Monday, March 18, 2013

Median Market Rent

Today the Progressive Conservative leader, Brian Pallister says if HE were premier he would increase the rental allowance of welfare recipeints to 75% of median market rent (MMR). He says that this would be an increase of about $100/month, up to about $385.

First of all, can we have that etched in stone and force him to wear that around his neck? I have a feeling that if he were elected as premier that it wouldn't happen. Secondly, according to the Province, the MMR for a bachelor apartment is $528, meaning that 75% would be $396 (although that is splitting hairs a bit vs. his statement of $385).

I think an important question is why is there this presumption that a single person will be living in a bachelor apartment? According to this report published by CMHC there are 3,612 bachelor apartments in Winnipeg as of fall 2012. There are however 26,401 one bedroom units (page 5, amusingly in a chart called " Number of Private Apartment Units in the Universe") The MMR for a 1 bedroom unit? A whopping $748! Meaning that 75% of that would be a far more reasonable $561. The problem with median rents is that they are exactly that, median. I won't even bother to touch on how many 1 bedroom units must be renting for more than $748.... So while there may well be bachelors out there for less than $528 there are also many that are more. It also means that of the 30,013 suitable-for-single-people units (bachelor/one-bedroom) in Winnipeg only 12% of those are bachelor units.

According to a piece complied by Sarah Cooper for the CCPA, there is a vacancy rate of 1.7% for bachelor units in the Winnipeg area (page 4). That said, according to her chart there are bachelor units renting for up to $799! Can you imagine not even having a door on your bedroom for almost $800 a month?

Now, obviously the amount given to EIA recipients for their housing allowance needs to increase, and it should be a worthwhile increase (since whomever does it is going to pat themselves on the back for it until the end of time) but I also think it's important that someone bring up the fact that there is certainly no way to make sure that bachelor apartments are only rented to people on EIA. I also don't know exactly how many single people on EIA there are in the city of Winnipeg (I took a quick look but couldn't find it, I'm sure it's out there somewhere) but I would hazard a guess that it might be enough to fill all 3,612 units. Of course, not sure how their new $396 is going to help them rent a $799 bachelor apartment (or a $699 one, or a $599 one...)

One last thought to put this in a little bit more perspective. According to the CCPA piece (page 11) a person would need to earn $10.50 an hour, which is more than minimum wage, to be able to afford that same bachelor apartment that someone on EIA is trying to live in. This is using the same formula that the bank used when deciding if you could buy a house - meaning a person shouldn't be spending more than 30% of their income on housing. You want that same single person to rent a 1 bedroom unit instead? Great, they now need to earn $13.94 an hour.

Now, thankfully, I don't have the same trolls here that the papers do, but I can hear them now... "if they don't like it they should get more education and get higher paying jobs" Ah yes, but in that perfect world where everyone attends university, eventually we would have university grads scrubbing toilets and asking if we want fries with that. Is it really fair to say that a person who gets up and goes to work full time shouldn't get to go home to their own place at the end of the day just like everyone else?

I realize I am now comparing people who have jobs to people who don't (those on EIA) but contrary to popular belief (of the trolls) not everyone on EIA wants to be; and if the minimum wage earners can't even techinically afford to be living in one of the 3,612 bachelor apartments without being in core housing need, but they do, where are those with even less supposed to try and live???

*My head just exploded*


  1. i'm glad you got that post in before your head exploded.

    there needs to be more debate about the availability of affordable housing in winnipeg. setting the housing allowance at a fixed-rate to the mmr seems a good start.

  2. It is an interesting policy position to take on the part of the Progressive Conservatives. People can choose to believe it or not but one thing is certain and that is the NDP will have to address the issue.

    They certainly can't blame the PCs for the mess that is happening now. Manitoba Housing is dangerous and of poor quality. Rent control is by-passed by converting apartments to condos and by doing major renovations and being exempt from rent hikes. During this time, the government has kept funding for rent allowance nearly frozen.

    In short, total and complete failure on housing rests with the NDP government on the issue of housing.

    If the PC proposal makes the NDP government squirm and do something, it is a good thing.