BY DARLENE DOIRON
There has been recent news coverage of proposed real estate projects and the efforts to increase the availability of affordable housing. I wandered what affordable housing meant on P.E.I. so I did a little research and number crunching to bring a little clarity for myself to the term ‘affordable housing.’
A single person, earning the minimum wage of $12 (May 2018) would gross $2,080 a month if working a 40- hour work week and take home about $1,700 a month. Economists advise housing costs should not exceed 30 per cent of income to allow you to meet other needs.
This would mean a single person, earning minimum wage, could afford to pay $510 for housing costs. The webpage NUMBEO has the average rent per month in the city centre for Charlottetown at $766.67 for a one- bedroom unit and $632.00 if renting outside of centre. Similar details were not available for the city of Summerside on the NUMBEO web page.
A single person, who wished to rent a one- bedroom unit in Charlottetown, would have to earn $19.25 an hour and work a 40- hour week to afford $766.67 in rent and meet other costs. This person would have a gross monthly income of $3,336 and take home of $2,556 to afford to pay 30 per cent of take home income, which is $766.80.
A developer has a profile of the tenant they hope to attract. What does this tenant look like in the marketing research? Large, million- dollar projects have market research behind them, guiding the decisions being made. The developer knows the demand for rental units and the price point at which they can fill the rental units.
Once built, the complex must generate enough income to cover such things as the mortgage, property taxes, insurance, maintenance, snow removal and utilities. The developer can aim to provide affordable units, but economics will always play a major role. The other realities are modern, new units can and will demand a premium rent and there is a long list of people who register for government-subsidized housing.
This leads me to believe that if the proposed projects are built they will have little impact on solving housing shortages for tenants whose take-home family income is less than $2,600 a month.
The take-home incomes were arrived at by using the payroll tables of Canada Revenue Agency. A micro-unit apartment, by Wikipedia’s definition, greatest floor space will measure 350 sq. feet.
- Darlene Doiron is a resident of Stratford