Past the finished line?

I’ve been struggling for more than 8 months to get the Inglewood project going. The project permitting phase has been like a brain damaging mind virus, always percolating in the background. What is amazing is that this project was totally non controversial, a contextual permitted use twin detached homes. This should have been among the smoothest and easiest permit processes ever. Instead, at this point I have countless hours and months of delays to be thankful for. I’ve missed the entire construction season (despite being an amazing fall, it can’t last). I’d estimate the time value losses and now weather related losses to be well into the $30k range. Expenditure on land, asbestos, demo, design, engineering, consultant work and now finally paid the last of $20k in city fees has added up into a numbing set of soft costs. I guess this is why home building is for the extremely brave, foolish or deep pocketed only.

Why does it have to be so complicated?

Pace slows for finishing work

Significant progress at the lakeview project and more planned for this week. With all flooring done we can re hang the interior doors and install the baseboards. Following this we can get into appliances and then touchups.

Vinyl plank install complete in the basement.

Hardwood stair nosing

Hire a skilled crew and the results speak for themselves on the job site is my mantra. They show up, work more efficiently and they take care of details without nannying. In this instance the installer farmed out the Nosing fabricating job to someone else I haven’t worked with before. This took the noise and dust away from the job site and into a woodworking shop where it could be completed to a more exacting standard. It is up to the client to decide if the cost is worth it. When you are spending 8$ per square ft for the material (or more) I think the decision is easier to go with the A team for the nosing and install than take a chance and try to shave a little off the final bill and be unhappy with the outcome.

This work is so good you have to consider the cost is justified.

Tile job underway

As the work week and now weekend wrap up we can enjoy the outcome of a lot of hard work selecting and now installing the tile. The clients selected all the finishes in this custom build and the outcome is coming together very well. I’ve enjoyed not having the responsibility of being the interior decorator on this project as much as seeing the finishing details materialize. The hexagonal mudroom tile is a product I may use myself on the upcoming Inglewood build.

Hexagonal tile on ditra makes for a seriously durable mudroom floor.

Lots of plans, little action

Some grand schemes are afoot to get building underway with plenty of behind the scenes machinations. It can be frustrating how long it takes us to launch a project and there is seemingly always some new hurdle. I’m looking at a few interesting non spec building business expansions and we may be able to get a good property soon. Until then here are the kids building a fort.

Hot day on the long weekend was spent south along the bow. Swimming was possible but freezing cold.

Summer is over … where is my permit?

August is basically done and with it the best summer months for construction. The entire summer passed and I wasn’t able to get a permit for my upcoming construction project. This annoys me in a way that people who have jobs with guaranteed salaries that are paid every two week despite non performance couldn’t possible fathom. Without getting too deep into the details, the reason I don’t have a permit is due to the mistakes of city staff. I’m considering issuing an invoice to city hall for my inconvenience and lost time. About $20k would suffice. What is the likelihood of the city taking ownership of the impact it has on small business owners? I’d estimate near zero. The city as an organization doesn’t understand the needs of business and the planning department is to me a heartland of this disconnect of reality and practice. The same bureaucracy that can promptly reassess and issue supplemental tax bills at the speed of light can’t get it together to approve new house plans that would employ dozens of hard working people and circulate seven figure sums within the local economy. The city needs to evolve from an organism that perpetuates itself, offers high wages above industry and better benefits as well as security into one that serves those who fund it.

Raspberry season market update

The calgary raspberry season has now peaked, so how is the market doing? Like the spring weather, the market was off to a slow start, to put it mildly. However it appears, anecdotally to me, that it has really warmed up into August. Reports from multiple sources, usually other builders I am in contact with, indicate inventory is moving. And the builders are continuing to start plenty of new basements throughout the areas I am familiar with. I am preparing a couple upscale detached homes and they’d be dug right now If I was able to convince the city to issue me a permit. This is a business that always has some crisis just around the corner. The latest speed bump is absurdly high lumber prices created by a combination of American economic activity and what I call ‘mill manipulation’ to raise prices. Well, they’ve raised the price and now the lumber companies need to work furiously to remobilize idle plants or whatever they do to resupply the industry.
As far as the calgary market, I think a little pent up demand was noticed once the lockdown phase started to really ease up. Perhaps we burn through the enhanced demand and then the market slows in the winter to below seasonal norms. Or low rates spur some buying. Or government assistance programs dry up and the economy enters another recessionary phase. Or … something else crazy happens.

Nice berry crop in the back yard. Hopefully the economy is as tasty as the fruit.

