Things changed in Fort McMurray the day, late last year, when TrueNorth Energy’s plans deflated.
That was the day construction in the northern oil metropolis came down into the healthy growth range of about five per cent from the crazy nine-per-cent average annual growth from 1999 to 2002, says Russell Dauk, manager of planning and development for the regional municipality of Wood Buffalo.
The projected number of residential housing units to be built in Fort McMurray this year is down to about 900 from an all-time high of 1,388 in 2002.
Research demonstrates that while the cancellation of TrueNorth’s labour-intensive mining project will have a short-term effect, it will only be a couple of years until its impact is no longer felt. There’s enough other large players to keep workers flowing into the community. Growth of the city hinges directly on the oil industry – for every one primary industry job created there is a need for 1.8 new residential units.
The city’s population grew from 34,000 in 1996 to about 48,000 presently (70,000 projected by about the turn of the decade), with the 1999/2000 year establishing the watermark for annual growth at 15.7 per cent.
|Kenton Friesen, Business Edge|
|The Nelson Ridge Estates apartments are renting for $1,900 per month, fully furnished.|
To achieve that kind of growth has required outstanding co-operation between the municipality and developers and contractors. No development process stereotype can go unscathed in the rapid-firing market. Gone is the perception that it takes years to plan and develop a subdivision.
Take Morgan Heights, a mobile home subdivision developed in early 2001. Residents were moved in and baking bread within eight months of the land being forested with absolutely no plans or permits in place, says Dauk.
The approval process took only weeks.
Developers have taken huge risks in the community, investing hundreds of thousands of dollars in detailed engineering works before all approvals are in place.
It has not been unheard of for people to move into new homes without a paved road out front or necessary services hooked up.
Amid the buzz, the city has tried to keep the growth orderly enough to not have regrets in the future, sometimes holding public consultations about the development of a large piece of land. Developers have sought citizen input over plans to develop chunks of land.
Fortunately, that chaos has come to an end and there is close to one year’s worth of serviced lots ready for construction.
Now that residential development is under control, the focus has turned to commercial projects, hotels and the attraction of key retailers.
Canadian Tire is poised to expand its existing store, and Rona (nee Revy) is in the pipeline. Last year was also a record-setting year for real estate sales volume – despite Kyoto.
Year-over-year sales were down by 46 per cent in January and February, but prices continued climbing – with the average single-family home now sitting at $252,800.
Realtor Greg Walsh says the Kyoto debate caused “so many people to sit on the fence that the fence fell over.” Now, it’s back to business as usual.
Walsh has been selling real estate in Fort McMurray since 1980, riding through the explosive and not-so-explosive times.
He predicts a more stable market for the future, as many of the oilsands projects have 50 or 60-year time spans.
That stability is being reflected in an increase in local residents buying rental property as investments.
Although work is being done on a variety of fronts, affordable housing and rental units remain issues of concern.
Confronting the issue is Dave Marshall, president of Prairie Communities Corp., whose present 168-unit condo project (seven one-bedroom units, 161 two-bedroom) was designed so that two people working at the local, unwritten minimum wage of $12 per hour could obtain financing for a mortgage.
The 671-sq.-ft., two-bedroom condos start at $107,900. Costs were kept to a minimum through an absence of underground parking and elevators.
Marketing began in August of last year and the units in five of the seven buildings in the project are already sold. He expects the remaining to be gone within three months.
“Communal living is an important part of the market here,” says Marshall, explaining the disproportionate number of two-bedroom units.
Filling the same market niche is Saskatoon’s TFM Developments Inc., developer of 225 two-bedroom/two-full-bath rental units in Fort McMurray. “We started renting them unfurnished and we weren’t getting anywhere,” says Rick Saumure, property manager. But the leather sofas, captain beds, dishes and towels have made all the difference.
The 150 units are now 100 per cent rented.
At $1,900 per month it would be a bit of a stretch, furnished or not, in any other Albertan city. But in Fort McMurray it’s a deal.