On behalf of Osuji & Smith posted in Real Estate on Monday, August 27, 2018.
Since March 2018, when Mayor Naheed Nenshi rolled out the new secondary suite rules, Calgarian landlords are glad to see a 2-year amnesty period where they can now meet the building code for their basement suites to become legal.
Calgary’s current registry of legal suites stands at only 961, while one independent estimate of its illegal inventory stands at 16,000. Cliff de Jong, senior Special Projects Officer with the City of Calgary, who has been involved with the secondary-suite file for a decade, said the target is to see a minimum of just 800 applications a year for the next two years of the amnesty in order to legalize currently illegal suites or 1,600 in total.
Additionally, Mr. de Jong said that the largest barrier to bringing these suites within the law may have been the complicated approval process in place up to now. People who meet the conditions, such as proper access, adequate lot size, and space for parking, will be approved.
What are other barriers to having legalized suites?
Caleb Roddick, who has owned a construction company for many years, has seen atrocious plumbing, dangerous electrical systems and most of the windows with fire-safety issues. He has estimated that for landlords looking for a basic upgrade to meet code and bylaw regulations it would cost $10,000. A brand-new suite built to code will cost between $35,000 and $40,000.
When people build a secondary suite they expect to make up to 15% more in rent than the unit was bringing in previously. “These reforms also open up new opportunities to meet the demands of a growing economy” expressed Nenshi.
There are people against this type of housing and say there will be suites everywhere. But Pernille Goodbrand, a research associate with the Haskayne School of Business at the University of Calgary, who has focused on secondary-suite research, said that just has not happened in other jurisdictions. “Generally you don’t see a massive increase in them when rules are streamlined and made more lenient.”