Building permit values down in 2008

Mac Olsen
South Peace News

Darrell Shewchuk is pessimistic about new residential and commercial building construction in High Prairie this year. “It might be a long, long time before I build again. I have one house … I just completed and I think I’ll end up renting it. The market has gone to nothing,” says Shewchuk, owner of D & C Plumbing Heating and Gasfitting Ltd. However, Shewchuk has a lot of plumbing and heating work and he will advertise for home renovation work because of a tax credit homeowners could receive, up to $1,350 per owner. Federal finance minister Jim Flaherty announced it as part of his budget speech Jan. 27. “I think people will spend some money and take advantage of it,” Shewchuk says. He also constructs commercial buildings and wants to construct one across the street from Macleods True Value Hardware, although he will require a renter before committing to it. The local real estate offices are more optimistic about sales and new construction. Gord Olson, agent/owner of Century 21 Sunnyside Realty, says new home starts were not as high in 2008 as they were in 2006 and 2007. However, home sales increased substantially in the last quarter of 2008 compared to the same period in 2007. “Our fall market was substantially better,” says Olson. He has talked to developers and they are committed to building a couple of new homes in High Prairie in 2008. “What has hindered residential development has been the lack of new lots, which we have now,” says Olson, referring to the Cornerstone Development lots just north of E.W. Pratt. There are also the lots in Peavine Estates on the east side of town and the commercial lots on the west side. “In the past, we’ve lacked the land for commercial development. Now we just need to attract the businesses and investors to those lots.” Debbie Nelson, broker/owner of Royal LePage P.V.R. Realty, says, although the economy is painting a grim picture at this time, the consumer should understand the current activity or lack thereof in the real estate market would not be long term. “We are only currently in a market correction which was a necessity in order to bring stabilization to the industry. This is a normal trend; i.e., the seller market peaks then slowly transitions to a buyer’s market. Once the market is stabilized then we will move into a more viable market.” She also says reasonably priced homes will return, which will then offer encouragement for future construction and possibly draw the younger families back into the market, as the current situation was a detriment to their buying capacity. “I believe once the dust settles we will see an excitement in the market once again, although it may not be the market we had for the last two years it certainly will not bottom out at this time,” says Nelson. She also says the Canadian mortgage market is very strong and will not be as affected as deeply as the U.S. More commercial construction could take place in the general area due to the multitude of planned and ongoing projects, including the Seal Lake Connector Road and oilsands projects. “All in all, recently we have noticed a strong draw to the north not only through the oil patch but also consumers wishing to escape the city environment and get back to a quieter way of life,” says Nelson. “With High Prairie being located in the hub of all the future planned projects, consumers are attracted here as they can also retain some proximity to the city amenities, with Grande Prairie only a short drive away.” Olson says world economics influence small town development. He would like Tolko to re-open its High Prairie mill as well as a more stable crude oil market because it would help the local oil and gas sector. One way to measure construction in High Prairie is comparing building permit values on a year-over-year basis and the Town provided this data to South Peace News. In 2007 and 2008, the total values are $9,448,700.80 and $2,884,300 respectively. When broken down into commercial and residential categories for 2007, the numbers are $4,456,181.80 and $4,992,579, while the figures for 2008 are $2,330,500 and $553,800. However, these numbers must be put into context, otherwise they give a skewed view of how well building construction is doing in High Prairie. For instance, one of the reasons the residential construction for 2007 is higher than 2008 is Prairie Vista Condominiums. Also, a permit was issued for the construction of a new paint and flooring store, which later became RONA. These buildings make a large portion of the permit value for 2007. The data for 2008 could be considered skewed as well because of the new hospital. Although a permit was issued last year, it has not been put into the financial data yet because the hospital will be built in phases, says development officer Heather Ferguson. Whatever the construction project is, there are two matters to deal with and the first is obtaining the development permit from the Town. Developers must provide all the information and meet all the requirements of the land-use bylaw, says CAO Larry Baran. Then they must obtain the building permit, which sets out all the requirements of the Alberta Building Code. He also says there could be as many as four levels of oversight - building inspection, plan review, closing files and stop-work orders. The building permit fee is based on $5 per $1,000 of construction value. Then 3.5 per cent of the fee is added for the Safety Codes Council fee. For example, for a $10,000 garage, there is a minimum $75 fee plus a $4 fee for the SCC. Ferguson says a building permit is not issued until the building inspector has completed a plan review. Once they receive the package from SCC, then construction could commence. This package includes a sign for the property which must be displayed, as well as the approval to start construction. The Town has contracted with SCC in Edmonton to perform the inspections. Each inspector has an accreditation number, which must appear on the permit.

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