Township of Centre Wellington: Attainable Housing Strategy Background Research Paper APRIL 29, 2021

By Victoria Agyepong, Dawson McKenzie, Rachel Suffern

RPD 6280, Advanced Planning Practice Attainable Housing Strategy Background Research Paper

Acknowledgements

As graduate students in the Rural Planning and Development program in the School of Environmental Design and Rural Development, University of Guelph, we undertook the preparation of this background research paper to assist the Township of Centre Wellington in its work concerning Attainable Housing. The preparation of this group project was an assignment as a component of our Advanced Planning Practice course.

We would like to acknowledge the assistance in the preparation of this report from Mariana Iglesias, Senior Planner at the Township, and Dr. Paul Kraehling, the course instructor.

Victoria Agyepong

Dawson McKenzie

Rachel Suffern

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Table of Contents Background ...... 3 Community of Centre Wellington ...... 3 Governance Model ...... 3 Planning and Policy ...... 3 Literature Review ...... 9 Understanding ‘Attainable Housing’ ...... 9 Potential Barriers to ‘Attainable Housing’ ...... 10 Federal Housing Policies ...... 10 Provincial Housing Policies ...... 11 Local Government and Housing ...... 13 Defining Attainable Housing ...... 15 What Does ‘Attainable Housing’ Look Like? ...... 15 What Does It Cost? ...... 16 Targets ...... 17 0 – 5 Years (2021-2026) ...... 18 5 – 10 Years (2026-2031)...... 18 10 – 15 Years (2031-2036) ...... 18 15 – 20 Years (2036-2041) ...... 19 Conclusion and Recommendations ...... 20 Appendix A: Municipal Definitions of Affordable and Attainable Housing ...... 28 Appendix B: Attainable Housing Definitions and Targets ...... 29

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Background As an introduction, this section will provide background information on the Township of Centre Wellington, how it is governed, and the current planning and policy framework that the municipality falls within. Providing this background will ultimately provide a greater understanding of the need and requirements of an attainable housing definition and the time frame within which the recommendations should be implemented. Community of Centre Wellington The Township of Centre Wellington was created in 1999 through amalgamation of Fergus, Elora, the Townships of Nichol, Pilkington, West Garafraxa, and part of Eramosa. The Township is part of the upper-tier municipality, the County of Wellington. Fergus and Elora are considered the main urban centres of the Township. The built form that exists today dates from the early 1800s. Centre Wellington residents are employed in many industries. The top 3 include: sales and services; trades, transport and equipment operators and related occupations; and business, finance, and administrative occupations (StatsCan, 2016). The unemployment rate in the Township was measured at 3.8 percent in the 2016 census, which was well below the provincial average of 7.4 percent.

The Township is also well known for its natural and cultural heritage, which draws a substantial number of tourists. Elora is home to the Elora Gorge Conservation Area and the Elora Quarry, which offer tourists and residents opportunities for outdoor recreation. Additionally, Elora hosts Riverfest, a three-day music and arts festival, which demonstrates the Village’s dedication to celebrating art and culture. Fergus also has its annual festival, the Highland Games, an internationally renowned Scottish Festival which celebrates the Town’s heritage. Governance Model The Township of Centre Wellington consists of 6 wards, each with its own elected councillor. The Mayor is elected to sit on the Township’s council and serves as the representative for Centre Wellington on the County of Wellington Council. Currently, Mayor Kelly Linton serves as both the Mayor of Centre Wellington and the Warden of the County of Wellington (head of the Council). Planning and Policy Several layers inform the Township of Centre Wellington’s planning policy framework of provincial, county and municipal policies. This section will provide a high-level overview of the policies that affect housing development within Centre Wellington. While numerous policies may apply when making planning decisions, the scope of this report is limited specifically to those addressing housing issues and policies.

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The Provincial Policy Statement (2020) The Provincial Policy Statement (PPS) provides policy direction for municipalities regarding matters of provincial interest. It provides many individual policies and is to be read in its entirety. However, this paper will focus solely on the housing policy directives pertaining specifically to housing supply and affordability. Section 1.4 of the PPS outlines provincial policy as it relates to housing. This directive includes advocating for intensification, providing a mix of housing options and densities, and establishing development standards to minimize development costs. The Township of Centre Wellington’s municipal policies must be consistent with the PPS. Further, the PPS states that planning authorities are encouraged to permit and facilitate a range and mix of housing options and densities, including new development as well as residential infill, to respond to current and future needs.

Growth Plan for the Greater Golden Horseshoe (2020) Centre Wellington is located within the geographic region known as the Greater Golden Horseshoe. This region is destined for significant growth over the next 30 years, and as such, the Province has developed the Growth Plan to direct that growth to some urban regions. The Growth Plan outlines policies regarding intensification, directing municipalities like Centre Wellington to determine Minimum Density Targets (MDTs), which they need to achieve in a given timeline. Additionally, section 2.2.6 outlines policies about housing, such as encouraging a mix of housing, including affordable housing, establishing targets for affordable ownership housing and rental housing, and supporting the use of planning tools to require multi- residential unit developments to vary in unit size to accommodate diverse household sizes and incomes. Centre Wellington’s Official Plan must conform to the policies of the Growth Plan. Wellington County Official Plan As Centre Wellington is part of Wellington County, it takes direction from the County’s plans and policies. The County of Wellington’s Official Plan encourages residential intensification in urban areas, including providing a mix of housing types, adding housing above commercial uses, redevelopment of brownfields and grey fields, and encouraging small-scale intensification, including accessory residences (4.4.3). Section 4.4.5 of the County’s Official Plan sets an approach for affordable housing. It is from these goals that the County completed its Attainable Housing Strategy (2019). The Township of Centre Wellington is now responsible for implementing components of the strategy at the local level

Centre Wellington Official Plan

Centre Wellington’s Official Plan outlines land use policies within the Township. It provides land use designations for land within the urban centres of Fergus and Elora and settlement areas within the Township. The County of Wellington Official Plan governs rural areas outside of the settlement areas. Section 5.1 outlines the Township’s housing policies, which include

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 4 WELLINGTON Attainable Housing Strategy Background Research Paper advocating for a variety of housing types. The plan encourages intensification and increased densities in newly developing greenfield areas, adaptive re-use and redevelopment of brown and grey fields, modest intensification in stable residential areas, and intensification, which results in new rental accommodation.

