Realty Check: A YMM Housing & Rental Market Update

Once the shock and disbelief somewhat eased, weary residents grappled with the question of where to live; where to live while destroyed homes were cleared away and rebuilt. For others, it was where to live while waiting for the all clear to return to homes still standing in fire-ravaged neighbourhoods.

People made their campers a summer home complete with outdoor rugs and hanging baskets of flowers at a boat launch area in Waterways or in Abrams Land. People bunked with family and friends.

Some continue to stay away until the fate of rebuilding in heavily damaged areas such as Waterways has been decided while others delayed their return until school started again in September.

While a Canadian Red Cross survey released in August said the agency had met with 76,000 since the reopening of the community, there was no way to tell how many stayed or if they’re still in Fort McMurray. Conversations with local organizations such as churches would indicate an estimated 25,000 people were not in town early August. Social profits were down volunteers, staff and board members as highlighted by findings released mid-August by FuseSocial. Also, a number of businesses that had re-opened over the summer had restricted hours often pointing to staffing shortages; a fact backed up by the number of help wanted signs seen around town. Housing has been forefront for short-term residency and the long term, and that’s been reflected not only in home sales, but impacts to Wood Buffalo Housing and Development Corp. (WBHDC).

July was a big month for local realtors as the total number of units sold rose 48 per cent over last year’s numbers. While the total number of properties sold, 73, was 21 more than last year, the average price was $686,060, down from $752,551.

Listings were also notably higher than last year at 179 compared to 115.

But Lynn Edwards, president of the Fort McMurray Real Estate Board, cautions the fire was only a factor in the numbers.

“Due to a combination of reasons such as properties that had expired during May and June were put back up on the market, people relocating, people selling existing property and purchasing another.

“It would be impossible to speculate as to how many of the newly listed properties were because of people leaving town.”

Edwards says there have likely been sales as people used insurance settlements to purchase a home to live in until their former home is rebuilt. However, she adds, there would again be a multitude of reasons for using or taking insurance settlements to purchase a property. 

A typical average market in the municipality has 850 listings. They were lingering over the summer around 700, the biggest decrease noted by the board.

Edwards notes there was some catching up to do as the real estate market lost May and most of June due to the evacuation.

“Yes we have had extra sales because of the circumstances that people found themselves in, but was that enough to cause a bubble? The market will probably stay steady for the remainder of (August) and into September, October. What happens in these months may give us a better look into if we will continue to have increased sales over last year. Historically we see a slowdown in sales around November. Market increases and decreases also depends on many other factors.”   

She did recognize that this local market is definitely front and centre in being watched to see how these circumstances has impacted the community in all areas of the market.

There are still vacancies to be found around town in the rental market judging by ads on websites such as Kijiji and on the various rental property management sites like Boardwalk, Northern Property REIT and Shelter Canadian Properties.

When it became known some landlords were taking distasteful advantage of the situation to inflate rents citing the demand for rentals as an excuse, the RMWB stepped in. It introduced a bylaw June 2 that anyone renting an accommodation property must maintain the prices that were in effect on April 30.

It remained in effect under the Provincial State of Emergency declared on May 4. Landlords and property owners charging above those prices were open to enforcement action being taken.

Even without it, some landlords were more compassionate, either reimbursing May’s rent or using it as a credit towards future rent.

One such landlord was WBHDC.

Its Board of Directors instructed this affordable housing agency not charge rent as long as units were not habitable due to the evacuation. That meant all but three days of May and 17 days in June. Rent for those periods was pro-rated and not charged. Anyone who paid rent in May had the full amount credited toward the next payable period, beginning June 18.

While no one knows with any certainty how many people will return to Fort McMurray, WBHDC once had a good indication, but it seems even that isn’t certain anymore.

Roughly 80 per cent of its tenants indicated they would be returning to Fort McMurray when contacted during the early days of the evacuation. By mid-August, however, only about 45 per cent had actually returned, says Greg Elsasser, acting president and CEO.

There were a small number of abandoned units, but it’s hard to quantify as WBHDC can only check into a specific unit when its occupant goes into arrears. 

WBHDC has 1,325 units in Fort McMurray including apartments, townhouses and seniors’ facilities. 

The agency also had properties destroyed by the fire: All 32 townhomes in the Southridge development in Beacon Hill as well as 10 three-bedroom townhouses at Siltstone in Parsons Creek.

A subsequent fire damaged Marshall House during the evacuation, but it has been re-opened. A social housing unit was also damaged by the May 16 explosion in Dickinsfield.

Elsasser points out that WBHDC re-located its own tenants before making vacant units available to others.

Except for seniors housing such as Rotary House, all its rental units were ready for people to return by June 15, weeks ahead of schedule. Seniors were able to begin their return in July.

“It was imperative that WBHDC accelerate its schedule to enable tenants to return as soon as possible and I’m very pleased we were able to open our doors on June 15 and welcome so many home,” he added.

Before the fire, WBHDC had its highest vacancy rate at about 32.5 per cent because of the lower oil prices and slowed oil sands activity. That means, at least in the short-term, it had the housing available for those who lost homes and needed somewhere to live. 

A vacancy rate of about 5 per cent to 7 per cent is normal for the simple move-in and move-out of tenants.

Elsasser estimates it was 10 per cent in early August. That was conditional on people moving into units that they had negotiated with WBHDC since the re-entry began, quantifying the number of abandoned units and readying additional units that were empty, but not ready to be occupied (ordinary between tenant transitions) that the agency would not have factored into its vacancy rate since the demand was lower than it had ever been before. 

WBHDC expects to fill every vacant unit it has with people who lost housing during the fire. 

“It will be tricky to manage; we’re viewed as a temporary solution by many, but we are a permanent business, even if that business is to provide affordable housing. We’re trying to stay true to our mandate while, at the same time, offering compassionate solutions to residents who have lost their homes.”

He noted that the past four months have been very tough for staff at WBHDC. Coupled with the emotional upheaval of the fire and re-entry into a changed community, the agency had already reduced staff 10% due to the decline in revenues. Now, the agency is constrained by landlord and tenant law on how it can move forward with delinquent accounts and abandoned suites. 

“We all have to do our part,” says Elsasser. “We plan to renovate the basements of several townhomes to accommodate larger families and people with pets, both groups for which the demand outstrips the supply. We’ll do what we can to help.” 

OPhotos: Remax agent Suzanne Anderson; Local mortgage specialist Don Skinner; Lynn Edwards, President of the Fort McMurray Real Estate Board; Greg Elsasser, WBHDC Acting President and CEO