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Boom and Bust in Urban Alberta (1900-1920)

Jasper Avenue in 1914

Alberta became a province in 1905 and was considered a land of opportunity due to its growing population and thriving economy. It is under these favorable conditions that Alberta's Real Estate industry came to be.

In search of vast, cheap and fertile land, homesteaders headed west and began to populate previously vacant areas. In addition to the influx of homesteaders, province-wide railway expansion inevitably contributed to larger and more numerous settlements. For example, towns like Stettler were founded specifically to accommodate railway construction and the human traffic it generated. Banff, a popular tourist destination, was developed in the early 1900s due to the expansion of the Canadian Pacific Railway in these areas. Other northern settlements such as Peace River, Athabasca and Dunvegan were transformed into thriving towns by the early 1900s as a result of the presence of Canadian Northern Railway and the Edmonton, Dunvegan and British Columbia Railway companies. Furthermore, the birth of a railway system in Alberta seeded a demand for coal. The growth of the coal industry facilitated the rise of "coal railways" and, consequentially various mining towns such as Blairmore, Frank, Drumheller and Vegreville were founded. Other industries such as natural gas and agriculture fuelled Medicine Hat and Lethbridge's economies, contributing to the development of streets, schools and housing in response to rapid population growth. Lethbridge particularly thrived attracting a variety of industries, thus diversifying its economy.

EDMONTON

In 1905 Edmonton had been honoured with the title of 'Alberta's capital' and with such standing came economic investment. Investment in infrastructure boosted the previously barely-existent real estate market. Industrial development took place along the river valley, home to new brickyards, sawmills and even coal mines. Having been the capital city for only one year, Edmonton had been gifted with many real estate-based improvements. Over the next decade, streets were paved, new schools and subdivisions were built, and water and sewage lines were extended. The Low and High Level bridges were also built to facilitate travel across the North Saskacthewan river, between Edmonton and the town of Strathcona, later amalgamated in 1912. Moreover, wood frame structures that previously sculpted downtown's landscape were replaced by brick-made buildings such as banks, post offices, business edifices, courthouses and even apartment blocks. And to celebrate Edmonton's capital status, construction of the Alberta Legislature began in 1909. Thus Edmonton's real estate heritage slowly began to evolve.

Downtown Edmonton 1915

Edmonton not only prospered demographically, but also economically as population growth required the development of infrastructure. Canadian Northern and Grand Trunk railways set up stations in the Strathcona area and consequentially, the population in Edmonton shot up from 8,350 people in 1903 to 72,516 people in 1914. Also, the Hudson's Bay Company relinquished its hold over its vast land reserves in northwest Edmonton, thus placing $4.3 million worth of land on the real estate market. It was during these economically prosperous years that entrepreneurs from various backgrounds joined the real estate industry, many of them speculators. Land speculation became a hot activity among entrepreneurs in light of the real estate boom. Speculators began to subdivide residential areas to accommodate the growing population. So prosperous were the times that many subdivisions were developed specifically for the wealthy elite. One such example was the Highlands, housing the Magrath and Holgate mansions. Moreover, downtown construction produced Edmonton's first high rises such as the Tegler and McLeod buildings as well as the prestigious Hotel Macdonald.

CALGARY

Calgary's growth surpassed even Edmonton's, as its construction industry expanded to meet the needs of a growing population. Much of Calgary's growth was fuelled by real estate tycoons such as the famous George Lane and Pat Burns. 1911 and 1912 marked the biggest boom years for the real estate industry, wherein 443 real estate firms operated throughout the city.

Mount Royal

By 1911, Calgary was the "commercial metropolis of the West" and the tenth largest city in Canada, receiving 1000 newcomers on a monthly basis. Much of Calgary's growth in the early years was due to the Canadian Pacific Railway (CPR). Also, the erection of industrial plants along the Elbow River attracted labourers. In fact, so extensive was the housing demand that residential developers could not keep up with the influx of workers. Between 1905 and 1909, Calgary suffered severe housing shortages, forcing many labourers to tent riverside. These labourers consisted of carpenters, bricklayers, and surveyors, all of whom benefited from the construction boom.

