London renters look at new data from city hall. They agree, renting is no longer affordable
Stagnating wages and rising housing costs are squeezing household budgets
A new city report that looks at London's deepening housing crisis shows that it takes a single earner approximately 19 days of work each month to make the rent on a two-bedroom apartment.
The report utilizing data from various organizations paints a dire picture of stagnating wages, coupled with rapidly rising housing costs that are squeezing the city's tenants on a scale not seen in decades. It will be examined by the standing committee on Community and Protective Services at city hall on Tuesday.
The report is meant to guide city lawmakers who have prioritized building 3,000 new affordable housing units in the coming years, but many renters say a solution to rising rents is needed now.
"Right now, if I had work to pay rent, I'd have to do two jobs at almost 12 hours a day to make rent up, it's getting that bad," said Mark Heddington.
They're keeping up on the rent, but at what cost?
The 61-year-old grandfather and his wife were forced to sell their home two years ago because they couldn't keep up with the costs. They now share a one-bedroom apartment in the city's Southcrest neighbourhood, for which they've been using proceeds from the sale to pay the $1,200 a month rent.
"We're living off of that until the money is gone," he said, adding he can no longer collect Ontario disability cheques because the province considers his home sale income.
The 61-year-old grandfather is four years away from collecting his Canada Pension and because he and his wife have been whittling away at their nest egg just to pay the bills, he's anxious he might run out of money before he gets there.
Heddington and his wife will be unlikely to return to home ownership because, as the report suggests, the dream of owning a single-detached home in London has become increasingly out of reach since the beginning of the pandemic.
According to the report, while home prices soared by 52 per cent between the second quarter of 2020 and the fourth quarter of 2021, wages remained flat.
At the same time, the average home became more and more expensive. The report said that homes valued at less than half a million dollars made up 77 per cent of all sales before the pandemic in 2019. This year, homes valued at under $500,000 made up just 12.7 per cent of all sales.
Rent isn't getting any cheaper either, even with a flood of new units since 2018. Between July 2018 and June 2021, London added 2,933 newly-built rental units, the report said, all of which had rents ranging from $1,571 to $2,067, weakening the rental market's overall affordability by putting added pressure on low income renters competing for units priced at $900 and below.
The report said in order to afford a two-bedroom unit priced at $1,200, the average worker must work 154 hours, or 19.3 eight-hour shifts, up from the 139 hours the average worker needed in 2020.
The rising cost of rent and real estate together makes the prospect of making the transition from tenant to homeowner ever more daunting, especially when it's a challenge just to secure an apartment in the first place.
Jessica McDonald and her partner AJ McManus searched for a year before they found an apartment suitable for them, their two children and two dogs and just securing it was a strain on the couple's finances.
$3,000 just to hold an apartment
"First and last month's rent is now $2,800 to $3,000 and that's just to hold an apartment," MacDonald said. "You have to afford to be able to keep that up each month."
MacDonald, who works as a server, said living with her grandmother helped cut down costs to save enough money to secure an apartment of their own, but others aren't so lucky.
It's why staff at city hall has been recommending height and density bonuses for builders, so long as they are able to provide affordable housing. So far, city hall has managed to secure 216 affordable housing units since 2018, in exchange for letting developers build taller and more concentrated projects.
The city's newest affordable building is at 122 Baseline Road West and opened this spring. It filled up quickly, the city said.
There are plans to build similar apartment blocks at 403 Thompson Road, 345 Sylvan Street, 18 Elm Street. The city is also looking at creating some type of affordable housing project on former school lands located at 1958 Duluth Crescent.