For Edmonton's Blatchford redevelopment, 2024 is a decisive year

Coun. Anne Stevenson uses the analogy of a plane hurtling down a runway to build lift and fly when considering the city's Blatchford development. "It takes time to pick up the speed and then to take off, and I truly feel that we are at that inflection point," Stevenson told Taproot.

Both Blatchford's critics and proponents say the question of how much runway Blatchford should get to achieve flight could be conclusively answered in 2024. This year marks a decade since city council approved the business case to fund the redevelopment of the 536-acre former downtown airport, with hopes of housing up to 30,000 people. It's been nearly 15 years since it put the first development plan in place. Since then, council has directed the city to invest more than $100 million in the project.

Blatchford's original 2014 business case expected roughly 500 housing units to be built yearly from 2018 onward, generating roughly $500 million in revenues from land sales. As of late 2023, fewer than 200 units have been built at Blatchford, or less than 10% of what was originally predicted by this time. Only 57 of those units are occupied, and revenues are also not where the decade-old business case expected them to be.

This pace has led to concern. There were almost 50,000 housing units added to Edmonton in the same time frame, said Kalen Anderson, CEO of the Urban Development Institute — Edmonton Metro. "Only 149 of them were in Blatchford," Anderson said. "And of that 50,000, 14,000 of those were infill. So it's not even like we can say that there's no infill — there's 14,000 houses that were added as infill units."

Some on city council share the concern. Last fall, at the prompting of Coun. Tim Cartmell, council asked for and received an independent market review of the project. That report suggested more than 80% of land the city has placed on offer to builders at Blatchford has sold, and that the pace of development is slow but "reasonable" and market acceptance is "improving."

Stevenson said that report and events beyond the city's control — such as the three-year pandemic — allow her to remain optimistic about Blatchford. "We went from planes landing to people living in homes in seven years," she said. She added this was in line with industry standards for new suburbs.

As 2024 opens, then, Stevenson said she's certain Blatchford is succeeding. "I think a lot of the concerns right now are premature and not borne out by what's being shown in the evidence," she said. "The amount of land that the city's going to be putting on offer next year for sale is going be twice what it was (in 2023)," Further, mainstream developers are coming in for 2024. "The phases are growing and that will lead to faster completion," Stevenson said.

Who those developers are also contributes to Stevenson's optimism. In November, Western Canadian mega-developer Qualico announced it will build townhomes at Blatchford using the StreetSide brand. "What's really exciting there, too, is that Qualico is taking a product from the new (suburban) neighbourhoods, adapting it to meet the (Blatchford) green energy requirements, which means that they can … be offering that in other neighbourhoods now," Stevenson said. "So, that to me is part of the (Blatchford) magic."

Still, Stevenson acknowledged 2024 is a big year for Blatchford. "Don't get me wrong," she said. "I think that if, a year from now, we haven't really seen an acceleration in sales and construction, then yeah I would have concerns then."

Anderson with UDI is also a former head planner at the City of Edmonton who played a key role in the creation of the City Plan. She appeared before a council committee in October as it discussed the independent report, and there made the point that the acceleration proponents hope for is likely not coming.

"One of the key messages (I shared) about why it's so slow is that the market niche is so, so small," Anderson said. "It's fairly boutique homes, in a multifamily form, which is not generally the preference of most homebuyers in the Edmonton region to start with. So it's already kind of taking a share of that (smaller) market."

Anderson said that if you consider the costs for homes at Blatchford, which are "fully double" those similar products offered in other neighbourhoods, "there just isn't a big enough market in Edmonton to fully populate a community of 30,000 people."

Given the growing affordability challenge for housing across Canada, Anderson said the slow use of land at Blatchford for housing increasingly presents an ethical question that council may need to grapple with when considering its vision. "At the most macro level, Canada is currently in a housing crisis," she said. "We're short 3.5 million homes. So, the opportunity cost of not maximizing (available land at Blatchford) immediately, wherever we can, it has a real impact."

Opportunity cost is a term economists use to illustrate what pursuing one idea to the exclusion of others can cost you, but it is often a subjective idea. For Anderson, the opportunity cost for council if it sticks to Blatchford's original vision could mean it has to limit investment in positive changes elsewhere. "Taxes are going up and up and up," she said. "And we clearly don't have enough public funding to do all the aspirations that we have. So, if you put 15 marbles on a table, you know, are you picking a sustainable community-development project? Or are you picking a rec centre, or are you picking more bus service?"

This year may paint an obvious picture for council about the private sector's ability to meet expectations at Blatchford, Anderson said, due to financial realities. "It's not profitable to build in Blatchford right now," she said, noting council asked UDI what it would take for the private sector to want to get involved. "The short answer is that for the private sector to get involved it would have to be profitable."

Unlike greenfield development, which as the term suggests is essentially developing housing on a green field at the edge of a city, Blatchford is a brownfield or infill development of an existing land parcel. Reclamation work to remove the former airport, along with higher costs created through adding Blatchford's district energy technology and the city's requirements for denser, multi-storey, and multi-family housing types, are all factors that can drive up the cost to build housing at Blatchford.

Builders must pass these costs on to the consumer, but Anderson said there is only so much the market will bear. This means developers struggle to find loans to build on the site — especially when many other development sites offer far safer returns. "You need to be able to prove that that's the best investment that you can make with that money in order to get the financing from banks," she said. "So, you know, it might not even be possible to have private sector engagement in that site to the level that I think council was asking about."

Levels are a critical point to understand Blatchford, Anderson said. On this point, she suggests Oliver, one of Edmonton's densest neighbourhoods that's currently experiencing a mass redevelopment (which Anderson wrote about for Canadian Architect recently) offers a strong comparison. "Oliver and Blatchford are of a similar size," she said. "Oliver has about 20,000 residents, and it's been developing and redeveloping for 100 years."

For Blatchford to reach the goal of up to 30,000 people residents, it would mean tripling Oliver's development pace and soaking up most of Edmonton's market demand for townhomes and multi-unit housing. "It's (going to be) tough sledding," Anderson said.

Councillors see signs of progress

At the October committee meeting, city administration agreed to begin researching what effect reducing lot sizes, allowing one-storey townhomes, reducing district energy investments, and selling raw land to developers could do to accelerate Blatchford's build-out. The shifts gave Cartmell, council's most vocal critic, a glimmer of hope. "Blatchford is not solved, not yet," he wrote. "I want to see actual land sales, and actual wait list numbers… But maybe, just maybe, things are turning a corner."

Stevenson said the overall discussion on Blatchford has been shaped by its critics rather than those looking at the raw data. She said the numbers show land sales are healthy. And on affordability, she said, Blatchford offers a lifestyle where transportation costs are far lower than those for someone living in other parts of the city, but these costs are often left out of the calculation when critics look at Blatchford.

Further, she said, as Edmonton adds more people from different parts of the world, many of whom are more comfortable with townhomes or multi-unit housing and do not expect a single detached home if they buy, the market could further move toward Blatchford.

"I would argue that we are seeing comparable housing prices (at Blatchford) and we're also committing to 16% of affordable housing in the neighbourhood, which no other neighbourhood is committed to doing," Stevenson said. "So yeah, do I want to continue to see it grow and excel? Absolutely. Do I think that the standards that are in there now are a major hindrance to that? That's not what the evidence is suggesting to me."

But, she added: "There could absolutely come a time where we need to compromise on our vision (for Blatchford). I don't feel that time is now."