New Face of Affordable Housing
We as a community are realizing, perhaps too slowly, that the face of affordable housing is changing. It’s not that those in the deepest depths of poverty no longer need support and solutions. We haven’t solved the crisis in some way. Those needs are still very real and growing. The troubling reality we face is that while the needs of those in the greatest depths persist, we continue to add new groups to those who face housing insecurity and affordability issues daily.
Gone are the days where this issue was one on the peripheries. This is an issue for professionals, trades people, and teachers. The issue of affordable housing and our current housing reality has started engulfing more members of our community.
My brother works for a municipality which is a good, stable and long-lasting job. His partner is a successful small business owner, building a business anyone would be proud to own…and they will rent for the rest of their lives without some sort of system change.
Not that long ago, two people with stable jobs, setting out to build a life together, would dream of owning their own home and know it would be within their realm of possibilities. Today, that option is lost for many.
So, what does this change mean for our community?
It means more members of our community will be in unaffordable housing. Affordable housing is defined as no more than 30% of your annual household income going towards your housing expenses. As we lose options and prices continue to climb, fewer people will be able to afford their housing.
This is a system failing in real time.
Consider this. A family of four making $85,000 a year is paying $2,200 a month to rent a two-bedroom apartment. They currently don’t have enough space for everyone. To be affordable, their rent needs to be less than 30% of their income or below $2,125.00 a month. So, what are their options? They could keep paying high rents and hope that the price drops, though that seems unlikely. They could try to buy something, but they can’t afford to do so.
According to the Waterloo Region Association of REALTORS, the average price for a townhouse was $664,519 in April. To buy that, a family will need a downpayment of over $41,000.00, making their monthly mortgage payments $3,825.00 or 54% of their gross family income. What about a condo? With the average condo price of $485,000.00 in April, they are looking at a $2,851 monthly mortgage payment, equal to 40% of their income, after a $24,000.00 downpayment. And where does the downpayment come from when they are already paying more than they can afford on housing? How do they save with the cost of living today?
So, they stay. It’s the best of some tough options, but that becomes one less rental unit available for the family living in subsidized apartments to try to move into market rent. Assuming, of course, a person living in a subsidized apartment can make the jump to paying $2,200.00 a month in rent, which is unlikely. Since they can’t make the move, they stay in subsidized rental, leaving those looking to move on from a shelter nowhere to go because the unit is full, and the entire system grinds to a halt.
This crisis is growing. We as a community need to recognize this shift, because without understanding the true scope of the issue, the new faces of affordable housing, how can we ever dream of solving this crisis? We need more housing. We need permanently affordable housing across the entire spectrum. We need a system that gives people the option to live the life of their dreams.
Philip Mills
CEO, Habitat for Humanity Waterloo Region
Philip Mills, CEO
