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‘Idiotic’ Toronto policy stymies mayor’s affordable housing plan

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Urban planner Sean Galbraith demonstrated — in recent Twitter posts — how Toronto’s own zoning regulations are standing in the way of Mayor John Tory’s goal to create 40,000 affordable housing units.

Galbraith, of Galbraith & Associates, specializes in development services for small projects.

Toronto’s zoning “yellow belt” of detached homes is blocking Mayor John Tory’s goals for affordable housing, writes Bob Aaron.
Toronto’s zoning “yellow belt” of detached homes is blocking Mayor John Tory’s goals for affordable housing, writes Bob Aaron.  (Dreamstime)

Deep in what Galbraith calls the zoning “yellow belt” — the city’s residential detached zoning area — a house was split into three apartments without permission about 20 years ago.

People moved in. No complaints were ever registered.

In 2015, Galbraith’s client bought the property. Because his client is a “good guy,” Galbraith says of the landlord, “he keeps the rents affordable for the tenants, who are an older single woman on disability, a single mom who must keep her child in the area for school, and a young immigrant couple getting on their feet.”

The landlord also asked the fire department to inspect the house for safety. He didn’t know the units were created without city approval.

The fire inspection passed, since the house exceeded requirements. But the fire department had to tell the city zoning department that there were three units, and the landlord was forced to begin the difficult process of trying to legalize the building so he wouldn’t have to evict one of his tenants.

The matter came before the local committee of adjustment last month. The landlord applied for a minor variance to the zoning bylaw to permit the building to remain as a triplex and to reduce the parking requirement from three spaces to one.

Galbraith and his client presented the committee with 45 letters of support from neighbours, and one from the local councillor. Despite this, a staff report from city planning recommended against the application.

After the hearing, the committee agreed with city staff that the application was not minor and that “three dwelling units within the existing detached dwelling results in an intensity of use that is not in keeping with the general intent and purpose of the bylaw . . .”

The landlord’s application to retain the existing use with three units was refused.

Galbraith’s client has two choices. The first is to evict one of the tenants and add to the city’s housing crisis.

The second option, which Galbraith calls “idiotic,” would see the landlord combine two units into one by removing one internal locked door and force two of the existing tenants to nominally share a unit. If that happens, the building suddenly goes from a triplex to a detached house with a secondary suite, a legally permitted use.

If the landlord applied to the city to rezone the building, the base application fee is a staggering $41,664.74 — with no guaranteed result.

Says Galbraith: “I just can’t accept that providing three units of affordable housing, that generates zero impact on anyone, is illegal.”

This is exactly the kind of city policy that frustrates the mayor’s goal of creating 40,000 affordable housing units.

Galbraith has advice for anyone who wants to see change in the city’s policy.

“Talk to your councillor,” he says. “Tell them that you support a complete overhaul of the Official Plan Neighbourhood policies and zoning bylaw policies.”

Bob Aaron is a Toronto real estate lawyer. He can be reached at bob@aaron.ca or on Twitter: @bobaaron2

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New pandemic protocols will change Quebec’s real estate business

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Quebec real estate brokers got some good news Monday when COVID-19 restrictions were lifted.

For the husband and wife real estate duo of Daniel Arsenault and Jennifer Smith of Royal Lepage Village in Pointe-Claire, it means they’ll be able to once again visit a potential client at their home, albeit two metres apart.

But it’s not completely business as usual as new pandemic protocols must be observed in the buying and selling of properties.

The traditional practice of holding open houses, in which properties for sale are showcased to the general public, will undergo tweaks.

“For example, if a family of five visits a home, only one person at a time is allowed inside,” Arsenault noted. “Given proper social distancing and limited numbers of people in a house at any time, proper sanitation, we’re pretty well back to business.”

In the new normal, virtual tours, or online visual tours of properties, will likely grow in popularity among both buyers and sellers looking to reduce person-to-person contact.

“We were doing it already, but more people will probably do it (now) is drone photography and 3-D virtual tours and floor plans,” Arsenault said. “That will become more of the norm because we want to make sure the people are qualified before visiting.

