Affordable Housing in Guelph: Rental Housing Stock

A while back a friend of mine who lives in rent-geared-to-income contacted me all a fluster about a change that is taking place in her housing complex. Until recently, she received access to a washing machines and driers as part of her "rent", but it was announced that this was going to change to a "pay-as-you-go" system. The costs are less than what a commercial laundry mat would charge, but not that much less. To middle-class people like myself, this is a trivial amount of money, but to the people in this complex, it is a very big deal because it comes out of their very small pool of disposable income. What I found surprising about this situation is that this was a significant change in the cost of living in the complex, but had no impact on the formula that provides a subsidy to the rent. After some research, it turns out that the formula specifically refers to the actual unit of housing---nothing else is considered to be intrinsic to the subsidy. That means that any sort of "side benefit"---like access to laundry---is something that the people who manage the property can use to raise more money.

I recently called my friend to see how things are going, and she says that there was such a big "push-back" against this change that management has put the change on hold and things are continuing as they were before. But this incident got me thinking about affordable housing in general terms and I thought I'd write a story about it.

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The Different Types of Housing

The first thing that needs to be spelled-out is that there are a huge number of different types of housing. These include:

• single, detached homes
• apartments
• condos, co-ops, and, tenancy in common
• "social" housing---like seniors centres, group homes, nursing homes, etc
• boarding and rooming houses
• emergency housing---such as shelters for the homeless

And, of course, some of these types of housing can be split into into whether they are owned, rented, or, subsidized through systems like rent-geared-to-income.

To a certain extent all of these different types of housing have an impact on each other. For example, if the price of single, detached homes goes up it tends to increase demand for apartments because increasing numbers of people cannot afford to purchase a home, so instead they seek to rent. Similarly, if the supply of cheap rooming houses dries up, this increases demand for social housing and emergency shelters. Another element to consider is the demand by university students for seasonal housing, as they place significant demand on the lower end of affordable housing. One final issue to consider are the number of people who choose to live outside of the city and commute to Guelph for work---and the opposite. Add in planning regulations that detail what sort of homes that developers are allowed to build in what quantity. There are also several federal and provincial programs aimed at providing relatively cheap accommodation for people of limited means. The result if is a very complex, inter-dependent "ecosystem" decides whether or not any given person can afford a good place to live.

The Current Guelph Housing Stock

According to the latest figures (2011) from the Canadian Mortgage and Housing Corporation, Guelph has:

• 32,265 single detached homes
• 2,265 semi-detached 
• 6,425 row houses
• 2,485 duplexes (these are houses with units that are more apartment-like than semi-detached which are more like single detached homes that share one common wall)
• 5,790 low-rise apartments (five stories or less)
• 5,265 high-rise apartments (more than five stories)
• 380 "other" (these include things like mobile homes and single-attached houses) (I looked and looked and could not find a good definition of a "single-attached house"---so your guess is as good as mine. Since 350 of the 380 "others" are in the townships and nothing at all in the city proper, I suspect that the vast majority of this number are mobile homes at trailer parks---which do not exist in Guelph proper.) 

According to Google Images, these are "single-attached" houses.
To me, they just look like row houses that have been separated out.
From a real estate site called "my property". Fair use provision.

The result is 54,870 structures for habitation. Please note that these figures say nothing about how these buildings are owned.  In 2011, according to Statistics Canada, the population of Guelph and townships was 140,000. This averages out to 2.6 citizens per unit of housing, so these numbers pass that basic "smell test".

Rental Units: Vacancy and Pricing

As of 2011 CMHC says that there were 7,040 condominiums. These would be spread through the row houses, and, low/high-rise apartments---as that form of ownership makes no sense for the other structures. Since it is safe to assume that any low or high-rise apartment building that isn't a condominium, is a rental apartment, that leaves 4,015 unambiguous apartments (5,790 plus 5,265 minus 7,040.) Unfortunately, CMHC has no numbers about how many row houses are condos or rental units, how many condos are being rented out by their owners (a very common phenomenon), or, how many of the various other types of house are being rented out, so there are no real numbers about how large the rental pool really is. 

There are, however, numbers about the size of the vacancy rate (for October 2017):

• One-bedroom apartments: 1.3%
• Two-bedroom apartments: 1.0%
• Three-bedroom apartments: 2.2%

When we look at those numbers it is important to understand that these are just the numbers of units that are currently empty. As such they are a snapshot of any given moment, but not a real picture of the actual market. When people are looking for a place to live they are rarely in the situation of having no place at all to sleep and need something immediately. Instead, they are seeking a place within a given time frame. For example, if I want to move to some place that suits me more than where I currently reside, I will look at places that already have people in them, but who have already given their notice to their land lords. Landlords don't want their properties to sit empty. It's important to understand a second number when looking at housing:  the availability rate. That is, the number of units that are currently unoccupied (vacancy) plus the ones where the current occupants have given notice to their landlords that they plan to move out by a certain date (availability.) I'm just speculating, but seems to me that since every other element of economy has used computers to squeeze out unused capacity (just-in-time manufacturing, uber, air bnb, etc) I suspect that landlords are using things like gottarent.com, padmapper.com, and, gscrentals.com to lower the vacancy rate by making sure that their units are never empty. As a result, I think that the availability rate is probably now more important than vacancy.


Looking at the CMHC numbers for October 2017, the availability rates are:

• One-bedroom apartments: 2.8
• Two-bedroom apartments: 2.0
• Three-bedroom apartments: 3.0

What this means is that between 2 and 3 percent of the units in Guelph are available for rent when a person is looking for a place to live.

