Years into a housing affordability crisis in Canada a new buzzword is starting to make the rounds for developers of new-build homes: attainable.
With mortgage costs remaining high despite recent interest rate cuts, and prices stubbornly high in even small markets, real estate developers like Sean Mason are using the term “attainable” to describe features that might make it easier for a buyer to commit to a preconstruction contract.
Potential buyers of one of the 36 townhomes he’s bringing to market in Bracebridge, Ont. might be reassured by a 10 per cent deposit. Or perhaps a pledge from a major bank to secure a mortgage amortized over 35 years, to help keep monthly carrying costs low. They might also be compelled to put down something priced in the “high-$700,000s” for a larger townhouse apartment if it came with a feature unique for the area: an additional rental apartment.
“It makes the larger units very attainable,” said Mr. Mason. “We think you can rent [the add-on unit] for as much as $2,500.”
Like a family buying a house and renting out the basem*nt, the Sean.ca project at 121 Woodward St. will come with a revenue stream to bring down the cost of the monthly mortgage. They will also add 19 apartments to a town with a desperate rental shortage.
All of which begs the question: Why is it so hard to attain a home – to buy or rent – in a small community of about 15,000 people that’s perhaps best known for having a Christmas-themed amusem*nt park called Santa’s Village?
In the fall of 2019, the Canadian Real Estate Association benchmark price of a single-family home was $477,400 in the Lakelands district that includes Muskoka and Bracebridge. That benchmark is in a sense misleading, because million-dollar waterfront properties and subdivision homes are averaged together. But in any case, the pandemic supercharged the prices in the whole community.
By March, 2022, the single-family benchmark hit an all-time high of $901,900 – an almost 100 per cent price growth in three years. Despite the crash in prices following the Bank of Canada’s interest rate hike program, by June of 2024 prices were still significantly elevated at $753,700.
“The residential non-waterfront median house price was $675,000, an increase of about 55 per cent compared to 2019,” said Arfona Zwiers, the commissioner of community and planning services with the District Municipality of Muskoka. The district has seen a boom in planning applications. There are 100 active applications, and the number of applications in 2023 was 173 per cent higher than in 2018. But Ms. Zweirs said that some of those projects are unlikely to make places like Bracebridge more attainable.
“Housing that is going to be more accessible to people who need more affordable housing is multiresidential and sometimes smaller, and without luxurious upgraded finishes,” she said. “That housing may not be attractive for some developers to build.”
Secondly, booming house prices have had the effect of knocking away a good chunk of the community’s rental accommodations. Ms. Zweir’s says the vacancy rate across the district is 2 per cent, with some communities sitting at effectively zero vacancies.
“You’re not getting a lot of multiunit housing. You had people who bought or inherited a second home and they were renting those out,” said Jayson Swain, staff lawyer for the Lake Country Community Legal Clinic that handles a lot of landlord-tenant matters. “When the real estate market took off, landlords were tripping over themselves to sell. We lost a lot of supply through purchaser’s own-use evictions.”
The loss of units raised prices for the remaining rental stock, and some landlords are also taking advantage of gaps in Ontario’s tenant protections to get people out of existing rentals so they can charge the new much higher market rents, according to Mr. Swain. He has been working with tenants for 20 years but says until five years ago he’d never seen so-called “own use” no-fault evictions – often in bad faith – in Bracebridge. Now they make up the majority of his cases.
“They say: ‘We’re moving grandma in.’ Oh yeah, sure. I have literally heard from landlords and landlord advocates: ‘Go ahead and sue me.’ The LTB rarely issues fines, and if they do, they are [considered by landlords] just the cost of doing business,” said Mr. Swain.
The tough market has also pushed many tenants into unacceptable housing, with landlords advertising units such as a one-room bunkie with no cooking appliances other than a microwave for $1,600 a month. Mr. Swain even came across a tenant who was given a converted chicken coop to live in.
Bracebridge also saw a spike of homelessness – there are 114 unhoused people in encampments according to the District of Muskoka’s tally.
The wait list for affordable or below-market rental apartments is more than 475 households long according to Ms. Zweirs. In response, the community has developed a housing strategy that will see a plot of community-owned land developed into apartments, adding 44 affordable rentals to Bracebridge. Ms. Zweirs estimates changes to the community planning processes plus expanded developer incentives could see the creation of 450 new housing units in the next four years. More, if higher levels of government would match the roughly $40-million the district is spending on its plan.
Mr. Mason believes his townhouses represent the kind of higher-density “new urbanism” that is the future of places such as Bracebridge. Small towns like Bracebridge more than two hours from hyperexpensive cities such as Toronto, might have prioritized single-family homes on big lots for decades, only to find that kind of housing supply is simply unattainable even for some long-time residents.
