Town’s myths & misinformation about Nenzel Road

The breadth and depth of information still missing from the Beach Creek Cottage Court application, plus the disinformation that continues to be pumped out by the Town, beggars belief.

June 16, 2021 brought us yet another Public Hearing for the Dreger application seeking approval to rent six portions of their single parcel of land at 545 Nenzel Road in Qualicum Beach to six individual tenants. In this latest version of the proposal, each of the prospective tenants will be expected to purchase a dwelling manufactured at a factory, carried to the site and assembled there, presumably by the applicant Dean Dreger himself, thus creating Beach Creek Cottage Court.  

That’s the picture in the sales pitch, but the proposal remains lathered with vague specifications and disinformation, fueling public concerns about the proposal’s questionable purpose and dangerous precedent.

The “rural rental cottage” myth

This is not rental housing. Period.

The Town’s Planning Department, in choosing to arbitrarily define a rural rental cottage to mean that “either the dwelling unit or building site is available for rent,” is misleading the public about the true nature of this proposed deal.

Luke Sales, Director of the Town’s Planning Department, even had the audacity to tell Council through the staffing report (attached to the Council agenda) on June 16, 2016, that “This proposal is an innovative approach to housing and would provide the town with rental housing.” This is preposterous — only the patch of land upon which the housing would sit would be rented, not the dwelling itself.

If a person wanted to live at the proposed Beach Creek Cottage Court, they would either have to purchase and then pull or carry their own home to the site, or purchase a factory-produced module that has been assembled by Dean Dreger and is already on site. Or, maybe you get to pick your site and building style and have Dreger acquire and assemble it. Or, maybe you could just bring a converted shipping container with you. Who knows? This level of “detail” is missing from Dreger’s application. The key fact is that, according to Dreger’s application, there would be NO rental housing available at 545 Nenzel Road.

The double-myth of “affordability” and altruism

Cheerleaders of this proposal, including a few members of the public (the usual developer choir), plus Town staff and Council members, keep applauding the affordability of these proposed cottages.

While the proposed dwellings are indeed modest in size (570 square feet), the would-be resident would have to buy his / her mobile dwelling. Curiously, and problematically, the Dreger application provides no confirmation of expected pricing, either to buy a dwelling or to rent the land under it. At no time during this entire cycle of application — review by the Planning department, review by the Advisory Planning Commission, two public hearings, and three Council readings — has any data on pricing / affordability of this proposal been presented to the public.

The project sales pitch has consistently used the theme: Let’s give the Dregers a break; they’re contributing to the community need for affordable housing. Enough of an altruistic sacrifice that we should even waive any talk about a Community Amenity Contribution (as was suggested to Council by Town Planner Luke Sales on June 16, 2021). All in return for destroying any remaining semblance of being governed and guided by the Town’s Official Community Plan.

Affordable for whom? Not “young workers”

Councillor Scott Harrison would have you believe this is “affordable housing for young workers,” as he claimed at the June 16, 2021 Council meeting.

Harrison suggests these housing units would be offered at a “lower price point.” Lower than what? Harrison seems to be making this up out of thin air. Does he have some authority or business relationship with Dreger or other unshared insider information that he is relying on?

For a fellow who loves quoting numbers at the public, it appears Mr. Harrison hasn’t done the math. Let’s work though a hypothetical scenario to test Harrison’s premise of affordability for young workers.

For illustration purposes, we’ll use some round numbers. Even if Mr. Dreger can buy the parts for a cottage, get them shipped, assemble them, connect electrical, water and sewage disposal, add some landscaping, and add on his markup for an all-in packaged purchase price of $99,999, for whom would this be affordable? [Detailed pricing estimates, in US dollars, can be found at https://homeguide.com/costs/modular-home-prices.]

Chris is a young worker, excellent references, could easily land any of the several entry-level jobs available in Qualicum Beach. Most are at or near minimum wage; few are at or above what is considered a “living wage.” Let’s assume Chris is fortunate enough to land a $20 per hour job, 40 hours per week, plus full benefits. Chris now goes looking for somewhere to live, and sets out with a smile on his/her face but no established credit rating, no cash, no car.

