Comment
Problem definition
Affordability is dead. The dream of owning a modest or starter home no longer exists in Prince Edward County. It wasn’t so long ago that one could find a home for $200,000 or $250,000. At that level, homeownership was within reach for these folks. But those days are gone now, and unlikely to return.
The only question remaining is: Who’s next? It’s a burning question because the forces that made the County unaffordable for low-income folks remain unchecked. The disease is growing and becoming stronger. Now it threatens the homeownership ambitions of average or middle-class folks.
According to data compiled by Treat Hull and Associates, the median house price sold in the County in 2009 was just over $200,000. In the decade, and a bit since, it has soared at breathtaking speed—rising to more than $585,000 last year. And the pace is accelerating. It raced past the $600,000 mark in December.
What does it mean? Some back-of-the-napkin arithmetic. Assuming you could muster a $100,000 down payment, the cost to carry a $400,000 mortgage on a $500,000 home would set you back more than $20,000 per year. Meanwhile, the median income of County residents is about $32,000 per year, according to the most recent census. The numbers don’t work.
Folks at the median or lower have effectively been shut out of this community. Many of us would be, too, if we didn’t already own our homes. This trend, and the challenges it manifests for our community, are only getting worse.
In previous columns, I cautioned that our indifference to the widening imbalance between supply and demand risked rendering the County a place where only the wealthy could live. Well, we’re here. We made it. Prince Edward County is now off-limits to all but the well-to-do.
Moreover, we did it to ourselves. Sure, we can point to dithering and procrastination by our elected officials who stood by for a decade and a half as the demand for homes in Prince Edward County began to skyrocket—while supply dwindled. And notwithstanding many lofty pledges that the County was eager to work with new home builders, on the ground the foot-dragging and indifference remained the operating principle. A many months’ long examination in 2016 to understand the roadblocks to residential development produced dozens of rock-solid recommendations that might have changed supply imbalance. But five years on, most of these recommendations remain unaddressed.
Council, however, merely reflects the disinterest, and in some cases, open hostility to the addition of new housing supply to the broader community.
Last week about 50 folks who live on a new street in Picton wrote to council to object to what amounts to an infill project on the north end of the town. Among their stated concerns is that the proposed expansion to their neighbourhood consists entirely of townhomes. They would, it seems, prefer these folks live somewhere else. We must move past these inclinations.
However, Council could have been a leader on this issue—making the argument for new homebuilding a decade ago. They could have explained the destructive impact of the precarious supply of homes—resale and new— when combined with unrelenting demand. They could have demonstrated that this imbalance would change our community in profound and unalterable ways. They could have communicated the necessity of residential development while at the same time ensuring protections were in place to safeguard the environment, community livability and reliability of our infrastructure. They could have provided incentives or inducements to new home builders (or, at the very least, ensured a homebuilding playing field that was competitive with neighbouring jurisdictions). But they did none of this. And so here we are. A couple of years ago, sensing something had to be done, Council put aside $250,000 to explore ways to make this place affordable. A municipal housing corporation was formed. With luck, we will see some development of a handful of apartments, perhaps some townhouses and such at the old Duke Dome lands in Wellington. One day, too, we may see affordable housing emerge from the former elementary schools in Bloomfield and Picton. These are welcome developments and deserve our full-throated support.
I join with council members Bill Roberts and Phil St- Jean, and others in calling for an urgent conversation about affordable housing in Prince Edward County. But let us be entirely clear, the addition of even a few hundred affordable units won’t correct the supply/demand imbalance that is changing this community. It won’t change our trajectory.
It is a market problem—it requires a market solution. Furthermore, it needs buy-in from community residents, who have heretofore demonstrated more interest in their back yard than the radical reshaping of Prince Edward County into an exclusive address for the wealthy that has been taking place before their eyes.
Perhaps this mood is changing, but it seems most folks still don’t see the downside of the path this community is on. After all, their property values (on paper) are rising. Meanwhile, the County is attracting an exciting and appealing class of investment, offering an array of impressive new restaurants and experiences. And, some folks are thrilled to see the County become a wealthy enclave like the Hamptons.
Our current path, however, is a dead end. Literally. We are among the oldest communities in Canada. And we are getting older faster than most other places in this country.
While many folks come to live in Prince Edward County, more folks leave. Mostly less-well-off neighbours and friends. The County population is shrinking, according to the last two censuses. Declining population makes everything worse.
It means our remaining schools are at risk. Healthcare services are next. The province has been emphatic that it will only invest in growing communities. The news from the QHC board last week that the development of the Picton hospital has been delayed by a couple of years ought to have sent a shudder through the County. Long-term care beds will go elsewhere. So will investment in assisted living or apartments. We will have nowhere to go when the single-detached home in which we all live becomes unmanageable.
The impact is magnified by the increasing burden of municipal services. User fees, taxes and water rates escalate because there are fewer folks to fund them. When this becomes unbearable, they will come for our arenas, town halls, libraries and parks.
Yes, we need an urgent conversation about affordability— but having put it off for a decade, we have made our challenge many times harder. It gets worse every day that demand wildly exceeds supply. Let us, at least, agree it’s a problem.
Rick, you are speaking on a topic that we have been attempting to address in the County for the past 8+ years. I strongly encourage you to come over to Bloomfield and walk through our proposed “Affordable Housing” project, LoveSong at the former Pinecrest school. I think that you may have an interesting prospective on affordability. We envision 50 affordable units in phase one and many more in the future planned phases. We are serious about applying the 3-R’s in the adaptive reuse of this excellent community facility. We really applaud you highlighting this growing dilemma and encouraging our volunteer efforts to address it. Sincere thanks Ken How, Project Facilitator
CAPITALISM.
FLOOD THE MARKET. TO REDUCE HOME PRICES. BUILD AFFORDABLE IF THERE IS A DEMAND. IS THERE,UNLESS WATERFRONT?
AS AN OWNER….GOOD FOR ME?
Too little too late for this piece. Let’s look at the market pre and post Drake. That right there is the source of this cancer.
You need to stop looking at the County in a vacuum. Recently a house in Brighton by the Bay was listed for sale. Two bedrooms, two baths, probably 20 years old, no basement only a crawl space with an attached garage. Asking price $585,000.00. About 4 or 5 years ago that home would have been listed for under $300,000 and would likely have been half that amount when built. The same can be said for Quinte West and Belleville. Median income is the number that half of the incomes fall below that and half fall above. It is not the same as average income which could skew higher. At $32,000.00 it is unlikely that anyone could afford to buy a house, anywhere.