Housing affordability a key issue
‘The Canadian dream is to own your own house and have a backyard,’ one realtor says
WATERLOO REGION Imagine viewing 30 houses in three months in your search for buying a home and putting in 12 offers — but each time, a higher bidder gets the house.
That’s happened to a Kitchener couple who are desperately trying to get into the competitive housing market.
“They have put an offer on almost every second home they have seen, and each time they are outbid,” said realtor Mike Milovick of Royal LePage Grand Valley Realty in Kitchener, who is working with the couple.
The couple is ready with a down payment of 10 per cent and have incomes to carry their house, but anything over $650,000 is out of reach.
On top of that, a deadline is looming.
They have been preapproved for a mortgage of up to $650,000 but come June 30 they will have to go back to the bank to renegotiate and by then the interest rate will be higher.
That means the amount they will be able to afford will be lower, more like $550,000, said Milovick.
“Their wallet is shrinking because of the rising interest rates,” he said.
Despite more inventory of houses on the market and some housing prices decreasing from last month, Milovick said the housing market with its runaway prices remains competitive as ever.
In Kitchener-Waterloo, the average price of a detached home fell by $150,000 from last month but it’s still over $1 million to buy a house. In Cambridge, it’s just under a million at about $973,000.
Some potential buyers continue to come in with inflated prices for homes, completely shutting an entire generation out of home ownership.
The housing affordability issue is a “real conundrum” that politicians will need to face, Milovick said.
Some unpopular decisions like building on the greenbelt may have to be considered, he said.
“I’m not completely convinced everyone wants to live in an apartment,” he said. “The Canadian dream is to own your own house and have a backyard.”
In this upcoming provincial election, all parties have said they will combat the most pressing issue — the housing affordability crisis facing Ontario.
In addition to supplying new homes, parties say zoning regulations need to be changed and fasttracked to allow for duplexes and small apartment buildings in neighbourhoods to address “missing middle” housing. There is also a concentrated focus on affordable housing and creating housing that is attainable for all.
The pandemic has pointed to housing challenges, particularly for working residents, and the issue of affordable housing will continue to grow, especially coming out of a global health crisis, said Region of Waterloo director of housing Ryan Pettipiere.
Last year, the region set a bold target of building 2,500 new affordable housing units over five years. It’s an ambitious goal considering that historically, the region has only reached 50 new builds each year.
“We are trying to achieve a level 10 times of what we have in the past,” Pettipiere said.
The region’s housing master plan will look at redeveloping and revitalizing existing affordable housing sites and adding 669 new units to existing housing sites over five years. This is being largely funded through the region, Pettipiere said.
“Affordable housing has come forward time and time again through community engagement,” he said.
“This is the region stating in a big way that affordable housing is a priority.
“A big portion of the region’s finances are going to address this,” said Pettipiere, pointing to $682 million in capital costs for the 669 units in six local projects.
They include seniors’ housing on Wilson Avenue in Kitchener, Langs Drive in Cambridge, Kingscourt Drive in Waterloo, Weber Street housing in Kitchener and housing units on Mooregate Crescent and housing at Courtland Avenue and Shelley Drive in Kitchener.
Other regional housing projects are also planned for local surplus lands located on Highland Road in Kitchener, Westhill Drive in Waterloo and Lauris Avenue in Cambridge.
The New Democrats, Liberals and the Progressive Conservatives all say they will build 1.5 million new homes over 10 years. The Greens said they will build 160,000 affordable rental homes over 10 years with 60,000 units being supportive housing to combat homelessness.
The 1.5 million new homes is the same number a recent government-commissioned task force on housing affordability has suggested. In addition to new homes, the task force focused on increasing density in neighbourhoods through zoning reform.
For some, home ownership is not on the horizon.
Chanel Fagan moved to Kitchener this month but she had to find a roommate to afford the $2,100 monthly rent for a twobedroom apartment, which includes utilities and parking.
“I couldn’t afford it on my own,” said Fagan, 31, who got a job with a cannabis manufacturer in Kitchener.
In Hamilton, she lived in a one-bedroom unit, paying $840. The 14-unit building was sold and the new owners wanted to renovate so she was forced out.
As a single person, the rent in Kitchener was not affordable and living on her own wasn’t an option.
According to Rental.ca, the average rent for a one-bedroom unit in Kitchener is $1,700, while a two-bedroom unit is $2,037.
“It’s a bit depressing that at my age I’m not able to live by myself,” she said.