Long distance garage building

An unfortunate vacation schedule left me far away when the delayed construction schedule called for work to start on a new garage. So I’m long distance garage building. So far so good. Just a lot of tiny details that are hard to manage from a distance. Doing a whole house from afar would make me crazy. It would be an interesting exercise but not something I’d want to do without a full time staff person. But the way I keep prices in check is by not having a site manager. A never ending conundrum. Even my best crews need a little hand holding and baby sitting from time to time…

Garage building again.

Finishing progress

The lakeview site is coming together nicely now, with the interior doors hung and most of the trim on. Finishing, cabinetry and then paint will be a lengthy process on this larger home. On this job am essential task will be to ensure the cabinetry and trim details are 100% ready before the painter arrives. So a lot of detail work. And then we need to make sure none of the paintwork is damaged during the remaining parts of the build.

Railings are on and doors are hung.

First half update - 2020

Much has changed in the world since I last published an overview type of post in early January. My 2020 prediction success rate are looking ugly right now, at least the more optimistic ones. I am still somewhat optimistic, and that is the second half of the year will be better than the first half. As a city and province, we’ve taken a beating so severe you’d think that some luck is long overdue. And there is sign of our fortunes changing everywhere;

• Trans-mountain pipeline - this really seems to be moving now without possibility for endless legal challenges. Who has money to pay for legal bills in this economy? Political leaders have been posting about the absurdity of tankers using the Panama Canal to ship Canadian product instead of a pipeline.

• Shale oil has been pummelled - the high decline rates in the US shale plays coupled with vastly reduced willingess to finance it has to have an impact on supply over the next six months

• Resilience - Canadians have proven to be much more inclined to act sensibly in terms of managing the risks of the pandemic vs those in the USA. There seems to be evidence the health system can manage more cases, even if there is a second wave during the fall school semester

• Interest rates - if you like money printing and central planning to manipulate the economy, you’d love 2020. I don’t, but without monetary insanity it is likely our economy would have seriously crashed in March. How are we ever to get out of the debt mess I don’t know, but for now we are surviving.

• Trudeau - another scandal, maybe he will have to resign and we can get a better PM, a smarter and more capable cabinet, and better protection of the value of the CDN currency (lol).

On the other hand, this ‘woke-ist’, Orwellian, authoritarian left, cancel culture war we have going on is a really dangerous and destabilizing phenomenon. I’d have never thought some of the more extremest ideas related to intersectionality and critical social justice would go so mainstream. Or perhaps the world isn’t so crazy just twitter is. We spent the Canada day/failed to launch Stampede Friday (can’t believe this actually happened) by doing some hiking and watching the fireworks while getting eaten by ravenous mosquitoes. Are biting bugs not a health risk for viral transmission?

June had a lot of rain, but was a better month than March, April and May. The trend is good!

Back alley paving - 60 years later

I was the fortunate beneficiary of alley paving over a year ago. The neighbours got together under the strong organizational skills of one heroic local champion and passed the petition. We may be paying for it for the next 15 years but at least it is done properly and permanently. Critical mass was reached when there were more recently built or rebuilt homes than original homes backing onto both sides of the lane. A tight community helped to exert a little ‘peer pressure’ on those that perhaps weren’t too keen to fund the improvement. I don’t think anyone wanted to be known as the local curmudgeon that cast a deciding ballot. I consider it another ‘miracle on 34 st event that we had it done. Landlords in particular (a small minority) were noted as the least willing to contribute to the paving as they largely voted against it. They also had the crappiest houses. The city compels ‘no’ voters to pay anyway so there is some satisfaction in having those that don’t want to improve the area forced to pay despite their reluctance, and that they earn income from their properties to fund their portion, rather than the owner occupants whom should view their primary residence as as much a lifestyle liability as an asset. The problem with having paving work done in infill areas is that new buyers have higher expectations than longer term residents. They want the paving complete because taxes are already set high on new builds so tend to expect that paving should be already included. The city also does a poor job of grading or plowing lanes and this leads to awful conditions and ponding and ruts. When budgeting for these types of improvements the city does not take into account the uplift of taxes once semi detached homes are built. Generally the taxes triple on a 50 ft lot once the new homes are reassessed. Yet the city doesn’t have money to do the paving?

The city needs to pave this alley. It doesn’t appear this block yet has enough owners willing to fund it. The process to collect signatures from the owners, particularly absentee owners, is hard. A person would have to pull titles and track down landowners who may not be eager to sign on the petition.