Other Policies and By-Laws Centre Wellington’s by-laws are tools that implement the policies of the Official Plan. Necessary by-laws in the context of housing attainability are the Zoning By-law, Development Charges By- law, and Community Improvement Plans. These critical tools are often the focus of reform to affect housing, as they implement the policies at the ground level. Centre Wellington currently encourages intensification in many ways through its Zoning regulations, most notably the R6 designation, which provides flexibility for a mixed-use development on a variety of lot sizes, and through its commercial zones, which generally allow a mix of uses including residential. Additionally, the Township provides Community Improvement Grants in the downtowns for rehabilitation, though these are seldom used for housing purposes. Demographic Trends

This section aims to provide information on the changing demographics of the Township, including changing population and predicted growth. It will also review economic trends such as income and housing prices for both ownership and rentals. This section will ultimately provide the basis for the need for more direct intervention in housing policy to facilitate attainable housing for the changing demographics. It is important to note that this section relies on Statistics Canada Census data published in 2016. This data will soon be updated in the 2021 Census and will be necessary for Centre Wellington to provide a more up-to-date picture of demographic trends in the Township. Population Trends As directed by the Growth Plan and the County of Wellington, Centre Wellington is slated for significant population growth to 2041. Further growth projections are being determined. The table below outlines population and job growth expectations for Centre Wellington.1

2016 2021 2026 2031 2036 2041 Total 29,885 35,800 38,390 41,350 48,520 52,310 Population Households 10,785 12,780 13,720 14,770 17,245 18,690 Total 11,970 15,590 16,460 17,300 20,130 22,780 Employment

1 From: Centre Wellington Growth Management Strategy Presentation, Stantec.

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This population growth comes with an ageing population as well. The following chart outlines the population percentage of major age ranges, compared to the provincial average.2

As compared to the provincial average, Centre Wellington has just 1 percent more of its population percentage in the 0-14 years range and 4.5 percent less in the 15-64 years range. Additionally, its population range of 65 years and older is 3.6 percent greater than the provincial average. These results can have significant effects on housing attainability as the population’s needs evolve through ageing and retirement. Economic Trends Household income is another important factor that is necessary to consider when understanding household attainability in Centre Wellington. The following graph outlines the growth in median household income from 2001-2021.3

2From: Statistics Canada (2016) Census Profile, 2016 Census. 3 From: Townfolio.ca, using Census Data uploaded by Centre Wellington Economic Development.

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Median Household Income (Dollars) 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2001 2006 2011 2016 2021

Median Household Income

Median household income has risen from 2001-2021. However, household income is not the same across all household types. Sole-parent households are making less than dual-parent households, which is to be expected. However, it is still important to consider that the number of lone-parent households has risen in Centre Wellington from 2,050 to 2,320 in the last four years.4

4 From: Statistics Canada (2016) Census Profile, 2016 Census

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Housing Trends Finally, a scan of the housing market is vital for understanding if housing is attainable in Centre Wellington. To define what “attainability” is, we first need an understanding of the current state of housing ownership in Centre Wellington.

Centre Wellington’s current housing ownership profile consists of 82% owner-occupied and 18% renter-occupied units.5 This ownership rate is much higher than that of the 70% provincial average. The median household income of renters in the Township is $46,981. Below are statistics on renters in Centre Wellington.6

· Median household income: $46,981 · Average proportion spend on rent + utilities: 23% (ON average:25%) · Average Monthly Rent + Utilities: $1,052 (ON average: $1,109) Regarding the median price for homeownership, it is difficult to determine where the market is going and what the actual median is, as statistics from even 2019 may be outdated. However, using the surveys and a scan of MLS, we can begin to understand home value changes over the last three years. The table below outlines the median home price in Centre Wellington.

20167 20218 Median Price $360,759 $850,000

5 Statistics Canada (2016) Census Profile, 2016 Census 6 Canadian Rental Housing Index (2016). Community Profile, Centre Wellington. 7 Statistics Canada (2016) Census Profile, 2016 Census 8 A scan of MLS was completed during the time of writing. A list of active listings was created, and the Median Price of active listings was used as the current median price.

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While perhaps not directly representative of the median value of a home in the area, the median list price of a home in Centre Wellington is representative of costs as the market stands today. Though the number may be high, it demonstrates the significant increase in housing prices in the Township over the last five years, and the need for action on attainable housing.

Literature Review Understanding ‘Attainable Housing’ Daniel Parolek9 popularized ‘missing middle housing,’ which is otherwise known as ‘attainable housing’ or ‘workforce housing’ to serve the demand of the ‘missing middle’ for walkable, urban living. The ‘missing middle’ comprises the portion of the employment market not having sufficient income to buy or rent quality or suitable homes in a local area. However, Mich10, after exploring the trends of planning permissions and construction of attainable housing in the Greater Boston area, found that aside from considering affordability, attainable housing needs to be context-specific, should maintain the local character and should allow households to move through the market as their needs and means change to gain public acceptance. This type of housing choice should accommodate different income levels, lifestyles, and demographics of the ‘missing middle’. By assessing some attainable housing development proposals against land-use regulations in Eugene, Oregon, Stuckmayer11 found that although creating a range of multi-unit or clustered housing types in between detached single-family homes and midrise housing will provide housing choices for the missing middle, current municipality regulatory regime for land use, such as minimum lot sizes, maximum densities, and siting standards, may inhibit the development of this type of housing. Furthermore, Wegmann12 proposed the relaxation or elimination of single-family zoning to allow multiple units on a single residential lot since it made no health, safety, or public welfare sense. Based on a litmus test on arguments against multi-unit zoning of residential lots, Wegmann recommends that attainable housing must be compatible in scale with single-family homes to help meet the growing demand for walkable, urban living. However, he suggested this form of change will require radical and inclusive planning changes which do not target specific areas based on race or social status to prevent gentrification. He also suggested nationwide, province-wide, or city-wide education in the form of the YIMBY (yes, in my backyard) movement in localities facing low public acceptance of these planning reforms.

