Affordable housing shortage in Fredericton 'entering a crisis': specialist

The affordable housing shortage in Fredericton has reached a critical juncture, according to one local housing specialist. 

"It's hitting the point where we are entering a crisis," said Shelby MacIntyre of the John Howard Society of Fredericton.

MacIntyre spends her days trying to find housing for her clients that is affordable and safe. But rising rents, a low vacancy rate and a lack of new affordable housing units are combining to make her job more and more difficult.

In the last three months, she said she's only been able to place six people — a far cry from when she started nearly two years ago.  

"I remember… referring [a] client to a shelter was a worst case scenario, if we couldn't find a place. Now if somebody gets a bed in a shelter it's a victory," she said. "It's a big victory because it's always so full."

Rents climbing, assistance stays the same

According to the Community Action Group on Homelessness's 2017 annual progress report on homelessness, the average rent for a two-bedroom unit climbed from $809 per month in 2014 to $860 in 2017, while social assistance remained unchanged at $537.

"Long-term solutions are really not there and the places that are on the market are too expensive and sometimes landlords just aren't willing to help out where help is needed," MacIntyre said.

But the president of the New Brunswick Apartment Owners Association notes they have their own pressures to consider.

"Construction costs have just gone through the roof. Our interest rates have probably gone up a point and a half in the last 12 months," said Willy Scholten.

Cost-prohibitive to build

According to the Canada Mortgage and Housing Corporation's rental market report, the vacancy rate in Fredericton in Oct. 2018 was 2.1 per cent. Scholten said that's a low rate for any marketplace, and the lowest the city has seen in years.

"Fredericton definitely needs [units]," he said. "With that kind of vacancy rate tenants certainly need to see more being built."

But Scholten says the high cost of building, interest rates and double taxation for landlords in the province all make it hard for developers to build more affordable spaces.

"There's really a lot of pressure. If you're going to build, you've got to get higher rental rates," he said. "You can't build units with today's costs and today's interest rates that are going to be lower in rent. It's just impossible, the economic equation just doesn't work."

Many more units needed

MacIntyre estimates that 100 affordable units would be a good place to start. The John Howard Society of Fredericton is currently building four.

"We need more affordable units that are just the bare bones, but also affordable for people to rent," she said.