Rental housing becoming more unaffordable in region

A new set of data shows that wages in Kitchener and Waterloo aren’t keeping pace with residential rent increases — a trend that’s forcing many households to allot more of their overall income to housing, putting many at a “crisis level” of spending and at risk of homelessness.

According to the 2018 Canadian Rental Housing Index released earlier this month, between 2011 and 2016, the number of renter households in Kitchener and Waterloo increased by 7,395, to 47,460. During that same period, average income increased by 15 per cent and 12 per cent, respectively, while average rent went up by about 20 per cent.

The index shows that 46 per cent of renter households in Waterloo and 42 per cent of renter households in Kitchener are spending more than the recommended 30 per cent of their income on rent and utilities, while one of four in Waterloo and nearly one in five in Kitchener are spending more than half their income on rental housing.

The trend isn’t confined to Kitchener and Waterloo. More than 1.7 million renter households in Canada spend over the recommended affordability benchmark of 30 per cent of gross income on rent and utilities. Of those, 795,000 renter households spend over half of their income on housing.

The Canadian Rental Housing Index was developed by BC NonProfit Housing Association and Vancity Credit Union, along with a national partnership of advocacy organizations and housing associations, including Ontario Non-Profit Housing Association.

The data was developed using the latest census data from Statistics Canada, and it paints a worrying picture for rental housing affordability across the country, a summary concludes.

“Traditionally, spending 30 per cent or less of household income on rent has been viewed as the benchmark of what’s considered affordable,” according to Jill Atkey, acting CEO of BC NonProfit Housing Association. “However, the data shows that spending more than 30 per cent of income on housing has become the new normal for families in almost all areas of Canada.”

If every renter household that spent more than half its income on housing costs lived in one place, it would be Canada’s fourth largest city, noted Kira Gerwing, manager of community investment at Vancity Credit Union. “This shows why a strong community housing sector is absolutely necessary to deliver rental housing that people can afford.”

The index shows that Ontario is facing the most severe challenges, with the average monthly cost of rent in 2016 in Ontario at $1,109. That’s up from $926 in the previous census, in 2011.

Ontario also leads the country in the number of renter households (709,000, or 45.7 per cent) spending over the recommended affordability benchmark and “is the epicentre of a trend emerging across the country where rents are badly outpacing increases in income,” the findings state.

We have a low vacancy rate … and while there’s groups of people that might find units that are available, they won’t be affordable. DEB SCHLICHTER, Region of Waterloo

Deb Schlichter, the Region of Waterloo’s director of housing, said recent measures taken by the province to calm the real estate market, such as mortgage stress tests, have made the rental market even tighter here.

Many people are staying in the rental market longer, she explained.

“There’s less turnover in units, so there’s less people moving out, which impacts the vacancy rate. So now you’ve got a more competitive market where less units are available to the people that are looking for them.”

While controls recently implemented by the province restrict the amount landlords can increase rent while a unit is occupied, they can still jack the price once they become vacant, which is often as high as the market can bear, Schlichter said.

This is just one of the “unintended consequences” of implementing various measures to aid the housing market, she said. “It’s a complex series of variables.

“We have a low vacancy rate … and while there’s groups of people that might find units that are available, they won’t be affordable.”

Schlichter said mitigating tools such as rent assistance programs will need to be established.

And, along with the need for more affordable housing, she said there needs to be more housing developed for middle income earners, as well — just “regular, plain-old market rent.”

“I’m mostly concerned about the average market rent, and even just above average market — there’s not enough being built for that group,” Schlichter said.

“If they can’t get into the home-ownership world, we’re going to see more pressures in the rental world, and who’s going to create those units? That’s not where the development community has put its focus.”