9 Parolek, Daniel ( 2016) MMH_Responding_to_the_Demand_for_Walkable_Urban_Living.pdf (missingmiddlehousing.com) 10 Mich, Luke (2017) The missing middle : understanding low-rise, moderate-density housing in Greater Boston 11 Stuckmayer, Ethan(2017) Missing Out On Missing Middle Housing Eugene, Oregon’s Opportunity To Create Housing Choice 12 Wegmann, Jake (2019) Death to Single-Family Zoning…and New Life to the Missing Middle

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Potential Barriers to ‘Attainable Housing’ To create missing middle housing for the South Georgian Bay Tourism Industry, N. Barry Lyon Consultants Limited13 conducted over 25 interviews and more than 500 surveys with employers and members of the labour force, which revealed that provision of attainable housing faces the following barriers:

Market demand from affluent retirees increased the popularity of short-term accommodations and seasonal/secondary homeowners, pushing housing prices upwards even for resale markets. Most workers have seasonal jobs making it difficult for them to find suitable rental terms, usually eight months or 12months. Increasing costs such as development charges for new housing development increase developers’ development risks to provide attainable housing. Increased equity requirements, an extended payback period, and rent control legislation caps annual rent increases, limiting demand for rental housing development. Lack of regional transit, extended public transit hours, and non-existence of employer co-funded private shuttles inhibit workers from attaining affordable homes far from their employers. Entry-level employees may not earn enough income to afford a home at the prevailing market price or meet the down payment required. Intersectionality between foreign ownership and attainable housing can lead to decoupling and the crowding out of local buyers. In localities where developers are predominantly local, as is currently the case in Centre Wellington, this barrier may not apply in the near-term.14 Federal Housing Policies In 2017 the Federal government came out with the National Housing Strategy, a 70-billion- dollar plan to improve the affordability and availability and quality of housing in Canada.

Definitions/Targets/Goals For affordable housing to receive funding through the programs provided by the strategy, at least 30% of units must rent at 80% or less of median market rental rates. CMHC: In Canada, housing is “affordable” if it costs less than 30% of a household’s before-tax income. Many people think the term “affordable housing” refers only to rental housing subsidized by the government. In reality, it is a broad term that can include housing provided by

13 N. Barry Lyon Consultants Limited (2018) South Georgian Bay Tourism Industry Workforce Housing Research and Business Case 14 Gordon, Joshua C. (2020) Solving puzzles in the Canadian housing market: foreign ownership and de-coupling in Toronto and Vancouver

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 10 WELLINGTON Attainable Housing Strategy Background Research Paper the private, public and non-profit sectors. It also includes all forms of housing tenure: rental, ownership and co-operative ownership, and temporary and permanent housing.

Programs/Support/Resources Resource/Program Key Take-Aways 10 Steps to Creating a Housing Action Plan: 1. Identify housing stakeholders in the community 2. Create a shared vision for housing 3. Confirm the nature of housing needs 4. Identify sites with housing potential 5. Form partnerships to achieve common goals 6. Assign responsibility and accountability for delivery CMHC (2010) A Guide for 7. Prepare a development plan Canadian Municipalities 8. Initiate housing development and celebrate milestones for the Development of a 9. Measure results Housing Action Plan 10. Review lessons learned and repeat

Barriers: higher development costs, neighbourhood opposition, regulatory issues, prolonged municipal approval process, fluctuations in the housing market

A housing need and demand survey should seek information about your intended resident population, such as: Profile of respondents (age, gender, marital status, household income, employment status) CMHC (ND) Assessing Current housing arrangements (own, rent, house, apartment, Housing Need and cost) Demand Future housing preferences (plans to move, preferred location, price, unit size and type, features, amenities, and need for assistance)

Provincial Housing Policies The provincial government focuses on affordable housing in two distinct ways: 1. Improving social and subsidized housing through the Community Housing Renewal Strategy and Ontario Priorities Housing Initiative 2. Through the More Homes, More Choice Act, reducing red-tape/administrative burdens to boost the supply of rental and non-rental housing and thus lower prices.

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Definitions/Targets/Goals The Province of Ontario defines affordable housing as the least expensive of:

1. a unit for which the rent does not exceed 30 percent of gross annual household income for low and moderate-income households; or 2. a unit for which the rent is at or below the average market rent of a unit in the regional market area.

PPS Definition of Affordable Housing Affordable: means In the case of ownership housing, the least expensive of: a. housing for which the purchase price results in annual accommodation costs which do not exceed 30 percent of gross annual household income for low to moderate-income households; or b. housing for which the purchase price is at least 10 percent below the average purchase price of a resale unit in the regional market area In the case of rental housing, the least expensive of: a. a unit for which the rent does not exceed 30 percent of gross annual household income for low and moderate-income households; or b. a unit for which the rent is at or below the average market rent of a unit in the regional market area. Programs/Support/Resources Resource Key Takeaways IMFG, University of Four pathways to increasing private participation in affordable Toronto Munk School of housing are discussed: Global Affairs (2013) 1. Levers to make affordable rental and ownership models Affordable Housing in work, including tax reforms and credits or inclusionary Ontario: Mobilizing Private housing models that use public lands and other incentives. Capital in an Era of Public 2. Investment vehicles for the social housing sector such as Constraint mortgage refinancing, Real Estate Investment Trusts (REITs), or emerging social finance instruments. 3. Incentives to maintain private rental supply like improved rent dispute processes, expedited property tax equalization, or enhanced financing for repairs and retrofits. 4. Creating the conditions for private participation by ensuring fair and consistent market conditions and building on the success of public-private partnership (P3) models.

