Not a boom

But new homebuilding is on the rise

Prince Edward County issued 100 new home building permits in 2015. It has been six long years since the County has seen this level of new home construction in this municipality. Since hitting bottom in 2012, when just 69 new home building permits were issued, building numbers have edged up slowly but steadily. The homebuilding sector is hardly robust, however. New home starts are still well shy of the mark in 2007 when 155 new home building permits were issued.

Council will face an interesting test early in the new year. In a 2013 response to the collapsing homebuilding industry, County council cut development charges in half and reduced water connection charges in areas serviced by municipal waterworks—a move intended to stimulate building activity.

It worked. But it was a temporary measure and these discounts are set to expire in March. If council allows development and connection charges to rise in March, it risks stalling this nascent growth trend.

But it will have to balance this risk with pressures in its underfunded waterworks system. Council’s rate structure consultant is urging steep increases to connection charges to offset rising water bills.

The homebuilding sector will be watching what council does.

In November, Mayor Robert Quaiff hosted a meeting in which he promised a new, more cooperative relationship with the sector. He said the County was open for business and that he and council were prepared to take the necessary steps to streamline navigation of the municipality’s processes and to provide the resources and staff to ensure the County was on a competitive footing with neighbouring communities.

Even with discounted development and connection charges, the County is the most expensive jurisdiction in which to build in the region. Should council allow this discount to expire, or worse, choose to push the charges even higher, these decisions will make hollow the mayor’s assurances.

If it chooses to continue some incentive by way of reduced development and connection charges, council should be buoyed by the numbers that show the value per permit was up sharply in 2015 compared with the prior year.

The average value of all building permits was $95,673 last year, compared with $65,833 in 2014— up 45 per cent. The value of all permits issued in 2015 was $76.9 million, increasing from $48.8 million the year before.

The bottom line is that the County generated $680,585 in building permit fees in 2015, up from $486,075 earned in 2014. That should give it some room to improve service and stimulate growth and investment.