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Attainable Housing Strategy for County of Wellington
Weston Consulting, together with O’Keefe and Associates, were engaged by the County of Wellington to prepare an Attainable Housing Strategy, which was presented to Council on November 28, 2019.
 
The Issue
 
The need for the Attainable Housing Strategy (“Report”) stems from the issues of workforce recruitment and retention in key business sectors due to the shortage of attainable housing in Wellington County. The lack of attainable housing diminishes the ability of the County of Wellington to retain and attract key businesses that will support growth and economic development. This problem is further influenced by the County’s geographic location, which is in close proximity to major economic centres in the City of Guelph, Waterloo Region and the Greater Toronto and Hamilton Area (GTHA). It is anticipated that this economic pressure will attract residential activity from outside the County, increasing the development of low-rise housing forms, which are not currently attainable.
 
The cost of the existing housing stock remains affordable for incomes below the median in the north end of the County; however, the supply is at issue and has reached a point where new housing is required to meet the needs of manufacturers and other employers. Current data regarding housing supply indicates that the total number of newly constructed units is not on the rise, while housing prices are increasing. In addition, the rental market is experiencing similar challenges with respect to attainability. The County’s vacancy rate of 1% is also making rental housing difficult to obtain.
 
The Cause
 
The heart of economic growth in Canada is the Greater Toronto Area (GTA). The requirement to accommodate growth includes infrastructure expansion, especially transportation systems, and residential development. The southerly and easterly half of Wellington County, approximately extending from Wellington Centre to Puslinch, is directly in the path of that growth. Thus, the City of Guelph is experiencing the second highest increase in residential unit values in Canada. Attainable housing is a hot issue in the area extending from Oshawa to London and from Barrie to Niagara Falls. Further, it has been a significant issue in parts of that area repeatedly since the 1970s.
 
The Issue Exacerbated
 
The issue has been exacerbated by a number of Provincial initiatives which diminish land reserves available for residential growth such as the Greenbelt, Niagara Escarpment, Oak Ridges Moraine, and now, the designation of Provincially Significant Employment Zones etc.  While these initiatives have great merit, when coupled with aggressive immigration policies at the Federal level and transportation infrastructure investment at the Provincial level, they impose on Wellington County, which generally is situated to the West of these restricted areas, a vigorous market and demand for housing. We expect the increase in home values in Guelph will be experienced in varying degrees by home values in much of the County.
 
The Context
 
It is essential to keep in mind the unique character of Wellington. The southerly and easterly half of Wellington is in the direct path of economic growth in Southern Ontario; the Northerly half is not. Wellington contains a cross section of virtually every type of community existing in Southern Ontario ranging from commuter communities between multiple urban centres, to magnificent historic destinations such as Elora and to historic villages and hamlets in the rural areas of Minto and Mapleton. This context directly impacted the findings of our Strategy Report.
 
Summarizing Our Strategy Report:
 
Noting the aforementioned issues and unique characteristics of Wellington County’s infrastructure and attributes, our team prepared an Attainable Housing Strategy Report that is divided into five major components:
 
  1. Research and analyses of applicable policies and programs addressing attainable housing;
  2. Public survey and analyses of the public perception and attitudes towards attainable housing;
  3. A series of recommendations incorporating different strategies which include policy-based recommendations, financial incentives and County action-oriented initiatives;
  4. A simulated pilot project to explore and evaluate a Community Land Trust (CLT) as a solution to the attainable housing issue;
  5. A study of available housing types to address the attainable housing issue in Wellington.
   
Significant Aspects of the Report
 
  1. A specific definition of what ‘attainable housing’ means for Wellington County does not exist. In the absence of a definition and to enable precise analysis and recommendations, Weston Consulting devised a definition unique to the County of Wellington to capture the type of rental or ownership units which the County’s workforce is trying to obtain. 
  2. Cost analyses by O’Keefe and Associates makes an important contribution to the analyses and recommendations contained in the Strategy Report. Through the simulated Community Land Trust (CLT) Pilot Project, it was determined that affordability is impacted by land costs and not the ‘bricks and mortar’.  As a result, public intervention by way of incentives are mandatory to provide housing at prices substantially lower than current market prices.
  3. The presentation of the CLT concept, particularly in the light of the cost analyses by O’Keefe and Associates, offers one potentially potent and unique solution to address the attainable housing issue in the County of Wellington. The simulated CLT concept has been tested through discussions at a ‘Symposium’ with the County of Wellington, and the viability of this concept seems clear.
  4. The ‘Housing Typology’ element of the Report explores choices for attainable housing typologies and, when viewed in conjunction with ownership models and construction methods, provides guidance for many of the recommendations in the Report.
  5. The Report makes every effort to focus on pragmatic and actionable advice.  

