Across the country, competition is stiff among apartment hunters as the rental market gets tighter. In Calgary, that struggle to find rental space is fuelling an unprecedented amount of rental construction.
As of September, construction has begun on 2,799 new rental apartment units in Calgary this year. That’s the highest number on record, though 2021 was another banner year with 2,572 apartment starts, numbers from the Canada Mortgage and Housing Corporation (CMHC) show.
Developers describe it as a classic Economics 101 scenario: supply rising to meet demand.
For years, they say a lack of rental construction in Calgary has left that side of the market underserved. On the demand side, higher interest rates are driving more people to rent rather than own.
The province is also seeing a significant uptick in people moving to the province, with more than 50,000 coming to Alberta to live in the first half of 2022 alone.
“We have this huge void space compared to a lot of the other major metropolitan cities within Canada of rental housing,” said Alkarim Devani, president of the Calgary-based development company RNDSQR, which has shifted in recent years to building rentals exclusively.
“We’ve had almost a 20-year gap of rental product, and so that’s why we’re seeing such an influx of it.”
According to the latest numbers from Rentals.ca, the average Canadian rental apartment was $1,810 a month in September, up about 12 per cent from the previous year.
In Calgary, the average one-bedroom rental was $1,629, an increase of 29 per cent year-over-year.
Outlook across Canada
Calgary isn’t the only city that’s seeing some shift toward rentals.
In several big cities, the share of apartments being built for rentals, rather than condominium ownership, has grown in the first half of this year compared to the average for the same period in the previous five, according to CMHC numbers.
One exception is Toronto, where the share of rental construction dipped in the first half of 2022, something CMHC analyst Michael Mak says is likely due in part to the high cost of land in that city.
“There are rising interest rates … and rising construction costs and labour costs, and those all play a factor in lower rental starts,” he said.
In Vancouver, development firm Anthem Properties is pushing hard on multi-family rentals, with about 3,000 units that are either in preliminary planning stages, under review or under construction, most in Metro Vancouver, according to Gage Marchand, the company’s manager of investment.
He noted that more Canadians are renting, rather than owning, their homes — a trend he expects will only continue to grow.
“I don’t see the affordability crisis getting any better anytime soon,” said Marchand, whose company also has offices in Calgary, Edmonton and Sacramento.
“I think moving forward in this next generation, renting will be more accepted as a sort of normal reality [and] Anthem wants to continue building homes for people.”
Policy also driving development
Public policy also has a role to play in driving rental development.
In Vancouver, Marchand pointed to policies that provide incentives to developers for building close to public transit, or higher density allowances if affordable housing is included, among other benchmarks.
Another example is a City of Calgary program that provides grants for converting empty office space into residential buildings, said Ken Toews, senior vice-president of Strategic Group, which is in the middle of transforming one of the city’s first oil and gas office towers into residential apartments.
Toews said many developers are also using a CMHC program called MLI Select, which offers insurance incentives if a rental development hits certain targets for affordability, energy efficiency, accessibility or some combination of the three.
“It’s a really good program, and it brings more product online than you would normally have in a market,” he said.
Opinions vary about whether rental development will accelerate or slow in the months and years ahead.
High interest rates and construction costs are also putting pressure on developers, which Paul Battistella predicts will lead to some pullback in rental development going forward.
“Rents are just not going to be able to accelerate at that same proportion to be able to make the math work on those things,” said Battistella, a managing partner with Calgary-based condo developer Battistella Developments, which also sets aside some of its units for rental.
“The [projects] that are in play now, they’ve been contracted for, their costs are locked, they’re OK … I just think anything new is going to be really, really difficult to get going.”
As for when, and if, the increase in supply will lead to relief for current renters — opinions vary on that, too.
Mak expects some buildings under construction now, especially the low-rise buildings, will wrap up in the months ahead leading to some loosening of the market.
But if demand continues at the current clip, Toews believes any new apartments added will likely be absorbed pretty quickly.
“I think we’re undersupplied and it’s gonna create challenges,” he said. “Less supply means that your prices are gonna go up.”
