Forget the 'burbs: the sprawl-weary build new inner-city homes
By Rod Nickel, TheStarPhoenix.com
Published: Saturday, July 26, 2008
SASKATOON - Frustrated by high prices of new homes in the 'burbs, Habibe Pjanovic and her adult son Mujo Culum took their search to the heart of King George.
On the tired 700 block of Avenue N South they found their dream home - a semi-detached, roomy 1,300-square-foot house. Pjanovic bought it for $235,000 - at least $50,000 cheaper than the price of the same house on a newer west-side street.
"People say it's a bad area. It has a bad reputation," said Culum, whose family immigrated from Bosnia. "But we've had a good reception with neighbours. People are really, really nice."
Across the inner city, new homes are springing up in unlikely places. Where dumpy rentals and drug houses once stood, new starter homes are rising in twos and threes. For the most part, it's a trend driven by changing consumer preferences and simple economics, not a government program.
Milano Homes has built and sold six to eight new semi-detached homes in the core in the last year. The company has bought property to build another 20.
It's preparing to sell three semi-detached homes in Westmount at 23rd Street and Avenue M. The area has decayed, but the raw materials for a renaissance are in place, said real estate agent Ivan Toledo, who is marketing the homes. Across the street is Leif Erickson Park. Elementary and high schools are a short walk away.
"Buyers are having to revisit their tradeoff points. If I can spend 275 grand, that's going to get me next to nothing in Buena Vista, maybe a townhouse on the east side or it's going to get me a full house on the west side," Toledo said. "(The market) has no choice but to favour the cheaper construction and a decision to live in what at worst would be described a transition area."
'Niche market'
Kory Kormak is putting a fresh face on a block of 27th Street in Caswell Hill.
Kormak more frequently builds homes in new suburbs. But when three adjacent lots on 27th Street became available, he decided to build three homes identical to those he's sold in Willowgrove.
"It allows us a niche market," he said. "If people are interested in living close to (SIAST) Kelsey, close to downtown and not have to worry about taking a car and parking, that's the opportunity we've seen."
Kormak's Caswell homes are equipped with basement suites with separate entrances and laundries, allowing the buyers to take in renters.
The city is on pace to see about 1,000 single-family homes built in 2008, said Randy Grauer, manager of development services. Five per cent of those, or about 50 homes, are expected to be built within Circle Drive - roughly the same number as last year. The city has no stats for how many are being built within the inner city, but builders say it's happening more often now that buyers are willing to consider the core.
The real estate boom is actually holding back a faster reclamation of the core, Grauer said. The cost of new lots hasn't increased as quickly as the cost of buying an existing property in some areas and tearing it down. The price spike has whittled down the economic advantage of infill, he said - fewer levies for developers to pay the city to install pipes and sidewalks.
But Toledo said there are ways to make the economics work. The lots Milano Homes buys are often turned into two homes where there used to be one.
Milano Homes' trio on 23rd Street are listed at $270,000 each. A similar home in Stonebridge goes for about $330,000, Toledo said.
Buying existing properties is still cheaper than new lots if the builder is choosy, Kormak said. Homeowners are well-versed in the real estate boom and are eager to cash in.
There are some savings by tapping into existing infrastructure like roads and sidewalks. But on 27th Street, Kormak had to install new water and sewer pipes anyway to replace old cast-iron pipes.
'Eclectic experience'
A reputation for crime and social problems keeps some home buyers from looking at the core. But others look at the inner city and see its leafy streets lined with character homes, Grauer said.
"When you build in an inner-city neighbourhood, you get a more eclectic experience, no doubt about it. There's a willingness to make investments (there)."
Caswell Hill's turnaround began in the 1990s as buyers attracted by the aesthetics fixed up homes, Toledo said. Similar good things could be ahead for Pleasant Hill and Riversdale, he said.
Core neighbourhoods like Riversdale that are closest to downtown will be quickest to turn around, said Kormack. The reason is in big block numerals at the pumps - $1.33 per litre.
"Everybody has a thorn in their butt about gas," Kormack said. "People are saying, 'I can save by not starting my car and going downtown and parking.' "
Even the inner city's old housing stock is getting a makeover. Many homes have been re-sided and re-shingled outside and gutted inside during the past year as speculators bought and flipped homes in the alphabet streets.
"What's nice about this real estate boom is pretty much every neighbourhood has benefited," Grauer said.
While builders are largely filling in the inner city on their own initiative, there is one government mega-project aimed at changing Pleasant Hill in one ambitious stroke. The three levels of government are paying for a replacement for St. Mary School and new housing on land cleared of 29 rental homes.
'A mixed bag'
The downside to infill is that for every new home rising in the inner city, a more affordable, albeit shabby, one is torn down. Some of those are overdue for demolition, said Laverne Szejvolt, assistant manager of Quint Development Corp., a program that buys old core homes and turns them over to co-operatives of low-income people.
"There's a lot of homes we've been unable to buy because of foundation issues, so my hope would be those are the ones being demolished and new ones being put up," Szejvolt said. "They're literally falling down on themselves.
"If (builders) are demolishing houses just for the sake of demolishing, that's not a good thing because a lot of the character homes should be and can be revitalized at a lower cost. (Infill) is a mixed bag."
Infill is a positive trend, said Mayor Don Atchison.
"What it does is signal to the community that there's confidence there that things are going to be better," he said. "You end up with people stabilizing the community."
Toledo said neighbours are "tickled pink" by new homes going up since their property values rise with them.
"We're actually helping to solve the affordable housing crisis," he said.
Kormak said infill solved a neighbourhood problem in Caswell. He tore down a notorious house to make room for his three new homes.
"I guess there was a lot of bad things that happened in that house," he said. "The neighbours were actually high-fiving when the house went down."
Back in King George, Mujo Culum has already noticed he and his mother aren't the only new house owners.
"Lots of new buildings are poking up and renovations are happening. It's nice to see.
"It's a breath of fresh air."
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© The StarPhoenix (Saskatoon) 2008
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This is really great to see, I feel that with more infill as well people will be drawn to the city. As well as Saskatoon becomes a bit more "advertised" we will see an influx in immigrants who usually prefer to live in the city.
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But who can really speculate Saskatoon is really just starting to come together as a "major-little" city it can really go either way but hopefully with the waves of people from the phillipines, vietnam and the ukraine they will call Saskatoon home!
)...moving further south, arriving at River Landing and all it's glory 
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