Our Key Strategy Findings and Recommendations:
  1. The cost of existing homes in the North part of Wellington remains below the cost of new homes. The issue is insufficient supply, thus generating workforce recruitment and retention issues for many businesses in that area.
  2. The increase in housing value in the County of Wellington is rapid. Thus, an existing homeowner is on the home value “elevator” – and each year it takes them to a higher floor. Except for families with incomes above the County median plus approximately $35,000 for purchaser’s deposits and $8,500 for closing costs, individuals who do not own a home at this date are locked off of the home value elevator.
  3. The cost of new housing now available at market price appears to have risen to a point where no new housing is available to any family in the County of Wellington with a family income at or below the median family income for the County.
  4. The ‘bricks and mortar’ costs seem quite stable throughout the County of Wellington. The availability of serviced land suitable for residential development is scarce and rising in cost from rapid to extremely rapid rates. The availability of serviceable land and its cost is at the core of the problem.
  5. Wellington’s Official Plan is in quite good shape. The required permissions are there. However, they are not being effectively used by developer/builder applicants. As might be expected, applicants will build homes in areas with the least amount of problems and the most profit. The very scarce serviced land in areas of a vigorous market is used up quickly.  To achieve significant impact on attainable housing availability in the County of Wellington, the supply and cost of serviceable land will need to be addressed.
  6. Official plans in similar Counties contain assertive policies requiring applicants, at that county’s pleasure, to include housing types relevant to the community need. Amendments to the County of Wellington’s Official Plan are recommended to put in place adequate authority and policies to provide for similar action.
  7. The public consultation survey establishes that the public has a good level of knowledge and appreciation of the attainable housing issue. The level of frustration does not appear to have reached a point where urgent action is mandatory but significant action is clearly advisable.
  8. ‘One size fits all’ solutions will not work for the County of Wellington. The range of community types, the range of land values and the varied supply of serviced lands suitable for residential development, etc., is sufficiently varied to require solutions to be tailored for each community’s context. However, recommendations pertaining to, and implemented by, Official Plan amendments, etc. are generally applicable and beneficial to a limited degree to all communities in the County.
  9. The choice of housing type will assist in providing more attainable housing but it is not a significant solution. The cost of ‘bricks and mortar’ is relatively stable for all housing types and is varied mainly by the size of the unit – the rapid rise in land cost is the issue where the servicing availability is controlled by the number of units to be serviced.
  10. A definition of ‘attainable housing’ that is sufficiently precise to allow useful analyses and the development of useful recommendations has not been found. Thus, a definition has been devised and it is Attainable Housing’:  provided for purchase or for rent and subject to public intervention at the time of purchase or construction only.’
  11. Public intervention’ is a term Weston Consulting uses in the discussion of attainable housing and takes on many forms. The term is varied and as simple and cost-free as an applicant's requirement to build houses suitable to the community's need, or an application to senior governments for grants and/or incentives to eliminate or diminish development charges, education levies, parkland dedication levies, and planning application fees. It is as complex and costly as the formation of a Community Land Trust (CLT) or a ‘not for profit’ subsidiary of the County to provide an inventory of attainable housing.
  12. While it is possible for a CLT to be set up privately or at the member municipal level, that appears to be improbable. Since a CLT approach will need to rely on the County of Wellington’s authority and its covenant, we advised the setting up of a County of Wellington ‘not for profit’ subsidiary rather than a true CLT.
  13. In short, the CLT is a device to rent land on which the house is built, thus removing the land acquisition cost in perpetuity from the home purchase equation.  It is the most potent solution identified in this Strategy to addressing the attainable housing shortage in perpetuity.  The concept has been put in place in about 240 locations in the USA but only one in Vancouver, the only example we have located in Canada.  The formation of a CLT structure is flexible and adaptable.
Recommendation:
 
The Report concludes that the Economic Development Department be tasked to develop a Working Committee to devise and recommend strategies selected from the recommendations presented in the Report. Our impression is that, at minimum, members of the Economic Development Committee, Economic Development staff and Planning staff should be named to the Working Committee.
 
 
We invite you to read the Attainable Housing Strategy Report, which is located here:  
 
Link to Report
 
Weston Consulting and O’Keefe and Associates look forward to the opportunity to engage and collaborate with other municipalities and private landowners to encourage and undertake creative ways to introduce, construct and support attainable housing in our communities.
 
 
About O’Keefe and Associates
 
O'Keefe and Associates is headed by Davvid O’Keefe – who has spent more than 30 years in the industry. Their experts deliver quantity surveying, pro forma budget and detailed estimating, and much more to complete a timely, cost-effective project.
 
O'Keefe and Associates provides a wide range of services as Quantity Surveyors, Construction Cost & Financial Management Consultants and Employer’s agent. They are working with various teams of developers, builders and design and planning consultants to provide effective cost planning and cost control.  
 
O'Keefe and Associates also provide expertise in project management and a wide variety of services for financial institutions and various partnerships, co-tenancies, etc., reviewing the Borrower’s documentation, building schedule, proposed budget and cash flow projections. They submit monthly reports, keeping clients informed of any changes and potential issues arising during construction. O'Keefe and Associates prepare reports for a variety of construction projects, ranging from condos, rentals, and offices, to religious facilities, retirement and Long-Term care, and industrial and commercial projects.
 
O’Keefe and Associates Contact Information:
 
101 Duncan Mill Road                                                          
Suite 220, Toronto, Ontario                                                 
Canada    M3B 1Z3                                                                
Phone: (416) 385-0019
Fax: (416) 385-9272
Website:  www.okeefeassociates.on.ca
 
Davvid O’Keefe: email: : davvid@okeefeassociates.on.ca
Jeff Shapiro: email: jeffshapiro@sympatico.ca
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