Tuesday November 25, 2014

QUESTION OF THE WEEK

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The great reversal

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For nearly a decade, the largest recurring issue facing Estevan has been the lack of available rental housing.

But the issue appears to have shifted from the housing dearth to housing costs.

The Canada Mortgage and Housing Corporation (CMHC) released its semi-annual housing availability report on June 11, and the numbers for Estevan were staggering. Estevan’s vacancy rate was at 5.5 per cent; a year earlier, there weren't any available rental properties in Estevan.

New rental properties are now available, which has helped alleviate some of the pressure. CMHC didn’t have the vacancy rate for three-bedroom units and bachelor suites, but the vacancy rate for one-bedroom and two-bedroom apartments was 4.9 and 5.6 per cent, respectively.

It’s the highest rate in Estevan in at least five years.

The soaring number of available units did not parlay into lower rents, though.

Estevan’s average rent increased from $1,068 in the spring 2013 to $1,170 in 2014. It’s still the highest in the province. In fact, it’s higher than Vancouver’s average rent.

Affordable housing is a myth, thanks to the cost of constructing apartment buildings and other rental properties. If a developer opens a new apartment building, rent will need to be over $1,000 a month to recoup costs.

But accessible housing is not a myth. Thanks to projects like the Marissa condo development, the Ridge subdivision’s mobile home project in south Estevan, and Trimount Developments’ multiple condominium projects, accessible housing is gaining traction in Estevan.

These projects, and others, have allowed people to own their own home. And in many cases, the mortgage that people have at these developments is lower than their monthly rent payments.

Some people still can't afford to purchase their own home, and they find themselves in a quandary some months to pay the rent. That's an unfortunate situation. Others will choose to rent, rather than accept the added responsibility of owning their own home.

But thanks to some of these new developments in Estevan, many have been able to escape the rental market, and move into a good home in a solid development.

Estevan has a lot of good landlords. It also has some unscrupulous landlords who have been gouging tenants, and treating them as a means to an end.

But landlords, both good and bad, can't use supply versus demand as the argument for burdensome rent levels. Those who have aging properties might have to reconsider their rental rates, or they could wind up with more empty apartments.

After all, why rent when you can have a mortgage for less money, and the property is newer and nicer? 


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