Iron ore recovery sparks surge in Lab West housing demand, with some residents feeling the pinch
With iron ore mining booming in Labrador West, the region's housing stock is struggling to keep up with surging demand from an influx of workers, sending rents skyward and leaving some residents behind.
Jay Torraville, a worker in the service sector in Labrador City, is struggling to make ends meet.
"Prices are rising for everything, for food, for rent, for gas, for just living," Torraville told CBC News.
Torraville said they can survive because they live in a room in another family's home, keeping their housing costs low but sacrificing having a place of their own.
They consider themselves lucky to be living with a family they like, but says their situation is not sustainable in the long run.
Nancy Bonnell Stoyles of Labrador City has experienced the region's housing volatility first-hand, having been forced to move twice when her rent doubled since 2008.
Her and her family eventually managed to buy a house in 2018 for $25,000 toward the end of a previous boom, and the most recent assessment put its value at $144,000, according to Stoyles, who chalked it up to the cycle of boom and bust.
"It goes around in a cycle. It goes around and around and eventually, this boom is going to end in a couple of years," said Stoyles.
Labrador City's deputy mayor says the town is looking into the housing shortage and has donated land to Labrador West Pioneer Living, a local business planning to build seniors' cottages.
"In the big turn of things, that's going to get about 40 houses." said Mitchell Marsh.
Although the units will be geared toward seniors, said Marsh, they will still open up the broader market as seniors move in, making their previous homes available for others to rent or buy. But the town can't say when the project will be completed.
Labrador West's NDP MHA, Jordan Brown, says the government needs to do more to fill in the gaps.
"We need affordable rental units, with more of a mixed style of housing," said Brown, who said a combination of rent control and low-cost housing unit development would help ease the current housing crisis.
But the provincial government says rent control doesn't work.
In a statement to the CBC, a spokesperson said, "The disadvantages of increased administrative burden and potential unintended consequences outweigh the potential benefit."
Boom-and-bust cycle
The Lab West boom has been drive by a surge in iron ore demand as global manufacturing recovers from a pandemic crash. The price of iron ore has dropped to pre-pandemic levels but the demand has remained, stoking the Lab West economy. The co-authors of a Canadian mining history say major natural resource developments can overheat an economy built around a resource.
"That can lead to things like rapid development or even housing challenges," said Arn Keeling, co-author of Mining Country: A History of Canada's Mines and Miners
"It's almost like a community flourishes and grows so much that the social infrastructure cannot keep up," said co-author John Sandlos.
When housing supply lags behind the economic boost, people whose incomes aren't tied to the boom can't afford the higher prices. But when cheaper housing is readily available as the economy cools down, people often struggle to find jobs and can't necessarily afford the lower prices either.
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