“In real estate, as in any sales business, you should qualify to lead. Now it’s much more so the case. We need to qualify that the buyers are financially prepared, that they’ve worked for a bit to decide what locations they want to go to.”

The onus on prospective buyers will be to filter info such as location, proximity to transportation lines and schools.

“So it’s a much more detailed analysis or qualification prior to committing to a visit,” Arsenault said.

Montreal’s red-hot real estate market has chilled like the rest of the economy since the city went into COVID-19 lockdown in mid-March. After 61 consecutive months of increases, the Montreal Census Metropolitan Area reported a 68 per cent decrease in residential sales transactions in April 2020 compared with the year earlier period.

“(The pandemic) is going to affect economy in ways we can’t even imagine,” Arsenault said. “Where there were 10 buyers before, now there might be five, so supply and demand might force prices down a bit.”

Arsenault said homes under $500,000 will likely remain attractive in a sagging economy.

“The low end of the market, in good locations, is insulated from (a downturn) … because if you’re in a bigger house and you need to downsize you’re going to go to the lower end. It’s more frugal.

“On the other hand, houses in a fringe location or are outliers in terms of size … is going to be a challenge. In other words, the house that was harder to sell before will be harder to sell now.”

Arsenault speculates that other factors, such as the type of housing and proximity to others, could affect the real estate market going forward.

“If you’re an elder person and planning to go into a retirement home, you’re holding off for now,” he said. “We have clients who are doing exactly that.”

Arsenault said the Montreal condominium market could also take a hit if buyers start looking for single-family homes with backyards and more space between neighbours.

“If people were on the fence, this will be a catalyst,” he said.

But other factors, such as proximity to medical services, must also be weighed if people move farther away from the city.

“We’re going to see fear of proximity,” Arsenault said. “No matter what the government is telling them, there is going to be a vast portion of the population that is going to be afraid to be around other people.

“Historically, after every major economic crisis, one of the trends was more people moving into smaller properties closer to major cities. So reduce your financial footprint.

“And now we have both happening at the same time. We have the financial crisis but we also have fear of proximity.”

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What Will Happen to the Real Estate Market in Calgary?

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The City of Calgary has been weathering its own storm, long before the COVID-19 public health crisis roared into the spotlight. The city is heavily reliant upon the energy sector, and as a result, the local economy has been suffering from the fallout of sinking oil prices. Investment levels have been weak within the city, and Calgary’s construction sector has been dealing with a downturn of its own.

On the flip side, 2020 brought a promise of change for Calgary. The city’s GDP was expected to expand by 2.4% over the next three years as the energy sector started to show signs of stabilization. There was hope that this economic boost would help to lift demand within the city’s housing market, which has struggled with a surplus of real estate inventory. According to Calgary Real Estate Board (CREB) statistics, there was a year-over-year increase in sales of 4.35% in the first quarter of 2020, setting the Calgary housing market up for the best first quarter in years!

Unsurprisingly, the spread and implications of the COVID-19 crisis has derailed some of this optimism. The Calgary housing market has had to forfeit the gains it had made earlier in the year as many realtors, buyers, and sellers have had no choice but to press pause and stay home. Below, we dive into how the pandemic has impacted the Calgary real estate market, and what we can expect to see in the months to come.

The Impact of COVID-19 on the Calgary Real Estate Market

In early March of 2020, Calgary businesses and residents adjusted to a new normal amid social distancing measures to contain the spread of the COVID-19. While the real estate industry, deemed an essential service, was continuing to operate, REALTORS® were forced to pivot, forgoing open houses for virtual home tours and 3D 360-degree imagery.

The full impact of these measures and business closures were most felt by the Calgary economy and real estate market over the month of April. Overall home sales plummeted almost 63%, new listings were down 54%, and the average price of a Calgary home fell more than 8%. These trends were mirrored in the communities surrounding Calgary; over April only 60 sales were reported in Airdrie, and 17 homes were sold in Okotoks.

Amid an environment of business closures, social isolation and depressed consumer confidence, it comes as so surprise that demand within the market is falling, and that sales activity is on the decline. Chief economist for the Calgary Real Estate Board (CREB) Ann-Marie Lurie commented in the CREB market update for April: “Demand is also falling faster than supply. This is keeping the market in buyers’ territory and weighing on prices.”