Will Chris end up living in one of the Dreger “rental cottages?” Highly unlikely.

But it’s only $100,000 and mortgage interest rates are so low right now, the chorus chimes. Reality check — you cannot get a mortgage for a manufactured/mobile home. You can only mortgage land to which you have title. In the Beach Creek Cottage Court proposal, the land would be rented to the tenant by the Dregers; the Dregers would retain ownership of the land.

OK, so maybe Chris could qualify for a chattel (personal property) loan, and could find a lender who will accept this manufactured/mobile dwelling, once registered, as collateral. Let’s be optimistic, and assume that Chris lands a financing deal: a $100,000 loan at 5% annual interest, to be paid off over 7 years. Monthly payment = $1,413.39 per month.

But Chris will also have to pay rent for the privilege of parking his/her mobile dwelling in the Dregers’ manufactured home park. We can find no suggestion from the Dregers in their submitted documentation made available to the public about how much they plan to charge to rent each patch of serviced land. Without this evidence, we are entitled to assume that, astonishingly, no-one in the Town’s Planning department or on Council seems to have bothered to ask the question. Maybe they have, and know the answer, but don’t want to tell the public in case their “affordability” deception is blown.

So we’ll hazard a guess — $200 per month for rent of the land under the dwelling, including parking. Add $1,000 per month for food / beverage / supplies, and $100 per month for heating and electrical (these units would supposedly be super energy-efficient). It all adds up to a monthly tally of $2,713.30 for Chris’ essentials. After deductions at source for EI, CPP, and income tax, Chris’ monthly take-home pay nets $3,000.00. Bottom line: Chris is left with less than $300 per month total to pay for dwelling and contents insurance, cell phone, Internet access, transportation, clothing, grooming, entertainment and recreation.

Based on a bundle of optimistic assumptions, Dreger’s ready-to-move-in dwelling (aka affordable rental housing) would only cost Chris $100,000 including sales tax, plus a personal loan at 5% secured by a manufactured home chattel, and $200 a month to rent the mobile home pad. Affordable housing for young workers? This dog won’t hunt.

Likely outcome? Chris will link up with Craig and go rent a shared two-bedroom apartment in Parksville. Who is Craig you ask? You’ll find him in our October 2020 article, Time for a community discussion about housing, written when version 1 of the Dregers’ proposal (later rescinded) was under consideration.

To their credit, the Dregers have suggested they are targeting an entirely different clientele — elderly retired singles who can afford to purchase their next dwelling with cash, assuming they would want to live away from Town amenities. It’s Councillor Harrison who is trying to hoodwink the public into thinking these cottages can be afforded by young adults in the early stages of their working life.

What else haven’t we been told?

What property tax rate would the Town apply to the Dreger parcel with its expanded use — rural residential or commercial enterprise? There’s a big difference in tax rate. Also, how will the BC Assessment Authority determine the revised market value of the parcel for property tax assessment purposes? Comparables are hard to find. We are left to wonder if the Town would receive any additional property tax at all from this proposed venture.

What guarantees will there be that these “affordable” dwellings actually materialize as proposed? How large of a performance bond, if any, will be held in escrow in case of default?

One thing we do know is that the Beach Creek Cottage Court dwellings, as proposed, would be subject to the BC’s Manufactured Homes Act and, per section 23 of the Act, would be considered a Manufactured Home Park defined as “land used or occupied by a person for the purpose of providing space for the accommodation of 3 or more manufactured homes and for imposing a charge or rental for the use of that space.”

Would this proposed cluster of dwellings also be subject to the Residential Mobile Home Park Regulations and Standards in schedule 6C of the Town’s Land Use and Subdivision Bylaw (No. 580)? That would seem logical but, again, Town planners have provided no such confirmation to the public.

No data. No transparency. No trust.