How Housing Affordability Impacts Communities

It’s no secret that securing homeownership is becoming more and more difficult in Canada. With increasing costs, rising interest rates, tightening mortgage rules, record levels of debt and plateaued incomes, the barriers — for many — seem unsurpassable.

According to the Canadian Mortgage and Housing Corporation (CMHC) (2018), “housing is considered affordable if it costs less than 30 per cent of a household’s before-tax income.” Based on this statistic, 17 per cent of Canadians own homes are just within their budget. And although homeownership in Canada is considered strong, one in every four Canadian households spends 30 per cent or more of their pre-tax income on mortgage payments (Statistics Canada, 2019).

40 per cent of the Canadian workforce is made up of essential workers, such as police officers, firemen, teachers, nurses and medical personnel, who fulfill our basic needs and keep our communities safe. Some are well compensated, but despite being gainfully employed, the essential worker’s average wage, excluding healthcare workers, is almost 20 per cent lower than employees in other industries (McQuarrie 2020). According to Statistics Canada (2020a), many essential workers rent long-term as homeownership is simply not a financial reality.

Housing affordability impacts other demographics, too. For example, seniors and students both often struggle to find comfortable housing within their economic reach. Restaurant workers, delivery drivers, and even office workers earning a moderate income also struggle to find homes they can afford.

In a 2019 Globe and Mail interview, Chief Executive Officer of the CMHC Evan Siddall said, “We need to stop taxing density and call out the glorification of home ownership for the regressive canard that it is. Overpromotion of home ownership is counterproductive, increasing the division between rich and poor.” Housing experts are calling for creative solutions to increase density to make current land usage more effective, by turning residential single-family dwellings into ‘plexes,’ townhouses and low- to mid-rise buildings, accepting that long-term rentals are part of the solution.

This demand for affordable, attainable dwellings and walkable communities continues to grow, but city zoning regulations and market regularities promote urban sprawl, making this more and more difficult to meet without intervention. As the demand for this housing category increases, prices rise and communities begin to experience gentrification, increasing the gap between classes and fuelling our nation-wide housing crisis. Without affordably priced dwellings, communities risk instability in children’s education, community populations and individual health as lower and moderate income families make difficult trade-offs to make ends meet (Enterprise, 2014).

These obstacles barring working Canadians from owning homes creates immediacy for housing affordability. Residents shouldn’t have to depend on their government to supply affordable options for them; they need access to safe, comfortable housing options at a rate appropriate for their income.

We recognize this rising need for quality rentals and aim to serve Canadians across the Prairies. Everyone deserves access to quality housing, whatever income bracket they may fall under. That’s why we invest in multi-family units and bring focus to providing housing affordability to the Canadian workforce, the backbone of our society.

We proudly provide housing to accommodate those who are gainfully employed but fall short of homeownership. These individuals often earn an insufficient income to live in close proximity to work, but want to live nearby. The buildings we invest in are class B and C apartments, typically low-rise, older inventory with affordable rent because they are purchased, upgraded, and then rented at a rate that is much more attainable than a new build.

Compared to other asset classes, class B and C housing presents several advantages, including locations, unit sizes, vacancy rates, rental prices and growth opportunities. Affordably priced dwellings benefit not only its residents, but the community as a whole.

Benefits of Affordably Priced Housing:

Creates a stable community. The growing need for housing that is affordable to the everyday Canadian means that this type of property will always be in demand. Upgraded, affordable rentals support a growing and stable population while encouraging economic investment from those residing in and giving back to the local community.

Builds the local workforce. Affordable multi-family dwellings in a neighbourhood means continual community growth and livelihood. With more essential workers, seniors, and students in the community, services and offerings grow and helps maintain the local economy.

Encourages economic stability. Essential workers tend to be dependable renters and have steady incomes. In times of economic downturn, essential workers often experience income increases as they are needed more than ever, thriving financially while they keep us afloat.

Increases disposable income. Paying less for rent means residents will have the choice of how to spend their money. With lower debt levels and more disposable income, residents can put more money back into their local community, thus fuelling the economy.

Allows for walkability. By increasing density in neighbourhoods, we provide ‘neighbourhood living’ over ‘city living,’ allowing residents to easily explore their community on foot. This actively supports small businesses, promotes physical exercise and encourages individuals to get involved in their neighbourhood.

Lowers our carbon footprint. By providing housing near places of employment, we help to lower our residents’ carbon footprint by shortening commutes, giving time and convenience back to these individuals. In addition, we seek out existing buildings and reposition them through strategic capital improvements, a carbon-friendly alternative to building new.

Revitalizes our communities. In addition to lowering our carbon footprint, investing in vintage properties and repositioning them benefits the community, making it a more attractive home for future residents while maintaining an affordable rate.

The bottom line is simple:

For many people, there’s a trade-off between convenience and affordability.  But it doesn’t have to be that way. Properties that charge affordable rent benefit individuals and the community at large by increasing neighbourhood quality and stability, providing economic security and allowing Canadians to live in safe and comfortable homes.

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them.