This is Part 4 of a five-part TVO.org series looking at how Ontario’s affordable-housing crisis is playing out beyond the GTA. Click here for Part 3; watch for Part 5 on Friday.
KINGSTON — Three young professionals and two real-estate agents stand outside a three-bedroom bungalow on Palace Road in central Kingston. Twelve hours earlier, the beige vinyl-sided home had been placed on the market with an asking price of $287,000. As a separate group exits the house, one of the agents remarks to her client, “We just have to pretend we’re in Toronto.”
Jeff Elwood, the other agent, says, “Actually, it’s worse than Toronto.” He’s joking, but there’s some truth to it: the house sells that night for $325,000 — $38,000 over asking.
“It’s like Toronto used to be, in the sense that most sales are happening with multiple offers, and there’s a lot of competition,” says Elwood, a former tennis coach who lived in Toronto for a decade before moving to Kingston. “And when homes go on the market, it’s a frenzy to get buyers to view the home, and then it’s often a mad dash to get your offer in.”
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In 2018, the average home price in Kingston was $365,146, up 9.4 per cent from the previous year — the largest annual increase in average house prices there in more than a decade. The number of new listings in 2018 was actually down 6.9 per cent compared to 2017. The problem, according to a release from the Kingston Real Estate Association, which tracks local listings, is one of supply and demand: “It’s going to take a sizable and sustained increase in supply to satisfy all of the pent-up demand in the Kingston housing market and start to calm the pace of price growth in the region.”
Ted Hsu, a former Liberal MP for Kingston and the Islands who co-chairs the newly formed Mayor’s Task Force on Housing, says that Kingston is seen as a very desirable place to live, thanks in part to its proximity to Montreal, Ottawa, and Toronto.
“A lot of people want to work here,” Hsu says. “We have three post-secondary institutions that draw people here. And we have a lot of people who want to retire here, including those from the GTA who can sell their home and find a cheaper place in Kingston.”
And local government is hoping to boost growth even further. The city recently launched a new marketing campaign, “Possible Made Here,” designed to attract more residents. It touts the lack of big-city traffic, Kingston’s recent designation as the best place for women in Canada, and, of course, jobs. The campaign’s website boasts that there were 1,146 active job postings as of June 2019. And more, it says, are on the way: according to the city, 30 per cent of Kingston’s workforce will be retiring within the next five years.
But issues with housing affordability have reportedly scared off some potential newcomers. Hsu says that Queen’s University and Canadian Forces Base Kingston — two of the city’s biggest employers — have already told the task force that some job candidates have cited the challenge of finding affordable housing in Kingston as their reason for rejecting positions. CFB Kingston’s base commander called the city a “scary place” for young military families, who often have only a few weeks to find suitable housing.
Rising house prices are also forcing residents who might once have bought to rent instead — and Kingston’s rental-vacancy rate is already the lowest in the province, at 0.6 per cent. (A healthy vacancy rate is considered to be roughly 3 per cent.)
Some relief may be on the way. Last month, Mayor Bryan Paterson wrote on his website that between May 2018 and May 2019, building-permit values had increased 445 per cent, the highest increase in the country over that time (Guelph had the second-highest increase, at 154 per cent). He also noted that, in an average year, Kingston approves roughly 600 building permits: it approved 800 permits in the first six months of 2019 alone. Take a walk along Princess Street, in midtown Kingston, and you’ll spot cranes that have popped up alongside notices of proposed developments.
Many of those developments, though, are geared not toward residents looking for affordable homes but toward investors. Sage Kingston, a project on Princess Street, is marketing its condos as potential investment properties that could be rented out to students. One advertisement for it encourages potential buyers to “realize the benefits of investing and watch [their] capital grow.”
That’s partly why not everyone thinks that focusing solely on the supply side is the right approach. Doug Yearwood, a PhD student at Queen’s who advocates on behalf of the Katarokwi (Kingston) Union of Tenants, says that Kingston’s housing system needs to be fundamentally restructured, as it focuses too much on market housing and not enough on non-market and social housing.
Steve Pomeroy, a housing-policy researcher and consultant who’s currently working on a report, commissioned by the City of Kingston, on affordable housing, says that the number of approved building permits has climbed recently, yet only 231 affordable or supportive projects have been started since 2001 (out of roughly 14,000 total housing starts during that period).
“So much of the news coverage around housing in Kingston focuses on supply and demand,” says Yearwood. “Why isn’t the city building more subsidized and low-cost housing? Everyone talks about the supply. Of course increasing supply will help alleviate things like the vacancy rate. But if there’s not going to be more social housing to compete with market forces, rent prices will never come down. They will continue to climb.”
This is one in a series of stories about issues affecting eastern Ontario. It's brought to you with the assistance of Queen’s University.
Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.