The once-sleepy town of Cold Lake, Alberta, located about 300 kilometres northeast of Edmonton, used to be most known for being home to the 4 Wing Cold Lake Airbase for the Royal Canadian Air Force. It is now busy and booming, gaining a global reputation as Alberta’s second biggest oil sands city. Cold Lake’s oil production has increased to half a million barrels per day. That growth is attracting people from around the world, eager for work. Jobs are plentiful, incomes are high, the city is expanding and currently there are no apartments for rent.
A census was released in July that showed Cold Lake’s population has increased nine per cent in just two years. This lakeside city is having a hard time finding enough housing for all the new migrants.
“All of a sudden a lot of people have been coming to work on construction sites,” Mayor Craig Copeland said in a radio interview. “This past winter…we had approximately a good 3,000 people embedded in the community in rentals; houses and hotels were full.”
The Canadian Housing and Mortgage Corporation’s Rental Market Report Alberta Highlights showed that the vacancy rate in Cold Lake is 0.3 per cent as of April 2014. According to this report, there are no bachelor suites, one bedroom or two bedroom rental units available. The number is brought up by the vacancy rate for units with three or more bedrooms at 8.3 per cent.
As the demand for rental housing tightens its grip on the market, rent could potentially increase. Cold Lake now has the second highest average rent in Alberta, second only to the Wood Buffalo region which includes Fort McMurray. The average cost of a two bedroom apartment in Cold Lake is $1506. Wood Buffalo’s average rent is a staggering $2,061.
Some stipulate that rent increased so rapidly due to living allowances issued by oil and gas companies to its workers. When there were no more beds available at the work camps, employees were given an allowance to rent in town, filling up units, feeding the rise of rental prices and making Cold Lake nearly unaffordable for long-time residents who are not earning oil-sized paychecks.
The city is working on increasing supply and has plans to construct 400 new rental units. The development of these units has been approved under a new rental incentive program where developers receive grants for constructing purpose-built rentals.
“We have a lot of supply entering the market. I think we’ll be in a really good position in mid-2015.” Mr. Copeland was quoted in the Cold Lake Sun.