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Ontario Ministry of Development charge delay until the building is rented; Municipal Affairs and Expansions of development charge exemptions to include Housing (2020) More second units in new homes; Homes, More Choice Additional Development Charges Act changes; Reduce the costs to build priority housing types, like second units; Fully cover municipalities’ waste diversion costs; Make the development costs clear from the outset to protect new home buyers, as development charges are often passed directly on to the consumer.

Local Government and Housing Through provincially designated powers, local governments contribute significantly to implementing planning policies that determine the future of development in communities. “Local governments have a significant role in leading the charge to create additional housing stock that is more attainable as the gap between median income and the cost of housing continues to widen … if not utilized properly, regulations create barriers that deter the development of attainable housing”15. In the Provincial Policy Statement, 2020, planning authorities have a duty to facilitate for a range of housing options that meet the affordable housing needs. Being a lower-tier municipality that acts as a local planning authority, municipalities like the Township of Centre Wellington have a clear role in supporting and creating housing that is affordable.

Section 1.4.3 states: “Planning authorities shall provide for an appropriate range and mix of housing options and densities to meet projected market- based and affordable housing needs of current and future residents of the regional market area.”

In addition to land-use policy, the Ontario Human Rights Commission’s Human Rights Code details that accommodation (housing) is a basic human right that must be provided without discrimination under Section 2. With the Provincial Policy Statement, 2020 and Human Rights Code outlining a clear duty and role, municipalities – both upper and single tiers – have a duty to respond to the need for housing that is affordable.

Section 2.1 states: “Every person has a right to equal treatment with respect to the occupancy of accommodation, without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual

15 County of Wellington – Official Plan

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orientation, gender identity, gender expression, age, marital status, family status, disability or the receipt of public assistance.”

With a rising demand for housing that is affordable, many municipalities have created affordable housing strategies, in addition to the mandated housing and homelessness plans that social service managers are required to create. Through existing municipal affordable housing strategies, there is no consensus on a definition for attainable housing. Most commonly, municipalities have defined affordable housing as housing that costs 30% of an individual's income, being consistent with provincial policy. While this definition is common, few municipalities use the term ‘attainable’. A rarity includes the Wellington County housing strategy which gave preference for the term “attainable”, defined as “market housing of various built forms and densities, which is attainable for the purchaser and satisfies their needs'. For further reference to municipalities’ definition of attainable or affordable housing, see Appendix A. Most commonly, the definition of affordable housing is housing that is 30% of an individual’s income. Throughout various strategies reviewed for this document, there was a consistent emphasis on social services as a provider of affordable housing - including County of Wellington. It’s recognized that a lot of implementation that isn’t social housing falls to the municipality. Further, it was common for the documents to identify affordable housing as housing geared towards those with lower-incomes or requiring social assistance. While social services are an important component to community development, it fails to help address the lack of affordable housing for middle-income earners. By focusing on affordable housing, the municipalities are addressing the needs of these specific communities but neglecting to create a diverse housing stock that meets the needs of middle-income earners. Further, by identifying affordable housing as being for individuals within vulnerable populations, it creates a negative stereotype surrounding affordable housing that does not accurately describe it. All individuals require housing, not just those belonging to vulnerable populations, and housing geared towards these individuals may not be conducive to middle-income earners or new homeowners. Housing must be affordable and available for all individuals without discrimination, as set out in the Ontario Human Rights Code. After reviewing various strategies, the following trends emerged:

A disconnect between affordable housing and target populations – affordable housing is not solely for those within the low-income bracket. All individuals require housing, and ‘affordable housing’ is misunderstood as inherently low-income housing. The definition of affordable housing as 30% of an individual’s income does not align with the market value and local median income. There is a need for increased density, while also respecting surrounding lands (prime agriculture and natural resources).

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NIMBY-ism is a large obstacle in creating affordable housing, for various reasons (i.e., skepticism associated with low-income housing concerns, etc.). There is a lack of diversity in housing types and costs. Defining Attainable Housing

“Housing that costs up to 30% of a household’s gross income, with the household income ranging from 80 to 120 percent of local median income. Beyond financial considerations, the housing should accommodate all people through all stages of life as needs and means change while being both available and sustainable.” What Does ‘Attainable Housing’ Look Like? Attainable housing should consider housing types, built form, community design, development costs and socio-economic household needs. Firstly, ‘attainable housing’ comprises a diverse housing stock by ensuring that housing density targets the balance scale of single-family housing and multi-unit/cluster housing. Thus, attainable housing encompasses a range of multi- unit or clustered housing types in-between detached single-family homes and midrise housing. This housing range usually includes duplex to multiplex, courtyard apartment, bungalow court, townhouse and live/work housing options, as depicted below.

Figure 1 Range of Housing Types for Attainable Housing

Finally, ‘attainable housing’ targets the underserved populace’s needs whose income levels and employment demography exclude them from owning and renting housing at the market rate. Based on the assumption that 30 percent of gross household income directed towards housing costs is attainable, housing attainability levels by household income levels for FT and PT workers can help determine the attainability benchmark for maximum ownership price and maximum monthly rental price. Determining the housing attainability levels by income, in

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 15 WELLINGTON Attainable Housing Strategy Background Research Paper addition to the nature of employment in a community’s high employment growth sector(s), allows a community to determine which demographic groups to prioritize.

Subsequently, with the priority demographic groups in mind, priority residential types for the housing mix in the local area would be determined using the information on the vacancy rates of housing stock. For example, in the South Georgian Bay market, households which earn less than $75,000 were considered a priority for attainable housing. Due to the nature of workforce development in the locality’s tourism sector, seasonal and part-time workers, commuter workers, newcomers, and young working families were prioritized within this demography, respectively. As a result, entry-level dorm-style housing, followed by purpose-built rental housing and attainable housing ownership options were prioritized.

