Open for business

Mayor meets with builders to find ways to halt decline in new home construction in the County

“Open for business.”

That was the message Mayor Peter Mertens brought to a group of builders and real estate professionals last month. Mertens called the meeting to understand what role the municipality could play in reviving the flagging building sector in the County.

From a peak of 155 new homes built in 2007, the County has endured steady declines each year since. So far this year the County is on track to build just 66 homes—fewer than half the homes built just five years ago.

When homes don’t get built it isn’t just jobs that are affected. Revenue from building fees, water works connection and charges fall, pushing more the cost of these services onto existing taxpayers. The tax base can’t keep up with the rising cost of running the municipality. Once again more of the burden falls on existing property owners.

Rising costs push lower income and new home purchasers out of the County, which has longer term implications for the diversity of the community and the preservation of institutions such as elementary schools and arenas. The County’s seven public elementary schools are already under pressure from declining enrollment.

“If you don’t have young families move into Wellington, Picton or Cherry Valley how are you going to keep your schools open?” asked Eric DenOuden, head of Hilden Homes and president of the Quinte Homebuilders Association. “When the public school in a village like Wellington closes—it starts a downward spiral in the community that is very difficult to turn around.”

It is concerns such as these that prompted Mertens to convene September’s meeting with builders and related players.

“We need to build affordable and entry level housing to encourage young families to settle here and put down roots,” said Mertens. “To do this we need housing stock at price points that don’t exist in the County at this time.”

Mertens noted too that falling building rates has a direct impact on the County’s ability to balance its budget. More than 90 per cent of the revenue the municipality receives comes from residential homeowners. Few communities rely as heavily as the County on its residential tax base.

Mertens was pleased the conversation with builders didn’t get bogged down in a discussion about lowering municipal fees.

It is not always about costs,” said Mertens. “Sometimes the issues involve process. So everything is on the table. What can be done in the short and long term to ensure the health of the building sector in the County? These are the questions we are looking to answer.”

DenOuden agreed that individual fees don’t paint the full picture.

“For the last few years policy decisions made by council gave the impression the County wasn’t interested in the building sector,” said DenOuden. “We are pleased to see the welcome sign is back out in the County.”

He says part of the challenge in the County is a scarcity of affordable building lots. He is hoping more supply will become available on the market and push prices down to comparable levels in Quinte West and Belleville.

He rejects, however, the notion that $5,000 (roughly the difference between the County’s development and connection charges and those of its neighbours) is inconsequential to some looking to purchase a new home.

“It makes a difference,” said DenOuden. “It just isn’t the only factor.”

He suggests the County might look at scaling development and connection charges to the selling price of the new home.

“Fourteen thousand dollars in fees may not be meaningful for someone building a half-million home—but it sure is meaningful to some hoping to buy their first home at $200,000.”

He suggests those on the higher end pay more—the homes on the lower end pay less.

Mertens agreed that this should be in the mix of ideas to be examined.

“We are looking at all aspects of costs—how do we compare with neighbouring markets and what is preventing housing being built at $200,000.”

DenOuden has undertaken to compile a survey of comparable costs required to build a new home in various locations in the Quinte area. Mertens has asked the group to gather again before the end of the year—to offer specific proposals that he might bring to the council table.

“The message I brought is that the County is open for business,” said Mertens. “We want to understand the roadblocks and challenges that are discouraging builders in the County and address them if we can.”