FTX founder Bankman-Fried objects to tighter bail, says prosecutors 'sandbagged' him – Reuters
NEW YORK, Jan 28 (Reuters) – Lawyers for Sam Bankman-Fried on Saturday urged a U.S. judge not to ban the indicted FTX cryptocurrency executive from communicating with former colleagues as part of his bail, saying prosecutors “sandbagged” the process to put their client in the “worst possible light.”
The lawyers were responding to a Friday night request by federal prosecutors that Bankman-Fried not be allowed to talk with most employees of FTX or his Alameda Research hedge fund without lawyers present, or use the encrypted messaging apps Signal or Slack and potentially delete messages automatically.
Bankman-Fried, 30, has been free on $250 million bond since pleading not guilty to charges of fraud in the looting of billions of dollars from the now-bankrupt FTX.
Prosecutors said their request was in response to Bankman-Fried’s recent effort to contact a potential witness against him, the general counsel of an FTX affiliate, and was needed to prevent witness tampering and other obstruction of justice.
But in a letter to U.S. District Judge Lewis Kaplan in Manhattan, Bankman-Fried’s lawyers said prosecutors sprung the “overbroad” bail conditions without revealing that both sides had been discussing bail over the last week.
“Rather than wait for any response from the defense, the government sandbagged the process, filing this letter at 6:00 p.m. on Friday evening,” Bankman-Fried’s lawyers wrote. “The government apparently believes that a one-sided presentation – spun to put our client in the worst possible light – is the best way to get the outcome it seeks.”
Bankman-Fried’s lawyers also said their client’s efforts to contact the general counsel and John Ray, installed as FTX’s chief executive during the bankruptcy, were attempts to offer “assistance” and not to interfere.
A spokesman for U.S. Attorney Damian Williams in Manhattan declined to comment.
Bankman-Fried’s lawyers proposed that their client have access to some colleagues, including his therapist, but not be allowed to talk with Caroline Ellison and Zixiao “Gary” Wang, who have pleaded guilty and are cooperating with prosecutors.
They said a Signal ban isn’t necessary because Bankman-Fried is not using the auto-delete feature, and concern he might is “unfounded.”
The lawyers also asked to remove a bail condition preventing Bankman-Fried from accessing FTX, Alameda or cryptocurrency assets, saying there was “no evidence” he was responsible for earlier alleged unauthorized transactions.
In an order on Saturday, Kaplan gave prosecutors until Monday to address Bankman-Fried’s concerns.
“The court expects all counsel to abstain from pejorative characterizations of the actions and motives of their adversaries,” the judge added.
Our Standards: The Thomson Reuters Trust Principles.
Gold declines in light of the report that revealed inflation continues to decline – Kitco NEWS
As of 6:00 PM EST, the February contract of gold futures has fallen for the second time in the last seven trading days. Currently, gold futures are fixed at $1927.60, a decline of $2.40 or 0.12%. Gold traded to a high of $1935.40, and a low of $1916.50.
The key takeaway from today’s PCE inflation index report was that the core PCA index declined in December by 0.3%. The preferred inflation index used by the Federal Reserve was at 4.7% year-over-year in November and declined to 4.4% year-over-year last month.
Both reports will influence decisions made by the Fed at next week’s FOMC meeting.
They will be critical components used by the Federal Reserve next week and will most likely strengthen the conviction of hawkish Fed officials to maintain their extremely aggressive monetary policy. Currently, the Federal Reserve’s forward guidance is composed of additional rate hikes and maintaining elevated rates for a longer time.
The most likely outcome is that the Fed will raise the rate by ¼% at the next two meetings. The Federal Reserve has stated they continue to work to reach its inflation target of 2%. A vast majority of market participants continue to believe that the Fed will backpedal on its commitment to keep rates elevated through 2023.
I will be speaking at the VRIC 2023 (Sunday, January 29-30) at the Vancouver Convention Center. Both Kitco News and I wish to welcome you if you’re available.
For those who would like more information simply use this link.
Wishing you as always good trading,
Afraid to check a bag? Canada's missing baggage woes explained – CBC News
Deborah Cleary was exasperated.
When she landed in Montreal on Dec. 19, following a trip to Italy, she discovered her suitcase was missing. More than a month later, Air Canada still hadn’t found her bag.