Priming stage

Finishing work really begins when priming the freshly sanded walls is complete. I’ve published a few random time to build posts on Instagram. Basically I’ve reached this milestone after 87 days passed since the April 1 footing pour. The pace of work has been good due to some average spring weather and just overall trade availability. Sticking to the schedule requires the builder to be always a couple steps ahead, and often you can run multiple crews on the same site at the same time. I’d estimate the job is 50% complete now and most of the remaining work is inside so weather becomes a non factor.
a lot of the pace of work is also attributable to management effort and experience. On this job the potent blend of me having a lot of time to lavish on the build and a growing familiarity with the crews, how they work, what they need for success has come together into a smooth running productivity machine. The neighbours may not be impressed with the noise and disruption but we stick to the work hours allowed by the city bylaw. My response to the neighbours is often to ask them if they’d rather be next to a site where we get the noisy and dirty stuff done in 3 months or should we stretch it out over 6 months or more. With inside work all we have scheduled for the next month I think the neighbours will get a reprieve from the noise and pretty soon we will be totally done.

Great to see the walls get a coat of drywall sealer. Finishing carpentry and cabinets are next.

Questionable exterior products

Continuing the complainypants theme this week, I have a new scorn worthy topic, its been ‘festering’ for some time. Knotty cedar siding is often used these days as a cladding. I don’t support it based on some real life experience. I won’t use it on a vertical wall surface particularly when facing south or west. What happens to knotty cedar siding in our climate? It splits, it shrinks, the knots fall out, it gets weathered quickly. Then it leaks and the last line of defence is the paper beneath it. It needs stained all the time or it looks shabby. Not shabby chic either, just shabby. On a condo, the board is least able to manage an eventual tear off and replacement project. Viable alternatives already exist in wood grain embossed metal or factory made non-wood products that are stain free permanently and will resist weathering. These cost more up front but much less than doing a job twice, nor do they need staining. What is the lifetime of the knotty cedar product? I guess we will find out how these recent jobs hold up. There was one instance where I did use cedar siding, and it looked great. But about 5 years later I heard from the condo board that they had received a quote to restain the siding that was higher than what I had originally paid to supply and install it! Ouch. For that price they could have torn off the cedar and redone it with stucco! I don’t have any wood siding jobs planned and prefer to use Lux siding, or competing similar products like Icon metal, sagiper, or brick. I think well installed masonry products are actually the longest lasting and can outlive the interior of the building.

I don’t like this look. How long has this been installed for? Looks like 5 years but more likely it has been on the wall for 5 months. Replacing it will cost some real cash and I want my building to endure with less work for the owners.

Random commentary on condo fees

Initial reaction to condo fees - well, I hate them. So there you have it. A condo fee is like a second mortgage that you can never pay off and will only ever go up not down. When do you hear of a project where the fee drops?

This fee really hurts an otherwise desirable property. Will a unit like this be rendered unsaleable at some point due to buyer reluctance to take on a condo fee?

On second glance, a condo fee includes stuff you’d have to pay anyway. Essentials like water, heat and insurance. Is it possible the condo fee for a merged water bill is cheaper than individual billing where each unit gets 50$ in fees to purchase $10 worth of water? Maybe the entire building pays a single tiny fee for admin compared to seperate billing such that even egregious utility wasting is insignificant in comparison.
More likely is the condo board pays outrages sums to maintain optional extras like Rec facilities and for reserve contributions. Despite the dubious merit of the high fees, this must have an impact on the resale value of the units in high fee buildings. $1000 per month would give the owner of a bareland or detached unit a vast sum to work with over time to make repairs or fund utilities. At historic low interest rates that 1000$ per month would also carry a $200000 mortgage. I would much rather have a $200000 better property than that kind of a financial ball and chain as a $1000 condo fee. Even worse are reports in the media of huge cost increases for condo insurance policies, these can add a lot of cost to the condo fee that is hard to manage. Bear in mind that catastrophes to the condo will come with a huge deductible, and regardless of the presence of a big condo fee, special assessment may still be needed. Yet a 60 year old bungalow can limp along with deferred work basically in perpetuity until someone such as myself comes along and buys it…

Tape, sand, texture.

further drywall stage progress. Another skim coat and sand and we are finished with drywall. Lots of man hours here to tape a sizeable house

This is some great progress for a house of this size to get boarded and mostly taped in a week.

Managing ground water

On occasion you will encounter an inner city rebuild with a higher than desirable water table. This means the sump system will work to discharge the water. Where to send this water when the property hasn’t been graded properly or, more likely, the disturbed areas have sunk is a problem. I’ve had to resort to hard piping the sump pump discharge to around the garage to get the water away from the window wells where it can just come back in again and enter the weeping tile. Definitely into the make it work stage of the project now. Eventually we will grade and landscape but not likely for another month as the stucco scaffold is up. This is the type of construction aggravation that just doesn’t go away until the end.

Farmer fixing the sump drain to get that water off the site and dry up the mud bog.

