'Greater than 1,000 to 1,500 homes a year in 2025 and 2026': St. Thomas, Ont. expecting housing tidal wave

It was 18 months ago when St. Thomas Mayor Joe Preston stood at the first council meeting after re-election and boldly declared he wanted 500 homes built per year during his term.

That was before the Volkswagen EV battery plant announcement.

“I think by the time we get to 2025 and 2026, we might have to be looking at greater than 1,000 or 1,500 homes in each of those years,” said Preston.

High interest rates held both buyers and builders back on single family home growth in 2023. Preston said they pivoted to market rent apartments, and nearly hit their goal with 483 doors.

“I don’t think its going to be one and done with Volkswagen that is coming here,” explained Doug Tarry of Doug Tarry Homes. “If you look at the tidal wave that's coming, we're standing on the edge of the water and the water's receding. So if we're this busy now [and] the water is receding, wow. It's going to be crazy. So we're all having to look at how to scale up.”

Scaling up means not only higher density, but also the higher number of homes and different types.

It also includes purchasing more land, which Tarry has done recently off Highway 3 in St. Thomas, not far from the future Volkswagen plant.

A construction worker pounds a nail into a home on Dunning Way in St Thomas, Ont. on April 15, 2024. (Brent Lale/CTV News London)

“It's also working with the local municipalities on infrastructure because we have to know where the sanitary is going to go,” said Tarry. “Where's the poop go? So until we can get that settled, it's very difficult to advance forward on where the subdivisions can go.”

Tarry also describes going through “four different economies in four years,” and said it’s not only the interest rates which could make it difficult for builders, but also customer expectation.

“We now have to start looking at the future for how do we balance carbon,” said Tarry. “How do we balance sustainability? How do we look at resiliency? All these other elements that have got to be built into the homes right from the get go? Customers are expecting it. They just come assuming that this is already included in the house.”

The St. Thomas and Elgin Home Builders Association (SEHBA) is expecting a “spring market.”

They just spent the past week at Queen’s Park speaking with government officials about upcoming housing incentives.

“The government is now supporting homes that need to be retrofitted to offer secondary dwellings,” said Angela Devries, executive officer with SEHBA.

A new subdivision is being built on Southdale Line in St. Thomas, Ont. on April 15, 2024. (Brent Lale/CTV News London)She explained, “There's incentives to people that are investing in the home to make that happen. We have incentives for first-time homebuyers as mortgage rates are now 30-year option instead of just 25. That's something that has not been changed in a very, very long time. That five years adds a significant amount of borrowing bandwidth, so that adds a lot more buyers into the market.”

Preston has been speaking with London Mayor Josh Morgan, Southwold Mayor Grant Jones and Central Elgin Mayor Andrew Sloan about looking together to continue to build housing on the outskirts of St. Thomas.

He said there are areas in the northwest of St. Thomas which are starting under subdivision agreements. He believes changes need to be made with new builds.

“We think even in new subdivisions from now on, there'll be density,” said Preston. “We can't just build swaths of single family homes, so it can be a lot of single family homes with some stacked townhouses, some duplexes and tall apartment buildings all in the same subdivision. We have progressive growth, and we caused it so now we have to fix it.”