/Left out in the cold: County hears how economics stymie housing progress

Left out in the cold: County hears how economics stymie housing progress

By James Matthews,  Local Initiative Journalism Reporter

Haliburton County needs 750 new units by 2029 to meet its affordable housing needs.

Michelle Corley, manager of housing and homelessness at the City of Kawartha Lakes, brought Haliburton County council up to speed Oct. 25 on efforts toward securing affordable housing to meet local needs.

Kawartha Lakes also oversees housing and homelessness in Haliburton County. They’re required to plan and oversee delivery of housing and homelessness programs, resources, and services.

“These programs and services touch most areas of the housing continuum, including everything from unsheltered homelessness, emergency shelter, community housing, affording housing, and affordable homeownership,” Corley said.

Although there may be some market rate rental properties, communities have housing with rent geared to income.

“Given the low incomes of these households … these projects typically require ongoing operating and rent subsidies to make the projects viable,” she said. “Locally, we strive to have any newer affordable housing that’s come into play also meet rent geared to income rent levels.”

New affordable housing units as well as community housing units are included within a single application.

Legislation, the Housing Services Act, requires service managers to implement a 10-year Housing and Homelessness Plan.

Corley said the current plan was adopted in 2020 after extensive public consultation with Haliburton County residents and other social agencies. It has more than 60 objectives covering eight policy areas.

For the first time, the plan contains affordable housing targets.

“In order to meet local needs for affordable housing, 750 new affordable housing opportunities are needed by 2029 specifically in the County of Haliburton,” Corley said.

Three models were presented in 2019 when the plan was in its formative stage. Halliburton County chose the more aggressive model to meet its needs.

“The approach taken with the targets was that we needed several partners to help us achieve them,” she said. “Council supported the goal that KLH Housing Corp. would build 150 new affordable rental units in the county with non-profit partners and private developers each contributing 50 new units.”

As many as 500 existing or new market rent units will need to be accessed to make them affordable through rent subsidies.

Households have been added to the community housing wait list over the last three years at a rate of 12 to 13 times greater than households are taken off the list and are awarded housing.

“This is increasing wait times and now folks are sometimes waiting up to 14 years for an opportunity at community housing,” Corley said. “And it’s causing residents to be in very precarious housing situations while they wait for this opportunity.”

Because of the increased need for a dwindling housing supply, the demand has enabled rents to outpace household incomes. That’s wrought a 72 per cent rent increase over the last five years.

In Haliburton County, the KLH Housing Corp. has achieved 15 new affordable rental units since the plan’s start in 2020. And, she said, there’s a potential for another 35 to be added to the affordable housing inventory.

“But that’s still to be determined,” she said. “So, really, we are looking at aiming for at least another 700 units to meet our targets by 2029.”

About $400,000 is needed to build a new affordable housing unit.

“This has risen significantly over the last few years, given increases in construction costs,” Corley said.

So, basically, $49-million is required annually to meet the plan’s 2029 target.

Unmet affordable housing need shows up in other areas. It can directly impact municipal budgets through funding more emergency shelters to compensate for the initial unmet need.

“Emergency shelters are simply a way to warehouse individuals,” she said. “Unless there’s affordable housing for people to flow into, it’s really getting more and more challenging to see people only stay in an emergency shelter for a short period of time.”

Kirstin Maxwell, the CEO at the KLH Housing Corp., progress has been made in the last decade, despite the challenges. Municipalities have waived development fees. There’s been land donations and cash contributions.

KLH Housing Corp. stock has increase by 69 housing units in Haliburton County over the last 10 years, Maxwell said.

Don Quibell, manager of buildings and properties at the KLH Housing Corp., planning for projects start about five years in advance of breaking ground. And that presents another hurdle.

Five years ago, construction costs were about $200 per square foot. Today, those costs have ballooned to as much as between $350 per square foot and $450 per square foot, he said.

That’s brought a development from a $9.2-million project to an almost $17-million project.

“What we end up with is twice the expense to build that property,” Quibell said. 

Similar cost increases go down the line to other facets of a development project.

“Each time interest rates increase, the situation just becomes worse,” said Maxwell.

Councillor Bob Carter, the mayor of Minden Hills, said some other housing corporations have reported similar high development costs per square foot, with some as high as $500 per square foot.

“And it’s not changing,” he said. “It seems to continue to accelerate.”

Nothing short of a provincial-federal “pixie dust” magic program will offset the circumstances that hinder meeting capital needs to make housing projects,” Carter said.

“This is a nightmare,” said Coun. Jennifer Dailloux, Algonquin Highlands’ deputy mayor. “It is a bone-chilling nightmare.”

And it’s one shared by the entire province, she said. Nothing short of a complete overhaul of the economic system will alleviate it.

Coun. Cecil Ryall, Highlands East’s deputy mayor, said he can remember when interest rates were as high as 20 per cent and houses were still being built.

“What did we do then to enable us to build that we could rob and duplicate in scale slightly today?” he said. “Because at five and six per cent (interest), even if it goes to seven per cent, is nowhere near the plus-20 per cent that we were running back in that day.”