New residential building up strongly in first half of the year
The County is on pace to smash new home building starts in 2017. So far, after six months, the County has issued building permits for 94 new homes—more homes than were built in all of 2014.
Interestingly, the County’s pace of new homebuilding is roughly the same as Quinte West and Belleville—two neighbouring markets that have consistently out-performed the County in recent years.
New homes are much needed in the County economy. The resale market remains a tough place in the County for first-time homebuyers. The inventory of homes for sale is well short of the supply available last year. Combined with still growing demand, the average price of resale homes continues to climb. That pressure is unlikely to ease until there is a strong and steady supply of new homes built in Prince Edward County. This is why rising home starts is welcome news to all County residents.
WHAT HAS CHANGED
Graham Shannon heads Sandbank Homes, the most active builder in the County over the past decade. Until recently, his company had been looking to finish up its projects at Wellington on the Lake and Picton and exiting the County homebuilding market. The building and development process was too expensive and cumbersome—particularly compared to Quinte West and Belleville.
But Shannon’s view has changed.
He spent the past couple of years working with Mayor Robert Quaiff, members of council, residents, builders and Shire Hall staff on committees looking to remove the obstacles that have made the County a precarious place to invest and build in recent years.
Shannon believes this work has produced a predictable investment climate in the County.
“That’s all we wanted,” said Shannon. “When you are making a 10-20 year investment, you need comfort that the ground rules are stable and predictable. That is what it’s all about. We have the comfort we didn’t have before.”
Rather than exiting the County as planned, Shannon’s firm is now looking at fresh opportunities to put their expertise, systems and relationships back to work in this community.
“I have to give credit to the mayor and some on council for making real progress on the hurdles that made development difficult in the County,” said Shannon. “I think we’ve seen a change in direction. Mayor Quaiff has understood, I think, how development is important for the County and we have seen a marked change in the culture and outlook toward the building sector.”
Shannon singled out the new manager for planning, Paul Walsh, as a strong addition to the County’s regulatory process.
“He (Walsh) is very developer-conscious,” said Shannon. “We get answers. He’s not a yes man, but he gives straight answers and sets out clear timelines. And he is always available for a meeting.”
Shannon credits the new investment climate in the County, in part, for encouraging developers back to the County who may have given it a pass during the past decade.
ATTRACTING DEVELOPMENT INTEREST
Neil Carbone, responsible for economic development for the County, says developers who may have been sitting on the sidelines are now ramping up their plans for this community. He points to a growing demand to live in Prince Edward County.
“Watching our real estate market over the past 18-24 months, a lot of developers have realized that there is sufficient demand here for new homes, to refocus their development resources in the County,” said Carbone. “It’s always going to take some time between when the market comes back and when shovels go in the ground.”
Carbone likes the mix of folks attracted to live in this community.
“The County seems to be attracting a diverse range of people with a combination of lifestyle, amenities, and a local culture and philosophy that is appealing to more and more people,” said Carbone. “The data indicates we are generating interest with early retirees, local seniors seeking to downsize, mid-career, mobile professionals, and young families.”
HOW FAR, HOW FAST
While the short-term trends look positive, questions will linger about how far and how fast residential building can ramp up in the County.
“So far, the County has been adept at handling its growing popularity in a local way, but we need to be diligent in protecting those unique qualities that are making the County such a desirable destination,” said Carbone.
But it seems inevitable that developers will run up against a capacity wall at Shire Hall at some point—in the form of infrastructure (waterworks) limitations or regulatory processing personnel (planning and engineering). Carbone is already considering the bottlenecks likely to emerge, and working to ameliorate them before they become a serious blockage.
“The County can’t staff for the peaks, so there will always be a bit of delay between when demand increases and when more resources are put in place,” said Carbone. “That being said, we’ve seen incremental growth in building permits, and new and seasonal home builds the past few years. So for 2017, council approved additional resources in our Development Services Group (capital projects, planning staff and engineering resources) to help address the growing workload.
“Our new Development Framework also highlights the need to maintain sufficient resources as growth continues, and this will involve workload projections and budgeting accordingly for new and/or contract staff in subsequent budget years to keep up with demand. The Community Development Department is also allocating more of our manpower to facilitating and tracking these developments.”
For his part, Shannon hasn’t seen worrying constraints yet. He is confident the second half of 2017 will be as productive as the first six months.
Shannon feels the work done, and efforts made, over the past two years has succeeded in creating a more investment- friendly environment.
“[Builders] are sensing a better regulatory system in place,” says Shannon. “That gives them some comfort to invest here. A balanced and reasonable process that is more predictable—these folks are now encouraged to make these long-term investments.