Prince Edward County real estate ‘disconnected from reality’; council receives affordable housing update

With houses selling for nearly 50 per cent more than last year and the rental market also seeing bidding wars (and the inventory for both at an all-time low) the need for affordable housing in Prince Edward County is dire.

“The County has been referred to as ‘disconnected from reality’ with respect to the real estate market outpacing the increase in home sales and price increases in Toronto and Ottawa, as well as like-minded tourist communities of Niagara, Muskoka and Peterborough,” said Chuck Dowdall, executive director of the Prince Edward County Affordable Housing Corporation, in his first annual report to council.

The average purchase price of a home in the County in March 2021 was $821,000 and 65 per cent of homes sold for full list price, or over.

Dowdall states the vast majority of purchasers are from the metropolitan areas of Ottawa, Montral and greater Toronto area – all relocating due to the pandemic, able to work remotely, or retire.

“The lack of available homes on the market has put an additional strain on an already very tight and overheated rental market as families who cannot afford to purchse a home are now competing in the rental market, resulting in bidding wars now being reported.

Overall, Dowdall says the average market rent parallels the home purchasing trend with an increase in the market rent year over year of 38 per cent.

He states average market rent last month for a bachelor unit was $965; a one-bedroom $1,464; two-bedroom $1,623 and three bedroom $2,377. In addition, he has a further 15 per cent for utilities and insurance.

Sharing an affordable rent housing example, Dowdall explains a family wanting a two-bedroom unit would need to spend $1,866 monthly, or $22,392 annually.

“For the rental unit to be affordable, the annual groos household income must be at least $74,640. The average annual gross household income in PEC is $66,140, according to Canada Mortgage and Housing data in 2020.”

Dowdall updated council on the housing corporation’s work to respond to the need for affordable rental housing.

For the Wellington arena land development, due diligence is in progress (feasibility summary, environmental phases and civil engineering assessment). Following will be the architectural design, and applications for planning, zoning, capital funding and building permits. The project secured $180,000 in seed funding from CMHC in December.

“The objective is the development of 36 affordable rental housing units with a mixture of 100 per cent one and two bedroom affordable units (meaning at least 20 per cent below the average market rent).

The estimated project cost is $6.9 to $8.9 million, dependent on the final design. Construction is targeted for 2022 with occupancy in 2023.

A public-private partnership (P3) proposal has been submitted to a national private sector corporation for 20 affordable rental housing units centrally located with a mixture of one and two-bedroom affordable units.

The proposal calls for modular units incorporating the current building of the private sector corporation.

“The objective is to secure a letter of intent by July 31, 2021 at which time pre-development of the site would be undertaken.”

Project cost is estimated at $3.4 to $4.4 million. Capital funding would be a combination of long-term financing through CMHC combined with capital funding from the P3 partner. Construction is targeted for early 2022 with occupancy late 2022 or early 2023.

Tiny home communities continue to be discussed as the corporation has been approached by private land owners in the County who wish to either donate their land, or provide land for development.

“The City of Kingston in partnership with the province is the first community in Ontario to undertake the development of a tiny home community of 40 homes centrally located,” said Dowdall. “Many tourist communities in the west have undertaken the development of tiny home communities in response to their affordable housing crisis.”

Dowdall notes tiny home housing offers affordable rental or ownership possibilities and this alternate model can be constructed at a reduced cost and production time of about 50 per cent over traditional builds.

The corporation is also investigating vacant property on Disraeli Street in Picton for a modular development; existing commercial, faith-based buildings and surplus schools to be converted; private developers willing to include at least 20 per cent of new units to be affordable, and quonset housing specifically targeted to seasonal workers.

“The objective of the corporation, considering the multiple projects being considered and vetted, is the development of approximately 100-150 affordable rental housing units in the County within the next 24 to 36 months.”