High price, low vacancy: Edmonton’s short supply of apartments coupled with high demand leaves many renters lacking

By Rebecca Medel, Vue Weekly

 

Buying a new home is not an affordable option for many Canadians due to the fact that in the decade leading up to 2010, the price of a new home nearly doubled, while incomes didn’t even hit a double-digit increase.

The Canada Mortgage and Housing Corporation’s (CMHC) Rental Market Report from October 2012 states that in 2001, the average price of a new home in Canada was $234 387, and by 2010 it rose to $454 154-$458 111 in Edmonton. To break it down even more: between 2006 and 2009, the average income for singles, couples and single parents only rose 5.5 percent, but the average cost of a new home increased 22 percent.

These housing increases inevitably lead to a great deal of debt. Canada’s level of household debt-to-income is at 158 percent, and 68 percent of that is from mortgages. In its 2012 report “No Vacancy: Trends in Rental Housing in Canada,” the Federation of Canadian Municipalities states that since 2005, the cost of owning a home has risen three times faster than income. For this reason, many people continue to rent-one-third of Canadians are renters-but since 2000, the number of rental units has declined while the cost of renting has increased more than 20 percent.

“Affordable rental housing is decreasing, and what we’re seeing is an increase in the number of condos that are being built as opposed to rental construction,” says FCM president and city councillor Karen Leibovici. She says that Edmonton has had an affordable-housing initiative for nearly 10 years, since the last economic boom happened and a lot of people were moving into the city.

“It was very difficult to find accommodation and housing prices were increasing rapidly, but the number of rental units that were available were not increasing at the same rate as the level of need,” Leibovici says.

But finding affordable rental units in Edmonton continues to be quite a challenge, as anyone who’s been on an apartment search can attest to. CMHC states that rents are up and vacancy rates are down. The average monthly rent for a two-bedroom apartment in Edmonton in 2012 was $1071, up 3.7 percent from a year earlier. But the vacancy rate of apartments was at 1.7 percent, down from 3.3 percent the previous year. A balanced vacancy rate sits at about three percent and affordable rental housing-including utilities-should cost less than 30 percent of before-tax household income, according to the CMHC.

“Rents have actually gone up,” says John Kolkman, a public policy researcher with the Edmonton Social Planning Council, a research and advocacy organization that educates the public on social issues. “Between 2002 and 2012 they’ve gone up 51.1 percent, if you want to get technical. They haven’t gone up as much as home prices and I think part of the reason for that is that home prices have doubled, and part of the reason for that is low interest rates that made home ownership more affordable.”

Many of Edmonton’s renters cannot even afford market rent and rely on rental subsidies or affordable-housing units. For example, the Capital Region Housing Commission (CRHC) offers rental units below market rent; tenants pay 10 to 20 percent less than the going rate. In 2012, the CRHC served 21 000 people-the majority of whom made less than $30 000 in annual household income-managed and operated over 5000 units and provided over 4000 rent supplements from a rent supplement budget of $18.5 million. One thousand households moved on from the housing programs that year, which allowed for 1000 to take their places, but over 2000 remain on the wait list.

However, in the 2013 budget, the Alberta government cut funding to help low-income Albertans pay rent from $71.1 million in 2012 to $64.5 million in 2013.

“That’s probably a recipe for financial hardship and for people at the very bottom end, possibly a bit of a recipe for increased homelessness despite the fact that the Alberta government says it’s committed to a 10-year plan to end homelessness,” Kolkman says. “Really, there’s no question that in a rental market where rents are going up and vacancy rates have gone down substantially, the amount of funding for rent supplements should be going up rather than being cut.”

For one segment of Edmonton’s population-women and children leaving domestic-violence situations-finding affordable rentals is next to impossible.

“I know a lot of our women struggle because most of them are living well below poverty level,” says Carrie-Lynn Mullin, an outreach worker with Edmonton’s women’s shelter, WIN House. “The rate at which they receive social services is well below the poverty level, so they’re very limited in what’s available to them, so they usually end up having to look for rents that are in the very lowest price range available in the city, and they’re often not suitable housing.”

She says her clients often have to take dirty and run-down apartments in high-crime areas.
“The reason they’re affordable is because landlords are having trouble renting them out,” Mullin adds. “So we do see a lot of inner-city housing available, oftentimes in buildings not suitable for children. We have stories about people coming and going selling drugs, prostitution.”

Mullin says many places discriminate against the women because they are receiving social assistance rather than working or don’t have a letter of reference from a previous landlord-an absurd request when a woman and her children have been living with her partner up until that point. She says CRHC is a great program, but because the women are in immediate crisis, they don’t have time to wait for months-or years-for an apartment to become available. Shelter time is 21 days only (three months for a special shelter for immigrant women) and then they’re on their own.

“I know the City of Edmonton offers HomeEd. It’s non-profit housing, so it’s not the same as Capital Region Housing, which is low-income,” Mullin says. “They offer low-market rent and they have a certain number of subsidized units in each complex and the rest are just below market price, so it is more affordable than renting privately. But we’ve actually had women turned away because they’re fleeing domestic violence and they told us that they will not accept [these] women, and their reasoning is that women come from a domestic violence situation, then they’ll move their partner back in and it causes damage and it causes fighting and they don’t want that in their complexes. … So that’s the city providing a service which is saying, ‘We’re not going to help the people who are obviously in the most need because they’re homeless and they’re on a fixed income and they need immediate help.'”

When asked if this was true, Bill Bell, executive director of HomeEd, said he was unable to go into detail about situations where people are turned away, but said HomeEd does work with Wings of Providence, a secondary-stage shelter for women and children, if they request housing for their clients.

Affordable rentals will continue to be an issue for Edmonton’s residents and for all Canadians in major centres. The FCM has suggested a number of things to make sure a good supply of rental units remain, including giving tax credits to developers who decide not to turn rentals into condos or giving tax credits for converting units into eco-energy rental housing. And since the federal government renewed its commitment to affordable housing programs in this year’s budget-which would have ended in 2014-the FCM will also have an opportunity to sit down with the appropriate departments and come up with a plan for the future of rental housing.

In the meantime, wait lists are too long, rents are too high and vacancy rates remain too low