Jenna Kulka (photo: Cooper + O'Hara)

Alberta Housing Options: 3 Ways to Make a Life Here

By Robin Schroffel

Choosing an option for housing isn’t as clear-cut as it used to be. As home prices rise and fall, economies skyrocket and stagnate, mortgage rules change, and demographics shift, there’s no one-size-fits-all approach. Accommodation needs change at every age, in all our varied life circumstances. Luckily, Alberta offers many options: from renting to owning; detached homes to garage suites; sprawling suburbs to downtown condos. We spoke to three Albertans—each at a different stage in their lives—to find out what works for them and why.

Jenna Kulka, Edmonton

Jenna Kulka has a strong work ethic, a head for numbers and a supportive family—which helps explain how the high school math teacher was able to purchase her first home at just 23.

“I was so proud when I got the keys two years ago,” the AMA member says, reflecting on her three-bedroom new-build duplex in the south Edmonton Glenridding Heights community. “The hard work and tears and sweat—it all paid off.”

Fewer people in their 20s are buying homes, according to Jason Provencher of Bridgewater Bank, a Calgary-based subsidiary of AMA that specializes in mortgages. Figures from the 2016 Statistics Canada census show the rate of home ownership for people in their 30s is also lower than it was for baby boomers at the same age. And the number of home sales in Alberta has been trending down for the past four years. The Canadian Real Estate Association reports that, as of August 2018, sales had fallen six percent below the same period in 2017. Sure, high prices make purchasing more prohibitive, but there’s also a culture shift: Today’s 20-somethings change careers, relocate or travel before settling down.

But for Kulka, buying was a no- brainer: She secured a permanent teaching position immediately after university, and she’d been saving for a downpayment since her first job at age 14. She lived with her parents through school and her first two years as a teacher, squirrelling away money while paying off her student and car loans.

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Provencher says it was the right move, noting that lending institutions typically look for two types of credit—a car loan, credit card or student loan operating for two years—and steady employment for at least three months with a guaranteed income. Kulka was approved on her first try at a mortgage, and she chose to make biweekly payments, saving thousands in interest over the long term.

Thinking of resale potential, Kulka opted for a home near schools in a family-oriented community. Her choice proved fateful: Soon after signing the paperwork, she met her partner, Dave. Today, they share the home with their two-year-old son.

While it’s true that purchasing means a person is paying into something that’s “theirs,” it also comes with expenses that renters don’t have to worry about: property taxes and homeowner’s insurance. AMA Insurance manager Sandra Bitter says it’s a good idea to look into insurance rates before you buy, noting that there’s more to it than just the market value of a home. Its age, location, square footage, number of bathrooms and even countertop materials all factor into insurance rates. “Talk to an advisor before purchasing to understand what is covered and how much insurance will cost,” she advises.

Home ownership has had its challenges: Kulka has been frustrated by the builder when it comes to fixing issues not covered under warranty. Still, she says buying a home has been worth it. “I like that I’m paying into something that is mine. I’m starting early. The more I pay into it, the better my kids will be taken care of.”

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The Hagen-Varadi family (photo: Cooper + O’Hara)

Zoltan Varadi, Calgary

As forty-something professionals who rent in Calgary’s inner city, Zoltan Varadi jokes that he and his wife, Tanya Hagen, aren’t your typical Albertans. “We don’t even own a vehicle, so we hit all the checkmarks for a freak family,” he says with a laugh. But by renting a century-old bungalow with a big backyard in the Sunalta neighbourhood, the couple can enjoy a lifestyle that aligns with their values.

The area meshes with their five-year-old daughter Éva, two cats and one dog—but it comes with a hefty price tag. “We want to live in an urban neighbourhood and enjoy the benefits of city life that you get from living close to the core: access to cultural institutions, amenities and all the great parks. And there was just no way we could afford to purchase a home in this neighborhood. We’d have to move much farther away, and that’s not something we want to do,” Varadi explains.

There’s no doubt that renting—especially in Alberta’s big cities—can present significant savings. Home prices in Calgary averaged $468,888 in the first half of 2018, according to the Canadian Real Estate Association, yet online mortgage calculators indicate an average Calgary family making a $50,000 downpayment could comfortably afford to spend just $374,738, with payments of around $1,714 per month. Meanwhile, statistics from the Canadian Mortgage and Housing Corporation place Calgary’s average rent for a two-bedroom apartment at $1,258 per month.

Varadi notes that in Toronto, where he and his wife lived before moving to Calgary seven years ago, high housing prices meant renting was the norm among his peers. Today, he’s seeing more young families in the inner city than ever before, and he suspects many are renters like him.

