Housing article data questioned
In your Oct. 1 issue, you reported on page 8 that “Renters benefit due to rise in vacancies”. However, in the Insight section, Pamela Stephens argued that the vacancies are not helping those looking for low rent units. Unfortunately, her argument is based on erroneous data.
Ms Stephens states that the average rent for a two-bedroom unit in Ottawa is $1,117. However, CMHC reports that the average rent is $932. A search through the classifieds or the Renter’s News will demonstrate which number is correct.
Ms Stephens states that the vacancy rate for apartments with below average rents is 0.2 per cent for bachelors and 1.7 per cent for one bedrooms. She is wrong. CMHC figures show that the vacancy rate for bachelors as a whole is 3.4 per cent and that the lowest rent units have the highest vacancy. For one bedroom units renting for less than $700, the vacancy rate is 3.8 per cent.
Statistics Canada reports that from 1992 to 2003 the cost of rental accommodation in Ottawa has increased 24.3 per cent. However, overall consumer prices have increased 24.9 per cent. In other words, rents have barely kept up with inflation.
The real problem faced by tenants has been that incomes have not kept up with inflation. That applies especially to tenants on social assistance.
Ms Stephens argues that the city should stop private developers from building high price units. However, bringing new rental supply into the market creates more supply. More supply lowers the price charged. If developers cannot charge high rents for brand new units, they will not build any units at all, and taxpayers cannot afford the cost of new units for the many tenants with low incomes.
The city, the province and the federal government currently spend millions of dollars every year building new social housing. But that investment does not work. Because it is new, the full cost of modest new rental housing is $500 per month more than the current average rent for a unit of the same size. That is $6,000 per year per unit. The three levels of government could help many more low income tenants by providing them with housing allowances to help them pay the rent where they currently live.
Housing allowances are flexible. They can be delivered immediately. The money available for affordable housing can be spread equitably among all low-income tenants. Low-income tenants can live where they want, and take the allowance with them when they move.
The best way that the city can help low income tenants is to start charging tenants their fair share in property taxes. Tenants now pay, through their rent, a tax rate that is 2.15 times as much as a homeowner pays on their house.
If the taxes are lowered, rents are automatically reduced. More than 32,000 tenant households received rent reductions this year because city council kept the tenants’ tax ratio at 2.15 when council could have increased it. If city council charged tenants the same tax rates as homeowners, most tenants would save about one month’s rent. A $932 rent would become about $840.
John Dickie, Chair,
Eastern Ontario Landlord Organization, Ottawa