A recent report from the Canada Mortgage and Housing Corp. shows that furious homebuilding activity in Brandon is starting to show some dividends.
The latest numbers, from October, show that the apartment vacancy rate has eased in the past year, to stand at 1.9 per cent. That’s still quite tight — many sources say that a balanced rental market will have a vacancy rate of three per cent — but it’s markedly better than a year ago, when would-be renters struggled with a 0.7 per cent rate.
The most recent numbers from the city’s permitting department show that local builders are doing their part. To the end of November, nearly 400 new dwelling units have been started in Brandon, including more than 100 condominium units and more than 60 units in multiple-family buildings. That’s more than 14 per cent better than last year.
But the news isn’t all good.
Despite rising supply, demand is still strong for housing — especially affordable housing — in Brandon. And that means prices are on the rise, too.
The CMHC report shows that the average rental price for two-bedroom apartments in Brandon has risen by 1.6 per cent over the past year.
While that’s less than the increases seen in other Manitoba cities, it’s still more money out of renters’ pockets, and it’s still above the one per cent rent hike that was allowed by the provincial government (there are several legal ways for landlords to raise rents by more than the allowed amount).
Some will say that a rising minimum wage, which has improved dramatically in recent years, should be more than enough to keep up with rising rents.
So we crunched some numbers.
Although the minimum wage is $10.45 an hour, most employers pay more than the legal minimum. Let’s assume a single person in Brandon may earn $11 an hour fairly easily. The trade-off, of course, is that fully full-time employment is difficult to come by. The traditional 40-hour workweek is often pared back to 30-something. Let’s assume 33 hours of work each week.
Let’s also assume that our hypothetical worker never needs to take a sick day and gets a paid vacation. At 33 hours a week for 52 weeks, our not-quite-minimum-wage worker will earn $18,876. After taxes, he or she will bring home $16,562 a year.
That’s about $637 on each paycheque.
Most people who live paycheque to paycheque count on two cheques a month. The occasional month with three paydays is an opportunity to pay off unexpected bills or perhaps to splurge on things like Christmas presents.
Imagine trying to make ends meet on $1,274 most months.
According to CMHC, the average one-bedroom apartment in Brandon rents for $592 a month. Add a bare minimum of $50 for stingy use of utilities and half the take-home pay is gone already. That’s far more than the recommended one-third of income that authorities say should be spent on shelter.
Our fictional budget would leave $605 a month for all non-shelter needs. That’s only about $20 a day, to cover all food and clothing, as well as every other daily expense, like transportation or toiletries. And we’re assuming that our hypothetical worker already enjoys a fully stocked apartment and doesn’t need to buy dishes or furniture.
This back-of-the-envelope budget doesn’t leave much for entertainment, a cellphone or a car payment, let alone gas or insurance. It would certainly be tough to feed and clothe a child.
Eyeglasses or medication — even over-the-counter cold pills — would be major expenses.
In the ongoing struggle to ensure that all our citizens are properly housed — a struggle that annually takes on more poignancy during winter cold snaps — we hope that looking at the numbers could show some of our subscribers just how tough it can be when rents keep rising.
Republished from the Brandon Sun print edition December 16, 2013