Edmonton’s development disconnect

By Tracey Arial

While other cities face residential land shortages and struggle against urban sprawl, Edmonton’s transportation system ensures access to surrounding municipalities that compete to attract developers.

We’ve just built a ring road that’s approximately ten miles in all directions from the downtown core,” said Greg Christenson, a senior housing developer in Edmonton. “It’s a major freeway system that opens up access to all the bedroom communities. In the Capital Regional Plan, they say we have 24, but more realistically there are 16. Each one of those municipalities has land.”

On the other hand, Christenson says that developers like him who serve markets that rely on collective transportation are not as well-served.

There’s a disconnect between where developers want to develop and where transit is going,” he says. “The transit progress is tenuous and slow and very much dependent upon what I call home-run infrastructure funding. They’re not really based on sustainable models of infrastructure funding. They’re based upon municipal governments begging to higher levels of government—usually the provincial government—to get money for a sort of manna from heaven for major LRT projects. There is quite a high level of capital expenditure on infrastructure that is not necessarily targeted to things light and rapid transit, so there’s a disconnect. Transportation is becoming a greater and greater cost and it affects affordable housing for families.”

There’s also some uncertainty in serving the growing seniors’ market due to changing standards.

There’s risk around that because of the heavy intrusion of politics and a crisis management system of looking after seniors and housing.”

Like all the other developers in Edmonton, Christenson also has to plan for an ever-changing market that he says operates on a 12-year cycle that ramps up slowly.

We’re really coming out of a relatively slow time, which is a little bit different than other Canadian cities because many of them are in a 15 or 20 year up-cycle.”

Edmonton’s local housing market has been healthy enough in the past four years that few people noticed its negative trend, he says. Instead, they dealt with the usual challenges of a short construction season, a very high cost of labour, and the ever-lengthening time it takes to get projects approved in his province.

In Alberta, more people are taking on more projects because of uncertainty of when the project is going to start, he says. “It takes more juggling.”

Note: This report appeared on page 58 of the Spring 2014 issue of Canadian Real Estate Magazine.

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