Mike Youds photos New homes on Fifth Avenue built on narrow lots with a view to greater affordability. Below, New home construction continues off Malone Road.

Nail guns are popping all over as a building boom continues on southern Vancouver Island, a trend increasingly making its presence felt in Ladysmith.

While the area was a little late in feeling the impact of the Island’s growth surge, the wave has clearly reached these shores with major residential and commercial development projects extending from Artisan Village in Chemainus to Oyster Bay north of town.

In between, construction of the first phase of Holland Creek — which could grow to be Ladysmith’s largest single housing development — gets underway this month.

“We’ve lagged, frankly, behind our neighbours to the south,” said Mayor Aaron Stone. “I think we’re playing catch-up right now.”

Last year, the town’s growth rate ranked sixth among B.C. municipalities at 5.9 per cent, already well beyond the 1-2 per cent growth considered optimal for sustainability, Stone said. That means Ladysmith has to pay close attention to ensure that growth doesn’t drive up taxes and undermine the character that continues to attract new residents.

“The most important thing is that we capture the investment going into the community and make sure that it pays long-term dividends,” Stone said.

A planned neighbourhood of 300 single-family and multi-family homes, Holland Creek is carved from the forested hills in south Ladysmith, one of several key projects expected to take shape over the next few years in a trend driven by market demographics, a robust economic recovery and that old real estate adage — location, location, location.

“The last two years have been busier than the previous 20,” said Brian Childs, a general contractor in Ladysmith. “We’re at full employment in the industry and it’s really hard to find qualified employees right now.”

While wages haven’t risen, lumber and drywall have doubled over the last two years, he noted. That’s pushing new home costs higher and eroding affordability — one of Ladysmith’s more attractive selling points in the past.

Affordability is one of three key elements in the growth matrix, along with community character and choice in terms of housing stock and lifestyle. It’s a delicate balance, Mayor Stone said.

“I think we’re striking a pretty good balance right now. Growth is always hard,” he added, having watched the small town evolve since childhood.

First Avenue may be the most visible sign of momentum behind the trend. The Traveller’s Hotel redevelopment now underway is only the latest example of commercial investment downtown.

“The growth has been phenomenal particularly in the last two years both business-wise and residentially,” said Mark Drysdale, chamber of commerce manager. “If you were driving the downtown core two years ago, you would have seen probably at least seven or eight for rent/for sale signs. Today you might see two.”

Ladysmith’s last surge more than a decade ago was interrupted by the 2008 recession, said Felicity Adams, the town’s development director.

Ladysmith was slower to slip into that recession and slower to recover than some communities, she noted.

“We are seeing kind of an upward trend for Ladysmith in terms of new lots per year,” though the numbers are not large, Adams said. “Last year, we had maybe 50 new units and we have quite a few new subdivisions in process.”

Residents have seen it before. After all, the town’s population has more than doubled since the early 1990s through multiple economic cycles.

This time though, the trend appears to have a more solid footing with residential growth concentrated in the south, balanced by the multi-faceted waterfront redevelopment, including a medium-density mix of townhomes and apartments, as it scales up over the next several years.

The first step on the waterfront will be $2.25 million in upgrades to the historic Machine Shop, an arts and heritage hub for the redevelopment.

Now in its design phase, the project is expected to span the next couple of years, Stone said.

Ladysmith has been effectively laying the supportive groundwork for these projects, said Amy Melmock, Cowichan Valley Regional District economic development manager.

“They have certainly tried to be that community and I think it’s starting to pay off,” Melmock said.

“They have a proactive CEO and a proactive mayor and a proactive planning department. I think those are all good ingredients.”

Melmock has watched the trend as a manager and resident, first residing in Ladysmith when she took on the CVRD role. She said the town is well situated for long-term growth in terms of services, shopping and transportation, including Nanaimo Regional Airport with a $15-million terminal expansion underway.

“I think it’s benefiting from that proximity to Nanaimo,” she said. “Strategically it’s very well-placed in terms of the movement of goods and access to larger population centres.”

Much of the market momentum over the last two years has shifted with more buyers coming from the Lower Mainland and Victoria, typically seeking a slower pace with substantial equity from their higher-priced metropolitan properties. The post-war generation is retiring and moving out, but so are young families, attracted by affordability and other friendly factors.

“They’re looking for a lifestyle where there’s more community atmosphere,” Adams said. “They’re looking to get out and enjoy nature.”

Realtor Kent Knelson wasn’t surprised to see Holland Creek properties snapped up in short order. Twenty-two parcels in the 28-lot subdivision are pre-sold, most of them bought by builders for resale. While construction is going full-bore in Nanaimo, properties available for development are thinning out, Knelson explained.

“I was not surprised at all,” he said. “I had my finger on the pulse. And it’s an awesome place to live,” he added.

Knelson is involved with a set of four new homes on 5th Avenue that he sees as the shape of things to come: smaller homes on smaller lots as narrow as five metres. He has a hand in another residential project of roughly 40 homes on Russell Road with a pending application for reduced lot sizes.

“It’s the wave of the future,” he said. “We can’t keep going to $1-million homes. Big lots are way too expensive. We need to make housing for our youth.”

He believes that’s a potential win-win for individuals and communities, balancing housing affordability and population growth with a greater number of properties bringing in more municipal revenues in terms of development cost charges and a larger tax base.

With expanding pressures felt from surrounding metropolitan centres, Ladysmith is almost assured of continued growth, but at what cost to affordability?

In some ways, that is the price of popularity.

“That’s a blessing and a curse for us,” Melmock said of the trend. “People are starting to realize what’s here.”

After 33 years in the local building sector, Childs remains upbeat about Ladysmith and doesn’t see its essential charm threatened by suburban sprawl.

“I think it will hold its uniqueness, but we’ll see more infilling from Chemainus to Nanaimo. Ladysmith is a bedroom community. That’s why people choose it. It’s an ideal place for people to have a small-town atmosphere. This is a really nice place to live.”