Windsor is expecting an economic rebound – and a housing crunch

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Visible from a highway on the eastern edge of Windsor, Ont., the sprawling battery plant that many hope will power the future of driving is taking shape with astonishing speed. Much harder to find are the thousands of homes needed to handle the burst of employment it is expected to bring.

The first phase of operations at NextStar, a joint venture of Stellantis and LG, is scheduled to begin within months. When fully operational next year, the plant will employ 2,500 people. Thousands more could work in spin-off companies.

Having successfully attracted the plant, at huge cost, the city now faces its next challenge: dealing with the work-force impact on the housing market.

Windsor already has rapidly increasing home prices and a tight rental market. The province says the city fell far short of its targets for housing starts in both 2023 and 2022, the year construction on the plant began.

The city also learned recently that it would not get tens of millions of dollars in federal housing funds, after council refused to allow four-unit homes in all residential areas. Instead, the city is trying to keep such buildings away from single-family neighbourhoods and pinning its long-term development hopes on converting farm fields near the airport to a new suburbia.

The bridge to Windsor’s revitalized future

While the NextStar jobs should pay well enough that its workers will be able to find homes, their arrival could exacerbate market trends that price out many locals. Mike Moffatt, founding director of the Smart Prosperity Institute, points out that people entering the market at any price-point can influence it more broadly.

“What happens on one side of the bathtub affects the water everywhere,” he said. “Whoever has the deepest pocket ends up winning, so you end up getting a fair bit of displacement.”

Stellantis spokesperson LouAnn Gosselin said in an e-mail Friday that “the housing situation is something we continue to monitor closely as we prepare to hire the bulk of our NextStar Energy battery plant workforce.”

The NextStar plant’s opening is approaching as pressure on the Windsor housing market comes from multiple sides.

New residents, including Ontarians from higher-cost cities, have boosted Windsor’s permanent population. At the same time, a surge of international students arriving on study visas has accelerated the trend of converting houses to rentals, removing starter homes from the market.

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For 28-year-old Nic Andrianidis, who finished a master’s degree last year and is working in an administrative job, owning a home seems far off. He is living with his parents and says the only mortgage he can get preapproved is not nearly big enough to enter the market.

“I think I’m past the overall pessimism of it. It just doesn’t seem possible and I don’t think complaining about it is necessarily going to make it better,” he said.

“The sad thing is that Windsor used to be known as the market that was a little bit cheaper. It used to be a lower-housing-cost market compared to other similar cities.”

At the most desperate end of the spectrum, the city also has hundreds of residents who are homeless. And the Windsor-Essex region waiting list for affordable housing has nearly 9,000 applicants, an estimated 18,500 people in a population of around 400,000.

Windsor is growing quickly. Its population – around 234,000 – is already bigger than a 2015 city staff forecast for 2036. House prices have tripled over the last decade and rents have surged. The average one-bedroom apartment rent in January was up 7.3 per cent over the previous year and cost $1,557 a month, according to rentals.ca.

A 2020 consultant report said that Windsor would add more than 14,000 residents and about 5,000 homes by 2041 – a projection that predates the NextStar announcement. Much of the growth is destined for a planned neighbourhood in Sandwich South, 2,600 hectares of mostly agricultural area incorporated into the city in 2002.

Ottawa, Ontario say Windsor didn’t build enough homes; the city says it did

How the city develops Sandwich South could mean an enduring additional cost to both city coffers and the environment. North American sprawl development has historically been populated by people who rely on cars to get around and create a structural problem for municipal finances by not paying enough taxes to cover city services.

Official plans for the area paint a more positive picture.

According to city staff, 15 per cent of trips out of the area by residents will be by transit, walking or bicycling. That is 50 per cent higher than the commuting average across Windsor, where many areas see few pedestrians. It’s unclear how such an ambitious target would be achieved. A sustainability plan for the area remains in progress.

City of Windsor spokesperson Jason Moore said it was too early to answer queries about future population density, how many people would live in the area, how soon they might be moving there or other detailed questions. The city’s chief building official, John Revell, was not available for an interview.