Figure 2 Determining Priority Demographics for the South Georgian Bay Attainable Housing Market (Example)

What Does It Cost? The Canadian Mortgage Housing Corporation (CMHC) defines affordable housing as housing that costs no more than 30 percent of a household’s annual gross income16. Average and middle incomes typically account for those between 80 and 120 percent of the area’s median income. As such, the definition employed within this strategy for ‘attainable housing’ combines both the definition for what is deemed affordable by CMHC for any income (30 percent of annual household income) and what the average and middle household incomes are locally in Centre Wellington. Therefore, the definition of ‘attainable housing’ in Centre Wellington is housing that costs 30% of a household’s income, with the household income being between 80 and 120 percent of the area median income. Beyond financial considerations, the housing should accommodate all people through all stages of life as needs and means change while being both available and sustainable, as described above.

The median income of a household in Centre Wellington is $94,975 annually as of 2021.

16 Canada Mortgage Housing Corporation, 2021: https://www.cmhc-schl.gc.ca

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80% of Median Income: $75,980/Annually (30% of income = $22,794/Year)

120% of Median Income: $113,970/Annually (30% of income = $34,191/Year)

*The data used within these calculations are sourced from Folico.com/Centre Wellington and previously cited data in the Demographics section of this report. Monthly (Range) Annual (Range) What is Attainable? Median Price in CW (2021) Home Ownership 30 Year Mortgage (approx. 4% (Monthly interest): $850,000 mortgage $1,899.50 to $22,794 to payments) $2,849.25 $34,191 Valued at $430,383 to $653,591 Rental Unit (All-Inclusive) Costing: Accommodation $1,052 (Monthly payment $1,845.50 to $2,768.25/Monthly all-inclusive) *The data used within these calculations are sourced from Folico.com/CentreWellington From this definition, two significant findings will need to be addressed in order to create attainable housing in Centre Wellington:

1. Housing ownership costs must decrease to align with median income earners – the current median housing price in the Township of Centre Wellington far exceeds 120% of the local median income per household. The average median income can afford a mortgage of $430,383 to $653,591, yet the average list price is $850,000; therefore, there is a misalignment between living costs and income. 2. The stock of rental units must increase – the current rental cost aligns with the median housing price in the Township of Centre Wellington, but the available stock is not meeting the current demand.

Targets Based on the definition provided in this report, four increments of housing targets are put forward for consideration. The cost and types of units are based on:

Median Gross Household Income: Local median gross household income is calculated with an annual increase of 2.18% (as determined by the average change in income between 2016 and 2021). Time Increments: Time increments are based on growth targets determined by the Growth Act and set out in detail within Wellington County OPA No. 99. Expected Unit Growth: Expected housing unit growth for each time increment is based on growth targets determined by the Growth Act and set out in detail within Wellington County OPA No. 99.

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Rental Unit Targets: The number of rental units proposed in each target is based on achieving a goal of 30% of housing units being rental-based. This rental unit proportion is aligned with the provincial average of rental-based units, 30% of all housing units in each community, and the current trend towards an increase in rental tenure. Detailed calculations and formulas are available in ‘Appendix B: Attainable Housing Definition and Targets’. The data used within these calculations are sourced from Folico.com/CentreWellington and previously cited data in the Demographics section of this report. 0 – 5 Years (2021-2026) Forecasted Median Gross Household Income (2026): $99,723.75 80% of Median Income: $79,779/Annually

120% of Median Income: $119,668.50/Annually Expected Growth of Household Units: 940

Monthly (Range) Annual (Range) # of Units Home Ownership 658 $1,994.48 to $23,933.79 to Rental $2,991.71 $35,900.55 282 Accommodation

5 – 10 Years (2026-2031) Forecasted Median Gross Household Income (2031): $105,709.31 80% of Median Income: $84,567.45/Annually 120% of Median Income: $126,851.17/Annually Expected Growth of Household Units: 1,050

Monthly (Range) Annual (Range) # of Units Home Ownership 735 $2,114.19 to $25,370.23 to Rental $3,171.27 $38,055.35 315 Accommodation 10 – 15 Years (2031-2036) Forecasted Median Growth Household Income (2036): $109,945. 43 80% of Median Income: $87,956.34/Annually 120% of Median Income: $131,934.52/Annually

Expected Growth of Household Units: 2,475

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Monthly (Range) Annual (Range) Types Home Ownership $2,198.90 to $26,386.90 to 1,733 Rental Accommodation 3,298.36 $39,580.35 742

15 – 20 Years (2036-2041) Forecasted Median Growth Household Income (2041): $115,442.71

80% of Median Income: $92,354.17/Annually 120% of Median Income: $138,531.25/Annually Expected Growth of Household Units: 1,445

Monthly (Range) Annual (Range) Types Home Ownership $2,308.85 to $27,706.25 to 1,012 Rental Accommodation $3,463.28 $41,559.37 433

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Conclusion and Recommendations Over the next 20 years (2021 – 2041), based on current growth projections, the Township is expected to accommodate 5,910 household dwelling units. We recommend that these units be considered within a Centre Wellington Attainable Housing Program to accommodate a variety of housing types and needs. The table below outlines the growth target timelines and provides short-term, medium-term and long-term recommendations that will contribute to achieving the targets set for number and types of housing units, as well as affordable cost ranges.