Drywalling at day 72 from footing pour

The amount of managerial attention I’ve been lavishing on this detached home is showing serious results in terms of progress. Having the drywall basically hung and ready to tape after 2.5 months is a real organizational feat in a large custom build. The drywall phase is a favourite among builders as they also get to take a little time off as the work is done. I don’t find my drywall crew needs a lot of supervision, they’ve done it hundreds of times and self organize the many steps along the way to being paint ready. The key is having all the framing backing done, water, and heat. Getting heat means all the atco work and gasfitting is inspected and approved, and the account set up and furnace commissioned. The plumber, electrician and Hvac trades all have a part to play to get it running. We always need heat even during the peak of summer to dry the compound on the lower floors, especially the basement which is a heat sink, below grade and a massive cold slab. The plan is to fire it up tomorrow and start taping.

The aftermath of a big hanging assignment. Love seeing a empty job site clear of all leftover stuff from earlier stages.

Peculiarities of the municipal tax arrears auction.

Each year the municipal government act, part 10 section 8 (linked below) requires an auction to sell properties with tax arrears owing.

http://www.canlii.org/en/ab/laws/stat/rsa-2000-c-m-26/latest/rsa-2000-c-m-26.html#Division_8_Recovery_of_Taxes_Related_to_Land_676048

I’ve reviewed this act and it is very peculiar because it shows a lack of common sense regarding how the market for property works. Essentially the act requires the city to set a reserve bid that is the ‘retail’ value of the property. The problem with these arrears list properties is they are not retail ready, they are distressed and nobody buys this type of property for full value. There must be a discount provided as a mechanism for the buyer to be compensated for the risk of buying a property that cannot be inspected.
not only is an auction buyer supposed to pay retail (according to the act), he’s also got to pay the back taxes and in some cases he’d owe the gst on top of the purchase price. How many bidders will there be for a property where the buyer needs to pay more than the fair value and won’t know what the interior condition is?
I do wonder how many bids are received at this annual event and I’ve always been intrigued to observe it. The cash settlement requirements are pretty onerous as well, you’d have to pay up 1/3 of the price the day of the sale and the balance in a month. That is a really tough hurdle and again shows how out of touch the act is.
Another issue that isn’t clear is how unbid properties are dealt with. Given the low likelihood of any bidders due to the high reserve, it seems that the city can take possession of the property after the auction. It then can sell it and distribute the proceeds. The city also has fees and bills 5% of the selling price to the owner as an administration fee. Allowing your property to go to auction is a terrible form of stewardship of your affairs. I’m amazed that some of these houses on the 2020 list are not on the mls for sale at attractive prices to allow the owner to recoup as much of the equity as possible. Upon completion of the auction the owner will take a big haircut based on marketing costs and city fees.

The act should have a lower or no reserve to increase the odds of the property selling at the auction and allow a reasonable discount to be granted to the buyer who’s taking on a potentially risky deal. I’m assuming if the property doesn’t sell the city then takes possession and hires its own realtors to list it, again at the market price. But at this stage they can discount it each month until it sells.

Garage building again

I’ve built a few garages now, enough that they all blend together into one long garage building exercise. To me, the key here is to send the same A team I use for the rest of the houses and get those crews to put it up quickly. I’m often investing in a slab detail well beyond the norm of 4 inches on dirt in order to ensure it holds up over time. The most recent project has full curb on the edge and a vaulted ceiling. It will also get a side mount opener which adds some cost, a gas line, drywalled and painted, and full stucco and electrical. This adds up to a reasonable cost but really good product. If all goes well I can complete it in 10 work days with some off days in between for mobilization and to make sure the stages are all ready. Another benefit of putting the garage up is the main service mounts there from the alley. The sooner I get the garage up the better we will be with inside panel power energized. I still need to run the furnaces to dry our drywall mud even in summer, so there are many steps needed to get that finished.

Garage building day 4. Next is roofing and wiring and then wrapping and stucco. Then we can put on the door and call it done.

City assessments are getting way out of whack!

You often find City tax assessments that are a fair approximation of the sale value of the home. This would be the best way to value property that I know of, the market price. But more and more I am seeing some that are quite off to the point where the City algorithm used to come up with this number is quite broken. This raises the question, is the assessment too high or too low? Well, in my experience with the City it can occasionally be dim-witted and slow moving, but when it comes to collecting money it suddenly evolves into a tech startup that’d make a google engineer blush with envy. So it seems to me the trend is property to be way over assesed vs what it can sell for in the market. That means the City will be getting a nice tax windfall come June, or I guess September if you want to delay your tax bill this year.

6427 Lombardy is on the market for $499K. But it seems to be worth $630K according to the City, down from a high of $672K! This place would maybe be worth that much if it had a comprehensive gut renovation. Still this is a good deal for the guy who bought it back in ‘71 for 22 grand.