A have province with no housing

By Carol Hopkins

It’s nice to be a “have” province, unless you are looking to buy a house.

All across Newfoundland and Labrdor, housing prices continue to rise. The oil sector, mining industry and tourism are a few sectors that are bringing new growth and new opportunities to the people of the province. Such progress, however, has a price.

“What we have right now in Newfoundland and Labrador is that we’re creating a perfect storm for this bubble to burst because we have very high prices for housing all across the province,” MHA Christopher Mitchelmore (NDP-The Straits-White Bay.)

The MHA travelled across the province with fellow NDP member Gerry Rogers (St. John’s Centre) and spoke with people about housing issues. Mitchelmore said several issues were identified, with the lack of affordable housing topping the list.

“We’re certainly seeing the cost of land and land development also driving up housing prices,” Mitchelmore said.

Mitchelmore said the high cost to get access to land, coupled with the high costs of infrastructure such as water and roads, also have an impact upon the price of housing. He said it can cost anywhere between $50,000 and $70,000 to put in the services needed and that is before the foundation for a house is laid.

“There are a number of people who are paying so much in rent that they could afford a mortgage, but they can’t get that down payment saved up,” the MHA said.

Renting a home or apartment is the logical alternative to buying. However, Mitchelmore identified renting as another problem area. He said  renting is no longer an option for many people due to a housing shortage.

“I have someone in my district that’s living in a hotel right now because there’s no option, there’s no alternative for them,” Mitchelmore said. “There’s nowhere to rent. The rent prices are extremely high and there is nothing available. And there are very limited vacancy rates. We talked to real estate agents and they say under three per cent vacancy, which means it’s basically nil.”

Social housing may be an option for some, but the Newfoundland and Labrador Housing Corporation can only rent to individuals who have an annual income of $35,500 or less, according to Jenny Bowring, media relations with NLHC.

Bowring said the corporation recognizes that high rents have been an issue for a number of people. In 2005 the corporation began a program that included partnering with the private sector and with not-for-profit organizations to provide affordable housing.

Since 2005 the program has added more than 1,100 units to the provincial total. She said it has eased pressure on the waiting lists somewhat.

“It has helped enormously that the private sector has started using this program and built affordable housing in the private sector for people, and that is part of our goal with that program. We’ve had great success with that,” Bowring said.

In Stephenivlle, a 2003 flood put a  strain on the housing market. Since then some new housing has been built. Ron Gaudon, a real estate agent, said that several factors, including the fact that many people commute back and forth from Alberta, has caused the price of homes in this area to rise. Wages in Alberta are considerably higher than most wages in this province for skilled labour, so people employed there can afford to pay more to purchase a home.

“For the size and the economy of Stephenville, the market is very good,” Gaudon said. “I don’t know if it’s a bubble or not, at the present time.”