Developing Affordable Housing In Rural Ontario Will Not Be Easy

Jeff Green | Apr 19, 2023

The “7 in 7” regional housing project that Hasting County Chief Administrator Jim Pine brought to a combined meeting of Frontenac County and township councils last week in Verona, was similar in some ways to a proposal he brought to Frontenac County about 15 years ago.

At that time, the goal was to bring rural broadband to Eastern Ontario. The model that Pine and the Eastern Ontario Regional Network (EORN) had helped set up, was to secure government funding to make large technology companies look again at making investments in rural areas where they would not normally see a reasonable return for their investment.

With up to half of the costs covered in grants, companies could see a benefit putting in the rest of the money, in return for a high market share, even in a sparsely populated area. It is fair to say that, while complaints about Internet and cell service are still a kind of bitter sport in many pockets of Frontenac County, without EORN's efforts, the situation would likely be much, much, worse.

EORN completed an Internet project several years ago, and is completing work on a Cell Gap project, which will also improve Internet service to much of the region by 2025. 

One of the key factors in EORN's success as a project manager, was the ability to follow and monitor projects to completion from the contracting stage to the completion stage.

When EORN was shut out of the next phase of Internet enhancement, when the Ontario government decided to take on that role for themselves, it became unclear what would become of EORN once the Cell Gap project is completed.

The answer may be apparent now. The massive regional housing initiative, aimed at bringing 7,000 affordable housing units to Eastern Ontario by 2030 is using the same model as the earlier EORN projects.

The first step is to identify a goal and come up with a financial target. The second step is to go to the federal and provincial governments, initially through local MPs and MPPs and by lobbying various ministries, for the kind of money that is necessary to entice builders to put up housing that they would normally not be interested in putting up.

This is similar to the logic behind those earlier EORN projects, and to how affordable housing has been built by the private sector in the past.

Developers like profit. In fact they require profit. To put in a 100 unit project, whether with detached and semi-detached houses, an apartment building, or a combination of all of them, the expected sale price of those units needs to exceed the cost of building them, by quite a bit. If those units are going to be rented out, by a local housing authority or any other agency, for less than the market price, there is less or no profit to be made by the developer.

So, subsidising the cost of construction, is the only way to create interest among developers. But while the Internet and Cell-Gap projects may have been complicated, housing projects could become a quagmire.

For one thing, there will have to be dozens and dozens of contracts, each requiring a unique set of negotiations because of geography, financing, and all of the players involved in each case. 

The Cell-Gap project for the entire region was done through a single RFP (Request for Proposal) and one contractor, Rogers Communications. It is about putting up 60 and 90 metre towers and equipping them with technology that Rogers works with every day.

Building even a single house involves general and subcontractors. The cost of materials and labour is rising all the time. And, as Central Frontenac's Chief Building Official Andy Dillon pointed out last week in Verona, all of the permitting and tax costs that play a big role in making residential construction so costly would need to be addressed, as would the capacity of local building departments who would need to oversee the work.

In Frontenac County, affordable housing projects were completed relatively easily in the 1970s, when seniors housing projects in Sydenham were completed. The wave of construction in the 1980s and early 1990s that saw McMullen Manor completed in Verona and a number of smaller projects in Central Frontenac now administered by the North Frontenac Housing Corporations, was not as simple. Since 1995, almost 30 years ago, only one project, a 5 unit seniors building in Central Frontenac that went up 10 years ago, has been built.

The “7 in 7” project contemplates 800 units in Kingston Frontenac, a region with about 150,000 people. With about 20% of that population, about 150-160 of those units should be in Frontenac County. 

If “7 in 7” can bring some federal and provincial money to the table, and some expertise making sure that the contracts have the right controls in place, and there is a means to exercise those controls, and the local building departments, which are already over-extended, can be beefed up, and there are willing developers and enough tradespeople available, and there is a way to manage and maintain the buildings once they are built, then maybe some of this will happen.

But it will be difficult and slow, and it will make the Internet and Cell Gap projects look like simple math compared to advanced calculus.

Our local townships will need to play a big role, in terms of capacity, staffing, and financing, in order to bring any of the “7 in 7” projects about, and ultimately they will result in upward pressure on the taxes we all pay. 

But it needs to happen.