Adventures in amateur property development

My three year adventure as a small time property developer is continuing at a glacial pace. I purchased 638 Cambridge Street four years ago. Prior to purchasing I had called the area City Planner obtaining the opinion that it was feasible to subdivide the 10,800 square foot lot into two equal lots. The resulting new lots are bigger than the neighboring 4,800 s.f. lots.

I ordered a comprehensive legal survey by a reputable Canada Land Surveyor in the spring of 2020. I had detailed discussions with multiple city departments, planning, zoning, engineering, land development and submitted the necessary plans, forms, certificates to the City later that year. I was advised that everything was ready to submit.

A bit later, the City Plan examination Department started calling me with detail design questions. I didn't appreciate this because I feel the detailed review should come when one applies for the building permits. Then the hammer fell, the City indicated that they had adopted new 'inner city design guidelines' and that my application. This was complicated with some City officials saying that something was 'allowed' and other city officials rejecting the same thing. This went back and forth, I tried to please everyone however the level of detail required was approaching the detail required for building permit drawings.

In 2022 I finally received approval after spinning my architectural wheels for 1,000 hours. I submitted more forms, posters went up and someone complained that building a garage twenty feet from the back lane was making the back lane hazardous for her, her children, and her dog. This was not a reasonable complaint by any stretch of the imagination. The appeal process took three months. I showed up at a committee meeting with presentation materials, drawings, and a solid rational for why the design was safe and a positive element to the community. The complainant didn't show up.

The City had several conditions prior to their approving the subdivision. They wanted me to prove there were no natural gas line encroachments buried on the new subdivision. This took two months, a lawyer, a surveyor, and the call before you dig people. The City also wanted me to take a window out of the existing house that faced onto the new subdivision lot. They wanted another $10,800 in the form of a certified cheque for fees and security deposits. All of the City's conditions have been met, currently the subdivision plans are submitted to Manitoba Land Titles. I expect that a clerk will review the documents sometime over the next month or three. My Surveyor tells me to start expecting the completely approved legal documents sometime in January or February.

Interest rates increased from 2019 when I purchased the property to 2023. I started to look for a line of credit to start the development. My assets outweighed by liabilities by about two million dollars so I thought that it would be easy to get a property based line of credit. I rapidly discovered that the large bank that I had dealt with for forty years had a mortgage call centre that didn't understand my needs, this bank also had a 'mortgage specialist' that didn't understand my needs. I started applying for a line of credit in December 2022. I received a line of credit from my Credit Union in October 2023. My long time big Canadian bank eventually contacted me to say my application was approved in August 2023. I chose to go with the Steinbach Credit union.

My original idea was to live in the existing house and build the new house on the new lot. This is one option. The increase in both construction costs and interest rates between 2019 and 2023 make almost every housing development or construction project difficult and risky.

My second option involves continuing to live in the existing 900 square foot house at 638 Cambridge and upgrade the windows, doors, exterior finishes, insulation, mechanical systems, kitchen, bathrooms, plumbing, and electrical systems. This incremental renovation is feasible. The various work components of a renovation can be value analyzed and adjusted while things progress.

I live with my 35 year autistic son. Ideally, I want to build a place where he can live independently for his life. I'm a widowed 72 year old architect who is thinking of retirement.

I have purchased a $310,000 small, old, under-insulated house with excellent structure on a supersized lot and subsequently subdivided the property into two lots. The value of a tear down house in my area on a small lot is between $300,000 and $350,000. I have a sign up advertising the property for sale. I might just sell the one 'empty' lot for $300,000 and use that money to improve the existing property. Another option would be to sell both lots and let someone else build on the property. Once the subdivision proceeds then someone else may be looking for construction ready land in River Heights / Crescentwood.

Lessons Learned:

1. I was able to stick with the subdivision process mainly because I chose to live in the existing house. The process would have been too expensive if the the house was vacant for three years.
2. I grew up in Crescentwood within 200 meters of my current house on 638 Cambridge. From the start, I have wanted to renovate and add onto the existing house as opposed simply demolishing it. I like the idea of 'recycling' and improving an existing house. This reduces landfill, and is a positive environment ideal. At times I find myself questioning wisdom of trying to recycle the house, its structure and its foundations. There is more risk renovating a house than with a demolish / new construction approach. The opportunity exists that renovating and improving the existing house will be less costly than new construction. I appreciate that home buyers may prefer totally new construction to buying a renovated house.
3. The renovation work to 638 Cambridge has to proceed with a carefully planned sequence: Changing the electrical service has to be coordinated with adding insulation and a new finish to the exterior walls. Changing the windows has to be coordinated with the insulation and exterior siding. Relocating the natural gas service line has to be coordinated with concrete demolition, the installation of new exterior doors and lintels, and the exterior work. Plumbing, bathroom work, a new kitchen and interior demolition have to be carefully scheduled. This will be challenging, however I understand the sequence and at times find myself enjoying the process.
4. In hindsight , I should not have included a secondary suite request as part of my zoning, & subdivision process. This complicated the subdivision and probably added a year to my application schedule.
5. The City of Winnipeg Planning Functions and the Zoning Functions are at arms length. They will contradict each other.
6. The process involves multiple city officials reviewing documents multiple times. This creates an expensive situation in the design and construction industry that we call "Work and Rework". The New City of Winnipeg Inner City Residential Design Guidelines require a lot of detail at the Planning Stage. The City Building Permit Process also requires a detailed design review. It is difficult to do a detailed, careful, cost controlled detail design at the conceptual stage submission to be used during the subdivision or zoning application stage. The lengthy process could be accelerated if the applicant was to commit to achieving the conditions of the "City Residential Design Guidelines" at the building permit stage.
7. The City does not screen out frivolous objections to the subdivision or variance process.
8. The City changes the rules mid-stream. For example the City changed the definition to calculate the area of a 'secondary suite'. This essentially reduced the allowable size of basement secondary suites. Another example: The City injected the 'draft inner city housing guidelines' into the middle of my application.
9. At this time, in 2023, Banks are risk adverse and do not want to invest in property development or speculative construction. Financing is extremely difficult to achieve without a guarantee against personal assets. Obtaining mortgage financing against personal assets is difficult and time consuming. Banks don't want to be involved.
10. One keeps hearing about "getting government grants for energy efficiency" however the process isn't easy, it isn't fast, and finding help for this task is very difficult.
11. One way to fight climate change and revitalize Winnipeg is to increase housing density in the older inner City. The process to increase densification is fraught with delays, process, scrutiny, work, and rework.
12. I appreciate the concern where a 50 ' wide middle of the block lot is subdivided into two 25' lots with two three story narrow houses built on the new lots. However I am subdividing a 156' wide (at the center) lot. The amount of process, delay, review, and paperwork has sent me the firm message that the City of Winnipeg wants to discourage what I am doing.
13. The process to subdivide has been so fraught with work, rework, delays, fees, and complications that the idea of selling the two subdivided lots has become attractive simply because I won't have to face the challenges of balancing complex civic permit requirements, with rising construction costs, and the difficulties in finding skilled trades.
14. I will proceed carefully. Everything is in flux. I am intending to renovate my existing house and add on to it. I will proceed slowly, reflecting carefully on my desired end result design, risks, costs, and frustrations.
15. I am proceeding in a manner that keeps my options open. The planning, design, and construction process takes time and a sustained focus. I'm happy to have achieved the completed subdivision. Perhaps my design sketches and plans can be useful for a builder / developer. If someone wants to buy one lot or perhaps both properties then I may sell and move on. My Winnipeg real estate broker is Friday Properties. You can drive by the property at the corner of Mulvey at 638 Cambridge St.