Alberta’s residential construction industry is in crisis, warns an industry group.
Fewer residential construction jobs, fewer affordable homes and uncertainty surrounding proposed legislation have crippled the industry, say officials with the Building Industry and Land Development (BILD) Alberta Association.
Steve Bontje, BILD Alberta board chair and managing partner at Laebon Homes in Red Deer, said the association hears from “members every day who have had to make the difficult decision to lay off staff.
“The ripple effect is far reaching, work order to skilled trades partners have been cut by at least a third,” he said.
There are more than 5,000 unabsorbed new homes on the market, resulting in a significant reduction in housing starts.
BILD Alberta said new mortgage rules have cooled the housing market across the country, and now the provincial government is proposing new legislation, Bill 32, that would further impact housing affordability.
“The last thing our industry needed was more uncertainty around things like whether costs will be added.
“The best thing you can do to get the industry moving again is giving certainty and confidence that investments (people) make are going to work out,” Bontje said.
Publicly unveiled last Thursday, the City Charters Fiscal Framework Act will provide Calgary and Edmonton with predictable infrastructure funding tied to provincial revenues, as well as long-term transit funding.
Bontje said while the legislation is specific to Edmonton and Calgary, the development industry is concerned that all municipalities may call for the same power to add levies.
The new legislation will allow Calgary and Edmonton even more freedom to add levies if they choose, without the restrictions imposed under the older legislation, he added.
“It’s frustrating for industry because those are significant changes that were made without any meaningful conversation about what it might mean for the consumer,” he said.
Bontje said the average Albertan’s ability to afford a home is “slipping away.”
“We have to be very aware that any further cost increases … end up adding to the price of lots,” he said.
The legislation has yet to be approved.
Carmen Wyton, BILD Alberta CEO, said for every $10,000 increase in the price of a home, 20,000 potential homebuyers are eliminated from the market in the province.
The “industry needs to be consulted before changes are made that result in less young families and first time home buyers from home ownership,” Wyton said.
BILD Alberta represents more than 1,800 business members of the land development, home building and renovation industry in Alberta.