Ottawa rents out of range for minimum wage earners: report
Single tenant would need to earn $22 per hour to be able to afford average rent
Tenant advocates are sounding the alarm over high rents across the province, including in Ottawa.
The Advocacy Centre for Tenants Ontario (ACTO) makes the case for government action in its report called "Where Will We Live? Ontario's Affordable Rental Housing Crisis."
Four out of 10 people are in danger of being displaced.- Kenneth Hale, ACTO
The report says 42.3 per cent of renter households in Ottawa are paying unaffordable rates, defined in the report as consuming more than 30 per cent of household income.
"Four out of 10 people are in danger of being displaced, or of losing their home because they can't afford it if some unexpected expenses occur for them," said Kenneth Hale, ACTO's legal director.
The average cost of rental dwellings of all types in Ottawa is $1,148, according to the report, which drew the figure from 2016 census data. To cover that cost on a single income such that rent would consume no more than 30 per cent of earnings would require a salary of $22 per hour, well in excess Ontario's minimum wage of $14 per hour.
Ottawa renters still better off
However, renters in Ottawa appear to be better off than their counterparts in most other Ontario cities. Of 15 Ontario communities, only Sudbury and Guelph have a smaller percentage of households spending 30 per cent or more of their income on rent, according to the report.
Still, the statistics across the province point to the need for government to build more social housing, support the building of non-profit and co-op housing as well as expand rent control, Hale said.
Rent control measures have expanded under the Liberal government but landlords can still increase rent as much as the market will tolerate for new tenants moving into a unit.
"Having an increased supply [of housing] is really important, but also having rules that don't allow tight markets to be exploited is really important as well," Hale said.
In Ottawa, the vacancy rate for one-bedroom rental units is 1.4 per cent and 2.1 per cent for two-bedroom units, according to 2017 data from the Canada Mortgage and Housing Corporation cited in the report.
A healthy rental market requires a minimum vacancy rate of three to five per cent, according to ACTO.
More rent control 'devastating,' landlords warn
While landlords agree with many of ACTO's proposals for the province, such as matching the federal commitment to a new National Housing Strategy, they argue that expanding rent control would lead to less affordable housing, not more.
"That would be devastating," said John Dickie, chair of the Eastern Ontario Landlord Organization and president of the Canadian Federation of Apartment Associations. "People would not invest. People would convert their properties and [owners] would demolish."
Dickie took issue with a number of the premises on which ACTO's report is based, starting with the assumption that for rent to be affordable it should consume less than 30 per cent of income. That standard was developed at a time when the average tenant household was a family of four or five people, Dickie said.
Many single people and even couples can afford to spend more than 30 per cent of their earnings on rent, Dickie argued. He also criticized ACTO for highlighting the high cost of average rent for people living on minimum wage.
"A really low income person is not paying the average rent. You can get cheaper rental units than that," Dickie said. "They have an affordability problem, but ACTO's figures make it look bigger than it is."
Other options
To make housing more affordable, Dickie said the province should look at increasing the shelter allowance built into social assistance, which he said is insufficient to cover even the cost of renting a single room in Ottawa.
As for social housing, he'd like to see public funds used to build more supportive housing, but not units for tenants for whom affordability is the only concern. For them, direct financial assistance would be more cost-effective, Dickie said, and would enable them to move more easily for work or other reasons.
"By world standards, rental housing in Canada is of modest expense," Dickie said. "The problem is tenants don't have enough income."