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Broken
There was a day not so long ago when young, ambitious people fled unaffordable cities to communities like this one in search of opportunity—and an affordable future. One in which they could expand their skills, climb the economic ladder and build a family. Over the past two decades, however, Prince Edward County has closed this doorway on these folks, through a combination of bad policies, short-sightedness and misplaced fear.
Today, many still come seeking opportunity, but they don’t live here. Or they don’t stay. They can’t. Increasingly, only those who are already wealthy can dream of living in Prince Edward County. This is bad.
And it is only going to get worse. Unless, and until, we do something to get us off this track.
We have the means to alter this trajectory—namely, unlock new homebuilding. Yet we remain stuck. Some worry about change. Some worry about unintended consequences. Others are seemingly content with the idea that Prince Edward County in 2020 has become an exclusive address for the wealthy.
Few local policymakers appear to understand the dilemma they have inflicted on this community. Fewer still are prepared to make the necessary changes necessary to alter our course. In his New Year’s Levee remarks, Mayor Steve Ferguson observed that the County had issued 158 new homebuilding permits last year— three more than 2018. This is tragically inadequate to offset the demand for new homes in this market. So, the problem compounds.
The factors dogging our housing market— changing our community, shrinking our population, and pushing folks out of their homes—aren’t unique to the County. But this community is illustrative of how housing policies instituted over the past three decades have magnified and deepened the challenges of inequality in North America.
Daniel Shoag of Harvard University’s Kennedy School of Government has studied this problem along with Peter Ganong of the University Chicago. They observe that in previous cycles of income inequality, we were more mobile as a population. Lowskilled workers moved to places where economic opportunities existed. Once established, these folks acquired higher skills and moved up through the earning ranks, thus closing the gap.
In this way, mobility tended to ameliorate income inequality. But Shoag and Ganong found that in recent decades layers of regulations on housing—environmental, local planning goals, building standards etc.— have served to dampen the incentive for low-skilled folks to move. Unaffordable housing costs across North America have blunted the motivation to pursue opportunities elsewhere.
This is a regrettably truncated description of their research, so I will provide a link at the end of this column and in the online version for readers to follow up.
But let us consider their findings in the context of Prince Edward County. By most conceivable measures, the County is blessed with a thriving rural economy, envied and emulated by communities across the nation. The County is teeming with opportunity and possesses a brand that can be leveraged in myriad ways. But business and investment are hobbled by a small and shrinking workforce— folks who can’t afford to live in the place they work.
Imagine you are a struggling young person scratching out a subsistence living in Toronto. (It isn’t hard to do, they likely exist in your extended family.) You might have an interest in food, hospitality or value-added agriculture. Or perhaps you are good with your hands, you can fix things, make things, build things. Prince Edward County needs you. We need your skills, your interest, and your youth. But we have no place for you to live.
The very folks we need to power our economy—to learn, to grow, to go out and create new businesses— can’t live here. Conversely, these folks can’t seize the opportunities our economy offers them.
When Shire Hall saw demand ramping up 15 years ago, it failed to respond. There were plenty of warnings. But they were afraid of new housing subdivisions, of how they would impact our community. They were afraid of change. They believed doing nothing meant everything would stay the same. They were dead wrong.
Sadly some still cling to these notions.
Every day, folks notice how much their neighbour’s home sold for. They look at their property taxes. Their waterworks bills. And they are cashing out. Ratcheting prices ever higher. There is no offsetting economic influence. This trend won’t relent until we restore balance to the demand and supply of homes in Prince Edward County. Economics doesn’t come any more fundamental than this.
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