Some major St. Albert housing developments are pivoting from condos to rental units as Alberta’s rent prices reach new heights and the city’s rental vacancy rate remains one of the lowest in the Edmonton region.
The first tower under construction at Riverbank Landing, a new condominium development in Oakmont, is 50 per cent sold and three stories out of the ground.
That building — 260 Riverbank Landing — will have 147 condos. But a second building that will begin construction later this year will add nearly 140 purpose-built rental units to the city's supply, according to Dave Haut, CEO of Boudreau Communities Ltd.
Rental was “always a possibility” for the second phase of Riverbank Landing, Haut said.
But now, Boudreau is considering adding another 60 rental units to a third building, which will break ground in early 2025.
Once all three buildings are complete, the housing development could be over 50 per cent rental units, at least until Riverbank buildings four, five and six take shape. It marks a shift in the way developers are doing things in St. Albert, a city that has been dominated by single-family detached homes.
Haut said that Boudreau changed direction for two reasons.
“There appears to be a shift in how society views home ownership,” he said. “More and more people are unwilling to be cash poor and house rich.”
Owning a home is also “a major expense,” Haut said.
“There are well qualified people who simply cannot afford the down payment for a home yet, are working towards it but need some time,” he said. “These are the type of people who would be attracted to Riverbank Landing.”
Midtown, a new neighbourhood under construction on the southwest end of the city, will also be breaking ground this year on what developer Averton Homes calls an “executive for-lease townhome community.”
Paul Lanni, CEO and president of Averton, said that the company had been receiving many inquiries about rental units. “We've seen for the last little while that there's an opportunity to introduce rental,” he said.
“We're looking to build a very high quality, higher end rental option in this community,” he said.
“The increase in rental activity is … a function of increased migration to the region, coupled with federal policy to encourage increased rental development and the higher interest rate environment.”
Lanni estimates that Midtown is under a quarter complete. When finished, the new neighbourhood will have about 1,000 homes, primarily townhomes and apartments of various styles. About half of its current inventory is sold, Lanni said.
East Village, a new apartment building under construction on St. Albert Trail and Coal Mine Road, was always slated for rentals, said Jeevan Garmilla, a project manager with Landrex Inc.
“There’s a huge demand for that,” he said.
East Village is about 40 per cent complete.
A nationwide trend
Developers shifting from condos and single-family detached homes to rental units is an established trend across the country, said Dr. Damian Collins, a human geographer and housing researcher at the University of Alberta.
“We're catching up, because for so long we built very little purpose-built rental housing,” Collins said. “We ended up with a real deficit.”
Rental has become more appealing for developers because of the large and growing segment of Canadian households (currently one-third) that are renting, Collins said.
Federal and provincial incentives have also helped spur momentum in the industry, he said.
“They can't come fast enough, really, given the level of need in our society and the population growth that we're experiencing,” he said.
Recent data from the city suggest that St. Albert’s apartment vacancy rate sits at 2.2 per cent.
