Rebuilding Fort McMurray: Naturally the biggest building boom in Canada during the past quarter-century

Published August 15, 2016 by Real Estate Leads


About two thousand homes in & around Fort McMurray were grazed by the Alberta mammoth wildfire of 2016. As of mid-year work has begun cleaning up the rubble and rebuilding.

However, it will take between 3-6 years before residents generally view their home city as fully recovered. The Fort McMurray inferno left behind more devastation than the fire that swept through Slave Lake in 2011, which destroyed about 420 homes, and that disaster took more than a year to rebuild.

The aftermath of the fire is the most expensive natural disaster in Canadian history. It is projected that insurance companies will be forking out over $3.5 billion dollars, as per the Insurance Bureau of Canada. Insurance companies are starting to sort through about 23,000 claims from the fire.

On one hand, a family’s beloved home was turned into smoke, soot and rubble; on the other hand each burned out home is now being seen as a ‘housing start’ on the books.

Eventually, most residents will be returning to the same piece of land which they had to quickly evacuate during those days of disaster. However, a yet untold number will be selling their restored homes; as many owners have already found or are now finding new employment in other areas of the province, or Canada.

These restorations are expected to create the largest new home construction activity Fort McMurray has seen in over 20 years. About 10% of the city is to be entirely rebuilt. Much of the rebuilding, including about 1800 homes will be inside leveled subdivisions of Beacon Hill, Abasand, and Waterways.

The rebuilding effort will do much, for at least the next year or two – to reverse the decline seen in Fort McMurray’s housing market – which had directly suffered from the drop in oil prices that began in late 2014, likewise affecting the surrounding tar sands mining.

In the months leading up to the wildfire, home sales had sagged back down to half the 5-year average. Average resale prices in the 1st quarter were down 17% from the same period two years earlier. Builders were working on constructing only 13 new homes in entirety. The area’s rental vacancy rate had floated down to nearly 30%.

Most of Fort McMurray’s rental units were spared by the flames so many returning homeowners are expected to first rent while waiting for ( or for some – “if” ) – their homes to be rebuilt – which will back-fill the previous void of vacant apartment stock.

In the past 3 months, after the wildfire forced about 88 thousand residents to evacuate the community , about 72 of the 88 thousand have returned (as per information the public information officer for Regional Municipality of Wood Buffalo published on their website). Wood Buffalo encompasses Fort McMurray.

A large-scale effort to begin cleaning up the neighbourhoods are currently underway. Municipal spokespeople stated it hopes to have the most heavily affected areas cleared and cleaned up in the September/October 2016 time-frame. Crews have already removed more than 11,000 refrigerators and freezers – which were taken to landfills to be degassed and crushed. The cleanup alone is a complex exercise. Many houses were so badly damaged that most will have to have the basements demolished as well.

Literally, for most sites, the plan is first to create ‘greenfield’ lots again before beginning to rebuild; such is the case for entire subdivisions.

Alberta is also trying to nip-in-the-bud what officials have called the “chaos” of the Slave Lake fires – where some homeowners were devastated twice: 1st – when they lost their homes to the fire and then 2nd when various developers they hired to restore their properties literally took the money and ran (leaving behind half-finished homes and unpaid bills). To avoid this, the government has now required eligible builders in Fort McMurray to register and provide detailed information about their business histories and finances. So far, only 7 building companies have fully registered (according to the Alberta government’s website).

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