Term Duration/ Rationale Targets Time Short 0 – 5 This timeline will permit immediate Total # of Household Units: 940 (648 Term Years action and account for the current Ownership units and 282 Rental Council term and the upcoming units) election, resulting in a change of representatives and collective vision. Monthly cost: $1,994.48 to $2,991.71 Medium 5 – 10 This timeline will permit action that Total # of Household Units: 1,050 Term Years spans multiple Council terms and is (735 Ownership units and 315 Rental achievable within a reasonable units) timeline while allowing adequate financial planning. Monthly cost: $2,198.90 to 3,298.26 Long 10 – 15 This timeline will allow municipalities Total # of Household Units: 2,475 Term Years to enact long-term plans or strategies (1,732.5 Ownership units and 742.5 that contribute to the housing Rental units) landscape that meets the community’s needs in the long-term. Monthly cost: $2,308.85 to $3,963.28 15 – 20 Total # of Household Units: 1,445 Years (1,011.5 Ownership units and 433.5 Rental units)

Monthly cost: $2,308.85 to $3,963.28

To achieve these targets, we make the following recommendations for the next steps in the form of six main objectives. Objective 1: Increase Land-Use Efficiency to protect Prime Agriculture Lands According to the Centre Wellington Healthy Community Design Baseline Report (2019), prepared by Wellington Dufferin Guelph Public Health after extensive study, density in Centre Wellington declines as one moves away from the downtown areas, revealing that options to increase density may be located close to the downtown core to maintain the character of the

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 20 WELLINGTON Attainable Housing Strategy Background Research Paper municipality.17 To increase density while ensuring efficient use of land and maintaining attainability targets set, we recommend the Township consider incentives to ease development costs and risks in the short-term and that the Township work towards inclusionary zoning policies in the long-term.

Density Incentives: allow a municipality to encourage developers to commit to building multi-unit developments, including secondary units or smaller lot sizes, all with the goal of increased density. These incentives can be administered under Community Improvement Plans in the form of faster planning approvals or waivers/deferrals of development charges, planning and development fees, parkland dedication or property taxes until occupancy. Market-Based Solutions: attract local employers to underwrite the development by providing a commitment to pre-lease all or a percentage of the building through a housing and lands association. New housing development targets their workforce so that employers do not need to struggle with finding housing for their employees. Inclusionary Zoning By-law Within a Development Permit System: under Regulation 232/18 of the Planning Act, requires that affordable housing units be included by private developers in new residential developments with ten or more units in specific locations in the locality, for a range of housing types, unit sizes and household incomes, tenure of affordable housing, number of affordable housing units or gross floor area, how measures, incentives and net proceeds for sale of affordable units will be determined and distributed, and under which conditions off-site units would be permitted. However, planners should assess the impact of this by-law on the residential development’s feasibility, housing supply and meeting the priority markets targeted as stipulated in section 2 of the regulation. Objective 2: Maximize Use of Official-Designated Low-Density Areas We also recommend evidence-based targeted promotions in the short-term and community benefit charges and zoning by-law amendments in the long-term to increase development applications for secondary units in Centre Wellington.

Make-it-Two campaign: which would include a land-use review to identify the neighborhoods containing a significant stock of single-unit dwelling units which can more easily be converted into double units subject to meeting suitable planning standards. Next, promotion and education are targeted to property owners in these areas to encourage them to expand their single-unit residences to double-unit residences for additional income, family expansion, and others.

17 Wellington-Dufferin-Guelph Public Health (WDGPH) & Township of Centre Wellington (2019) Healthy Community Design Baseline Project Final Report

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Minor variances: to encourage the development of secondary suites on existing single- unit properties. Zoning by-law amendments: to encourage the more flexibility in home occupations or live/work arrangements as permitted uses in low-density residential zones. Strategic Use of Community Benefit Charges: As the municipality moves towards higher density, it should consider the development of Section 37 implementation guidelines to direct attainable housing as a priority in using the community benefit charges. Nonetheless, in the short to medium-term, the Township has limited use of this recommendation since Section 37(4) of the Planning Act stipulates that a community benefits charge may not be imposed concerning development or redevelopment of a building with fewer than five storeys or fewer than ten residential units. 18 Objective 3: Encourage Walkable Urban Living Through Mixed-Use Housing The Centre Wellington’s Healthy Community Design Baseline Report (2019)19 revealed that although 76% of residents felt a connected neighbourhood would encourage healthy lifestyle behaviours, only 53% of residents felt they live in a connected neighbourhood. A high proportion of residents (67%) felt it was essential to travel actively to outdoor recreation destinations and a lower proportion to community life destinations (43%) or to access commuting locations (25%). Meanwhile, most Centre Wellington dwellings are located over 800m away from a supermarket or school, whereas 92% of dwellings reported being within 800m of a park. While Fergus residents reported being able to travel actively for community life and recreational destinations frequently, Elora/Salem residents reported being able to travel actively to only recreational destinations. Economic development policies should prioritize the provision of healthy grocery markets in mixed-used housing closer to the downtown core areas, especially if the number of households in these neighbourhoods will reach the minimum threshold of 4,000 households for a 45,000 square foot market, which is supported by food supply economics as identified in the report. Bearing in mind that intersection density in Centre Wellington increases towards the downtown core areas, mixed-housing development as it relates to type, affordability, and availability, should be progressively encouraged through land-use policies in the long-term as described below.

The Official Plan: should allow for land use designations for mixed-use developments and specifically include grocery stores in the permitted uses. Council directive or corporate policy: should allow a municipality to direct surplus municipal land to affordable housing initiatives as a priority.

18Planning Act, R.S.O. 1990, c. P.13, s. 37 19 Wellington-Dufferin-Guelph Public Health (WDGPH) & Township of Centre Wellington (2019) Healthy Community Design Baseline Project Final Report

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Zoning by-law amendments: should encourage the development of more flexible live/work arrangements in residential land use designations. Attainable housing built forms: should consider smaller corner sites (2.7 acres). In the Township’s Urban Design Manual, a subdivision plan can create attainable housing units that are ideal for remote workers or entrepreneurs. We propose an ‘All live/work units option’ consisting of 8 two-storey buildings to hold 31 live/work units. Each unit is 720 square feet with a flex space of 720 square feet on the ground floor. This built form option allows for 11.5 units/acre, a 4,380 square feet green open space and 62 off- street parking.20 Objective 4: Ensure Vulnerable Priority Groups are Appropriately Targeted In the short-term, the Township should consider better understanding the needs and priority groups within the municipality’s current and expected ‘missing middle’ and develop policies to encourage communal homeownership.

