inner city duplex part 1-4

[Sean Kollee]

OK, Im going to run through a project here in its painful entirety - start to finish. I will figure out if I can post here efficiently so it is easy to follow along, text, images etc.  I have all the material on my website, but I will attempt to paste it in here in some kind of aggregate format.

The tale begins during the heady market of 2013, when I overpaid for an overpriced inner city shack.  At the time the market was rationing out build-worthy inner cit lots and I had to jump quickly to get one.  The place was tenanted, so at least there was a little cash coming in.  By the time I was ready to build the market had tanked and I was looking at selling the land for a loss, or trying to build my way out of it, so when the tenants moved out I rented it again to an even worse tenant, who eventually stopped paying.  By mid 2016, I decided to hit the go button, and planning began in earnest.  This is one of the first posts.

My design team has recently filed the development permit application with the city. Once our permit is granted,  I can apply for the building permit application and proceed to the construction phase. Right now I am occupied with budgeting and making the key material and interior selections. Given the weaker than normal marketplace I will be reducing the specification somewhat from my prior project, but retaining the overall style and quality that I put into every home.

Once I get to the end of the design phase we are making the smallest adjustments possible to the drawings to get it just right. The red ink is all electronic these days, and the design team can now submit drawings electronically to the city, saving both time and paper. 

post 2

Every time we start a new project in Calgary we wonder what the next fee will be for and what it will cost. The previous year the City introduced its asphalt degradation and restoration fee schedule. That cost can be very frightening if you are unfortunate enough to need to install a new sewer line in a road classified above the local collector category. Budget for 2-5000$ here per project.

This year the City brought in the off site levy fee for sewer infrastructure. They have a complicated formula for determine the fee and it is adjusted based on the location such as a greenfield site or in an established area. Our fee added up to $1657 for a duplex project.

The City prefers to stick the builders with these fees as an approval condition, because it makes the fee impossible to avoid, and the fees can be tied to a 3.3% inflation increase (despite being in a deflationary recession the City ensures it gets a nice fee bonus each year). There is an expectation among City staff that the builders can raise their prices and recoup the fee from the end buyers of the new houses. We have also encountered an attitude among some City staff that as long as a builder company continues to stay in business, it must be profitable enough that it can absorb the ever increasing burden of City regulation and fees.

The fallacy with these fees is the builder has to pay for the cost but the community as a whole is the beneficiary. You often will encounter a situation in Calgary where a long time landowner will have a low cost base on his or her property, say $25k, and the current land value is 50x that original amount. Yet the city attaches the new fees to the builders for accessing infrastructure rather than a property owner who has contributed to wearing out the existing infrastructure for the past 30-40 years. The preferential treatment of long time owner is also reflected in the property tax collected on older, primarily land value properties. The assessment on such properties is lower than it should be. So the City isn't collecting enough tax to pay for the needed infrastructure upgrades so must look elsewhere (to the builders) for more revenue.

The City also does not factor in its growing tax base from new inner city projects. You will commonly find that the tax multiple from a new project will increase city revenue annually by a factor of three. This means an old derelict house with a tax bill of $3300 becomes two new houses with a combined tax bill of $10000. We often wonder why the City needs to introduce new fees when it receives such a significant annual gain in tax revenue thanks to the builders.

post 3

The chronic asbestos infestation found in postwar homes follows us around the inner city as we demolish decrepit old shacks. Every year the city adds a little more red tape to the process of demolishing the unsalvageable old homes. You would think the city would be so pleased to have the private sector take care of this problem it would facilitate the paperwork process. Instead they burden the builder with multiple fees, payment windows and convoluted processes to pre and post inspect the demo sites, get the utilities shut off and use so much time that could be better spent building houses. Hopefully we can get a demo permit issued this week on our 41 st project.

post 4

The following is a comprehensive look at the complex and time consuming process of getting the demolition permit in inner city Calgary. Most projects will require a demolition of an old structure on the property, so timely permitting is essential to ensuring a project can begin on time. Any deviation from the process, missing documentation, or key signature absence will result in major delay and frustration to the applicant. We suggest budgeting one month to provide enough time to compile the paperwork, attend the site and City hall repeatedly to navigate the process, and to deal with asbestos issues. With some good fortune and experience, this timeline can be compressed. In our last demolition permit attempt, we were able to get the asbestos sampling, remediation, service disconnects, paperwork and inspections done in three weeks of intermittent, but focussed effort. The staff time spent including travel, parking, waiting, preparing documents, photographs, hiring contractors, fencing, planning and attending the site and City hall on multiple occasions was in excess of 20 hours (this would be very costly to outsource to a permit-fixing agency). We would likely quote $2000 to take care of this process for a client (in part because the job takes a month, is often frustrating, and can consume days of staff time if procedures are not followed explicitly).

Note that we were able to complete the process in 21 calendar days, the current wait time for a single service disconnect (gas) is estimated at 35 calendar days. We were very lucky to convince Atco to move us up the waiting list for disconnects. To receive the demolition permit, some steps may be initiated while the house is still occupied by the owner or tenant. This has its own set of pitfalls and risks associated with pre-initiating the disconnects. The demolition permit process is greatly aided by having a staff person free to navigate the various site visits and offices during the work day, and who can respond on short notice to get the necessary signatures from the three key parties to the permit (ENMAX, Atco and Waterworks). Feel free to contact us if this description is confusing or unclear. We have done this a few times, but it hasn’t been getting much easier (and how quickly we forget these procedures - which is, in part, why we record this material in our blog post).