“I’ve spent so much time thinking about it, worrying about it, checking online, calling Air Canada,” said Cleary from her home in Plattsburg, N.Y., on Tuesday. “I’m just sort of desperate to get my bag back.”
The post-pandemic return to travel has been turbulent, plagued by mass flight disruptions and missing baggage piling up at airports. That has led to calls for airlines to improve their baggage delivery systems.
“It’s broken, so I think they need to fix that,” said Cleary, who visited the Montreal airport two weeks ago to search for her bag amidst a sea of unclaimed luggage. She didn’t find it.
However, following a CBC News inquiry to Air Canada, Cleary learned on Friday that her suitcase is being shipped to her home.
“I’m very, very happy,” she said. “I had almost resigned myself, I was never going to see it again.”
Canada’s first round of missing baggage chaos erupted in the summer, largely sparked by staffing shortages as airports and airlines scrambled to ramp up operations.
There were high hopes the holiday travel season would go more smoothly — until severe winter storms hit much of Canada, causing hundreds of delayed and cancelled flights, plus a backlog of lost luggage.
“In the airline industry, a delay of greater than 15 minutes generally results in missed connections,” said former Air Canada executive Duncan Dee. “Delays equal missing bags.”
Dee said airlines need to do a better job keeping track of luggage, and the federal government also needs to invest more in airports.
In late December, cold weather caused a baggage belt to freeze at Toronto’s international airport; a fierce snow storm caused widespread flight delays and cancellations at Vancouver’s international airport.
“There’s obviously a need for better infrastructure, better resources for airports … to make them more resilient to these weather events,” said Dee.
What about the airlines?
When asked this week about recent travel chaos, Transport Minister Omar Alghabra said airports will get the tools they need, but did not elaborate.
On the baggage issue, he pointed the finger at airlines.
“I find it extremely frustrating when I hear stories of people not having their luggage for days on end,” he said during an event in Hamilton. “Airlines should be doing more.”
His comments follow several recent media reports about air passengers’ struggles to find their missing luggage
They include the saga of Nakita Rees and Tom Wilson of Cambridge, Ont., who battled with Air Canada for more than four months to retrieve Wilson’s missing suitcase.
The bag vanished during their flight home from Greece in September. Because the couple had put an air tag tracker inside the suitcase, they were able to track its journey to a storage facility in nearby Etobicoke, Ont.
Even though Rees shared with Air Canada the whereabouts of the bag, the airline deemed it lost.
“The most frustrating thing about it was we had no way of getting it, even though we knew the location and we told the airline so many times,” said Rees. “Because the air tags are newer, I just don’t think airlines know how to even use that information.”
The couple finally got the suitcase back this week — after their story was picked up by the media.
Other passengers have also complained about similar experiences when tracking their lost luggage with air tags.
Former Air Canada executive Dee said airlines typically track luggage by scanning their baggage tags and that their systems currently can’t accommodate air tracking technology.
“That’s something where airline processes have not caught up to the technology that’s available,” he said. “No airline in the world has the ability right now to accept information from travellers.”
Alghabra suggested airlines need to change with the times.
“We hear about how Amazon is able to identify where their items [are at] every moment,” he said. “It’s frustrating that airlines still have not modernized their luggage handling system.”
Air Canada told CBC News it’s constantly exploring new technologies. The airline added that its baggage delivery rate has returned to normal, following the stormy holiday weather.
Air Canada said that in Rees’ case, the baggage tag had fallen off the suitcase. The airline didn’t say how it eventually located the couple’s bag, but did indicate that they get to keep the $2,300 in compensation they received for lost luggage.
WestJet said it has launched a strategic review to fine-tune its baggage systems. “[We] are committed to working together with our third-party service partners … to ensure we improve in this area,” said spokesperson Madison Kruger in an email.
Travellers can claim up to approximately $2,350 for luggage that is lost or delayed on an international flight. For delayed baggage on domestic flights, the airlines design their own rules.
Alghabra’s office told CBC News this week the government is exploring ways to strengthen rights for air passengers, including for delayed and lost baggage.
As for passenger Cleary, she had applied for compensation for a lost bag, but said getting it back is a better outcome.
“I would much prefer to have my bag back than any money from Air Canada.”
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