2.2 Market Analysis
PROJECTED RESIDENTIAL DEMAND
Bragg Creek’s future residential occupancy demand in general, and by dwelling type specifically, is a function of the projected future population of the Hamlet, the age makeup of that population, and the distinct (and shifting) relationship between population by age and housing demand by product type as defined through primary household maintainer rates.(1)
The population of Bragg Creek has been forecast on the basis of the population growth rate in Rocky View County between 1996 and 2013, with adjustments made based on conversations with local area realtors. The population growth model projects that the population of Bragg Creek will double in the next 15 years, growing from 454 residents in 2014 to a total population of 908 residents in 2030. This is an average annual growth rate of 4.4%. It is also assumed that Bragg Creek will grow more rapidly at first as latent demand is met with new supply, and more slowly toward the end of the projection period as the market normalizes. Therefore, rather than projecting linear growth, the model begins with a high rate of 6.6% per year, shifting gradually to a growth rate of 2.2% per year in 2030. It is assumed that the age composition of the population will become more similar to the age makeup of the population of Canmore in the coming decades.
In projecting housing demand, GPRA applied future household maintainer rates on the basis of the assumption that over time, the household maintainer ‘profile’ of Bragg Creek will become more similar to that of Canmore. Details on household maintainer rates, and the methodology underpinning the assumed near and long term maintainership profiles for Bragg Creek, can be found in Appendix A: Bragg Creek Demographic, Housing and Commercial Demand Analysis.
Over the next 15 years, about half of the demand for new housing in Bragg Creek will be for single-family housing; about 72 new units will be required by 2030. There will be an additional demand for 45 apartment units in low-rise structures, and 38 ground-oriented multi-family units such as row houses or duplexes. No demand is projected for movable homes or high-rise apartments.
It should be noted that this housing demand projection does not account for the likely need for more supportive housing or retirement home options, particularly given that the population of seniors is projected to increase much more rapidly than other demographic groups. In general, offering a mix of housing types and tenures (rental and ownership) will contribute to a positive social mix.
(1) A primary household maintainer is the person in a household most responsible for paying housing costs. Dividing the number of people of a given age cohort who are household maintainers by the total number of people in that age cohort produces the age-specific household maintainer rate. This number represents that age cohort’s propensity to be a maintainer of a household.
PROJECTED RETAIL AND COMMERCIAL DEMAND
The retail environment in the Hamlet is typified by aging strip centres, with the largest anchored by a small community grocery store. Vacancy rates are high (9.1% overall and 20% at the main mall), and overall the appearance and tenant mix, as well as an apparent lack of property re-investment (particularly in the main mall property) suggest that the Hamlet’s major retail clusters suffer from low sales, or lack of growth and change in the area has fostered a complacency amongst some property owners. Overall it is estimated that the Hamlet has 153,000 square feet of ground floor retail and service commercial space, including automotive-related space as well as 14,000 square feet of vacant space. The ‘core’ of the Hamlet, comprised of a cluster of 5 mall properties, accounts for nearly 100,000 of these square feet. The balance of space is located along Balsam Avenue west to River Road north, and scattered along White Avenue west to the Elbow River.
Within 5 years, projected population growth in the Hamlet’s trade area could warrant a net additional 11,000 square feet of commercial space. If 11,000 square feet of new commercial business were to enter the market by way of occupancy in currently existing vacant space, this would leave the Hamlet with only a 2% vacancy rate. To maintain a healthy market vacancy rate of 5-7% would require an additional 7,000 to 11,000 square feet added to the market.
Within 15 years, population growth in the trade area is likely to warrant a net addition of nearly 19,000 square feet over the amount of occupied floor area in 2015. In order to absorb this amount of new commercial business into the market while maintaining a healthy market vacancy rate, Bragg Creek would need to add 13,000 to 19,000 square feet of new space in this period.
Looking at specific commercial categories’ current and projected future level of under/over-supply, we find that there could be a net additional demand for up to 33,000 square feet over a 15 year period. The most prominent categories of projected future demand are: Personal and Professional services, Grocery, and Home Furnishings & Accessories. If all of this demand were added to the market and a target vacancy rate of 5-7% were maintained, Bragg Creek would require a net addition of 28,000 to 31,000 square feet of new space.
A key consideration going forward is whether the existing vacant space in the marketplace is suitable for future space users. How one answers this question, and what alternate plans may be put in place for some of the existing older commercial properties, will impact the amount of assumed additional space that could be supported. On the whole, it is reasonable to expect that the Bragg Creek Hamlet could see demand for the net addition of somewhere between 25,000 and 35,000 square feet of new space within the next 15 years.
Throughout the engagement process the issue of overnight accommodation has come up for debate and discussion. On the one hand, the community supports a more developed overnight accommodation market—in line with the Greater Bragg Creek Area Structure Plan’s vision—and is eager to inherit the benefits of increased walk up traffic and the overall economic benefits it may bring. However, there are existing restrictive policies that limit the number of overnight units to a maximum of ten (10) and the community remains divided on whether or not it is appropriate to relax this policy to allow further units.
Evidently, the feasibility of overnight accommodations also requires assessment, and specifically an understanding of the market opportunity, needs of the market, and cost of development. A verdict on the maximum number of rooms allowed needs to account for the relationship between size of development and practicality of investment. There very well is a minimum number of rooms critical to the success of overnight accommodation units, and if the Hamlet wishes to attract development, the policies restricting maximum units should be relaxed in favor of more developer friendly policies, supported by other regulation like Hamlet Design Guidelines to ensure all development fits in with the existing Bragg Creek character.
Please consult the original document to read more about the background. It is available here: