Aunt Mildred

The last house in Wellington was sold last week. There is nothing left. It’s all gone. If this trend continues the village may consider a lottery to award the next chance to live in Wellington.

It’s a bit of an exaggeration—but not by much.

To say the resale market for homes in the village is hot is to ridiculously understate the current situation. It’s become a place where rumours, marital squabbles and moving vans send hearts aflutter—that perhaps a Wellington home may soon come on the market. You have to know someone, who knows someone, who knows someone.

So why aren’t builders carving new roadways and digging new basements in Wellington? Three large developers (Kaitlin, Hirschfeld and Schickedanz) are ready to go with site plan approval for more than 700 homes on the northern edge of the village. They’ve been ready for several years now. Yet all is still, save for Sandbank Homes at Wellington on the Lake.

A housing resale market without supply, in other circumstances, would be a bright signal to builders. Yet these folks remain on the sidelines. Why is that?

It may be that they are focused on other projects and other communities, that they may have neither the capital nor human resources to commit to these developments at this time. But this seems an unlikely explanation.

These are expensive assets to sit idle in the builder’s pipeline. If demand persists and the economics work, there will be pressure to realize this opportunity—whether by existing developers or others. Capital will always be attracted by the promise of a healthy return on investment.

So what is the drag? One can only speculate that the economics don’t work very well yet. We see clues around us in Quinte West, Brighton and Belleville—communities eager to grow. Eager to benefit from a growing tax base. To build new facilities. Improve playgrounds and parks.

On Wellers Bay, Briarwood Homes had begun in earnest developing as many as 500 homes on the edge of the County. While the project will be marketed and promoted as Prince Edward County, with all the virtues the brand engenders, these homes will all be built in Quinte West. The benefit will accrue in their coffers. None in the County.

It is simply easier to do business there. Fees are part of it. As Graham Shannon, president of Sandbank Homes, illustrated clearly to council last month—the County is massively out-of-step with our neighbouring jurisdictions. We are just not in the market. It isn’t just development, connection and permitting fees either, even though these are as much as three-times greater in the County than Belleville and double those in Quinte West.

It is also the vast sums of capital the County requires developers to tie up for years to secure against default. These charges are multiples of the security required next door and where the funds are released much sooner.

Shire Hall’s overhead costs are also much higher than Quinte West’s, while processing fewer homes.

But attitude is also a part of the problem. Folks at Shire Hall aren’t convinced that promoting new home building is a good thing. That is a problem. There is little effort exerted to ensure the County is on a competitive footing with our neighbours because at least some of the County’s administrators aren’t sure residential growth is desirable.

The focus at Shire Hall is almost exclusively on the expense line—perhaps an occupational hazard in government finance. It would explain why the County’s finance chief, Susan Turnbull, conjures the imaginary Aunt Mildred when discouraging council from discounting development charges to builders to incentivize new homebuilding in the County.

Aunt Mildred, according to Turnbull’s telling, must pay, through higher County taxes, the incentive offered to builders.

From this perspective, there are only bills to pay and fairly allocate. Either Aunt Mildred pays them or the builder does.

It is a far too narrow view. It ignores the top line altogether. It ignores growth.

When new homes are built, we create a permanent addition to the tax base—the top line. It is an annuity that churns fresh revenue every year. New homes mean more folks to help fund waterworks, libraries, parks and arenas. New homes mean a chance for young families to get a start in the County and help keep schools open.

This is why our neighbours aggressively compete for new homebuilding in their communities. They understand the power of a growing tax base and what it means for the future prosperity of their communities.

As Shannon showed council in April, had the County managed to maintain the same rate of new homebuilding as Quinte West since 2007, Shire Hall would now be collecting $680,000 in additional tax revenue each and every year.

Looking exclusively at the expense line misses the bigger picture—one that should, I think, be obvious at Shire Hall. The tax levy per capita in 1998 was about $400. Today it is more than $1,200. Aunt Mildred is paying three times more in property taxes and user fees now than she did 18 years ago, precisely because the County did not grow. Could not grow.

Two new committees begin work in the coming weeks, looking at the County’s homebuilding sector and waterworks costs. Their work is crucial. The County needs a profound and fundamental rethink of the way we look at the world around us.

Will we continue to amass a steady increase in costs to be paid by a shrinking or flat population? Will we spend our creative energy figuring out how to allocate these costs in ever-finer increments? Or, are there opportunities to be explored and pursued—as energetically and enthusiastically as our neighbours do?

Given the opportunity, many folks would choose the County over a great many other communities in Ontario. Perhaps we could make it easier for them to do so.

rick@wellingtontimes.ca