Calgary, with its stunning mountain backdrop, has always been a place of promise. But behind the scenes, there’s a critical issue: affordable housing. Today we're going to look at some key factors to understand what’s going on.
The Numbers Don't Lie
Calgarians seeking affordable housing encounter an uphill battle. Here are some eye-opening statistics:
1. Wait-List Woes: In the spring of 2021, the provincial government reported a staggering 24,000 people on the waitlist for affordable housing. This number has doubled in the past decade.
2. Supply Shortfall: The average non-market housing supply in major Canadian cities hovers around 6%, however, in Calgary, it's a mere 3.6%. To catch up with other cities, we need approximately 15,000 additional units over the next decade.
3. Working Poor: Twenty percent of Calgary's renting households earn $36,000 or less annually. Yet, only 11% of rental units fall within their budget, and most of these are one-bedroom apartments. The current average income in Calgary is just over $58,000 per year which equates to just $4,850 per month. With this income, a tenant can typically only be approved for a monthly rent of $1,615, which falls below the current average rent of $2,139 per month.
Root Causes
1. Rapid Growth: Calgary's population surge has strained housing availability. Hundreds of thousands of newcomers have flocked to the city, exacerbating the crisis.
2. Income Disparities: The working class faces a stark reality. Individuals earning less than $87,000 per year can afford just 40% of the city's market housing.
3. Market Forces: Real estate speculation, financialization, and rising property values contribute to the affordability gap. The dream of homeownership slips further away for many.
4. Economic Inflation: Calgary experienced the highest inflation rate among major Canadian cities, reaching 4.1% in January.
The largest contributing factors are:
Gasoline Fuel Tax Reinstated: The Alberta government reinstated the gasoline fuel tax, which had been suspended since 2022 due to high energy costs. This is a total 119.9% jump in electricity prices compared to January 2023.
Rental costs increased by 14.4%.
An influx of over 180,000 people moving to Alberta in the last 12 months, many settling in Calgary, has put pressure on housing costs however efforts to increase housing supply and labor pool expansion are expected to moderate inflationary impacts heading into spring of 2024.
Overall, inflation remains a significant concern in Alberta and Calgary, driven by factors such as electricity prices and housing costs.
Our belief:
At CIR REALTY Property Management our goal is to provide quality homes to quality people. We want quality tenants as we believe that an investment property that is occupied by safe, secure, and trustworthy tenants, far surpasses a slightly higher rent in the long term. Tenants who take pride in the home and take care of it as if they owned it, is our ultimate goal in securing any tenancy. Long term, these quality tenants will help landlords reduce maintenance costs, and turnover costs to create a win-win scenario for all. Understanding that the above-mentioned issues are impacting not only tenants but landlords as well, it is a balancing act to ensure both landlords are content and good tenants are renewed long-term.