Capitalizing On Flight To Affordability
Calgary-based Avenue Living has observed a flight to affordability trend that has taken root across the Prairies, where the company owns and operates about 10,000 residential rental units.
Avenue Living’s strategy of providing quality shelter for essential workers across western Canada, has enabled the owner/operator to experience higher than normal retention rates in addition to a heightened number of new residents renting units. This is promising for the company, particularly during this time of the COVID-19 pandemic.
Louise Elsey, Chief Operating Officer of Avenue Living Communities, said there is definitely a flight to affordability evident in the markets the company serves, based on an increase in leasing activity.
“We typically see an increase in activity during the summer months anyway, but the fact that we’re in a pandemic and we’ve still got very much an inbound migration of people interested in living with us really supports this flight to affordability trend,” said Elsey.
The popular 30 per cent rule, from Canadian Mortgage and Housing Corporation, defines affordability by the percentage of a household’s income that should be allocated towards rent. Avenue Living aims to keep rents economical, so that a wider demographic can fit within this 30% guideline. In doing so, this allows residents to manage their necessary expenditures during times of uncertainty and allows Avenue Living to retain current residents, increase the number of new leases, and continue with a forward-moving strategy.
Avenue Living’s vision is to help ensure that a greater number of Canadians have a safe and secure place to live.
“Many people are currently facing financial challenges, often with their employment being impacted, hence, people are looking at ways to cut costs and save money. They’re first looking at cutting down on non-essential luxury items, then looking at their general cost of living and seeing how they can make those numbers be more affordable. We are also seeing those that are living with us, continue to stay with us. We’re experiencing very high retention rates.”
Avenue Living has built its model on providing quality shelter to the essential workforce demographic since its inception in 2006, with the purchase of 24 rental units in Brooks, Alberta, for $3 million. Today, the company provides homes to about 20,000 residents in 19 markets in Alberta, Saskatchewan and Manitoba.
The company continues to grow. At the end of June, it acquired 231 residential rental units in Lloydminster, Red Deer and Edmonton.
From day one, offering residents value at an economical price point has been a key part of Avenue Living’s philosophy and business strategy.
“We speak to it in our mission statement, ‘to provide quality and value’. That’s very much front of mind. Value is very much dependent on the consumer. But I think the fact that we are seeing occupancy levels grow, shows that we are providing both of those things,” said Elsey.
From a value point of view, people are spending more time at home today than they ever have. Working from home has also changed the landscape, reaffirming the necessity of having a safe, comfortable place to spend the day. With our retention rates, it shows that people do find that the product that we offer is comfortable and of good value,” added Elsey.
“People are looking for a consistent level of service and quality, a clean place to live as well as flexibility in leasing options. Prior to COVID-19, we had already put in place technologies such as mobile leasing options to facilitate our resident experience. It is this proactive nature and innovative culture that really makes us stand apart, in addition to our unique business model.”
