo.ca is the website. There are a few other shipping container residential and office space projects scattered around the planet in England, Netherlands. Google shipping container house if anyone is interested in seeing more. Not as crazy as it sounds.
May 14th, 2009 at 3:49 pm
Larry,
Well, whatever you want to call it, I love it, and I recognize the wisdom behind much of what you have to say. At 44, I suspect I’m still a little naive as I do tend to look for the brighter side and hope for the best from people.
Jesse,
Entry level aside, an “affordable home” would be one where you could service your mortgage, property taxes and heating costs with 30% of gross income. If you earn $40,000 per year, that gives you a whopping $1,000 a month for all of those things. Budgeting $100 for heat and $150 for taxes, you’re left with $750 a month for the mortgage. That gives you a total of eight options from the MLS including a handful of small condos in Meadowgreen and 3 decrepit houses. Alternatively, one could probably buy a nice lot in a decent area and live in a tent. Without two half decent incomes the first time buyer is pretty much s-o-l.
Thomas,
Interesting story. Though I am not aware of any recent instances where this has happened I wouldn’t be the least bit surprised. If CMHC thinks we’re anywhere near the top they may indeed become more conservative in order to reduce their liabilities.
Investors rarely bring cash to the table (common misconception). One of the big benefits to real estate is the ability to leverage. In most cases, they put as little in as possible. That said, they may well be inclined to pay a little more than the typical home buyer if they believe that there’s an upside. They may also have access to funding from more non-traditional sources but the objective is almost always put less money in. I’m thinking that buyers are probably not facing much comptetition from investors right now.
The reason that you’re seeing more of these people around your apartment is that it makes more sense to rent right now. Even with the wild increases we’ve seen in rents you’ll almost certainly pay more money per month to buy something comparable. This is just one of the things that we can look to in understanding that prices are “out of whack with the fundamentals.”
You may very well be making the best decision you could make right now. I think you can look for improved conditions for buyers as we move forward. Prices likely stabilize, perhaps even decline. Interest rates come down a smidge eventually. You get a raise, hopefully. All of those things have the potential to improve affordability. In the mean time, you can let your landlord subsidize your housing costs.
Good luck.
May 14th, 2009 at 3:49 pm
xcondoguy,
kind of cool looking places actually, especially from the inside.
May 14th, 2009 at 3:49 pm
That Zigloo thing is super neat but being in the architecture field i tend to wonder…i looked through the videos and photos, and it seemed they still need to frame floor joists, still need to frame and finish the exterior walls etc…i mean unless these shipping containers are free isn’t that just an expensive exterior siding? I also wonder how the air vapour barrier works (if there is one)…it better or they’ll have rotted exterior walls in no time esp in a rainy humid climate.
Still neat though!
May 14th, 2009 at 3:49 pm
I’m not mocking anyone Alex. And I think I’ve clearly stated a few times now that I’m in favour of rent controls. This is coming from a Saskatoon landlord. I’m also a BC landlord – with rent controls in place and my investments are dong fine.
You say I sound like a bad landlord … well I admit to being less than civil on this board in a few instances and for that I apologize. I am, however, proud of my track record as a landlord in several provinces and, to date, have had no complaints to speak of. I do everything by the book and employ professional property managers (the one in Saskatoon being notable for their excellent service).
May 14th, 2009 at 3:50 pm
Okay as i’ve looked a little more into it…it appears he may have covered the building science issue with the vapour barriers etc…and the free containers.
Good man! it’s a sweet house.
May 14th, 2009 at 3:50 pm
Callum: I didn’t think you were mocking anyone.
I think that most good landlords — and I’ve had many over the years — have little trouble working within reasonable guidelines and regulations. It’s the guys who try to ’save money’ by avoiding maintenance, deferring repairs and hanging on to deposits that are the problem.
Thomas: I wonder if CMHC is just wanting to avoid the kind of problems that developed south of the border? It’s kind of heartening — if frustrating — that they won’t guarantee a price that doesn’t make sense.
I don’t think it’s odd that people will rent rather than buy: partly, it doesn’t make sense to pay 2,000 plus for a converted apartment, and many single professionals are only here for a short time, in which context buying really makes no sense. If you’re raising kids that’s different, but I’m a single woman, don’t need a house and am danged if I’ll pay half of my take-home pay on what amounts to rent.
Norm: I think if you’re paying 150 in condo fees out of that 750 bucks, the condos in Meadowgreen will be too expensive as well.
May 14th, 2009 at 3:50 pm
Jesse,
He did mention something about vapours and air flow and had to bring in an engineer of some type for consultation. I think it had to do with the 4″ hollow tube on the container frames and the way those worked into things. Creates a vapour lock in the tubes if they are welded together.
May 14th, 2009 at 3:51 pm
callum,
You do tend to have a mocking tone to your posts when disagreeing with us “radicals”, haha. Glad to hear you treat your tennants right. It’s no excuse for a landlord to turn into a slumlord because not ALL tenants are ideal. A clean conscience goes a lonnnng way. :’)
It’s also nice to hear a landlord speak positively on minor rent controls.
May 14th, 2009 at 3:51 pm
xcondoguy,
Yeah I saw that later on in the site search. It’s a really neat idea. I was more impressed with the interiors than the exterior but all in all very cool! Welding certainly would lock in things but depending on where the ‘vapour lock’ is it could cause problems. I’m sure the consultant had his hat on while tackling these things.
I’d love to see more of the ‘different’ shape and type of houses in areas instead of the typical cookie cutter 2car garage 1700 sq feet houses that we typically see in the new areas (or the narrow 2 storey ones which are just as ugly).
May 14th, 2009 at 3:51 pm
Callum, what Heather said.
Seriously. If you are a good landlord, it has likely already been apparent how doing a GOOD job is better than doing a profitable one.
May 14th, 2009 at 3:52 pm
Very interested. I guess some land lords never learn!
Warm Regards,
Rob Lawrence
http://www.battlecall.com
May 14th, 2009 at 3:52 pm
Coun. Charlie Clark brought up a good point at that meeting. A very insightful point indeed. Unfortunately it went over just as unsuccessfully as everything else he tried to say to bring to light the severity of this crisis.
He agreed that the incentives would be helpful and are a step in the right direction. He pointed out though that if we concentrate more on protecting the rental stock that we currently have instead of converting apartments into condos, we wouldn’t be in such desperate need for the construction of new units in the first place.
I liked his analogy of a bucket… There’s a whole in the bottom (dear liza, dear liza – kidding) and the units that we have leak out (condo conversions) while we scramble to fill the bucket at the top (new initiatives and incentives).
What a great guy : )