Palisser Hotel

In light of these economically abundant times, affluent subdivisions were built such as CPR's Mount Royal and the Tuxedo Park Estates. Investment also flowed into downtown Calgary, steadfastly expanding the commercial real estate sector. Equipped with a modern street car system, Calgary also saw the construction of the Grain Exchange building, the neo-classically styled Dominion Bank, the famous Palliser Hotel, the Hudson's Bay department store, a general hospital and, a new city hall.

RECESSION

In 1913 an economic recession hit Alberta, putting a halt to the 'boom' era of the early 20th century. A potent combination of falling grain prices, railway industry layoffs, high housing prices and overambitious speculation in real estate contributed to the province-wide recession. The recession hit the real estate market the hardest. Pre-recession speculation led to high inflation in residential housing prices, making urban housing unaffordable. Over-speculation eventually became a problem in Edmonton as the subdivisions that were created could not be filled, forcing the city to repossess them. In the years leading up to the First World War, Edmonton faced bankruptcy having lost 70,000 of its residents to mass emigration in reaction to the economic downturn. The eruption of the First World War delivered the final blow to Alberta's growth as military conscription severely reduced the labour necessary to revive once thriving industries. Consequentially, the real estate industry (among others) ground to a dead halt. Edmonton suffered terribly as it had few war-based industries and those it did have were destroyed in 1915 when the North Saskatchewan River flooded the River Valley (home of Edmonton's most important industries).

Dominion Bank

Relative to Edmonton, Calgary experienced a less drastic recession although the real estate industry there too became impaired. Many real estate companies went bankrupt and building projects were cancelled, contributing to already high levels of unemployment particularly for blue collared tradesmen. Calgary however, was able to recover from the 'bust', because the discovery of oil around Okotoks and the Turner Valley area led to the establishment of the Petroleum Products Company in the city. Thus began Calgary's long and prosperous relationship with 'black gold' which would shape its real estate industry well into the future.

Among the smaller cities, Red Deer suffered the most from the economic recession. By 1921, its population had shriveled to 1911 levels. The city neared bankruptcy, suffered floods, a failing sawmill industry, and an exodus of homesteaders in the area. Both Medicine Hat and Lethbridge nearly went bankrupt, while they endured high unemployment and growing vacancy rates. Lethbridge however, was able to recover slightly due to its war-related industries such as helium gas, oil and coal, yet it too suffered from extensive absence of human capital. All of these realities deeply fractured rural Alberta's real estate industry.

After the First World War, real estate development across Alberta would continue to stagnate well into the 1940s and would not recover until after the Second World War.

Bibliography

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Byfield, Ted. "The Lonely Romantic who Won Provincehood for Alberta." Alberta in the 20th Century, Vol.2: The Birth of the Province 1900-1910. Edmonton: United Western Communications Ltd., 1991.

Byfield, Virginia. "As the Boom Becomes a Bust Edmonton Politics Turn Violent." Alberta in the 20th Century, Vol. 3: The Boom and the Bust 1910-1914. Edmonton: United Western Communications Ltd., 1991.

Byfield, Virginia. "In Three Wild and Zany Years Edmonton Burst Forth as a City." Alberta in the 20th Century, Vol. 3: The Boom and the Bust 1910-1914. Edmonton: United Western Communications Ltd., 1991.

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Keer, Stephani. "Lethbridge was the World's Capital of Dryland Farming and Then." Alberta in the 20th Century, Vol. 3: The Boom and the Bust 1910-1914. Edmonton: United Western Communications Ltd., 1991.

Keer, Stephani. "The Hat was a Boom Town until the CPR Shops went to Calgary." Alberta in the 20th Century, Vol. 3: The Boom and the Bust 1910-1914. Edmonton: United Western Communications Ltd., 1991.

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