Challenging times for building industry

Like much of Alberta, COVID-19 has slowed work. Here at a Medicine Hat project, work has been delayed about half a year.

Besides the horrible human cost, it has been turbulent times for business in Alberta as government, private businesses and the public as expectations, rules and regulations change as those affected by COVID seems to increase.

It is no different for those in the building construction business, whether it be homes, multifamily homes or condo projects or new buildings to house businesses have had to work around all the hurdles created by the pandemic.

Cypress County resident and Nickel Group Developments’ partner Chris Nickel says it has been a learning curve with all the unexpected hurdles that one has to understandably work around. 

“The biggest impact Covid had was timeline. We had sales before COVID started so obviously a company like ours, we have investments, you have people putting money into what we are doing and with the world shutting down, you basically have to revamp your entire business when everything (eventually) turned around,” explained Nickel while standing at the site of a multifamily building project at Division Ave and 1st St in Medicine Hat. “We are pretty proud of our business and our group and everybody is involved in it that we got to this point and we are still here to tell the story and we can actually still build the same thing we were going to build last year at this time per se. It just looks a little different as far as our industry there was a lot of things we couldn’t control and I think we are doing a good job of adapting to them.

“Basically we were completely shut down for six months. (The Division Ave project) was slated to begin construction in April in 2020 and here we are in November we are just getting rolling. Timeline obviously threw everything for a loop. The other hard part was that certain approvals and certain applications only last for say, six months. They expired when COVID hit and it was kind of new to everybody. It was necessarily the town’s fault, it wasn’t the council’s fault. It wasn’t anyone’s fault — it was the rules and regulations that were there and certain things expired so I had to do things twice which I never had to do in 20 years of building.”

He adds that it is dramatically different between dealing with urban and non urban governments. 

He says that, in an urban area, many people that have been situation in the same for a lot longer, a lot more rules as far as urban planning goes. 

“Typically in counties you don’t necessarily have like architecture guidelines. You don’t have  certain rules to follow, you pretty much build whatever you want just as long as it doesn’t standout too much,” explains Nickel. “Where here in the city, we had to follow certain guidelines. It was already zoned to have multi family on it so that part of it was fine. But there is guidelines you have to follow and makes it a little bit more challenging. Anytime you do an infiil (for example) you are going to just be up against a lot of people a lot of community members who have been there a long time and who are always a little bit nervous of change. I think easing it through (this particular project) the fact of just not like having this happen really quick, maybe helped us a little bit because it gave people an opportunity to think about what was actually coming here. We weren’t ruining the area, we are actually adding value to the area. The City is actually getting more property taxes, you are now getting four property taxes on one site instead of one, so different values financially, different values as far as it looks. I think cities definitely have more challenges than the counties but I think they also have more opportunity too.”

Infill housing projects involve taking older properties in longtime neighbourhoods and generally tear down old house and construct new houses or projects. In this particular case near downtown Medicine Hat, an older building, while unique, came down. Nickel saw the size of the lot and the opportunity was there. It is a matter of construction companies keeping an eye open for lots and envisioning something different.

“You couldn’t get a lot this size in a new development anywhere for a single family home and you get a lot this size and you re-subdivide it from one to four and now you got an opportunity where so instead of one property at a 2 million dollar price tag, you got four at under half a million dollars each. Now people who are at the 50 and under age group that can’t necessarily afford $750 grand and don’t feel like they can never ever get into a new home, now they can,” explains Nickel. “They have an opportunity to live downtown, have less property taxes, less driving if they have a business down town. It will attract that millennial mindset to kind a move to an area that has an older mentality but yet has affordability to younger generations they can actually have new. And people like new stuff.”

There is also the general price of doing business during COVID times

With the price of new housing getting more expensive across Alberta, with the price of a lot of building materials such as lumber dramatically going up, Nickel says the only real way where the younger generation can have something new is if you do infill and revitalize development.

He uses this new project, which is mostly sold and has drawn a lot of interest as an example.

“Infill developments are never conventional. Every single one of them is different. Every single one of them has its own challenges. I would say the city (of Medicine Hat) has been quite welcoming, it’s just a different project so it was a little bit new to everybody. Plus it is on a street that is probably one of the most established streets in the city of Medicine Hat It is in a prominent location,” explains Nickel. “It added challenges in the fact it’s got new addresses…Everything got re-subdivided; we had to go through a different planning commission than you would typically go through  in a new build. New services, getting rid of old services, I mean the process I think it has been fine. 

“Of course we hit a six month world shut down which didn’t really help the momentum of the project to get anywhere…obviously in March everything shut down, everything stopped for four or five months which put a little bit if a dent into it. Other than that, the process has been fairly efficient, it is just been new to everybody. Everybody who that is on municipal planning, city council, development and planning, we all realize that projects like this need to happen to help revitalize the city of Medicine Hat.“

Being outside they are watching any updated government rules and regulations to the ones already in place for construction zones.

Nickel has a long history in building projects. His family has a lot of ties to the building industry in Alberta; worked for Jade Homes’ Jade Built and then later to Jasper Homes’s master builder before moving on and helping to create Nickel Group Developments. 

Always the buildings’ designer it has been a major learning curve to ensure he got used to the legal side of it

“As I have got a little older, I’ve got used to enjoying the behind the scenes stuff and dealing with government and dealing with the government level and deal with the CHBA (Medicine Hat member/director of the Canadian Home Builders Association), and having that part behind us and learn. I enjoy that part of it, not more than the onsite stuff but just learned that is part of the business,” says Nickel. “The thing with the development in the industry, is that it is a a people first industry. You are dealing with people are buying home and this is for families, it is not just businesses. You are dealing at a level where it is not a perfect science. It is not there are a lot of opinions and a lot of regulations involved. You have to put the people that are purchasing and the people who are moving their families, you have to put them first. As long as you have that in mind first, everything else is just a ‘how do you get there?’ thing.”

As for the pandemic, Nickel remains optimistic, but like everyone, can only wait and see how it all unfolds. 

“As far as what could happen, the building industry overall never really saw a stoppage of work, it was more of these kind of projects, it was more the council, it was (waiting for) the city, it was fighting for appeals; legal offices were shut down, vital statistics was shut down, we just couldn’t move, because some of the bigger offices were closed. As far as construction goes we are waiting just like everyone else, don’t what’s going to change. Don’t know if the world shuts down again, if it will stop progress any. Anything we can do legal side has been done. 

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