Pedestrians stroll past a block of empty home lots in Saamis Phase 7. The city's economic development office has announced plans to provide a $10,000 grant incentive to home builders who start home construction this year in new communities as a way to bolster stagnant activity in the midst of a pandemic-caused economic slowdown.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
A city grant meant to bolster new home construction this summer is “almost fully subscribed” about one week after it opened, which could translate to 30 new homes built in what was forecast as a potential complete slowdown.
A brief overview was provided during a general press availability at city hall on Tuesday, during which Mayor Ted Clugston said the response to the offer of a total of $300,000 in grants, only announced on May 28, was encouraging.
“As far as I’ve heard it’s almost fully subscribed, which is something,” said Mayor Ted Clugston during a Tuesday press availability.
“You never know what the tipping point is: whether people have been sitting thinking about it, on the fence about something and there’s a little something that tips them over the edge.”
Local builders also say they’ve been heartened by the program, which would pay out a maximum of $10,000 for each new lot sold to a registered builder after June 1 in new communities on condition that foundations are finished by year end.
If all grants from the first round materialize, it would put new home construction levels on par with last year – not great, considering 2019 was remarkably slow, but better than dire predictions about homebuilding cratering during a COVID-related recession.
“It was looking like a rough year (before March),” said Aaron Brost, of Brost Homes and the president of the local Canadian Homebuilders Association chapter, earlier in the week, before Clugston’s comments. “Now we’re a bit more optimistic, but realistic; nobody’s jumping up and down expecting a boom, but we may have a bit more business than maybe we thought at the start of all this.”
Brost said many of the CHBA members are also keeping active in the renovation sector, but would likely work hard to make new builds a priority and entice buyers into contracts.
“Most will pass it on to (home buyers),” he said. “It’s a bonus for maybe some things you want to see in the house, or for a price reduction.”
The “10-20-30” grant is offered through the city’s economic development office, and can be applied to both city and private developer lots in new communities. A maximum of $10,000 per lot would be awarded if builders must get to the weeping tile stage of construction, meaning foundations complete, by the end of the year.
Clugston told reports on Tuesday the idea could be applied to infill construction in a future program.
Only 20 starts were recorded in 2019 inside city limits, and the city’s land department sold just 24 new lots.
Residential construction began the year on a slight upswing. At the end of May, 11 new home building permits had been issued by the city’s planning department, compared to six in the first five months fo 2019, though duplexes lagged substantially behind.
Nationally, data released by the Canadian Mortgage and Housing Corporations this week states that new single-family home construction in Alberta was down about 17 per cent in May compared to one year earlier. Across the country, starts were essentially steady thanks to major gains in Quebec and steady figures in Ontario, while the prairies and parts of the Maritimes saw major declines.
In Alberta’s major markets, Calgary and Edmonton both saw double-digit percentage declines while Lethbridge saw housing starts cut in half.
