If you’ve had a chat with me in the last year or so, there is a good chance that I found occasion to slip something about apartments, Centretown, or both into the conversation. It should come as no surprise that during the Depression, construction of all sorts ground to a virtual halt. If you were take a look around the neighbourhood during those years, it would appear that someone forgot to let a small group of developers know that the party was over.
Whenever I’ve discussed this mini “boom” with people over the years, the assumption has normally been that the federal public service expanded considerably during the Depression and housing was required for all of the new civil servants. While I never did find that entirely satisfying (given, for example, the general reluctance of Prime Ministers Bennett and King to match the ambition of Franklin Roosevelt’s New Deal in the United States), I didn’t have much reason to doubt it. Except for the fact that the Inside Service (Headquarters) did not grow considerably through the Depression, that is.1John Taylor. Ottawa: An Illustrated History (Toronto: Lorimer, 1986): 212.
Employment in the Inside Service stood at 11,766 in 1931 and 11,848 in 1939,2Ibid. so perhaps there was something about the nature of their employment that had changed in Ottawa during those years. That’s where I decided to dig into a handy edition of the Dominion Bureau of Statistics’ Statistics of the Civil Service of Canada.
As you can see with the table above, there was a change in the nature of employment in the civil service at the time: between 1931 and 1934, there was a considerable switch from temporary to permanent employment. Some of this is explained by classification differences: those employed by Public Works were “continuous non-permanent”, which until 1935 was accounted for as Permanent, rather than temporary.3Admittedly, I am currently unsure about the specific proportion of those in the Inside Service that the re-classified Public Works employees represented. See Canada. Dominion Bureau of Statistics. Statistics of the Civil Service of Canada (Ottawa: King’s Printer, 1939): 10.
Even for those outside of Public Works who were made permanent, it was not as if things were necessarily as plush as it might be assumed. Between April 1932 and March 1935, civil servants were subjected to a 10% reduction in salaries and annual raises were disallowed.4Ibid. At this point, a clearer picture begins to appear. Employment tenure in the Inside Service (from Temporary to Permanent) did change briefly during the Depression, but overall employment numbers did not grow and salaries decreased. Add to that a tightening credit market, and those younger civil servants who had yet to purchase property were suddenly left out in the cold.5I have not systemically collected the data, but after having spent time with the city’s assessment rolls, it seems clear enough that these apartments were largely home to young and retired couples.
So then, we’ve got ourselves a good stable of civil servants who, if they hadn’t had occasion to purchase a home before 1930, were certainly unable to afterwards with a 10% salary cut and a tight credit market. What they did have was relatively stable employment, and with that, they remained attractive to prospective builders of rental apartment buildings.
Another important ingredient to this would be unemployment in the building trades. I do not have numbers specific to the Ottawa market, but reporting from the newspapers in those years suggests that the experience in the city was little different than elsewhere in Canada. As the chart above demonstrates, unemployment in the building trades across the country shot up beginning in 1930, reaching a peak of 67.1% in 1933.6Otto J. Firestone. Residential Real Estate in Canada (Toronto: University of Toronto Press, 1951): 328. In other words, when Wolf Shenkman was constructing his six-building cluster at Gladstone and Metcalfe, he was most likely getting a bargain on labour as well, which further tilted the economics to build in his favour.
There are a couple more elements I believe contributed to this state of affairs. The first is that the construction market at the time was much less competitive than it was in the 1927-1929 period. With few others swinging a hammer, builders like Snear Miller and Wolf Shenkman did not have to invest in the same grade of finishes and materials they had in those earlier days. A combination of deflation and what we’d today term “value engineering” enabled these smaller builders to construct units at a much lower cost. Pricey yellow brick and mahogany were replaced with cheaper rug brick and oak, for example.
Peeking at the records in the Land Registry Office, it is also clear that these builders were gaining access to credit in the traditional market. Although some had mortgages from private individuals, most on file were issued by insurance companies. In other words, their investments were considered to be safe enough, even in the very tight lending market of the 1930s.
A perfect storm, or meeting in the middle. It seems that builders like Wolf Shenkman, Snear Miller, and Isidore Stone were well-positioned and well-tuned to some very specific aspects of the Ottawa housing market during the Depression.
To sum up:
- Employment in the so-called “Inside Service” (Headquarters staff here in Ottawa) did not increase or decrease considerably during the Depression.
- Between 1931 and 1935, there was a noteworthy and proportionate decrease in temporary employees and increase in “permanent” (or “indeterminate”) civil servants. During the same period, civil servants were given a 10% pay cut and annual raises were cancelled.
- I have not systemically analyzed the 1934 and 1935 assessment rolls, but after having reviewed them at the Ottawa Archives and run some newspaper spot-checks, most of the inhabitants of these apartments seem to be younger couples and retired couples. At rents of $40-$90 per month, these units were on the mid-to-high end of prices for lodging in the city.
- Beginning in 1930, as the result of the deepening Depression, credit markets tightened up considerably (therefore, a mortgage was much harder to come by), deflation took hold, and unemployment in the building trades reached into the high double digits.
- Centretown (and to a slightly lesser-extent, Sandy Hill) was filled with large homes that, at 40-50 years of age, were at the bottom of their value and desirability. Although some were maintained, most were either converted into apartments/rooming houses or purchased for demolition and replacement.
- Combined, this resulted in a market with an unfulfilled need (young and retired civil servants) and low land acquisition and labour costs for builders. Builders like Wolf Shenkman, Snear Miller, and Isidore Stone, moreover, had access to legitimate building capital from the usual sources (insurance companies) and successfully met the need, or at least a portion thereof.
There is, of course, much more to deal with and this just represents where my thinking is currently at.
|↥1||John Taylor. Ottawa: An Illustrated History (Toronto: Lorimer, 1986): 212.|
|↥3||Admittedly, I am currently unsure about the specific proportion of those in the Inside Service that the re-classified Public Works employees represented. See Canada. Dominion Bureau of Statistics. Statistics of the Civil Service of Canada (Ottawa: King’s Printer, 1939): 10.|
|↥5||I have not systemically collected the data, but after having spent time with the city’s assessment rolls, it seems clear enough that these apartments were largely home to young and retired couples.|
|↥6||Otto J. Firestone. Residential Real Estate in Canada (Toronto: University of Toronto Press, 1951): 328.|