How will Kitimat house thousands of workers for new LNG plant?

Acknowledges there’ll be problems

LNG Canada has laid out a detailed plan to buffer as much as possible housing impacts on residents now that the green light has been given to its multi-billion liquefied natural gas project in Kitimat.

In documents filed with the B.C. Environmental Assessment Office that form part of the environmental certificate received for the project, the company acknowledges the potential, rated as “high” in the documents, for reduced housing availability and increases for renters as well as higher home purchase prices.

But it says its Kitimat work camps, which will house at least 4,500 non-resident workers with a potential jump to 7,000, are at the heart of its plan avoid local accommodation disruption during the estimated five year construction and commissioning phase of the project.

“With few exceptions,” the company says in its documents, non-resident workers will be required to live in the camps.

The level of control over LNG Canada’s own direct and indirect housing impact will extend to refusing to provide living out allowances to non-resident workers “unless a benefit can be shown to the local community without creating an impact,” the documents add.

READ MORE: LNG can help B.C. prepare for future energy sources, prof says

That’s already happened, LNG Canada employees told a Sept. 20 luncheon in Terrace hosted by the Real Estate Institute of BC to discuss anticipated real estate and general housing impacts.

LNG Canada real estate manager Ilyas Begaliyev, who spoke at the luncheon, had already moved to “quash” a living out proposal by a sub-contractor, said LNG Canada community advisor Ruth Sulentich.

What LNG Canada wants to avoid, she said, were the prospects of rented out over-crowded basement accommodations with multiple pick up trucks parked on residential streets.

Specific to Terrace, Begaliyev also said minimizing the number of non-resident workers in and around the city will also reduce the amount of highway traffic between Terrace and Kitimat.

The overall objective, LNG Canada says, is to “reduce the potential for the project workforce displacing local residents from using temporary accommodations or accessing rental opportunities or home ownership.”

That’s in reference to avoiding situations as to what happened in Fort McMurray when mass influxes of workers and families took place without a housing management plan, resulting in super-charged housing prices.

LNG Canada real estate manager Ilyas Begaliyev

Companies in Fort McMurray “threw money into an already-heated market” by assisting employees with housing assistance in an effort to assist which backfired into making the situation even worse, said Begaliyev at the Sept. 20 Terrace luncheon.

“We won’t be doing that again,” he noted.

And it’s also to avoid the impact of previous large-scale projects in Kitimat and in Terrace which featured not only increases in housing costs but in “renovictions” where landlords issued eviction notices to existing tenants so they could then rent out accommodations at much higher prices.

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To track housing impacts and pressures on social services, recreation and other amenities, LNG Canada has formed what it calls Social Management Roundtables where its representatives and those from the provincial government, local governments and various social service and other agencies will sit regularly to discuss problems and find solutions.

As far as housing for LNG Canada’s permanent employees in Kitimat, the company says it will reduce the potential impact on affordable housing for residents by “working with developers and the District of Kitimat to incent apartments, condos and/or single-family houses in Kitimat to accommodate potential project staff and their families…”

Begaliyev estimated LNG Canada would need slightly more than 90 housing units for its own direct needs for its plant’s operational phase.

LNG Canada estimates there’ll be a permanent workforce of anywhere between 400 and 800 people.

That’ll replace to some extent the 500 jobs lost through attrition and other measures because Rio Tinto’s modernized smelter requires fewer workers and the 535 direct jobs lost when West Fraser closed its Eurocan paper mill in early 2010.

Potential rent increases also came up for discussion at the Sept. 20 luncheon with audience members commenting on the number of empty multi-family units and single-family residences in Kitimat.

Kitimat realtor Graham Pitzel, a second speaker at the Terrace luncheon who provided a historical and current perspective on real estate prices, said owners of empty units could very well be waiting for a LNG Canada announcement.

That’s because if they are renting out units now, they are limited as to the dollar amount of increases they can charge, he said.

But if demand soars for accommodation, landlords can put their units on the market at much higher prices than current rates, Pitzel added.

In a follow up email, Pitzel said he didn’t have a lot of data pointing explicitly to that scenario for multi-family units.

“For the single family homes, I have spoken to many owners that do in fact keep them empty just in case a higher rental rate can be realized in the near future,” he said.

“Rent rate increases are just one of the many changes our town is going to face, along with increased property values for owners to be able to draw equity from for home improvements to make our town look even better,” Pitzel added.

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