Final Report - City of Charlottetown

CITY OF CHARLOTTETOWN: COMPREHENSIVE WATERFRONT MASTER PLANFinal Report • December 20122.3 Market AnalysisThis section provides an overview of the dynamics associated with the real estate market indowntown Charlottetown. The intent is not to provide an exhaustive market analysis, but ratherto gain insight into the dynamics of the market, and to identify steps the City can take to improvethe development climate in the waterfront zone.The Charlottetown waterfront has been transformed over the past four decades from anindustrial area with warehouses, oil storage tanks, and railway lines, to a mixed use area withapartments, retail, hotels and office space. This transformation has occurred in stages, and hasmoved from the west to the east. The 1970’s saw the construction of the Harbourside project,which included apartments and office space, while the biggest development in the 1980s wasthe Delta Hotel. Development continued its way east in the 1990s and into the new century,including Peakes Quay the renovation of Founders Hall and the construction of several residentialcomplexes.Today, most of the large sections of vacant land have been developed, and the areas availablefor redevelopment include infill locations (e.g., Water and Prince, the land between Founders Halland the new residential building, and the former Coast Guard site, among others). As such, thissummary is intended to help provide input that is appropriate to the redevelopment of these sites.The following paragraphs provide a summary of the development potential of these sectors:residential; office space; hotel rooms; retail; and institutional uses.ResidentialResidential housing can be a big driver of demand for waterfront land. While not a waterdependent land use, residential housing is enhanced by an adjacency to water. As well, the additionof new residential units in the waterfront zone creates more overall activity; an important step tosupport retail and office uses. The adjacent chart illustrates the total number of housing starts inthe Charlottetown Census Area over the past 7 to 8 years.The most interesting fact depicted by the housing starts chart is the dramatic increase of multifamilyhousing as a percentage of total housing starts in the Charlottetown area. For example,from 2006 to 2008, single family housing starts exceeded multi-family starts by a large margin.This changed in 2009, and since that time multi-family construction has dramatically out paced theconstruction of single family homes. In addition to this shift in demand, total housing starts haveincreased 32% from an average of 429 per year (2006-2008) to 568 units per year (2009-2012).CMHC research indicates that this increase in overall demand has been driven by low interestrates, migration to Charlottetown from other parts of PEI, and increased immigration to PEI vis-à-visthe Provincial Nominee Program (PNP). It is the PNP that has the largest ability to destabilize thelocal housing market, as the program is coming to an end in 2013, and although 6,000 immigrantshave come to PEI since the program was started, many have no direct ties to the area and willlikely re-locate once regulations allow them to. One large apartment landlord indicates that manyof PNP nominees rented apartments but never occupied them. This same landlord has also noticedthat as PNP residents vacate their apartments, a large number of security deposit refund chequesare being mailed to the same community in Central Canada (Branford, Ontario). This indicatesthat these immigrants are relocating to another community with a larger immigrant population;something with which Charlottetown cannot compete. CMHC is reflecting this outmigration intheir estimate of multi-family vacancy rates for 2013, which they are projecting will reach 5%.14