Part 1 City Pre-application - Prepare necessary documents

download the city building permit requirement 

prepare letter of ownership/authorization

site plan showing building to be removed (survey/real property report works)

photographs of house and garage and yard to be demolished

complete tree disclosure statement

complete asbestos abatement form (depends on outcome here of sampling)

hire demolition contractor and record name for City file

estimate building footprint to be demolished and estimate fee for permit

Part 2 Asbestos survey must be conducted

if no asbestos is found sign off asbestos clearance letter and file for use at inspection phase

if asbestos is found, locate a remediation contractor and conduct the remediation work. Obtain an air sampling report and clearance letter from the contractor

Prior to any asbestos work being conducted the site must be fenced off. Order and set up the fencing (or have the supplier do this).

Part 3 - Visit City Hall (1st time) and submit Pre-application Paperwork

If any document is not satisfactory the application will be denied

Upon successful review of documents, pay demolition fee (usually less than $200)

The applicant will now have the crucial document - the ‘Service Disconnection Request’ form. Without this the actual demoltion permit cannot be issued.

Part 4 - Initiate service disconnects (this is where it gets tricky, and possibly frustrating)

Water Call City switchboard, attempt to speak to waterworks estimator. If this fails, email them at @@@@. Within 5 days you will receive a service disconnection quote. For some reason this is always $4250. Unique properties may have other fees. This is a remarkable fee because it is REFUNDABLE if you do the disconnect in the city street later. No other fee we have encountered has this unique feature. Attempt to make an appointment to have the water shutoff by the City crew. If you fail here it is because you have not yet paid the fee (this fee receipt is an essential document you must keep to claim your refund later). Upon paying the fee you can book the City crew to do the disconnect, usually a 5 day window is sufficient.

Visit City Hall (2nd time) - the payment window is located at the top of the escalator to the left. This is the third floor of city hall. Once again, ensure the receipt for the payment is not lost because it is essential to getting the refund later.

Electricity Call your electricity retailer to receive a permanent disconnect and reference number. Given the property is likely uninhabitable/vacant by this point, you may need to make an electricity account prior to getting a disconnection. A site ID may need to be issued. Make an appointment to have ENMAX remove the electrical meter. This will be a multi business day wait depending on the crew workload.

Gas Atco is the company that controls this process. Do not make the mistake of attempting to call Atco, this will achieve no result (we know this we have tried). Go to the Atco office in the NW, we have found this the best option. Fill out the necessary paperwork. Atco may require 5 WEEKS to do the gas line removal, which requires the alley to be excavated to locate the gas connection. It may be necessary to do this work many weeks in advance of when you actually need to begin site work.

Part 5 - Attend the Site to receive disconnect sign-offs by the three parties (warning - failure to do this properly will result in many delays and hardships. Ensure someone can respond immediately to calls from the crews and attend the site with the disconnect worksheet).

This is the site phase where the applicant must (if you want to do this with any reasonable time frame) attend the site while the crew is working. If you do so the form can be signed off. The same form must be signed by all three parties to the disconnect. Either the builder or a staff person must be available to attend the site with very little notice.

Electricity - ENMAX crew is unlikely to contact the applicant. Once the meter is removed, you can email the blank disconnect form to xxxx and it will be signed. Now you will no longer be working from the original disconnect worksheet, it will be a reprinted copy (legibility will begin to suffer)

Water - City crew will call when they begin the process because the water meter is located inside the house. This is the opportunity to get the second signature on the disconnect worksheet so the signatures can both be on the same form, not two different copies.

gas - Atco will not likely call when they are on site. If the crew is missed, Atco can be emailed to sign off the form. We will not publish the email address of the individual who takes care of this, just call the 6 Atco line.

Part 6 - Apply for the Demolition Permit and Call for Pre-inspection

Visit City Hall permit counter (3rd visit) to apply for the actual demolition permit. The disconnect form will be reviewed for signatures. If this is successful, the demolition permit can be issued immediately. Demolition cannot begin at this time

Call the City switchboard and book an inspection. This will be a pre-inspection of the house, at this time the asbestos related documentation must be produced for the inspector. Fencing must also be inspected so it must be satisfactory

Part 7 - Actual demolition and Post-inspection

At this time, the site can be demolished (upon approval from the inspector)

Once demolition is complete, call for a post inspection. At this point the city will be inspecting an empty hole in the ground. Not sure why this is necessary...

Part 8 - Apply for refund of water service disconnection fee

The $4250 fee is not quite available for a refund, however, it will be once the new sewer and water lines are installed. Generally the new water service is put in after the basement is poured, but it can be done much later in the project. It is in the builders interest to get the water and sewer hook up done ASAP in order to reduce the cost of having the fee tied up at the City.

Once new water service is complete, email the department and the cheque will be issued only to the name on file.

*Note - while we have made every effort to describe the process in detail, some divergence from the process may be necessary, and changes to City procedure happen regularly. These instructions do not provide any guidance on selecting the remediation or demolition contractors, what cost may be associated with these services, or how long this could take. It is fairly reasonable to expect that this process could occupy the time for a single person sporadically over a period of one month or longer. Delays by the service provider will cause a domino effect of delays, as key steps must be performed sequentially. Less significant steps can be performed in any order, such as conducting the asbestos remediation work. Expecting an untrained staff person to attempt this process without guidance will likely result in very poor outcome, lengthy delays, and great frustration for the home builder. Any suggestions on how to avoid having to attend City hall three times over a month period would be welcome.