Workforce Housing Needs Assessment Study: To identify the attainable housing needs of the ‘missing middle’ within priority sectors of the Township, we recommend that in the short-term, the Township considers conducting a municipal-wide survey of workers in the priority sectors and key informant interviews with top employers in these priority sectors. The study will help bridge the knowledge gap on the demographic groups within the missing middle to prioritize, aside from their income levels, the specific needs they require for the housing mix to meet their lifestyles. Some information that the study could elicit about the workforce for each priority sector may include, but not be limited to: o Worker classification such as full time, part-time, casual, seasonal or permanent; o Households with children (non-school-age, in school or homeschooled); o At least one person working remotely; o Commute more than 30 minutes to work; o Average household size; o Participate in home occupations; o Preferred dwelling size and amenities; o Difficulty in finding preferred dwelling size for renting/owning; and, o Difficulty in finding affordable housing for renting/owning. Communal Home Ownership Policies: to permit communal and shared homeownership that is differentiated from group homes. After amending the Planning Act, municipalities are permitted to allow this after a group of senior citizens in the Township of Scugog advocated for shared homeownership. This type of housing accommodates

20 Parolek, Daniel (2018) 2-5 Acre Missing Middle Site Planning

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affordability, while also supporting social needs of residents. See the Golden Girls Act for additional information.21

Furthermore, in the medium-to-long-term, we recommend that the Township considers the following attainable housing approaches:

Municipalities as Landowners: to actively intervene in the market with the goal of providing housing that is affordable for the local median income earners. However, this requires the municipality to have both land and equity funding. Community Land Trust: actions that a municipality make take to protect the local land base, and that they hold those lands in trust for future generations. While a land trust often refers to land conservation for future generations, the use of a land trust for housing and development ensures responsible and deliberate housing development in each area. A municipality would be in control of the type of housing, density, and affordability. While a proactive solution that allows municipalities to take a hands-on approach to solving housing attainability, financially restricted municipalities, especially rural municipalities, cannot afford to invest such funding into a land trust. This would require municipalities to purchase (or already own land) for the purpose of future development. This proactive and futuristic strategy is promising but may fail to meet the present-focused climate of municipal politics and the four-year term of a Council. Attainable Housing Built Form Types to consider for the Municipality’s Urban Design Manual: to give developers options to consider for the development of attainable housing. Priority Proposed Built Form Description Population/Location Options Farm Workers or On-site permanent Dwellings for farmworkers co-located Farm Helpers (Full farm help dwellings on with the farm operation in the time)*22 agriculturally agricultural area. Dwelling will be designated lands considered an agriculture use. subject to the guidance of the Zoning By-law. Farm Workers or Off-site farm help Dwellings are located within the Farm Helpers (Part- dwellings (within agricultural area but on a different time or seasonal)* 800m) subject to active site from where the farm operation is transportation located. These dwellings should be in connection and small boarding houses for six persons servicing capacity or less or significant boarding houses availability. for more than six persons. Dwelling will be considered on-farm diversified

21 Golden Girls Act: https://www.ola.org/en/legislative-business/bills/parliament-42/session-1/bill-69 22 Municipality of Leamington (2020) Leamington-Boarding-House-Study-with-executive-summary_-Sept-18.pdf

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use if the intention is to house farm workers from neighbouring farms. This use can only be permitted through partial zoning under the PPS. Low-income Entry-level dorm-style This style was identified as the best seasonal or part- housing solution to locality whose time workers who predominant workforce are seasonal are younger, single or part-time. The style is like and without university or employee housing which children offers single or double occupancy with shared amenities. Newcomers, Purpose-built rental commuter workers housing and younger workers * These proposals align with the PPS Policy 2.3.1 (2014) and OMAFRA Guidelines, Section 1.3 but require a revision of the Municipality’s Zoning by-law and the Official Plan. Objective 5: Increase Public Acceptance Through YIMBY-ism Centre Wellington’s Healthy Community Design Baseline Report (2019) revealed that although 69% of residents perceive that a denser neighbourhood encourages healthy lifestyles, 84% of residents prefer less dense neighbourhoods, especially in Fergus. However, Fergus and Elora/Salem’s maximum dwelling density were 28.1 dwellings/ha and 13 dwellings/ha, respectively. These findings suggest that residents’ resistance to denser neighbourhoods may not necessarily be health-related, and these reasons need to be explored further. Throughout the program, we recommend a municipal-wide education in the form of the YIMBY (yes, in my backyard) movement, which will comprise of the following actions:

Data collection on residents’ reasons/triggers for NIMBY-ism against attainable housing objectives Creation of myth buster promotions to justify why these triggers make no health, safety or public welfare sense Promotion of information on why YIMBY-ism will lead to better personal and communal benefits and why municipal-wide approaches are most likely to reduce the incidence of gentrification Objective 6: Determining ‘Best Fit’ Attainable Housing Approaches After reviewing several strategies for developing the attainable housing program, we recommend that the Township consider using the following criteria to settle on the mix of strategies that will fit the Township’s needs, strategic priorities and capacity. Generally, land use policies encourage development toward community objectives but are unreliable for

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 25 WELLINGTON Attainable Housing Strategy Background Research Paper creating new attainable homes in the near-term. However, it helps guide long-term development towards the provision of attainable housing.

Criteria Evaluation Questions Complexity What is the relative complexity associated with the start-up and operation of the project? Is there an existing legislative framework? Are there existing local models to draw from? Cost What costs would be incurred by the municipality? Are there funding programs available to support this investment? Does the model create a revenue source? Start-Up What level of effort, politically and corporately, is required to get the initiative off Resources the ground? Management What resources are required to manage the day-to-day operations of the initiative Resources properly? Ability to Target How flexible is the approach to address the need, criteria and target workforce Priority Groups groups that may differ in each community? Unit Delivery What potential does the approach offer in terms of delivery of housing units relative to the effort behind the program?

