Housing starts show lack in apartment buildings
By: Viola Pruss
| Posted: Saturday, Oct 20, 2012 06:00 am
Apartments are rare to come by, living expenses are up and the jobs are in Edmonton. St. Albert is lacking in affordable housing options and its youth is moving away.
The Canadian Mortgage and Housing Corporation reported a high demand in rental units for Edmonton in September, whereas St. Albert had none.
The last significant jump in St. Albert’s rental starts was in April, with 118 new apartment units. In comparison, the previous year saw only 96 rental starts and zero in 2010.
It is not the demand that’s lacking but the houses, said Doris Vandersteen, executive director of the St. Albert Housing Society.
The society is currently building a 117-unit market-based and affordable rental complex in North Ridge. The complex, Big Lake Pointe, is set to open in early 2013.
North Ridge is also home to another rental complex, which began occupancy this summer. Northridge Village Apartments is a 96-unit, two-building complex that is already fully rented.
Vandersteen said both complexes were the first apartment units built in St. Albert in 35 years. The society already has 150 people asking for information on Big Lake Pointe.
“The demand is quite significant. Compared to surrounding communities we have a very low number of apartments available,” she said.
Vandersteen recently compared the number of residents in the city with the overall number of apartment units and found there is one apartment per 93.7 residents.
Most renters are below the age of 35 with modest incomes. To live comfortably in a one-bedroom apartment in the city, earnings would have to be $17 an hour, with one-third of the monthly income dedicated to rent.
“If you add children to the mix these 30 per cent become more and more difficult,” she said.
In the spring of 2012, the vacancy rate for apartments was at 0.2 per cent. Vandersteen said five percent is generally considered healthy for a housing market.
“When vacancy rates are this low there’s little opportunity for people to come into the community and for those who need change,” she said.
“Many people find they have limited disposable income to put to a down payment. They would have loved to have their kids remain here but they bought their first home in another community and haven’t come back.”
St. Albert had 17 housing starts in September. All of the buildings are single detached homes.
David Lan, senior market analyst for the Canadian Mortgage and Housing Corporation in Edmonton, said mortgage rates have changed little over the past years and Edmonton shows a rise in employment rates as more people move to the city.
“St. Albert is a relatively small market and tends to be influenced by other markets. You have Edmonton right beside you and employment in Edmonton is fantastic,” he said.
Pam Filipchuck, realtor with RE/MAX said people were looking to buy homes rather than building them due to the high costs associated with construction.
Re-sale family homes and bungalows cost about $300,000, while buying two-storey buildings in St. Albert costs between $500,000 and $1 million.
Filipchuck said many young families prefer to return to their old neighbourhoods where they renovate homes, while seniors move from their family homes into bungalows.
“Usually if you look at a new home, the cost involved is higher than with a re-sale home and you have the landscaping too. And often it all depends on what the kids want,” she said.
Vandersteen anticipates that future economic growth in the city might attract more investment into the housing market.
“The cost of construction is influenced by the cost of land, the cost of servicing and the cost of materials and labour. And also by interest rates,” she said.
“We need to continue to work on providing more housing options for new residents and those within our community.”