Does Canada enjoy a strong economy? Two recent headlines in The Globe and Mail seemed to give opposite answers to that question. One told us the Canadian economy was “on fire” and the other stated that half of working Canadians are “living paycheque to paycheque.”
Housing can be a key indicator of whether people are living in good or bad economic times. Increasing house prices and lower vacancy rates are sometimes used as signs that a community is doing well, but they often create unsustainable debt burdens for homebuyers and a critical lack of rental accommodation, problems we are now facing in Powell River.
Of course, we are nowhere near as bad as Vancouver or Victoria, but housing prices here are on the rise and decent rental accommodation has become extremely hard to find.
With Canadian incomes virtually flat since 1980 and mortgage rates at historic lows, Canadians have borrowed heavily to buy homes. In some communities, they have had little choice other than to buy. Real estate developers have been unwilling to build rental accommodation because the return on investment is not attractive enough.
Manic buying sprees in local housing markets feed on themselves, with people seeing housing as a good investment. In addition to the debt they take on with mortgages, people have used increasing amounts of credit card and other kinds of debt to make up for stagnant wages. Results are scary for personal debt levels and affordability.
Canadian Payroll Association’s recent annual survey revealed that almost six in 10 employees in BC are living paycheque to paycheque, indicating they would have trouble meeting their financial obligations if their salary was delayed by even a week.
BC has the highest personal debt figures in the country. Half of us are actually spending more than we earn each year, creating record high personal debt.
Various elements of our skewed economy have all come together to impact housing. With incomes flat, the cost of maintaining properties rising and property prices escalating, those owning rental units are selling.
Over the past year, many renters in Powell River have had to move because owners seized the opportunity of an “improved” housing market to sell their properties.
Past federal governments killed programs such as co-op housing and residential rehabilitation grants geared to creating and maintaining the supply of affordable housing. This was a truly false economy.
Federal government studies show that spending $10 on housing for the chronically homeless saves $22 in health and social costs, and many studies have shown that to deal with poverty, housing has to be dealt with first.
Locally, encouraging efforts are being taken to address the problem. Life Cycle Housing is working to create more affordable housing and Sunset Homes Society is close to announcing a seniors’ affordable housing development. City of Powell River council is also taking the issue seriously.
The NDP’s first provincial budget provides $208 million for 1,700 affordable rental units and $291 million to house 2,000 homeless people. The federal government has committed about $300 million to BC over two years.
Improved government housing programs are absolutely critical to solving the crisis, but so is addressing gross income inequality. Then people wouldn’t be buying houses hoping to boost their incomes and driving prices through the roof. They would just be buying a home.
Murray Dobbin is a Powell River freelance writer and social commentator.
