Comment
Stand up
It was never going to be a fair fight. Developers are more motivated, more agile, and less morally restricted than regulators and municipalities. They wage battles in communities like ours every day. They have the tools, the expertise, and the incentive to win. So they play hard.
However, even the most optimistic developer could not have imagined their luck in Prince Edward County.
Next week, Council appears ready to approve the construction of a $26 million trunk line for a developer in Wellington. It has already spent $18 million for this developer. That’s $44 million waterworks users of Prince Edward County have funded for this developer. It is a remarkable feat. For the developer.
In exchange, the developer has promised that someday—on a date of his choosing— he will sign a subdivision agreement, triggering a payment of development charges. Someday.
Until then, waterworks users will carry this burden through our water bills. Waterworks users—and Shire Hall—are entirely dependent upon the developer building many homes soon. If it doesn’t happen, existing water ratepayers will fund this massive debt each and every month. That is the deal.
But the world has changed since the arrangement was signed in 2021. Development has dried up across the province. The business of building homes was already tenuous and heading toward a correction. Material costs spiralled through the pandemic and remain stubbornly high. Labour costs are rising and likely moving higher in response to inflation. Regulatory and municipal costs remain a massive component of the cost of a new home. Builders were already finding fewer buyers for $900,000 homes.
Then, interest rates spiked. Overnight, mortgage costs for prospective buyers doubled. It had an immediate impact in Prince Edward County.
“We are down to our lowest numbers we’ve seen in permit applications and permits issued since 2013,” explained Andy Harrison, the County’s chief building official. “Mortgage rates have really killed the housing market,” said Harrison to Council during budget deliberations last week.
Every market signal is urging caution. Lights are flashing. Bells are clanging. But Council seems intent on pushing ahead. With waterworks users’ money.
Last week, former councillor Ernie Margetson offered Council an off-ramp. A simple way to buy some time in an uncertain market environment. Margetson proposed tying the awarding of the trunk lines tender to the developer’s pre-payment of development charges. This way, the municipality and the waterworks users would be assured of the developer’s timely financial commitment.
But will Council take this path? We will know next Tuesday night.
Should Council approve the trunk line tender next week, any pressure the developer may have been under to sign a subdivision agreement, will slip from Shire Hall’s fingers. The developer will be free to sit back and wait for the housing market to return. Months. Years. Decades.
Any leverage the municipality had—or thought it had—will be frittered away.
Maybe this was pre-destined. Maybe this is just what happens when rural municipalities deal with big developers. Maybe there is little that municipal leadership, Council or the community can do.
But Council should try. And it should be seen to be trying. It should demonstrate that they are working for the residents and the waterworks users in this community. It begins by standing up for constituents next Tuesday.
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