The provincial government, however, counters that its budget provides $100 million for affordable housing and that a task force will bring forward a plan to provide more cash for affordable housing next week.
Price per door in 1997 for apartments in Edmonton (as found in Alberta-ThePerfectRealEstateStorm.pdf published by Prestigious Properties Inc.) was $37,801. Statistics Canada says that the Apartment Building Construction Price Index for Edmonton is 161.3 (1997 is par at 100). That means that our current price per door is about $60,970. The government's budget of $100 million would only buy 1,640 doors in Alberta at Edmonton's prices.
According to Madeleine Baerg of Boardwalk, they would not consider new apartment construction in Edmonton until the rent reaches about $1,600. Which is about double their average rent, in the fourth quarter of 2006, of $820. So, $780 over 12 months is $8,640 per unit per year. So $100 million subsidy would buy, over a 20 year mortgage, about 580 doors. Maybe I'm looking at it the wrong way?
Something needs to be done. As apartments get sold as condos, as potential home buyers fall out of that market because of construction costs and house prices, the rental market gets tighter and tighter. I'm looking at an impossible situation. I'm a single dad with one full-time and 3 part-time boys. If I were just entering this rental market, I would be unable to find housing on my own. But with the kids, I'm not eager to find a room-mate.
Politically, I'm a bit right of middle so generally I'm not keen on government getting involved in markets. But we're not talking about widgets. We're talking about shelter - a basic requirement of life. My bias is against government throwing money at problems as it seems to be inefficient. In the rental market, most of that $100 million would likely end up in Boardwalk's pockets. Their profits are healthy enough that they don't need a government subsidy.
What I would be happy with right now is fairness and protection from corporate bullies. In a tight market, high tenant turnover means rents go up faster. But, I'm expecting, that tenants would tend to not move when faced with inflating rental prices. Landlords who accelerate the eviction process, threaten huge legal costs, charge arbitrary legal costs, and otherwise heighten the litigious tension between themselves and their tenants are corporate bullies. Their goal is to heat up the tight rental market by speeding tenant turnover. Once we're protected from being forced out of our homes then and only then does rent protection have any merit.
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