Instant uptake

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This article was published 15/08/2022 (1130 days ago), so information in it may no longer be current.

Move-in week at Paragon Living’s latest Osborne Village apartment project will feel a little like orientation week at a university dormitory.

That’s because in a span of three days in September, tenants will move into each of the Bell Avenue building’s 50 units, filling the property with residents at a rate even Paragon president Nigel Furgus didn’t quite anticipate.

Furgus, whose company has developed 200 apartment units in Winnipeg over the past two and a half years, said the reception for the “luxury affordable” units — which start at $1,150 and include access to an on-site gym, outdoor dog run, underground heated parkade and free high-speed internet — was startling.

The company began marketing the units in February following two years of development and construction. By May, with four months to go until the ribbon-cutting, 90 per cent of the units had already been leased.

That showed Furgus a few things. For one, there was a healthy appetite for modern accommodations in Osborne Village. For another, adding unexpected amenities to rental properties boosted uptake. “We’ve seen that COVID really shifted the mentality of the renter,” he said. People wanted better bang for their buck.

When the company began work on the Bell Avenue complex, there was tremendous uncertainty: it was the start of the pandemic, and the budget of roughly $15 million easily could have gotten out of hand, Furgus said.

To mitigate unexpected increases in costs and and possible slowing of the supply chain, he said the company pre-purchased steel and lumber for all scheduled projects, anticipating and cutting off rising costs before they hamstrung those developments.

Wall sections were pre-fabricated to reduce labour interruptions on-site. From the city of Winnipeg, Paragon — which now encompasses management, development and design services — rented space off the boulevard from the site to store those materials.

All told, the final cost, Furgus said, amounted to a total within three per cent of the initial budgeted costs.

However, some elements of development changed. The initial, pre-pandemic plan had been to use three main-floor units as commercial spaces, including the gym meant for tenant use.

But sensing the difficulty of attracting steady commercial tenants, Furgus said the company applied for a variance to convert those spaces’ zoning to residential. The result are three loft rental units at grade, and the relocation of the gym to a space above the parkade.

To build the property, which came with a roughly $15 million price tag, the company accessed the Canada Mortgage and Housing Corp.’s affordable housing program, which provides funding assistance to firms when they develop properties with rents falling below the market rate.

As always, the word “affordable” is a contentious one, and its correct application depends entirely on income and financial well-being. The CMHC’s February report said that for those in the lowest income quintile (earning less than $25,000 per year) an affordable rent would amount to less than $625. That group had truly affordable access to less than three per cent of the total rental universe in 2021, but represented about 20 per cent of all renter households. “While there is a need for more affordable units, new supply coming on to the market posts higher average rents,” the report said.

That being said, “among units in the purpose-built rental market between July 2018 and June 2021, the average rent was $1,541, or 33 per cent higher than the average rent for all units,” the report went on. So when stacked against the rental universe, the rents on Bell Avenue are considered to be below market value for new-built rental units.

But in terms of the demographics Paragon is seeking to attract — young professionals, downsizing seniors and students looking for high-finish units at a comparably low price — there is clearly a huge demand.

“Winnipeg is a value city,” Furgus said. “And it’s clear people want to get more out of their units.”

Paragon is positioning itself to be among the top suppliers of such units in the city. Over the next 36 months, Furgus said the number of units developed and brought to market by the company will near 500, with each following a similar formula: provide more than what renters expect elsewhere, while charging them a comparatively lower rent.

Soon underway in Bridgwater’s town centre will be a project offering one-bedroom, 600-square-foot units, 20 per cent of which will rent for $981 per month, including internet and water costs. In one of the city’s fastest growing suburbs, that figure could be an attractive proposition to newcomers and first-time renters in particular.

Elsewhere, a pair of projects are scheduled to begin in the Corydon area, with two on Wardlaw Avenue and one on McMillan Avenue. Another project, an 84-unit, six-storey development across from Maples Collegiate, is anticipated to be complete by May 2023.

On Tuesday, Paragon will hold a ribbon-cutting ceremony at the apartment complex on Bell Avenue, with expected attendance from Coun. Sherri Rollins (Fort Rouge—East Fort Garry) and Conservative MLA Obby Khan, who represents Fort Whyte at the legislature.

Then on Sept. 1, the tenants arrive, one by one.

ben.waldman@winnipegfreepress.com