In April of 2019, the average price of a home was $460,953 – by the end of April 2020, the average home price was sitting at $422,655. The steepest price plunge has been seen in homes priced over $600,000.

Reignited demand in the Calgary market will help to re-balance the market and flatten the curve in terms of dropping real estate prices. The question remains as to when those waiting out the pandemic will feel safe enough, and financially ready to return to the market.

Calgary’s Return to Business-as-Usual

Alberta Premier Jason Kenney has already announced a multi-stage rollout for the province to emerge from its COVID-19 lockdown, with some businesses given the green-light to open as early as May 14th. The success of this plan, Kenny comments, will depend on the capacity of Albertans to continue to heed rules put forth by public health officials, including limiting public gatherings of over 15 people.

With the local economy and daily life within Calgary already on the path to recovery this month, there is much hope that by summer, there will be enough of a climb in demand within the housing market to start reversing some of the dips caused by the public health crisis.

Hope for the Calgary Real Estate Market

Mid-way through April, Prime Minister Justin Trudeau announced that the federal government would be pledging $1.7 billion to clean up orphan wells across the provinces of British Columbia, Alberta, and Saskatchewan. As well as providing environmental relief, this move will bring a much-needed boost to the struggling prairie provinces.

Effective immediately, this incentive will help to provide thousands of jobs within the receiving provinces, also helping large corporations (some of the region’s main employers) avoid bankruptcy in the midst of the public health crisis and the plummeting oil prices. With this investment helping to maintain 5,200 jobs in Alberta, there is optimism that this will also provide a modest boost for real estate within the province’s major markets, including Calgary.

Prior to the outbreak, despite its high unemployment rate, the city of Calgary continued to grow in population, attracting residents from other areas of Alberta. As the city maintains its reputation as one of Canada’s top 10 affordable real estate markets, it will continue to pull homebuyers in, who will be even more keen to take advantage of low prices and low interest rates post-crisis.

Other financial incentives and programs introduced since the onset of COVID-19 will also help to soften the economic blow to homeowners in Calgary. Mortgage deferral programs will also prevent spikes in new listings which can further imbalance the market during periods of high unemployment. With listings declining proportionately with sales over the second quarter, says Lurie, this will make the market less competitive for those selling their homes in Calgary. “Given the nature of this crisis, the situation is evolving rapidly. If additional government policies and programs are enacted, it could help soften the economic burden faced by Albertans”, Lurie says.

While so much uncertainty remains regarding the economic, political, and real estate climate within Calgary, hope and a spirit of resilience remains strong.

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Edmonton’s real estate market looks to bounce back after sales drop due to COVID-19

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As much of Alberta tries to recover from the economic impacts of COVID-19, Edmonton’s real estate sector is among the industries hoping to bounce back.

After facing a major decline in home sales in April, many realtors say they are looking forward to a relaunch of their own.

“Mid-March we got that announcement that everybody needed to stay and work from home and that sort of dropped off, and then we really saw the effects of that impact happening in March in April,” Jennifer Lucas, chair of the Realtors Association of Edmonton, said.

Buyers and sellers started expressing safety fears about touring homes. In the latest report released by the Realtors Association of Edmonton, sales of single-family homes were over 55 per cent in April, compared to the same period last year.

The average sale price of single family homes is $410,200 — a drop of just over 4.14 per cent from last year.

With no exact timeline for a market rebound, there has been some indication that things are changing.

“We’re starting to see now that the government has introduced their phase-in plan for the economy, that people are starting to feel comfortable with the protocols we’ve put in place… they’re starting to get their houses back on the market and we’re getting a lot more calls from buyers to start looking at houses,” Lucas said.

“There’s no question this last week, week-and-a-half we’ve had tons of conversations with buyers and sellers that are definitely looking to get going,” realtor Ryan Boser with Sarasota Realty said.

While many realtors switched to virtual showings and assessments during heightened COVID-19 restrictions, they said making such a large transaction could benefit from a more personal approach.

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