Study asks why cheap rental housing in Calgary has declined over the past three decades
When Susan James learned that her home in Calgary’s Bankview neighborhood was about to be demolished, she needed to find a new home for herself and her nine-year-old daughter.
The only two-bedroom apartment the single mom could find within a stone’s throw of her budget was a smoke-damaged apartment in Southwood. Factoring in both rent and utilities, she said she’ll be paying about $600 more a month.
James, a healthcare worker, plans to offset some of the cost by selling her plasma.
“There’s nowhere to go,” she said, describing Calgary’s lack of affordable housing. “[Low-cost housing] is a myth, it doesn’t exist.”
New data released Thursday by the University of Calgary’s School of Public Policy says the number of low-cost rental units in Calgary has declined significantly over the past 30 years.
Economics professor Ron Kneebone, the report’s author, said Calgary has lost more than 3,000 low-cost rental units since 1990, adding that the city’s population has grown by more than half a million people over that period.
“So if you look at it on a per capita basis, the number of cheap rentals in Calgary is down almost 60 percent,” he said.
Story of Two Cities
Kneebone’s study looked at the number of cheap rental units in both Calgary and Edmonton between 1990 and 2018, the most recent year for which figures were available.
The professor found that cheap rental units had declined in both cities, but the decline was much more pronounced in Calgary (down 3,155 units) compared to the provincial capital (down 669 units).
But what explains the difference? Non-increasing incomes, Kneebone said, noting that median incomes adjusted for inflation are up about 25 percent for both cities.
The construction costs were similar. He said builders reported that it costs about the same to build a high-density apartment building in both cities.
Kneebone’s report concluded that the difference between the two cities’ affordable rental units could be due to municipal-level land-use regulations, something researchers in both Canada and the United States are studying as a possible way to address the lack of affordable explain housing.
“So one possible explanation here is that Calgary’s land-use regulations are driving up the cost of lower-end housing,” he said.
“If that’s true, then there is a solution here, and the solution lies with local governments in Calgary. They need to look at what they are doing to impose costs on builders and how those costs can be reduced.”
Land use regulations include things like zoning laws, environmental impact assessment requirements, maximum building height restrictions, and requirements to reach neighborhood associations, among others.
“You need everything”
From James’ point of view, the lack of affordable housing for those on modest incomes is cutting through the city’s social fabric, leading to more problems with substance abuse, homelessness and domestic violence.
“[Landlords] raise rents because they can,” she said. “That’s it. Because the market allows it.”
James wants Calgary leaders to consider rent caps or controls to help those who are struggling. (While Alberta does not have a cap on rent increases, the province does limit how often rent can be increased.)
Courtney Walcott, a Calgary councilwoman who represents part of downtown, said rent caps, below-market housing and public housing, and changes in land-use regulations are needed.
“You need everything,” he said. “Any solution that doesn’t have everything is a failed solution.”
Walcott says the city has responded to market pressures amid boom-and-bust cycles for years and never built a sustainable rental market.
Downtown is an example, he said. The city has been overdeveloped for the office industry and underdeveloped residential areas, and now the city is working to rectify this.
For Kneebone, rent caps or controls are short-term solutions that create long-term problems. He advised against blaming the private sector before looking at how local policies could prevent cheap housing from being built.
“People come to Calgary because it’s an attractive place to live, but we have to make sure it’s not just attractive to people with very high incomes,” he said. “We also have to make sure that the city can accommodate people with lower incomes.”
According to the Canada Mortgage and Housing Corporation, the median price for a two-bedroom rental in Calgary increased 6 percent last year, with an average monthly rent of $1,466.