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By James Peters

Eyeview

CHARBONNEAU: The Kamloops rental shortage is no accident

Feb 20, 2020 | 2:55 PM

THE SHORTAGE OF AFFORDABLE RENTAL UNITS in Kamloops is the result of deliberate government policy starting with the Mulroney Conservatives in the 1990s. Not just Kamloops but all Canada was affected.

Governments stopped investment in affordable rental units for a number of reasons: strong wage growth from 1996 to 2006 coupled with declining interest rates and modest housing prices enticed more renters into home ownership.

But by the mid-2000s, stagnant wages and the growth of low-paying jobs along with escalating housing prices pushed people into rentals.

Now the federal Liberals in cooperation with the B.C. government and CMHC have reversed that trend with an investment in affordable housing.

Our society, the Centre for Seniors Information in Kamloops, is one of the city’s non-profits involved in the construction of affordable housing. (I am the president of the society.) We are building a five story apartment with 112 units, ranging from studio-sized to two bedrooms on the site of the old Cineplex Odeon theatre on the corner of Sixth Avenue and Victoria Street.

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Judging by the response that our housing manager is getting, the building could be full when it opens its doors in just over a year.

The drought in affordable housing has had a devastating effect on low and middle wage-earners.

Canada’s five most common occupations are low-paid and often not full-time: administrative assistants, retail salespersons, cashiers, food and kitchen helpers, food and beverage servers. They represent 1.8 million workers or 12 per cent of all jobs.

According to calculations done by David MacDonald, senior economist with the Canadian Centre for Policy Alternatives, wages don’t pay the rent anymore. He has come up with a measure of how much wages are short, something he calls the “rental wage.”

He defines the rental wage as the amount you would have to earn so that no more than 30 per cent of your wages goes to rent. In Kamloops, the rental wage is $25 an hour for a two-bedroom apartment. That would leave a reasonable remainder of 70 per cent for groceries, medicine, clothing, fuel, etc.

Another way of measuring rent is by the number of hours you would have to work at a minimum wage of $12.65. In Kamloops, you would have to work 78 hours a week to pay for an affordable two-bedroom apartment.

I suspect that many Kamloopsians are doing without essentials because they pay more than 30 per cent of income for rent.

Between 1980 and 1993, 49 per cent of all rentals built were affordable. Federal tax incentives and loan programs to private investors also played a pivotal role in apartment rental construction over that period.

Now, new federal programs plan to deliver more than 110,500 new units by 2027-28. Combined with other provincial and federal programs, 15,100 new affordable units were committed in 2017-18 and 16,600 in 2018-19; almost as many as from 1970 and the early 1990s before the cuts.

Canadians desperately need affordable rentals. One-third of Canada’s 14 million households rent their homes.

Without deliberate government policy, private investors can’t deliver the housing needed.

Everybody wins. Mortgages are given specifically for low income rentals, developers build the units and employ tradespeople, people can afford rent with money left over, and non-profits like ours take ownership of the buildings to generate much needed revenue.

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Editor’s Note: This opinion piece reflects the views of its author, and does not necessarily represent the views of CFJC Today or the Jim Pattison Broadcast Group.