In its closely-watched biannual survey, Canada Mortgage and Housing Corporation (CMHC) reports the vacancy rate for rental apartments in Thompson, included in its fall survey, completed in October and released Dec. 16, was 0.1 per cent.
That means the rental market for apartments is still incredibly tight in Thompson with 0.1 per cent marking a slight decline in availability from the spring Rental Market Survey last April when the vacancy rate was 0.2 per cent. However, it is a slight improvement over last fall in October 2008 when the vacancy rate was zero, meaning no rental apartments were to be found officially at any size or at any price. In April 2008 the vacancy rate was 0.2 per cent in the CMHC spring survey.
What the CMHC survey doesn't fully capture, local rental experts say, is a shift in the marketplace over the last couple of years from low-end poorly maintained apartment units to landlords doing major upgrades and renovations to tap into a previously under-serviced higher-end rental market.
Employees from several well-paying outfits in town, including the BRHA and Vale Inco, now have a viable option to rent as tenants rather than buying a home, which would have been their only option two years ago, local rentals experts say. There were recently 80 homes on the market and listed for sale in Thompson.
At the same time, the upmarket move in rentals has decreased the supply of affordable housing available. City council voted unanimously Nov. 16 to establish the Thompson Housing Authority, signaling it intends to get directly involved officially for the first time on an ongoing basis in affordable housing issues municipally.
CMHC defines affordable housing as that which consumes less than 30 per cent of before-tax household income (rent or principal, interest and taxes).
The distinction between social housing and affordable housing, although the two terms are often conflated and used interchangeably, is that social housing is not self-sustaining economically and can't be supplied by the private sector with a reasonable expectation of return on investment.
Without ongoing public sector support social housing is not sustainable. Another distinction between social housing and affordable housing is that social housing has entry qualifications restricting access, while affordable housing is open to all residents and is considered economically sustainable and can be supplied by the private sector either in partnership with the public sector or independently.
Rental units above $1,105 per month are not subject to provincial rent control and landlords are free to the rent at whatever the market will bear.
Yellowknife developer Tony Chang's 120-unit Grey Wolf Bay Townhouses, which have undergone millions in renovations since late 2007, has dramatically moved upmarket through the upgrades. Princeton Towers was also extensively renovated in 2007 by Sheiner Group, a Montréal-based real estate investment firm specializing in the acquisition and development of commercial, residential and retirement lifestyle communities in Canada and the U.S. controlled by Lloyd Sheiner, and Silver Management Group Limited, an Ottawa-based residential and commercial property management company with numerous properties, mostly in Ottawa and Sault-Ste. Marie, Ont.
Sheiner and Silver sold Princeton Towers to Winnipeg lawyer Ken Carroll and Winnipeg realtor Russ Knight's Polar Bear Properties Ltd. on March 30 for $14.75 million. Princeton Towers is trying to convert many of its 275 rental apartments to condo ownership. To date it has sold 10 condominiums.
Princeton Towers, two nine-storey buildings on Princeton Drive, comprising the North Tower and South Tower, which opened for occupancy in September 1971, sporting an indoor pool and sauna and originally built to house executives who wanted the best amenities and the best views of Thompson from their balconies, attached to every unit, has been designated for use as condominiums since 1991, says, Gary Ceppetelli, the city's director of planning and community development.
Also, up to 16 of the 133 yellow-clad Corayana apartments on Copper and Nickel roads, owned through Corayana Enterprises Ltd. by Southern Ontario businessman Arkadi Neiman and other investors, may eventually become condominiums known as Riverside Court in a test-marketing venture, but there have been no buyers to date.
Melanie Bekevich, the onsite manager at Riverside Court, says, "We have a major process to undergo to obtain subdivision of the units for condominium use. We own seven buildings and we can't put rentals and condos on the same title. So we first have to subdivide the buildings, since some are now going to be executive rentals. The surveyors have already been here and we're working on the final design for submission to the city. After the city approves the subdivision of the buildings, then we can begin subdividing the units.
Bekevich says while they've had "contracts in place with several people in Thompson" for condo purchases "obtaining financing has been a big challenge. As a result we've begun to look at rent-to-own programs, which we've had a lot of interest in."
A one-bedroom Riverside Court condo starts at $139,900.
Bekevich says while open houses have been well attended "the global economic crisis compounded by a local slowdown in the real estate market has shaken people's confidence. This has impacted the real estate market across the board, not just with condo sales." She says on the rental side "the market has shown a significant demand for quality apartments, and the critical mass for condos is developing." One building has been "opened for executive rentals, and another one slated for Feb. 1" and that is also full.
RE/MAX Thompson sale associate Tana McCartney says she has not heard anything on the Legacy Condominiums project planned for the corner of Wekusko Street and Arctic Drive in Burntwood "in quite some time [neither] I,nor anyone inour office hasseen anything come in nor have they contacted me to go further in marketing or selling this project. I think the condos wouldbefantasticif it does happen!"
Dennis Fenske's DDAK Developments Inc. has built an eight-unit apartment building, which is fully rented, and earlier this year advertised the building of condos in a second building on Centennial Drive near Thompson Drive South and Maple Street, but only the apartment rental part of the project has proceeded to date.
Fenske said Dec. 21 he still hopes the condo portion of the project will go ahead, but says it is unknown what size it will be if it does proceed.
An agreement between the City of Thompson and Winn-Can Properties Ltd. to build about 110 new homes in the Burntwood South subdivision by the end of 2011 has not a single unit of housing has been built since the deal was struck with the developer on June 23, 2008.
Winn-Can Properties Ltd. is comprised of a Winnipeg group of investors, working in conjunction with Schickedanz West, a division of Calgary-based Schickedanz Bros. Construction, to build 96 multi-family units, priced around $200,000 per unit, as fourplexes, which could possibly be sold as condos, in the MacMaster Bay area of the Burntwood South subdivision.
In each of 2009, 2010 and 2011, Winn-Can was to develop and offer for sale no fewer than 30 serviced lots, houses or townhouses under the deal.
The development was to proceed in three phases starting with the single family detached homes on 19 lots on the portion of Smith Crescent west of Campbell Drive. In Phase 2, Winn-Can was to receive an option to develop Hambly Crescent and Smith Crescent west of Campbell Drive in a configuration to be determined by the City of Thompson.
Based on market demand in June 2008, the agreement was originally touted as leading to the development possibly of more than 300 homes in the subdivision by Winn-Can.
The CMHC completes its twice a year survey with snapshots of local conditions and typically the spring report is released in early June and the October report in early December.
The average monthly rent for a two-bedroom apartment in Thompson in October was $666 compared to $639 last April.
Thompson had a total of 1,591 rental apartments, according to the Canada Mortgage and Housing Corporation, as of October 2008. They included 55 bachelor units, 654 one-bedroom apartments, 855 two-bedroom apartments and 27 three-bedroom or more units.
Despite the push by several landlords into the condo field, the total number of rental apartments in Thompson, perhaps surprisingly, actually increased slightly by 32 to 1,623 this past October compared to 1,591 a year earlier, says Jeff Powell, senior market analyst for CHMC's Market Analysis Centre Prairie and Territories Region in Winnipeg.
For the purposes of CMHC's Rental Market Survey, a rental unit is considered available if the unit is vacant, or the existing tenant has given or received official notice to move and a new tenant has not signed a lease.
CMHC takes rental apartments undergoing renovations temporarily out of the apartment rental inventory and returns them to its list when tenants are back in them.
CMHC also does not count in its survey new apartment rental units constructed less than six months ago.
