Denley: A roof over our heads – it's getting harder and harder to afford decent housing
BY THE NUMBERS: An excerpt from the City of Ottawa's 10-year Housing and Homelessness Plan Progress report (2014 to 2017)
Ottawa’s affordable housing problem has been getting worse, not better. Today, Randall Denley begins a special opinion series examining why and exploring what can be done:
The high cost of housing is a big issue in Ottawa, as it is in just about every major city in Canada. People trying to rent apartments or buy their first house know this. So do our federal, provincial and city governments. Combined, they have spent billions on housing programs and have pulled every policy lever they can get their hands on.
And yet, the housing affordability problem has gotten worse. It’s time to ask if we are doing the right things.
The term “affordable housing” has come to mean rental housing subsidized by government and owned by its agencies or community non-profit corporations. This is the visible, seemingly intractable, issue on which governments most frequently focus.
Apartment rentals.
The problem of housing affordability, though, is much larger than that and affects a broad swathe of the middle class. People looking for their first apartment or their first house find that supply of both is inadequate and prices strain their budgets.
The Canada Mortgage and Housing Corporation says Canadians should be spending no more than 30 per cent of before-tax income on housing. That includes rent or mortgage payments, utilities, property taxes and condo fees.
In Ottawa, according to the Royal Bank of Canada, buying the average single family home takes 38.6 per cent of median family income. While that’s far short of the crisis levels found in Vancouver and Toronto, our affordability number has worsened for five straight quarters, and the bank predicts further deterioration in a market that has the tightest housing supply in nearly a decade.
Another study by the National Bank found that mortgage payments here, relative to income, were increasing at the fastest rate in the country. Mortgage rate and housing price increases combined were outstripping our annual increase in income.
Our affordability number has worsened for five straight quarters, and one bank predicts further deterioration in a market that has the tightest housing supply in nearly a decade.
The situation for renters isn’t any better. The vacancy rate here is a meagre 1.6 per cent, according to the latest CMHC numbers, although the Eastern Ontario Landlord Organization says it’s actually close to one per cent. For tenants to readily find apartments, the vacancy rate should be about three per cent. In Ottawa, that would mean we would need 2,000 more rental apartment units.
The tight market is driving up rents in Ottawa. The CMHC reports that rents have gone up 5.8 per cent over the last year, the second-highest rate of any major city in the country.
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