New Calgary rental development signals optimism despite high vacancy rates

Click to play video: 'New Calgary rental development signals optimism despite high vacancy rates'
New Calgary rental development signals optimism despite high vacancy rates
Calgary's planning commission has approved a development permit for a new rental apartment tower. As Adam MacVicar reports, there is optimism despite a continuing high vacancy rate in the core. – Mar 18, 2021

A new rental apartment development is set to begin construction in downtown Calgary after it received approvals at the city’s planning commission on Thursday.

Hines, the company that owns Park Central in the Beltline, applied for a development permit build a 39-storey tower that includes 531 apartment units. The application was unanimously approved.

Although there is no word on when construction could begin on the new tower, the city’s development permits remain eligible for just three years.

The applications received a letter of support from the area’s community association.

“In spite of the economic malaise in Calgary and what we’re seeing in downtown Calgary, the Beltline is still a really attractive place for developers who have their choice of working in cities across Canada and around the world,” Beltline Neighbourhoods Association president Peter Oliver said.

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Read more: Locals look to play key role in revitalizing Calgary’s struggling downtown

Oliver said the community has been focused on making the neighbourhood a more desirable place to live and work, with investments in parks, downtown underpass clean up and cycle lanes.

“It actually just affirms that all these investments we’ve made are paying off,” Oliver said.

The approval comes as city officials continue to try to find solutions to revitalize the struggling downtown core.

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One of those solutions is attracting more people to both live and work in the area.

According to Ward 6 city councillor Jeff Davison, newer buildings with amenities like Park Central will factor in to Calgarians’ decision to move downtown.

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“We’ve got to be thinking of how we put in product offerings that are different; the places people want to live, the places people want to work,” Davison said.

“Buildings that are coming to market that offer not just community; but pools, a gym, a place for your pooch, those are the types of places people are looking for in downtown living.”

But the city’s apartment rental vacancy rate is the highest it’s been since 2016, when the effects of the oil price crash reached their lowest point.

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According to a report from the Canada Mortgage and Housing Corporation, the city’s apartment rental vacancy rate was 6.6 per cent in 2020, that includes a rate of 8.8 per cent in the downtown core and 5.8 per cent in the Beltline.

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The high vacancy rate compounded with the COVID-19 pandemic has forced some of the city’s newer rental developments to get creative to attract renters.

Read more: Behold, the Canadian condo market joins the COVID-19 real estate frenzy

Upten Calgary, near Victoria Park, is one of several downtown buildings offering incentives on the first couple months’ rent and security, fee relief and flexible lease terms.

“We’re taking away some of those up-front costs to help with the burden of making a move,” Laurel Edwards with Upten said.

“A community has really developed and we’re on pace to get this building full in short order.”

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20% of Calgary downtown office space vacant, highest level in over 30 years

The Calgary Residential Rental Association said the development of a new tower, and others coming on the market, is positive for renters, as it provides them with more options.

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However, the newer builds are making the market challenging for existing buildings to attract new tenants.

“How do you take 30- or 40-year-old building and compete with the new buildings going up?

“They’re brand new, they’ve got more amenities, there’s more to do in the buildings,” CRRA executive director Gerry Baxter said.

“People will go and move into buildings that they can afford, move to areas that they want to live in… Now they’ve got a great choice. There’s lots of product available.”

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