What plans exist call for a mix of land uses, including industrial, residential and green space. A hotel is slated for the area. The proposed site for a new regional hospital, which remains a bare field after years of arguments over the location, is there. A developer’s sign touts a cluster of midrises as forthcoming “luxury condos.”

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Windsor Councillor Kieran McKenzie, whose ward includes Sandwich South, believes the area can develop into something other than classic sprawl. He notes the nearby Devonshire Mall and the commercial strip along Walker Road as destinations for residents of the area.

“My vision for this part of the city is to create that urban environment in what people might say is the suburbs,” he said. “At some point your population growth creates the argument that you can build outside of the core, and you may need to build outside of the core to sustain what’s happening in the community.”

The risk is that sprawl is expensive. The cost of providing sewers, roads, police, fire and other city services to lower-density suburban sprawl would create an enduring net burden on the local budget, in addition to up-front costs to prepare the new neighbourhood that are expected to run into the hundreds of millions.

Much of the area is on a flood plain and will have to be raised before it can be developed. The proximity of the airport complicates flood management because retention ponds could attract birds. Roads need to be widened and modern sewers added. There is currently no transit in Sandwich South, except to the airport, and adding service to meet the hoped-for number of riders would be costly.

A small portion of these improvement costs will be borne by existing residents. Some people in what is now a sparsely populated area rely on septic systems and each household will pay upward of $10,000 to hook into the new trunk sewer. However, most costs to prepare the area for housing will flow to the city, which will get back what it can from developers.

Windsor will also make it easier to add density within the built-up parts of the city, though not as much easier as the federal government wanted.

To receive up to $70-million under the federal Housing Accelerator Fund, Windsor was asked to allow four-unit residential buildings throughout the city. Instead, council voted to authorize such buildings where staff deem they make sense, largely along bigger streets. Staff say this could lead to 2,135 additional housing units over three years.

Mayor Drew Dilkens made no apologies for what he framed as protecting homeowners from change. In a statement after the federal decision not to grant the funding was made public, he acknowledged the need for more housing but stressed the need to go slowly.

“I am steadfast in my commitment to safeguard Windsor neighbourhoods,” he said on X, formerly Twitter. “City Council will continue to represent the best interests of residents and do what we can to protect their most valuable asset – their homes.”

The mayor was not available for an interview.

A wrinkle of the debate is that three units are legal already on residential lots throughout Windsor, but have seen little take-up. To critics of densification, this indicates there is no reason to loosen zoning regulations further. To proponents, it suggests that fears about fourplexes taking over neighbourhoods are overblown.

For Rino Bortolin, a former city councillor who now works at the University of Windsor’s Centre for Cities, there’s a bigger moral argument for removing zoning that keeps apartments out of most neighbourhoods, rules that he says are rooted in racism and classism.

“When we use zoning to regulate things, what you’re doing is you’re creating your own little districts of where the poor people should live,” he said, comparing the result to racist 20th century policies of “red-lining” that kept Black people out of certain neighbourhoods.

“If you start to break down the demographics of who is in that poor category, it’s very few white people and very often made up of a lot of other nationalities and races.”

In spite of the rules, house conversions continue under the official radar. Particularly near the university and St. Clair College, but increasingly on streets across the city, landlords are filling homes with students. In some cases, they are over-filling them.

The risks inherent in illegal rooming houses are on the mind of Councillor Fabio Costante, whose ward includes blocks of ad hoc student residences. He pushed for a 2023 rental licensing bylaw pilot project, now being challenged in court. Many landlords have not signed and even among those who have – which the councillor posited were likely the best ones – only 38 per cent of their units passed fire and building code inspections.

Proponents say allowing widespread fourplexes would create a legal pathway, attracting more responsible landlords. But Mr. Costante argues the reasons for allowing more density go beyond that.

“The way we grow and the way we develop is not going to be the same as the way we grew in the past. It can’t be,” he said. “We’re really in an interesting time in the city’s history and so … this is a debate about housing but really this is a debate about how we build our city, and housing is central to that.”