OPINION: Tackling housing, labour challenges in county

By Tom Lusis and Jana Burns

In July 2018 the CBC published an article, titled Renaissance of Elora, Ont., puts housing pressure on longtime locals, that highlighted some challenges related to a booming housing market.

More specifically, it addressed rising property values and a lack of rental vacancies.

This is not unique to Centre Wellington. In fact, Wellington County as a region is facing the same predicament.

Statistics paint a sobering picture of the housing situation in the county. For example, in 2017 551 new homes were built. While the number of units actually decreased, construction values increased, meaning a focus on bigger, more expensive homes. Data on existing housing stock shows similar trends.

According to 2016 Canadian Census data, the average home price in Wellington County is $453,244. Based on current mortgage regulations a household would have to earn at least $110,855 and have access to savings/down payment to afford home ownership. This amount excludes related expenses such as home insurance, taxes, utilities, etc.

Data from this year from the Canadian Real Estate Association put the average price of residential housing in southern Ontario, including the county, at $495,512.

The availability of rental units in Wellington County is also extremely low; the current vacancy rate is 1%. The rate identified for a healthy rental market is 3%. Approximately 16% of the county housing market is rental stock, but when examined by municipality, some areas are as low as 7%.

Furthermore, due to increasing house prices, property owners, who are often landlords, are selling their properties, which displaces current renters and further decreases the rental supply.

These housing and rental issues are complicated by Wellington County’s proximity to the Greater Toronto Area (GTA) and the Kitchener-Waterloo region.

GTA residents sell properties in the city and purchase locally, further increasing the demand and values. Housing costs in Kitchener-Waterloo are higher than in Wellington County. Lower prices make the county extremely attractive to buyers willing to commute.

Leaving these challenges to the market to solve poses significant risks. Three primary areas of concern are the impacts on existing residents, youth and young adults, and employers/businesses.

From a resident’s perspective, the high price of housing is dislocating a portion of the population that can no longer afford to live in Wellington County. Some residents are unsure they can stay in the place they have always called home. This issue is compounded by our region’s low vacancy rate and lack of rental stock.

In effect, people cannot afford to buy a home and there are very limited opportunities to rent.

Housing challenges also have troubling implications for youth and young adults. Rural communities are experiencing an out-migration of these age cohorts, typically to urban areas. Rural municipalities often encourage these groups to stay in the community or consider returning once they have experienced life in the “big city”.

Yet if someone wanted to stay in the county what rental opportunities are there for their first experience of life outside the family home? Could they afford a home if after being away they wanted to return?

A third risk revolves around labour and industry. Workers – whether young professionals, families, students, or immigrants – cannot find a place to live locally. By extension industry and businesses cannot find workers.

This creates incredible vulnerability for a county with significant reliance on manufacturing and agricultural industries, and a growing service/tourism sector. If employers cannot find workers they will close their doors. In the short-term jobs disappear along with the contributions the company made to local taxes. In the long-term the economic viability of the community suffers, as stores and services no longer have customers and eventually more businesses begin to close.

The County of Wellington recognizes that the current housing market puts our communities in a vulnerable economic position.

To find innovative solutions to these challenges, a call for proposals took place in March 2019 to establish what the County Of Wellington can do to:

– encourage home developments priced at less than the average price in the county;

– increase rental stock to ensure diverse housing options;

– offer short-term solutions for employers to house workers;

– identify possible municipal incentives to encourage stakeholders to build accessible and rental housing; and

– develop recommendations for working with developers, municipalities and others to implement solutions to this dilemma.

Local factors and community engagement are central to this initiative. Wellington County does not have a homogenous housing market. What is considered “affordable” in one municipality may not be in another. Housing and rental solutions will vary based on local conditions.

One thing that will remain consistent across the county is that communities will need to have an open mind, and be open for change in order to solve these issues. Innovative solutions by their nature mean doing things differently.

If the existing housing market reflects the “traditional” landscape of Wellington County, it is a landscape increasingly only affordable to some. “Not in my back yard” thinking or a reluctance to change, due to aesthetics or attitudes, will only reinforce the status quo.

To make the housing and rental markets more accessible will mean forward thinking, commitment and collaboration from all stakeholders involved.

Tom Lusis (talent attraction initiative) and Jana Burns (director) are part of Wellington County’s  Economic Development department.