Fresh start

New home starts rose for the third year in a row in 2014, but most were built on rural, unserviced lots.

Homebuilding improves in the County in 2014

Where does one turn when the regular remedies no longer work? When the problem is bigger than your wallet, your savings, your borrowing ability and your wits to fix?

Since taking their seats around the horseshoe in December, the new council spent has spent many days coming to grips with the sheer scale of the infrastructure headache they have inherited. Too many roads to repair. Too many pipes to mend. Not enough money. Not enough taxpayers.

Several councillors have voiced the obvious, yet provocative, point that growth is the only long term solution for the County infrastructure ills. Obvious because, as the County’s treasurer has repeatedly made clear, even crippling increases in taxation or debt would be insufficient to fund these needs.

Provocative, because for many the attractiveness of the County is the quaint, familiar and predictable pace of growth in their community. The idea of new residential subdivisions is at odds with their vision of the County.

But as more of these postponed infrastructure costs are borne by a slowgrowing tax base, the County becomes an increasingly unaffordable enclave accessible to narrow segment of the population.

It is why council is saying, with uncharacteristic clarity and unity, that a growing residential tax base is necessary to preserve the County’s diverse and traditional communities.

They got some good news on that front last week. After years of stagnation, new home starts were up sharply in 2014. Through much of the last decade, homes were being built at a pace of about 130 per year. But since 2010, new home building had languished at about 77 homes per year.

Last year 91 new homes were built in the County. Renovations were also up sharply— helping trades and building suppliers with a good year in 2014.

But despite lower development charges, offered on a temporary basis, for new homes built in areas serviced with municipal water and sewer, just 25 of the new homes took advantage of this incentive. Most new homes were built in the countryside last year.

A leading homebuilder attributes this to the high cost of land in the Counties serviced areas. Eric DenOuden is principal at Hilden Homes and past president of the Quinte Home Builders Association.

He says a lack of supply of serviced lots has kept prices high, discouraging development for builders like him.

“I was in Wellington last week and I shake my head at the price I have to pay for a serviced lot,” says DenOuden. “It doesn’t make any sense. A young family can do the same thing in Belleville or Quinte West for much less.

“It’s disheartening. I would have to add $20,000 to a young couple’s $250,000 house, just because of the land component. It is a big number on a starter home. It doesn’t work.”

He believes a larger supply of lots in serviced areas would put pressure on land prices to align more closely with markets in Belleville and Quinte West. He says development and connection charges are just part of the overall equation. If the market for lots were more liquid— that is greater supply and demand—they would be more competitively priced.

This is easier said than done.

DenOuden says 30 to 50 new lots must be opened up for development to create the liquidity necessary to correct the price imbalance. Otherwise, landholders will continue to sit tight, waiting for their price.

To do so will require taking on some risk, because it isn’t proven that the County can absorb this much residential development in a timeframe that would provide an acceptable rate of return.

DenOuden contends the County must nevertheless encourage this in order to attract first-time buyers and younger families.

“It is great to attract the retired and semi-retired group, but I think we need to really look at diversification—we really need to try to make it possible for younger generations to raise a family in Prince Edward County.”

CONVERSATION NEEDED
DenOuden believes opportunity is ripe in Ameliasburgh, Rossmore and Consecon— communities served with municipal water and close to jobs and economic opportunities in Belleville and Quinte West.

“They have water infrastructure and a sense of community,” says DenOuden. “Let us work together to develop these communities. I would like to see these communities grow.”

But to do so requires vision at Shire Hall. He is encouraged by the new council and eager to sit down with them.

“I am optimistic,” says DenOuden. “I have had an opportunity to speak to the new mayor, Robert Quaiff. I would like to start fresh with this council.”

“We have to work together in a more co-operative and user-friendly way with each other. We are a huge industry in this region, employing hundreds of people directly and indirectly—whether it’s the concrete delivery guy or the plumber or drywaller.

“We need a conversation to understand if there is an appetite to work together. Does the County’s vision include residential construction—to make the building process more user-friendly? There is a lot of potential to improve relations between Shire Hall and the region’s builders.”

He says his industry must accept some responsibility for the disjointed dialogue between builders and Shire Hall.

“Communications isn’t always our strong suit—we often don’t communicate until frustration boils over.”

He adds it is in everyone’s interest that this conversation begin in earnest.

“It is why I suggest we need someone on council to take a lead role—to sit down with builders and let’s chip away at some of these issues to improve the process,” says DenOuden. “Not to circumvent the regulations and protections, but to make the process more transparent, predictable and responsive.”