With flooding putting pressure on an already tight rental market, the head of one Calgary housing agency said demand has grown exponentially.
David Watson, director of Attainable Homes Calgary Corporation (AHCC) – the non-profit organization that works to deliver entry-level homes for Calgarians – said over the last year, interest has increased substantially.
“Before I started here, for awhile there they had units and they were getting quite nervous that they weren’t finding any buyers,” said Watson. “I would say over the last year, and it has increased to the middle of this year, the demand has been growing exponentially.”
Attainable Homes recently announced the acquisition of 42 units in Skyview Ranch. Available for quick possession and starting at $170,000, the homes will help alleviate some of the need for affordable housing in the city.
Under the Attainable Homes model, clients who meet AHCC’s criteria are “gifted” a down payment to help purchase one of the company’s affordable housing units.
But despite the recent acquisition, Watson, who previously spent 35 years as general manager of Calgary’s Planning, Development and Assessment Department, said demand for affordable housing in the city is only bound to increase.
“I don’t think we can meet the demand. That’s why we need more units. If I had more units I could sell them.”
Exactly one year ago, 5,028 people had registered interest in the attainable home ownership program (that was the total since AHCC was created in 2009).
Currently, the organization has over 9,000 registrants; meaning thier database of aspiring attainable homeowners has nearly doubled in the last year.
One major factor that Watson said is contributing to the demand is the lack of affordable rental units in the city.
“I would think the vacancy rate must be close to zero,” he said. “We’re getting a lot of people – and it’s all hearsay – coming in and saying ‘my lease or my rent is coming due and I’ve been told it’s going to increase exponentially and now it’s getting to a point where it doesn’t make any sense for me to rent if I could spend as much money or even less and get a mortgage.’”
One of the main factors in the current lack of rental space in the city can be traced back to the economic recession of 2010, when investment in apartment construction plunged from over $218 million to $31 million in the span of 15 short months.
While apartment-style construction in the province has recently rebounded, hitting $137 million in May, the impact has yet to be seen in the number of available units. According to Canada Mortgage and Housing Corporation, Calgary had the rental lowest vacancy rate in the nation as of April at just 1.2 per cent. Frances Crow is one of those who turned to Attainable Homes in search of an alternative to renting.
“The mortgage is not much different. There are condo fees, but at least I’m putting my foot on the ladder and I can afford it,” said Crow, who moved into her unit in Skyview in mid-July. “It was great that someone was able to help me with my down payment. I can afford the mortgage, I just couldn’t get the down payment together.”
According to Watson, remedying the situation faced by Crow is precisely the purpose of AHCC.
“That’s the whole point of our program. If you look at the cost of ownership in Calgary and the rising cost of that over the last couple of decades and wage and salary growth, there’s a gap between those two things that’s just getting bigger and bigger,” said Watson.
Putting further stock in Watson’s claims of escalating prices, a recent report from ATB Financial shows that population growth in Alberta is currently outpacing the growth rate of new homes by 1.2 per cent. In the recently released Calgary Civic Census, the city’s population increased by 29,327 residents, an increase of 2.6 per cent, while the number of housing units in the city rose by just 1.96 per cent.
“Currently, the rapid pace of population growth in Alberta is outpacing the growth rate of new homes by about 1.2 percentage points,” said ATB Financial economist Todd Hirsch. “This could eventually result in a tight housing market, which would in turn push home prices higher.”
Between June 2012 and June 2013, the average price of a home sold in Calgary rose from $441,718 to $466,458, an increase of 5.6 per cent.
For more information on Attainable Homes Calgary, visit www.attainyourhome.com