With Cambridge rental prices at an all time high, the current guidance around what meets the definition of “affordable housing” for a one-bedroom unit in this city would require a renter to make a minimum of just over $5,000 a month before taxes.
That means single renters would need an income of about $60,000 a year, or at least that much in combined household income for couples, according to the definition of affordable housing on the Canadian Mortgage and Housing Corporation's website.
The Crown Corporation says housing should cost less than 30 per cent of a household’s before-tax income.
The CMHC's February report on the annual rental market shows the average rent for a two-bedroom home in 37 cities and regions the federal housing agency studied, increased to $1,167 last year, a three per cent rise from $1,128 in 2020 and $1,080 in 2019.
In Cambridge, Kitchener and Waterloo, the report states the average rent for a two-bedroom unit in a purpose-built rental apartment increased 3.2 per cent in 2021 to $1,356 per month.
For condominium rentals, the average rent for a two-bedroom unit rose to $1,950.
According to the website rentals.ca, the average monthly asking rent for Canadian properties in February 2022 was $1,820 per month, an increase of 6.2 per cent annually from $1,714 in February of last year.
The site says the "high water mark for average rent nationally was $1,954 in August of 2019."
But Craig Pickthorne, of the Ontario Living Wage Network, said the 30 per cent formula for defining what's affordable is outdated and unrealistic.
"There's certainly a disconnect between what is considered affordable housing and then the wage floor," Pickthorne said.
It's particularly apparent when you consider the living wage in Waterloo region is $17.20 an hour.
With the minimum wage in Ontario set at $15 an hour, Pickthorne says living off a minimum wage job is nearly impossible and it's apparent in the rise in demand for things like food banks and other social support programs.
"People start to make these horrible compromises and choices between food, child care and rent and they're still going short on things," he said.
"Nowhere in the province is the minimum wage even close to a living wage and it's only going to get worse when we calculate it this coming November."
And by far the largest expense Living Wage sees is in shelter costs.
Pickthorne thinks that the government has to do more when it comes to supplying housing to control the rising costs of putting a roof over our heads.
"We're going to have to figure out how to get this to work because you can't have people spending 50 per cent of their income on shelter," he said.
One of the housing types offered by the region that falls under the traditional definition of affordable housing is rent geared to income.
That's where a renter will receive a subsidized rent based on how much they make in a month. This is normally calculated using the 30 per cent figure and gets recalculated on an annual basis.
Then there are buildings owned and managed by the Region of Waterloo. These units are provided to families that are unable to afford market value and receive a subsidized rent.
There is also co-op housing. This is where members pay housing charges instead of rent.
Housing co-ops normally run as a non-profit. There is no landlord making money off these units and each household will pay their share of operating costs each month, making up the housing charges.
Co-ops will have subsidized housing as well as market rentals. The units that are listed as market rentals are still cheaper than apartments owned by a private landlord, according to Settlement.org.
But even with support, it's getting harder for the average person to afford rent.
According to the 2016 census, over 40 per cent of Canadian households pay more than 30 per cent of household income on rent or mortgage.
Executive director for KW Urban Native Wigwam Project Lee Ann Hundt said even affordable units are becoming less affordable for the people who need them most.
“It’s becoming harder to rent to these people who can only afford a certain amount. Even with the help from the government, the mortgage, utilities and property taxes are very expensive,” said Hundt, who is helping to oversee the group's 30-unit affordable housing project on Cambridge Street.
And while adding to the housing stock will help, some local politicians think developer incentives are critical to increasing the supply.
Ward 5 councillor Pam Wolf said developers are having a harder time justifying building affordable housing units because the costs of building them are so high.
“From the materials and real estate to the added rise in inflation, it’s harder for them to add in these units,” said Wolf, who wants to see the province include Cambridge in expanded zoning measures that require developers to build affordable units.
The City of Cambridge already encourages developers to add more affordable housing to certain projects, but many choose to pay cash in lieu of including affordable units in their buildings.
In the meantime, it doesn't look like it's going to get better anytime soon.
The current average rent for a two-bedroom apartment in Cambridge is $2,475 while a one-bedroom is right around $1,695 according to popular rental website Zumper.
