Inaccurate data makes it 'impossible' to build affordable housing, rural county says

Ken How is trying to turn an abandoned rural Ontario school into affordable housing — a difficult task made harder, he says, by inaccurate rental data that puts federal funding out of reach.

"It's like you're swimming upstream — all the time," he said.

The retired elementary school teacher turned non-profit housing developer supervises a small team of volunteers undertaking the ambitious conversion.

Their vision is to breathe new life into the former Pinecrest Public School near the centre of Prince Edward County, a mostly rural municipality jutting into Lake Ontario about an hour's drive west of Kingston.

How's goal is to turn it into an affordable housing complex and community hub for low-income seniors, complete with a medical office, gym and dedicated space for crafts.

He said the project is a direct response to a dire need in the aging community, where affordable apartments for seniors are now in higher demand than classrooms.

"People just can't afford to live here, so they buy a bus ticket and they leave," How said.

His non-profit, Pinecrest Housing, purchased the building alongside 20 acres of surrounding land in the Bloomfield area for about $400,000, or less than it would cost to buy a lot in the county hub of Picton, he said.

Now, they're in search of funding to transform it.

Pinecrest Housing has raised more than a million dollars so far, but the conversion will cost millions more.

How said efforts to secure a loan from the Canada Mortgage and Housing Corporation (CMHC) have turned his once-brown hair grey.

"I thought CMHC is there to help us, and they want to make affordable housing," How said. "What a knucklehead."

An ongoing issue throughout years of the application process, he said, has been the way the Crown corporation calculates affordable rent as it delivers federal housing programs.

Rental data 'bogus'

Pinecrest Housing plans to squeeze 56 units into the school's sprawling footprint, charging affordable rent for half and market rent for the rest.

A range of CMHC programs offer loans to help encourage the development of affordable housing. To secure a loan, organizations must submit an application showing they can pay back the money while charging affordable rents for at least a portion of the units on offer.

According to How, the success of any application for a CMHC loan hinges on whether the agency believes it will get its money back.

The financial sustainability CMHC wants to see, he said, must be possible with all affordable units priced at 20 per cent below CMHC's market rent, which is the agency's internal benchmark for affordability.

How said the problem is the agency uses in-house values to set market rent, and those values are much lower than what renters actually pay in Prince Edward County.

The CMHC numbers, he said, are "bogus."

"CMHC is saying, 'Okay, this is the rent for your region.' And it's not an achievable number," How said. "It's certainly not a number that we can afford to pay them back."

County keeps own records

Accurate information about the rental market is hard to come by in rural municipalities, said Elis Ziegler, a county affordable housing supervisor.

To address the problem, the county started collecting its own rental data in 2020.

Ziegler said most organizations that measure rent in a given market call landlords or browse online listings on websites like Facebook Marketplace and Kijiji.

Prince Edward County takes that approach a step further, with staff updating rental figures as apartments come available rather than taking a snapshot.

Ziegler said the county now has a clearer picture of what residents are actually paying — and the true number is much higher than what CMHC is reporting.

For example, the most recent data collected by the municipality estimates the median rent for a one-bedroom apartment in Prince Edward County is $1,650 per month. The latest CMHC data estimates it at just $1,200.

"CMHC data is consistently less than what's actually being charged here for rent … which makes it impossible for non-profits and private developers to build affordable housing," Ziegler said.

Despite that reality, Ziegler said, CMHC refuses to accept the county's rent numbers and to explain why.

In a written statement, a CMHC spokesperson said the agency is confident in its data and the methodology of its rental market survey.

"Working closely with municipalities is crucial for CMHC to produce the most accurate and objective data on rental housing," the statement read.

Bidding wars on rental units

Ward 1 Coun. Phil St-Jean, who also chairs the county's affordable housing corporation, brought a resolution to a March council meeting calling on CMHC to amend its funding formula to include "locally generated rental market data."

They're not willing to accept that their data is flawed and they need to correct it.- Coun. Phil St.-Jean

"Because CMHC doesn't recognize any of our numbers, they don't recognize that we are an area that is in need," he said in an interview.

"There's this absence of data, and they're not willing to accept that their data is flawed and they need to correct it."

In Prince Edward County, St-Jean said, a lack of affordable housing means the aging, tourism-dependent community is pricing young service workers out of town.

He believes the experience is happening in other rural communities across the province.

"[CMHC is] completely underrepresenting the seriousness of the problem, particularly in rural Ontario," he said.

"Essentially [the CMHC is] saying you don't exist and you don't have a problem, when we clearly — from our own research and being the boots on the ground in our community — understand that there's a huge problem here."

If CMHC accepted local rental data, How said, it would help his efforts to secure a loan.

"If that [market rent] is raised just a little bit … it will impact us greatly," he said, adding the municipality's help on the issue has been "fabulous."

Asked by the mayor whether he'd consider taking on another conversion, How's response was a definitive no.

"Yes, it makes sense, yes I think it's easily convertible, and yes, it would be a fabulous building," he said. "But, [we're] not getting any help doing this one."