The New Arena Will Bump the Value of Nearby Homes
*Image source: Rogers Place Web Site
I found an article in the Calgary Herald this week about the construction of new stadiums, and how they affect real estate values that was very interesting. The article discusses research done by REIN (Real Estate Investment Network). With the new arena (Rogers Place) coming closer to completion every day, this is timely research for those that live near the “Ice District” as well as those considering buying or selling real estate in the area.
According to REIN, the new arena should have a positive impact on real estate values for properties close to the arena, particularly those within a 1km radius. The positive impact can be felt as far away as 5km. The report said housing values increase on average 1.75% for each 10% decrease in distance from a stadium:
“A key highlight of the research findings is: Homes in neighbourhoods close to new stadium builds — or proposed stadium builds — on average, have premiums ranging between three per cent and 15 per cent, depending on the different types of housing, parking options available, and the distance from the stadium itself,” said Don Campbell, senior analyst with REIN.
Of course, there are some negative side effects to living near a stadium or arena such as increased traffic, noise, increased property taxes, and parking issues.
Not surprisingly, the location of new stadiums was directly tied to how much property values increased:
“When a stadium is located outside the downtown core of a city, and is not connected to any other economic development activities or an urban redevelopment program, residential property values around the facility will still see a positive increase in value. However, this increase will not be as dramatic as those that are built in, or with nearby accessibility, to the Central Business District,” said REIN.
I think Rexall Place is a perfect example of an arena outside the downtown core that did not improve property values in the area (at least over the long run), and hopefully Rogers Place will be the opposite. The study also notes that the impact is the greatest “when appealing architecture, community plazas, park landscapes, retail, commercial, and entertainment spaces, and the stadium’s construction itself are incorporated into its design.” I think it’s safe to say Rogers Place and the Ice District meets the requirements noted in the study, especially when it comes to appealing commercial, retail, and entertainment spaces.
The one big caveat REIN mentions in the report is parking – the new arena must accommodate all the vehicles that need to be there, or local residents feel the pinch and property values can be negatively impacted. I know there are differing opinions on the parking situation at the new arena and arguments could easily be made on both sides. This is one aspect that will play out over time, and I know that some will feel the parking is inadequate at the new arena no matter how much is available, and others will just take the LRT or pay outrageous parking prices. I understand from a friend, that event employees (like bartenders and food service staff) currently get free parking at Rexall and are not being offered that option at Rogers Place, which could suggest a shortage of parking. It could also suggest they feel they’ll be able to pull from a larger local population for staff at the new arena and won’t need to offer the free parking incentive.
What do you think? Will property values near the arena go up? Or are they overbuilding, creating too much supply for the demand that will come in the area? Generally if they can’t pre-sell enough units in any building, construction does not proceed. I know the Stantec Tower is under construction and is set to be the tallest tower in Canada outside Toronto, and it is a mix of office and residential, but other towers could be put on hold if sales aren’t strong enough. Regardless, there are, and will be, a lot of condo units to choose from in the area around Rogers Place.
The full REIN report will officially be released at this weekend’s Real Estate Investing Forum in Edmonton.
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.