Western Canada’s Infill Plans Could Boost the Portfolios of The Wealthy

Image Credit: Jeff Wallace

New city planning measures could boost the investment portfolios of wealthy Canadians in the west.

Since 2008, there has been a substantial new focus on building density. Cities and builders have learned some powerful lessons. Focusing on smarter development has big benefits for communities, local property owners, city revenues and services, real estate firms, ensuring sustainability, and for provincial and national governments. How might Western Canada’s evolving approach to infill impact the finances of wealthy investors as well?

New Plans for Edmonton Neighborhoods

Like many other cities, Edmonton, Alberta is dealing with its own infill plans. After years of building and expanding, Edmonton officials have recognized the need to focus on infill. Not everyone has been pleased with plans and building restrictions so far. However, those rules could be changing if the mayor gets his way. New plans could allow for larger properties, and more multifamily units, at least in some neighborhoods. That could include 3 story homes, house with 3 plus suites, and full sized row homes. More debates and votes are expected later in 2017.

Investments of the Wealthy

A January 2017 report from The Globe and Mail comments that real estate can be good choice for the currently and aspiring wealthy. That is in part thanks to the lower risk and volatility it can provide for investment portfolios. The report goes on to state that one of the basic ways to take advantage of the benefits is through investing in commercial buildings like neighborhood strip malls. This may be done directly, or through private REITs and private limited partnerships. This puts these investors right in and around many of the neighborhoods which cities like Edmonton are focusing on filling in and revitalizing.

The Benefits

The new approach Edmonton appears to be taking with infill suggests a strengthening of neighborhoods and local communities. It means more residents, residents staying longer, more development activity, and in turn a stronger local economy. Tenants and owners of local retail strip malls stand to experience great gains if there is more shopping traffic, and more customers per square foot of sales space. That can lead to higher incomes and profit margins, as well as property values.

Summary

Cities are getting serious about infill development. That could soon include more density. Wealthy investors who already own commercial real estate like shopping plazas when new rules go into effect could see substantial benefits to cash flow yields and equity.