By Judy Haiven
Housing affordability is the worst it has been in 41 years. According to a new housing study, nearly two-thirds of renters across Canada are paying more than 30 percent of their before-tax income on their rent.
Paying up to 30 percent of gross income in rent is considered “affordable” according to the Canada Mortgage and Housing Corporation (CMHC), the federal crown corporation charged with monitoring the country’s housing. Yet with more than 63 percent of Canada’s renters paying more than 30 percent, their “rent-burden” is increasing – which means the renters have less money to spend on necessities including food, drugs, utilities, childcare and transportation, and even less to spend on discretionary things like clothes, entertainment or travel.
The article in The Conversation suggests that with a $50,000 annual income, a family should pay no more than $1,250 per month for rent (30 percent of income). In 2021, the median household income in Nova Scotia – before taxes – was $71,500. Median means half the households earn more and half earn less than $71,500 a year. Using the 30 pecent rule, that household should pay a maximum of $1,787.50 in rent.
However, in Halifax, the median rent in January 2024 was $2,300 – a 21 percent increase from the previous January. The average two-bedroom rental costs $2,893 a month. Even with a household income of $71,500, paying rent of $2,893 per month represents 48.5 percent of the household’s income – significantly more than what CMHC recommends.
Let’s take a look at the new-builds in Halifax.
If you listen to Halifax peninsula councillors Waye Mason, Shawn Cleary and Lindell Smith (all of whom are not re-offering in the upcoming municipal election) the goal is to build, build and build. But let’s look at what they are supporting. They recently voted for developers’ plans for four 31-storey towers on a Halifax city block just off Spring Garden Rd. These towers will mean demolishing more than 140 affordable apartments and flats above stores which have been there for years, plus about a dozen small shops.
Not one of the new apartment units in any of the towers will be “affordable” – especially not two or three years from today when they might be finished. There will be more than 1,200 suites, all renting at 40-50 percent of the median household income. That is not going to be affordable. Neither of the developers (each one boasts two gargantuan buildings) has said how big the suites will be. But word on the street is they will range from 500 to 900 square feet.
Given the small size of the individual apartments to be built, few to none will be geared for family living.
Smaller apartments now and even smaller in the future
Local developer Alex Halef of Banc Developments agreed about the small size. He warned the audience at the National Conference on Ending Homelessness held in Halifax in October 2023, “I know you’re seeing smaller units now, but even smaller still.”
For Halef the goal is to make as much as he can. To ensure Banc makes more, he noted, “The issue is one of affordability. How many people can you put in a building? What is the rent you can charge?”
One person who disagrees with the for-profit developer strategy is Stephan Richard, of the Community Housing Transformation Centre. At the conference, he pointed out that “in Nova Scotia, it’s less than 3 percent of housing that is not owned by the private sector. If we want a real, sustainable solution, we need more community housing.”
Indeed, one thing that will contribute mightily to slowing rent increases is removing more housing stock from “the market.” That means public housing, non-profit and co-operatives.
Richard insists that for a serious alternative to staggering rents and housing insecurity, the non-profit and co-op sectors should own and operate at least 20 percent, not just 3 percent as it does today.
22,600 new housing units and not one affordable
Then there was the Nova Scotia Tory government’s announcement of nine “Special Planning Areas” around Halifax Regional Municipality (HRM) in Spring 2022. With little to no consultation with HRM, developers promised to build 22,600 new residential homes within a few years. But as Gary Burrill, former leader of the Nova Scotia NDP said in response, “We have here 22,600 units being announced and the total number of them that is designated as guaranteed affordable is zero.” Yet it is non-market housing that is key to providing housing to the hard to house, people of lower incomes, students, and disabled and elderly people.
In December 2022, local developer Joe Ramia and his Rank Inc. brought a proposal to HRM council to develop his Mic Mac Mall site into “a small town” for 2,000 residential units in seven 30-36-storey apartment towers, plus five nine-storey residential buildings along with underground parking for 6,000 cars. Again, questions of affordability, green space, limiting traffic and environmental issues were not seriously discussed. Ramia is the man who built the enormous Halifax Convention Centre, which some argue has become the next thing to a white elephant.
Outrageous mortgage payments
It is abundantly clear that developers are leading our housing policy and the ramping up of all the new builds. But new builds mean higher rent – and high mortgages. Most of the single-family homes built in the Special Planning Areas will cost at least $700,000 -$800,000. So even with a 10 percent down payment, monthly mortgage payments will range from $4400 to $5100. Who can afford that?
Wages, which increased nearly 4 percent during the pandemic (a drop in real terms) have dropped even more precipitously. Nova Scotia’s new $15 hourly minimum wage means if two people in a household work for 35 hours a week at minimum wage jobs, their yearly income together will be just over $55,000. Theoretically, according to the 30 percent guideline, they could afford to pay a maximum of $1365 per month in rent. That low a rent in Halifax, and in most cities and towns in Nova Scotia, is as rare as a hen’s tooth.
If the couple both earned Halifax’s living wage of $26.50 per hour, for a 35-hour work week, their combined income would be $96,460 per year. The 30 percent guideline suggests the couple could afford to pay rent of $2411 a month. That’s still 16 percent (or nearly $500) short of the average rent of $2893 now charged for a two-bedroom apartment in Halifax.
Rent control: Tory style
To top it off, rent control which the provincial government pegged at a maximum 2 percent increase per year, has now more than doubled. Anyone living in rental accommodation is now facing a maximum 5 percent annual rent increase. And what’s worse, if a new family or person is just moving in, the landlord can charge whatever they want – in other words, way more rent than the former tenant paid.
That’s the Tory government working for you.
The federal Liberals with their Housing Accelerator Fund promised to fast track or “build faster” at least 100,000 new homes across the country in the next few years. To do so, the government is taking the few remaining regulatory restraints off developers to incentivize for-profit developers.
Judy Haiven (jhaiven@gmail.com) is a principal of Equity Watch, a Nova Scotia based non-profit that fights against discrimination, sexism and bullying at work.
[Photo: Nova Scotia ACORN]
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