Katherine Blackburn beams with pride when she talks about her home.
The single mother lives with her 15-year-old twin boys, two daughters aged seven and five, a dog, and a bird in a brand new three-bedroom apartment. It’s cozy.
And it’s her “forever home.” A home that Blackburn put months of sweat and tears into getting.
“I worked on the door springs to make the doors close. I cleaned every single toilet in the building — 28 toilets.”
Blackburn’s family is one of 21 that live in Habitat for Humanity Edmonton’s first apartment building in Cold Lake. The non-profit was asked by Alberta Municipal Affairs to complete construction on an apartment building started by the Cold Lake Affordable Housing Society with a $3.5 million provincial grant, but abandoned in September 2009 after the organization went bankrupt, according to the Cold Lake Sun. Municipal Affairs facilitated an agreement between Habitat for Humanity and the City of Cold Lake to finish the project and bring more affordable housing to a community that is getting squeezed by market prices responding to high oilfield wages.
Katherine Blackburn, 41, moved into Habitat for Humanity low-income housing with her four children after her divorce.
Blackburn, 41, separated from her husband in 2012 after 18 years of marriage and found herself unable to rent a home for her family on her modest daycare supervisor’s salary. She said it would have cost her at least $3,000 per month. Daycare supervisors make $2,700 to $3,900 per month, according to the Alberta government.
She applied for low-income housing but was turned away because she has four children and it is illegal for them to share a room, Blackburn said.
Lakeland Lodge and Housing Foundation, a provincially funded organization established in 1966 that manages government-owned low-income housing in the area, offers accommodation only up to three bedrooms.
The low-income housing worker gave her a brochure for the Habitat for Humanity project and she applied right away, in November 2012. She was approved in March 2013 and moved in on October 28 the same year, only days before she was going to be without a place to live.
Blackburn was visibly emotional and grateful when describing her arrangement, which allows her to rent-to-own for just under $1,000 per month.
“I would not have been able to keep my kids. They would have had to go live somewhere else,” she said.
“We would absolutely be homeless.”
The down-payment on her $250,000 apartment was 500 hours of volunteering — the aforementioned toilets, as well as other work in the community — and she said she hopes to completely pay off her interest-free mortgage by the time she retires in about 20 years.
Priced out of Cold Lake’s housing market
Blackburn, who is the former spouse of a member of the Canadian Forces, represents a class of Cold Lake residents who simply can’t afford to live in a community where rents peaked at $1,900 for a one-bedroom apartment in 2013 and the average house sells for more than $400,000.
The City of Cold Lake has made solving the rental shortage a priority. In April 2013 city council approved a rental incentive program that pays homebuilders $7,500 per door if they build at least 13 units and $5,000 per door for three to 12 units. In 2014 the program funded more than 340 units for occupancy in 2015.
Local leaders say the solution to Cold Lake’s rental shortage is a matter of supply and demand.
“I’m sure that prices will come down as supply comes on the market,” said Mayor Craig Copeland.
Copeland said in October that he heard Seymour Pacific, a B.C.-based builder that received money from the city under the rental incentive program, had originally asked for $3,100 per month for its three-bedroom town homes but were now asking for $2,800 because builders had filled the market with newly constructed units.
But Connie Surgeson, chief administrative officer at Lakeland Lodge and Housing Foundation, isn’t convinced that an increase in supply is necessarily enough to bring rental prices down.
“The only way I think the rental rates are going to decrease is if something happens with the oil price,” she said.
“If people start getting laid off, then they will go down.”
A search on Infomall.ca, a popular classified ad site for Cold Lake, shows that February rental prices are actually 50 per cent lower than Copeland’s estimate of $2,800 for three bedrooms. One ad asks for $1,400 for three bedrooms and two baths.
It matches the drop in West Texas Intermediate, the North American benchmark oil price, which has declined more than 50 per cent since a July 2014 high of US$103 per barrel, to around US$50 in February.
Click on the photo to view a slideshow on average properties for sale in Alberta in March 2015.
Increased housing stock and oil price drop cools market
Randy Meise, a land developer who owns Tri-City Holdings, a residential and commercial land development company, and is the Cold Lake chapter president of the Urban Development Institute, said the Cold Lake real estate market began to cool in the summer of 2014. He thinks that’s a good thing.
“We are in the midst of a correction at the moment. A lot of the real estate people will not admit it, but it is the fact that we’re seeing.”
Meise said Cold Lake’s real estate market sped up in 2012 and 2013 and it’s now “over-built.” He said a three-bedroom, two-garage, 1,200 square-foot home would have sold for $320,000 in 2010. That home was worth about $520,000 before the cool off.
He attributes the price inflation to high demand and sub-trade workers who raised their wages in response to demand. A friend of his who builds homes was quoted $70,000 when demand was its highest by a tradesperson to do the plumbing on a house — a job that normally costs about $20,000. Builders had to pass on higher costs to buyers who were already willing to pay, said Meise.
“They’re paying more than they should have to pay,” he said, referring to people who bought houses in Cold Lake despite the inflated prices.