Of course, there's no comfort in there being an apartment to rent if you cannot afford it. So let's look at the average rent for an apartment in Guelph as of October 2017:

• bachelor apartment: $750
• one bedroom: $980
• two bedroom: $1,124
• three bedroom: $1200
• average cost of an apartment: $1,066

Now please remember that these numbers are only for the primary rental market. CMHC points out that there also exists a secondary market. These are things like condominiums that people bought as investments and rent out, and, illegal rental housing. This is not an insignificant part of the rental market, although a great deal of it is devoted to seasonal rental to students. Unfortunately, CMHC has no data for this type of housing.

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A while back someone on a social media page was talking about the importance of supporting the people who are trying to fill the void created by the final elimination of "The Guelph Mercury" as a real newspaper. He didn't mention "The Guelph-Back-Grounder" until I reminded him, but then stepped up and seconded my suggestion. Another person grudgingly suggested "yes, it does provide a useful synopsis of facts". I was a little annoyed, but not much (the guy has lots of cred with me for the work he does.) But thinking about this, it struck me that it's important to understand exactly what I'm trying to do with the "Back-Grounder".

It's important to understand the difference between a "journalist" and a "reporter". I've been told by people with a lot of time in the profession that I am one of the former, not the latter. A reporter is someone who gets an assignment and goes off to interview news-makers and then reports what they heard and saw to the public. In other words, they collect a segment of basic information to share with readers. A journalist, on the other hand, tries to assimilate a large amount of information in order to develop a nuanced picture of a social issue in order to create a complex narrative that explains the issue to readers. Of course, the separation of the two jobs is to a certain extent conceptual rather than hermetic---I sometimes interview people for these articles and reporters sometimes do research. But both jobs are equally important.

Unfortunately, when a news resource is under financial stress, journalism gets cut away before reporting does---simply because it is a lot more expensive to do. A reporter can charge off and knock out several "he-said, she-said" stories in one day. A journalist can easily work for a month or more on one in-depth article. There is, however, a significant market for in-depth, newsletters. These generally deal with very narrow parts of the economy and are either subsidized by the industry or hide behind very expensive pay walls. (To cite one example, a friend of mine used to publish one of these newsletters---about recycling---that was paid for by a mysterious "patron".) What I am trying to do with the "Back-Grounder" is to create a Patreon-supported newsletter that helps all the citizenry understand the problems that Guelph faces---so they can do a better job of participating in our local democratic governance.  As such, I'm doing something that never really has been tried before. I hope that if I can built a significant audience of paying readers, that the business model will be "proved" and the enterprise won't just collapse when I finally get burned out and move on to something else (or die.) So if you like what I'm doing here, why not put up a token amount of money to support it? Even a dollar a month---$12 a year---works as "proof of concept", and, is a lot less than a subscription to the old "Mercury" would have cost you.  

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Of course, just saying that that a type of rental housing costs so much money doesn't mean anything unless you have a handle on the household income in Guelph. Luckily, the CMHC has that number too.

• less than $20,000/year: 3,945 or 26%
• $29,000 to $39,999/year: 4,225 or 28%
• $40,000 to $59,999/year: 2,905 or 19%
• $60,000 to $79,999/year: 1,760 or 12%
• $80,000 to $99,999/year: 990 or 7%
• $100,000 and over: 1,090 or 7%
• Total renting households: 15,010

It's really important to remember that these numbers are how much a households makes, not how much their rent is. It's obviously true that there aren't going to be many apartments where the renters can't afford their rent---but it might be true that a significant number of people are living in places that are quite cheap compared to their income.

And, of course, it is important to have an understanding of what percentage of your income should go towards housing. That's a bit of a judgement call, but here's how the Credit Counselling Society says people should break up their living expenses:

From the Credit Counselling Society website,
image c/o "Fair Use" copyright provision.

Right away I think people should be able to see a problem. 26% of Guelph households make $20,000/year or less. This means that according to the Credit Counselling Society they should be setting aside $7,000/year (or less), or, $583/month (or less) for rent. Yet as we have seen above, the lowest price units for a household---a bachelor apartment (which are extremely rare)---averages $750/month. In effect, the primary mechanism that the city has committed to for providing housing (the development industry) is not properly servicing a little over one quarter of Guelph's households. 

I am assuming that the majority of people living on less than $20,000/year are people in some sort of financial difficulty because of some sort of "issue" in their lives (ie: age, physical or mental illness, chronic under or unemployment, etc) since a full time job at the minimum wage should provide something like $29,000 in gross pay ($14x40x52=$29,120.)  It could be argued that the govt should be providing housing for these people through some sort of social housing system---but unfortunately, the problems programs that do exist are woefully underfunded. (More about this in a later post.)

It's important to understand that most families can't live in a bachelor apartment. Nor do they usually want a room-mate to help with the rent. (This is the workaround most people without great jobs use to afford a place to live.) That's why it's important to consider the special case of single working parents. Statistics Canada says that in 2011, 20% of families had only one parent. Of those, the average income by single mothers was $35,700. (Single fathers, in contrast, averaged out at $55,500---that's an interesting figure to consider, but beyond the scope of this article.)  35% of $35,700 is $12,495, divide that by 12 and you get $1041/month for rent. As I quoted above, in Guelph the average cost for a 2 bedroom apartment is $1,124 and a 3 bedroom one is $1200. This isn't as bad as the 26% of household earning $20,000 or less that I mentioned above, but it probably still means that a lot of single mothers with average jobs find themselves in a situation where they have to count every penny in order to live some semblance of a functional life for their children. (Don't forget that I am totally ignoring the 600lb gorilla in the room---childcare. That 35% figure that the Credit Counselling Society came up with doesn't even add that into it's formula. That pretty much blows all of these figures to smithereens if our working single mom has preschool children.) Cheaper housing would definitely be something that would make a big difference in their lives.