Figure 3 below illustrates how to rate the attainable housing strategies against the criteria provided using another municipality’s example. Using a difficulty level RAG rating of answers to the evaluation questions, research consultants recommended that the municipality consider adopting an attainable housing program that consists of a mix of strategies, potentially with a range of partners and employers. Thus, the ‘best fit’ program for the South Georgian Bay’s tourism sector included PPPs and market-based solutions while ensuring that land use policies are progressively actioned for long-term impacts. However, we recommend that the Township pursues a similar exercise to determine its best fit program since outcomes may vary.

Figure 3 Example: An Evaluation of Attainable Housing Approaches for The South Georgian Bay’s Tourism Sector

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ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 27 WELLINGTON Attainable Housing Strategy Background Research Paper

Appendix A: Municipal Definitions of Affordable and Attainable Housing Municipality Term Definition City of Stratford/Town of Affordable 30% of an individual’s income St. Marys/County of Perth City of Guelph Affordable 30% of an individual’s income, with an annual income between the 30th to 60th percentiles. City of Barrie Affordable Affordable housing encompasses a range of housing types allowing all residents to find suitable living space without spending a disproportionate percentage of their income (30%). Grey County Affordable If housing costs less than 30% of a household’s pre-tax income, it is affordable. This applies to both private home ownership and rental housing in all income brackets. Kawartha Lakes Affordable Housing, both ownership and rental, are said to be affordable if the accommodation costs or rent does not exceed 30% of gross annual household income for low or moderate income households. Town of Muskoka Attainable Attainable Housing means: Adequate in condition (no major repairs needed) Appropriate in size (bedrooms appropriate for household) Affordable (costing less than 30% of before tax income) Access to Services (located in areas where common services are available) Available (a range of housing types) Wellington County Attainable A specific definition of what attainable housing means for Wellington County does not exist. In the absence of a definition, the use of this term is meant to capture the type of rental or ownership units which the County’s workforce is trying to obtain. This means market housing of various built forms and densities, which is attainable for the purchaser and satisfies their needs. Town of Cobourg Affordable Based on this definition, the affordable housing thresholds for Northumberland are $1,019 for rental housing and $316,190 for ownership housing. The rental threshold is the average market rent reported by CMHC and the ownership threshold is the maximum house price which households with moderate incomes can afford. These thresholds also define what affordable housing is in Cobourg as Northumberland is the regional market area.

ATTAINABLE HOUSING: TOWNSHIP OF CENTRE 28 WELLINGTON Appendix B: Attainable Housing Definitions and Targets

2021 Attainability Cost This calculation will inform the current level of affordability as it’s defined by the definition put forward in this report.

Variables: Median Income - $94,975.001

1. Calculate percentile range (80th to 120th)

������ ������ × 0. 8 = 80�ℎ ���������� $94, 9754 × 0. 8 = $75, 980

������ ������ × 1. 2 = 120�ℎ ���������� $94, 975 × 1. 2 = $113, 970

2. Calculate portion (30%) of each percentile that can be allocated to housing (based on definition outlined)

������ (80�ℎ ����������) ÷ 0. 3 = ���������� ��� ������� $75, 980 ÷ 0. 3 = $22, 794

������ (120�ℎ ����������) ÷ 0. 3 = ���������� ��� ������� $113, 970 ÷ 0. 3 = $34, 191

Forecasted Household Gross Income (2021-2041) This calculation will inform the expected annual gross income over future periods when determining targets for affordability.

Variables: Median Annual Gross Income Change in Income

1. Determine historic annual change in income (2016 - 2021)

% �� �ℎ���� = 100 � (����� ������ − ������� ������)/�������

Year Median Annual Gross Income Change in Income

2016 $85,149

2017 $87,029 2.2%

2018 $88,951 2.1%

2019 $90,915 2.2%

1 Townfolio - Centre Wellington 2021: 2020 $92,923 2.2%

2021 $94,975 2.2%

2. Determine average historic annual change in income ���� (�� ������� �ℎ����) = (2. 2 + 2. 1 + 2. 2 + 2. 2 + 2. 2 + 2. 2) ÷ 5 ���� (�� ������� �ℎ����) = 2. 18%

3. With forecasted change in income, calculate the estimated income based on growth target increments of five years.

�������� ���� = �������� ������ � (������� �������� ������ �ℎ���� �� ������ � 5)

2026: $94, 975 � (0. 0218 � 5) = $99, 723. 75

2031: $99, 273 � (0. 0218 � 5) = $104, 709. 93

2036: $104, 709. 93 � (0. 0218 � 5) = $109, 945. 43

2041: $115, 442. 71 � (0. 0218 � 5) = $115, 442. 71

Forecasted Unit Affordability (2021-2041) This calculation will inform the expected affordability of the units over the future periods, with previous calculated data included (estimated income) and calculations used (percentile calculations and 30% of income allocation)

Year 80th Percentile 30% of income 120th Percentile 30% of income allocated to housing allocated to housing

2026 $79,779.00 $23,933.79 $119,668.50 $35,900.55

2031 $83,767.94 $25,370.23 $125,651.91 $38,055.35

2036 $87,956.34 $26,386.90 $131,934.52 $39,580.35

2041 $92,354.17 $27,706.25 $138,531.25 $41,559.37

Household Growth Targets and Affordability (2021-2041) These calculations will inform the number of expected units that are required to accommodate growth between 2021 and 2041, along with the expected cost of a unit based on the definition outlined in this report. Variables: Forecasted Household Population (FHP)2 Change of Units (+/-)

1. Over the outlined growth target periods, the change of units required (+/-) must be determined.

�ℎ���� �� ����� (+ / −) = ���� ���� ��� − ���� ��� ���

2021 - 2026: + 940 = 13, 720 − 12, 780

2026 - 2031: + 1, 050 = 14, 770 − 13, 720

2031 - 2036: + 2, 475 = 17, 245 − 14, 770

2036 - 2041: + 1, 445 = 18, 690 − 17, 245

Change in # of Household Units Required 2021 - 2041: + 5,910

2 County of Wellington Growth Targets - OPA No.99