How tiny homes could provide a path to security for new Canadians
They're not just an emerging lifestyle: they're a potential solution to affordable housing
Tiny homes are more than just a trend; they're a triple threat, an emerging lifestyle, a potential solution to affordable housing — and, possibly, the first home of a new immigrant renter.
In St. John's, about 12,100 households live in unaffordable housing, of which nearly 65 per cent rent. More than 8,900 tenant households require improvement to meet one or more of affordability, adequacy, or suitability standards.
Affordable housing is a real problem in our city, and this is only exacerbated when one is a new immigrant. A lack of understanding of the real estate market, whether renting or buying, the loss of a social network, language barriers and employment challenges make the search for affordable housing akin to running on a never-stopping treadmill.
Regardless of the economic status, the path to affordable housing is fraught with obstacles for a new immigrant in their first year in Canada.
"The main concerns are that they are required to establish Canadian credit which often is not an instant item to secure," said mortgage professional, Cheryl Stoyles-Sellars of Verico Premiere Mortgage Centre.
"This is typically arranged with the financial institution that they initially open a Canadian bank account with. There is often a need to do a secured credit product to establish the credit item."
I think it can be successful for particularly first-time buyers, immigrants, millennials and retirees.- Chris Janes,
For some immigrants this is an easy task, but for others who may lack the financial means, a secured credit product can't be acquired easily.
In the first year, for example, new immigrants don't have room to contribute to an RRSP, as there typically is not any Canadian source of income to report from the previous year. These impediments make renting seem like the only viable option for housing — propelling new immigrants toward tenancy, at least when they first arrive.
Echoing these thoughts, Realtor Amanda Arsenault of Hanlon Realty said, "Financing has to be the biggest barrier [for new immigrants]. The Canadian government and the provincial government need to realize this because immigrants are a huge part of Canada's today, tomorrow and future."
Tiny homes, big possibilities
Stephenville's Brook Street is now home to a new subdivision of 600-square-feet homes that are complete with appliances, a solid foundation, a backyard and sodded lawn — and all only for $90,000 — busting the stereotypical image of a house on wheels.
Some might assume that these homes are simply a fad, but, with an average home costing over a quarter of million dollars, they may be a sustainable solution to the lack of affordable housing for several demographics, including first-time immigrant renters, like international students, who often end up living in dark and dank basements to conserve their finances.
Chris Janes, senior market analyst with Canada Mortgage and Housing Corporation, says tiny homes work.
"For anybody looking for space that is economical, innovative and comfortable [and] relatively close to urban amenities. I think it can be successful for particularly first-time buyers, immigrants, millennials and retirees," said Janes.
He indicated that owing to the changing household composition, tiny homes were an emerging lifestyle.
Not only a solution for affordable housing, Winnie Lei, a ReMax realty specialist with St. John's Life, said tiny homes could be the answer to downtown parking woes.
"It might be a good fit for torn-down properties downtown where the extra square footages can be used for off-street parking," said Lei.
Recent developments in the City of St. John's regulation now include tiny homes as an in-fill in certain residential zones, as well as a new zone for pocket neighbourhoods of tiny homes.
But not everyone is sold on the idea of a tiny home. The size, lack of information around appropriate city bylaws regarding this housing model and finding appropriate financing are some reasons why tiny homes haven't taken off (yet) in St. John's.
"It has proven very difficult for clients to obtain mortgage financing on tiny homes. The lenders would consider them to be in the same category as mobile homes or mini homes," said Stoyles-Sellars.
Despite this, its economical, low-carbon footprint qualities, the low energy and maintenance costs, and its price make this model attractive to many — including developers, first-time home buyers and, subsequently, renters.
For new immigrants who are limited financially in their ability to buy or rent when they first arrive and, sadly, end up in inadequate and unsuitable homes (such as dark and dank basement apartments), this provides a new housing option.
A home is more than four walls and a roof. It is a fundamental human right. And tiny homes are a potential solution to the affordable housing predicament not only for first-time home buyers but also renters.