The gangbuster years of 2012 and 2013 for housing in Cold Lake coincided with construction work on Imperial Oil’s $2 billion Nabiye expansion which added 40,000 barrels a day of oil production starting in early 2015. The vast majority of those workers have now gone back to where they came from — Ontario, B.C., the Maritimes — but locals are confident there will be another Nabiye, no matter what happens with the price of oil.
Meise said Cenovus Energy’s Foster Creek project expansion was expected to bring 1,800 more people to Cold Lake by 2017. The second-largest oil company in Canada recently announced it was cutting 15 per cent of its workforce in 2015, freezing employee salaries and reducing discretionary spending to account for a $472 million loss in the quarter ending Dec. 31. It cut its 2015 capital budget by about $700 million to between $1.8 and $2 billion. Despite all this, Cenovus is still focusing on expansion that is already under way at Foster Creek.
Cold Lake’s “steady increasing market”
Donna Michaud, a local real estate agent since 1988, said housing prices have increased in Cold Lake for as long as she can remember, even during tough times for oil.
“It always kind of makes us giggle when we hear that word ‘boom’ because we’ve been a steady increasing market for 25 years.”
But Michaud agreed that 2014 was a slower year for home sales than in 2013. In October 2014 there were 60 new houses on the market within Cold Lake, which is huge for a community of 15,000 people. She worries about the non-oil workers who get squeezed out, especially the Canadian Forces members whose salaries can’t compete with the market rate.
“These are the people that stand on the line for us to have a free country and they’re sitting on a soup line in Cold Lake,” she said.
The Canadian Forces gives each enlisted member a taxable “post living differential” that is intended to subsidize the cost of living in places where a $2,800 per month salary for a new private just might not cut it out. The PLD for Cold Lake is $319 per month. It’s $684 for Edmonton. The price of a three-bedroom apartment is about the same, if not less, in the bigger city.
Blackburn said she has thought about giving up the child-care job she loves, to go work on the Air Weapons Range, where the Cold Lake oil sands are located.
“I could honestly go work in a camp somewhere and clean toilets and make more money than I do now. That’s just a fact and that’s disturbing,” she said.
Blackburn estimates she could make about $9 an hour more cleaning toilets than caring for people’s children. But it’s her own children that keep her at home; the shift work and long hours are undesirable and unfeasible.
4 Wing housing was built in the 1950s when the base first opened and has received little more than cosmetic touch-ups in the intervening decades.
Permanent demand for affordable housing
Surgeson said the Lakeland Lodge and Housing Foundation always has a wait-list of families, mostly single moms like Blackburn, who want to get into one of the foundation’s affordable housing units or receive a rent subsidy.
Families are charged 30 per cent of their income for housing or can receive up to $1,000 per month toward rent from Lakeland Lodge and Housing Foundation, depending on demonstrated need. She said she currently has 50 families looking for housing assistance.
She said Lakeland saw an explosion in demand about two years ago, around the same time that Meise observed housing prices increase. Surgeson said more people came to her organization looking for help due to dramatic rental increases of $500 or $600 per month, doubling the price of a one-bedroom apartment.
“It was ridiculous and it was literally overnight,” she said.
In Alberta, there is no rent control. Landlords can increase the rent by as much as they want once per year.
Everyone agrees that housing in Cold Lake is too expensive. But for now, there seems to be some reprieve from increased supply and lower demand — there are more apartments for rent under the rental incentive program and more houses on the market, as well as fewer workers in town since layoffs on the construction side of the oil industry.
But, as Michaud said, Albertans always expect the price to rise again and for the industry to keep expanding.
“You know they’re going to keep using oil. What else are they going to do? They’re going to keep buying it, it has to get produced,” she said.
“Did you stop driving your car when it went up to $115 a barrel?”
Planning for the future
While local leaders continue to rely on market incentives to keep supply and demand in balance, low-income housing providers are planning for the future.
Habitat for Humanity Edmonton is planning to build more homes in Cold Lake. Blackburn’s building was the non-profit’s first project in the community and the City of Cold Lake transferred six building lots to the organization in fall 2014 for future use. Blackburn said they’ve already started fundraising.
Lakeland Lodge and Housing Foundation is moving ahead on a $21-million rebuild of its seniors’ lodge in Cold Lake in anticipation of baby boomers retiring, Surgeson said. They received $6.8 million in provincial funding for the project. Seniors aged 65 and older are eligible to apply to live in Lakeland’s seniors’ lodges in Bonnyville and Cold Lake. Surgeson said there are currently vacancies in low-income seniors’ buildings.
She said Lakeland is also looking into how it can better deliver low-income family housing. Discussions with the province are on-going, but one possibility is selling the 32 family housing units in Cold Lake and moving tenants into one building because it’s more practical. Blackburn won’t have to worry about elbowing her way into a Lakeland’s seniors’ home one day.
Now that her housing is secure, she takes comfort in knowing that her grown children will one day “bring my grand-babies back to me.” She plans to grow old in her Habitat for Humanity apartment.
“You’re going to be taking me out of here in a body bag,” Blackburn said.