Developers say PEI lacks land to build homes as housing shortages continue
Construction of new apartment complexes on PEI peaked years ago, a factor which, coupled with rapid population growth, has created a desperate need for more housing.
It’s difficult to pinpoint the start of what is commonly referred to as a “housing crisis,” but these words were first used in 2018, a year in which the housing vacancy rate fell to a record low of 0.3 percent.
The root of the problem appears to be rapid population growth coupled with the inability of developers to build new homes fast enough.
In this first year in particular, it has become evident that builders have reacted quickly to the demand for housing. But while the housing crisis lingers, activity has slowed in recent years.
Some have blamed a labor shortage, others with funding difficulties, but Ajay Punnapadam, owner of Confederation Construction, said his main problem was something else.
“We have no land,” said Punnapadam.
“There are no multi-unit lots available. Getting land zoned for multiple units is almost impossible. The maximum you could get is a triple or quadruple thing, but anything beyond that is very, very difficult. “
Housing completions on PEI surged after people started talking about a crisis in 2018, but they peaked in 2020. There were 15 percent fewer completions in 2022, and the difference was particularly noticeable in apartments, where the number of completions almost halved.
Early indications are that 2023 could be even worse, according to reports released this month by Statistics Canada.
In the last quarter of 2022, investment in new residential buildings and housing permit approvals fell sharply.
Capital expenditure fell to $93.3 million, the first time since 2018 that fourth-quarter capital expenditure for PEI was below $100 million.
Looking back at these five years of building permit data, we find a peak in 2018 when permits were granted for 491 new housing units, including 320 apartments. In 2022, on the other hand, only 284 apartments were approved, of which only 122 were for apartments.
Building permits in Q4
Housing Secretary Matthew MacKay said last month he expects soft finance introduced in the autumn to encourage much more construction on the island this spring.
However, Punnapadam does not see much difference in this political move.
If there is no country, what’s the use of getting the funding? — Developer Ajay Punnapadam
“If there is no country, what’s the use of getting the funding?” he said.
“If you don’t have land that’s zoned for this type of development, what will the funding do? It will not help you in any way.”
One of Punnapadam’s first projects in founding Confederation Construction in 2019 was a 12 unit apartment building in Belfast near Dr. John M Gillis Memorial Lodge.
The rezoning process took more than nine months, and this type of difficult and lengthy rezoning process is not uncommon, said Bayside Group’s Peter Brown.
“I just refuse to buy land that needs to be repurposed because of the NIMBY stuff that’s happening,” Brown said.
“While cities will say ‘yes we want growth’ and ‘yes we want people’ and yes city councils will say that, what matters is when voters show up en masse to be against something, usually the politicians stand on the side of the voters.”
Try something new
The city of Stratford, the island’s third-largest municipality, is in the middle of a project that it hopes will help these hearings run more smoothly.
Stratford is one of six communities across Canada working with Canada Mortgage and Housing Corporation on initiatives to try to build housing faster in Canada.
Stratford is working on a new permitting process that would change the way residents are consulted on rezoning. In the current process, residents are usually presented with a plan that looks like a completed deal, as if the developer could lay the groundwork for the project the next day.
A new approach would result in residents being involved much earlier in the process.
“The whole process starts with the residents and the developer sitting around a table in a workshop and having a blank map of the area to be developed, a top map with all the forest areas and contours and everything that’s written on it,” Mayor said Steve Ogden.
“They are asking residents to identify areas they think should be preserved and areas they see as good for development and to voice any concerns or fears openly so they can be discussed.”
A federal partnership project, it aims to create a model for a new process that could be deployed in communities across Canada.
Location, location, location
But Brown sees another problem. The land available for housing is in the wrong place.
Ideally, housing should be close to shops, jobs and other services.
“When I build senior units, I really want to put them somewhere near the churches, banks, and coffee shops,” Brown said.
It’s just good planning, Brown said. A centrally located apartment building means that residents use their cars less often or perhaps do without a car altogether. This in turn means less traffic, less wear and tear on the roads and less need for more and wider roads. In addition, in a province where transport is a major source of greenhouse gas emissions, this means less pollution.
But that’s not what happens.
“In the last 10 years, a lot of the guys just haven’t bothered to go places where you can get public backlash. They’re going to go to the 20 acres out of town and build where it’s easy,” Brown said.
“It’s probably not the best place to build, but it’s the easiest.”
The City of Summerside believes it has played its part in making land available for high-density housing development.
“Right now there’s a fair amount of land that’s not only zoned but also served by roads,” said Aaron MacDonald, the city’s director of technical services.
This includes properties along most parts of the waterfront from east to west, as well as in the downtown core and north of the city.
MacDonald anticipates that the land currently available will meet the city’s needs for some time. There is quite a bit of interest from developers, he said, and he expects a busy year.
In a statement to CBC News, Coun. Alanna Jankov, Chair of Charlottetown’s Planning and Heritage Committee, said the city also believes it has reserved appropriate lots for development.
The market decides when building conditions are favorable and when to withdraw. – Charlottetown Councilwoman Alanna Jankov
“The market decides when conditions are favorable for construction and when to withdraw,” Jankov said.
“We have no data to indicate that space is a constraint on planning applications.”
Charlottetown is in the early stages of preparing a new official plan that will guide the city’s future growth direction, she said.
The province has grown rapidly since initiating a five-year population growth strategy in 2017.
At that time the population was 150,000. Now it is more than 172,000. The growth was twice as high as planned.
The five-year plan, designed to address the very real problem of an aging population and labor shortages, expired last year, but the PEI government is in the process of developing a new strategy for the years to come.
Ensuring there is somewhere to live for everyone will be a bigger part of the planning this time around, the government says, and that will likely mean a change for the people who now live on the island.
The creation of high-density housing close to services and jobs will likely mean replacing some of the low-density housing that exists in these areas. But repurposing some of those areas doesn’t mean evicting homeowners, Punnapadam said.
“Property values will definitely go up,” he said. “It’s not a lost situation for anyone. It’s definitely a win-win for everyone across the range of events.”
It may seem radical, but so is the growth PEI is currently experiencing, and the status quo isn’t really an option.
“No one wants their life to be disrupted. They just want to continue what they did yesterday and 10 years ago. However, this is not a plan. This is just a review,” Brown said.
“You can’t build communities, you can’t build a future on that basis.”