Foregoing home ownership has its advantages. Varadi and Hagen can use their spending power for priorities beyond housing: buying locally sourced foods, supporting area restaurants and businesses, and attending the city’s many festivals. Central living also means Varadi—an avid user of Calgary’s cycle track—can bike to work year-round, and the family can easily run errands by bike or on foot. “It makes for a healthier lifestyle,” he adds.

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Peace of mind is an important consideration too. “Home insurance for renters is considerably cheaper than for homeowners,” says AMA Insurance’s Bitter. “It protects not only a person’s belongings, but also covers certain types of personal liability.” This is particularly important in the case of at-fault incidents that affect property owned by others, such as starting a fire in an apartment building.

Varadi enjoys the sense of freedom inherent in being a renter. Like many his age, he has moved around a lot, changed careers and knows that life throws curveballs. “For the foreseeable future, this is where we’ll make our home. But who knows what opportunities will arise in a few years’ time. This allows us the freedom to not be tied down in any one place,” he says.

That said, he does see the value in ownership: “I’ll admit, there is a little piece in the back of me that thinks it would be nice to have that investment in something that is yours; that you could fall back on should you require it.” Varadi and Hagen do plan to purchase one day—a condo, in time for retirement. “But right now,” he says, “there’s no rush.”

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Carillion Cameron at her backyard suite (photo: Cooper + O’Hara)

Carillon Cameron, Edmonton

Ten years ago, Carillon Cameron’s daughter Jane suggested she come live in her Edmonton backyard. Garden suites—secondary dwellings on someone’s property—were slowly catching on in Alberta. With a background in environmental studies and urban planning, Jane was intrigued by the notion of sustainable living and better use of city space.

At the time, Cameron wasn’t quite ready to take the leap. But after a series of downsizing moves took the AMA member from living alone in Lethbridge to a condo in the province’s capital, she began to experience a sense of isolation and a growing worry about accessibility.

“I didn’t want an independence where I felt I was ‘apart from.’ I wanted to be ‘part of,’” she explains. So she sat down with Jane, her son-in-law Matt, and her two young grandsons. Together they hatched a plan for a garden suite attached to the garage in the backyard of the family’s Westmount home.

City-wide, Edmonton homeowners have had the option to build basement suites since 2007, and garden and garage suites became possible in 2009. Regulations continue to evolve, making it easier to get permits. There are also attractive incentives for suites meeting inclusive-design standards—no-step entries, flush or minimal thresholds, and minimum widths and clearances for hallways and doors.

“As a city, we want to be sure that we are not standing in the way of innovation; that we are creating opportunities for Edmontonians to meet their housing needs,” explains Anne Stevenson, senior planner for the city’s zoning bylaw team.

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Designed by Cameron herself, under the guidance of Battle Lake Design Group, the open-concept 519-square-foot garden suite features 14-foot ceilings, a loft bedroom with a skylight, laundry, a living room, a full kitchen and heated polished-concrete floors. She included a space on the main floor for a single bed, looking ahead to a time when she’s no longer able to manage stairs.

The move has enabled the marriage commissioner to work from home—while watching her grandsons play soccer through the floor-to-ceiling windows. She also enjoys relaxing and gardening on her patio.

When a garden or garage suite is occupied by family members, they’re covered by the homeowner’s insurance. But Sandra Bitter of AMA Insurance recommends the occupant get their own tenant’s insurance to make sure that, if they need to make a claim, it doesn’t affect their family’s rates. Plus, if there are items like antiques, jewellery and collectibles involved, they might require special insurance coverage.

Downsizing can be intimidating, but Cameron’s example proves that sometimes, even a drastic change can be for the better. Although there were challenges, particularly during the building process, the end result couldn’t be better for all parties involved. “I wanted a smaller life. This has enabled me to live in my own little house while being close to my family,” she says.

Taking in a tenant can be a win-win: It can help ease a mortgage or supplement a pension, while providing company around the house if you want it. But before you welcome a boarder, consider how it’ll affect your home insurance.

Personal property: Property belonging to a boarder won’t be covered under your policy, so advise them to get their own insurance for personal items.

Liability: It protects you if you accidentally injure someone else or damage their property. If a tenant is injured on your property and sues you for negligence, you’d be covered for the liability.

Capacity: Each insurance company has its own guidelines regarding the number of boarders you can take in. If you plan to take in more boarders than your insurance allows, your premises would be considered a boarding house—and a commercial property policy would be required.

Rental suites: If the space you plan to rent has a separate entrance, your policy will need to be changed to cover it—a rental suite is considered a separate premises, and needs to be insured differently.

Remember: Your insurance policy is a contract. If you do something outside of the listed specifics, you might not be covered. Your best bet is always to contact us before you decide to rent out space in your home.