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Local construction in the dumpster

Rick Conroy published a good article in the July 20 edition of the Times on the decline of new home construction in the County. It’s real and it’s serious.

Here is the disturbing trend in numbers of new permanent home building permits:
.         2007 = 155
.         2008 = 133 (-14%)
.         2009 = 103 (-23%)
.         2010 = 78 (-24%)
.         2011 = 66 (-15%) Rick’s estimate
or
.         2011 = 45 (-42%) Gary’s estimate

There were 33 permits issued in the first 6 months of 2011.  Rick grossed up to the full year by multiplying 33 by 12 / 6.  I took account of seasonality in issuing permits by multiplying 33 by 78 / 57, which is the ratio  of building permits for 2010 full year to 2010 first 6 months.

If my estimate proves to be more accurate, the average rate of decline in building permits from 2007 to 2011 has been 27% per year.  If Rick’s is better, it’s still a decline of 19% per year.  Either way, this is very serious for the County’s economy.

The decline in new home building permits is likely due to the cumulative effect of several factors:
.         2008 – general economic decline.
.         2009 — imposition of development charges ($7K for a 3+ bedroom
home).
.         2010 – increased service connection charges (now $7K if both water and sewer).
.         2011 – substantial percentage increases in fees for pre-construction approvals.
.         Uncertainty about wind turbine projects in the County – how many and where.

Some additional information – rumour only:
.         Kaitlin Group’s 460-home subdivision to be built over 10-15 years in north Wellington.  Speculation is that, having obtained all of the approvals necessary, Kaitlin will defer the start of construction until the economy improves significantly – could be several years.

.         Shopper’s Drug Mart on Main Street, Picton.  It is believed that construction will be deferred for 4 or 5 years, with the property to be modestly landscaped in the interim.

Gary Mooney

Filed Under: Letters and Opinion

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  1. Steven Draper says:

    If people looking at living here google PEC and find articles on wind turbines it DOES effect the more premium house sales. A realtor told me it happened a couple of weeks ago………

    While the ability to measure exact amounts is not really possible, the fact is that house deals have fallen through as a result of the possibility of Industrial Wind Turbines, that has to effect the realistic price attainable.

    When the economy provides a challenge, regions need to be well on their game to remain popular. For much of PEC’s ‘new economy’ the fuel is the dream of living here and IF that is lost then PEC will run the risk of becoming a rural ghost land over the next 10 – 20 years, albeit one with a nice beach!

    There is a very critical and highly sensitive feedback loop that could undo much of PEC’s growth in a very short time span leaving PEC with huge debt and massively reduced income.

    PEC needs to look to areas like the UK Cotswolds to see how a region manages growth and balances rural tradition with economic sustainability and success.

  2. John Thompson says:

    Dayton, I do wish that DND would publish a map indicating their areas of air space concern but they don’t seem to be that transparent. Don’t expect them to have any issues with White Pines though.

  3. Renee says:

    “House construction is down almost everywhere because of the ecomomy and how many houses does one need anyway? Bubbles break and sooner is always better than later. Wind energy development would have little if anything to do with this.”

    I’m not sure why you would think this wouldn’t have any impact John. I can confirm at least one housing project that has been put on hold because of turbines – ours. Our property happens to fall in the White Pines “study area” and because we haven’t built yet our home it isn’t allowed for consideration as a noise receptor. Why would we build in paradise only to find ourselves in an industrial wind farm?

    It does indeed have impact.

  4. Dayton Johnson says:

    Well John we’re all anxious to here more….reliable source? Is this information available reading? I’d like to know because “White Pines” have been calling!

  5. John Thompson says:

    Gary, it may be an inconvenient truth to your campain but reliabe sources can say that DND will object or has objected to wind development in most of the County and it is not worth fighting with them. Your info is long out of date.

  6. Gary Mooney says:

    John Thompson said: “Remember that there won’t be much wind development in the County as DND now claims most of our air space. That’s why nothing has been built north of Picton and nothing is even proposed for most of the County.”

    This is absolutely not true. DND claims airspace only within 10 km of a major military airport (Trenton) and likely Mountain View. But there’s lots of County outside those areas.

    Currently, there are 11 projects identified as being underway — 4 in Hillier, 5 in South Marysburgh/Athol and 2 in North Marysburgh. See the map at http://ccsage.ca/Default.aspx?pageId=671947. Of the 12 wind projects on land, only Skypower has been cofirmed as cancelled.

  7. John Thompson says:

    It is unfortunate that the water and sewer charges since almost forever have not reflected the cost of depreciation. Therefore, no money is in reserve when new replacement equipment is required and rates now are higher than would have been necessary. It is now a legal requirement for the rates to be sufficient to cover costs.

    House construction is down almost everywhere because of the ecomomy and how many houses does one need anyway? Bubbles break and sooner is always better than later. Wind energy development would have little if anything to do with this.

    Remember that there won’t be much wind development in the County as DND now claims most of our air space. That’s why nothing has been built north of Picton and nothing is even proposed for most of the County.

  8. Chris Keen says:

    The County bureaucrats have perhaps “done it to themselves” over the past 10 or 15 years by not charging the real costs of sewer and water connections as new permits were issued. This has now apparently been addressed with “actual” costs now being applied. I, for one, not on County sewage or water, am not prepared to pay higher taxes so those who will be save money on their new houses. Sorry … but I’m sure I’m not alone on this. At the end of the day, if people want a new house here they’ll pay the real costs.

    I think the real reason for declining new house construction is: wind turbines and the economy – plain and simple. No one invests in a climate of uncertainty – period!

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