Saskatoon city council’s executive committee will consider proposed changes to our condo conversion policy at its February 25th meeting. The proposal, brought forward by city administrators recommends a number of changes which they say would be helpful in keeping a supply of rental units available in the city.
Administrators have suggested that the city refuse applications to convert apartments to condominiums when Saskatoon vacancy rates drop below 1.5%. They further suggest that investors should pay a fee of $10,000 per unit when vacancy rates are between 1.5% and 3%.Finally, administrators would like to see conversions involving more than 50 living units actually go to city council for review. Currently, only those projects involving 100 or more living units require approval of council.
“While your administration remains of the view that condominium conversions have an overall positive impact on the community during normal market conditions, the drop in vacancy rates does raise the question as to whether the City of Saskatoon should continue to approve condominium conversion applications in the foreseeable future,” the report says.
Saskatoon developer Ken Achs, president of Midwest Development Corporation argued in a letter to council opposing the proposed changes that people may be overlooking the benefits of condo conversions, which include needed upgrades, which improve safety and quality of life for residents. He also notes that typically 30% of converted units are returned to the rental pool in an improved state.
“If there were suitable tax incentives and lower-priced land, more apartments would be built and the market would self-regulate through supply and demand,” says Achs in his letter.
The city received 54 applications to convert a total of 1,544 rental units to condominiums during 2007. That’s more units than were converted over the previous ten years combined. Saskatoon rental vacancy rates plummeted from 3% in the first quarter of 2007, to .6% by the third quarter. Rents saw significant increases over a short period of time while tenants, displaced by ongoing conversions scrambled to find a new place to live.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email. Norm Fisher Royal LePage Vidorra