By Trevor Busch
As part of an affordable housing report from the Taber and District Housing Foundation (TDHF), that organization is pitching the potential construction of a new mixed-market design affordable housing complex for the community.
In September 2017, previous council had transferred up to $35,000 from operating reserves into the Planning and Economic Development budget to partially fund TDHF’s Housing Needs Assessment and Project Feasibility Analysis. The Alberta Rural Development Network (ARDN) was retained by TDHF to complete the project, which was jointly funded by the M.D. of Taber. The total project cost for ARDN to complete the study came to $22,293, of which the town contributed $7,431.
Various community consultation and stakeholder engagement sessions were held by ARDN in formulating the housing needs assessment, followed by completion of a business case and financial model for the construction of a 30-unit housing complex. The proposed two-story building would include 20 affordable housing units, 10 market rental units and commercial office space on the ground floor.
“When I’m referring to affordable housing, I’m referring to a specific type of housing within the social housing continuum — usually 40 to 60 per cent of market rent,” said TDHF CAO Tim Janzen at town council’s Jan. 14 regular meeting. “I’ll talk about more housing that people can purchase as obtainable housing. They’re two separate issues, but unfortunately the terminology gets used interchangeably.”
The 18,000 square foot building would be designed to provide mixed market housing to the community at very affordable rates. Rents, including utilities, would range from $534 (bachelor suite) to $933 (two rooms) per month. The project would make use of modular housing units to speed construction and net zero technology (high insulation values, passive solar and solar panels) to greatly reduce utility costs for tenants. The total cost of the building is estimated at $5.35 million (including $500,000 for the land).
“The idea behind mixed-market properties is that as household income increases, the amount of rent can change, but the tenant remains in the unit,” said Janzen. “The unit is agnostic — it doesn’t care what the tenant earns. It’s simply calculated based on their income. Only the tenant and landlord know the amount of the rent. One of our current challenges as a housing foundation is in social housing, if a client’s income increases over the cumulative net income threshold, they’re no longer eligible for social housing. We evict them because they make too much money. The reality is that they’ll be back on the application list in six months to a year, because their income likely can’t make the leap from social housing rates, to market rates. There’s nothing in-between, and it’s quite possible they might consider quitting their job so that they once again are eligible for social housing. I don’t think that’s the cycle that we want to see.”
Highlighting some examples from around the province that have utilized a sea-can style of construction, Janzen admitted any number of options could work for Taber.
“I don’t know that we are necessarily married to that concept. I think there are merits to modular construction. There are some more local contractors that are involved with modular. With that being said, if it got down to the brass tacks of we’re funding and we’re ready to build — that’s where a number of other considerations can be taken. I think that a project like this can be also seen as an economic driver in the community if you can find ways to get the community more involved, sourcing supplies or sourcing labour. I think the sad part of many large projects is they don’t often consider that economic impact in the community, simply parachuting crews in. We’re potentially missing something there.”
Affordable housing guidelines state that shelter costs should not be more than 30 per cent of a household’s income. For example, if one’s rent is $1,000, then that household should be earning roughly $3,330 a month — or about $40,000 a year — for that rent to be considered affordable.
The 2011 census reported that 24 per cent of households in non-subsidized rental housing were utilizing 30 per cent or more of their income on shelter. In the 2016 census that number has now escalated to 34 per cent, representing an increase of 42 per cent in only five years.
“That compares to Alberta being about 11.4 per cent. However, what’s really interesting — or dismaying — is that households that rent residential properties often pay a greater per cent of their income for shelter than those that own homes,” said Janzen.
While lacking much hard data, Janzen proposed some scenarios for why this situation may have arisen in Taber and other communities.
“This assessment doesn’t get into why that is. But it usually is because renters may not generate an equivalent income, either due to lower wages or the likelihood they may not be able to secure full-time employment. In this economy, lots of people are working many part-time jobs to come up with an income. It’s difficult to find a traditional, full-time 40 hour work week job. Or rental market prices can be quite high, so you’ve got this low-income, high-market price. But there’s no doubt that renters represent a far greater per cent of households in core housing need, and Taber is no exception.”
Average rent in Taber is $882 (median rental shelter cost, 2016 census), with average rents broken down into bachelor suites ($525), one bedroom ($635), two bedroom ($771) and three bedroom ($940) apartments/homes. The required wage to maintain affordability was calculated as $18.38 per hour. On the ownership side of the equation, the average value of a home in Taber is $250,465 (median value, 2016 census), with the income required to qualify for a mortgage pegged at $50,700. The median owner shelter cost is $1,215 (2016 census), with a required wage to maintain affordability calculated at $25.30 per hour.
“More than one third of the people who rent in the community are paying more than 30 per cent of their income for shelter,” said Janzen. “You see some average rent rates there. Many people have indicated that they actually look kind of low. One of the rationales is that it’s an average. What we’ve found is there’s really two distinct rental markets in Taber. There’s high-end properties, which tend to be newer, larger, more amenities, and likely not affordable, particularly to single individual households. Interestingly, there’s almost zero vacancy. It’s almost impossible to find a higher-end home. Then there are properties at the lower end of the spectrum. Typically, they’re older, smaller, and I will only use the words of some of our information session attendees — the nicest thing they would say is they’re not in great shape. The units are more affordable, but there are some serious questions about suitability. Even due to size, so people are cramming in a large family into a smaller place, or suitability — they simply are not in good condition. The vast majority of vacancies in Taber are attributed to the lower-end properties.”
According to the report, between both homeowners and renters in the community 18 per cent are spending 30 per cent or more of their income on shelter. Of these 590 households, some 330 were non-family households. Core need assessments from 2018 indicate that between 43 and 86 households are in unaffordable homes and have no alternative housing solution.
“Our organization found this really informative, because we can do something with our property inventory for couples with children and lone parent families. Our senior apartments might very well address couples without children, because many of those might very well be seniors. But we have no properties to deal with single individuals under the age of 60. Also, it shows there are a significant number of households that are simply in core housing need, and the census data suggests that the situation is getting worse over time.”
Recommendations for an Affordable Housing Strategy for Taber include taking inventory and assessing total renter and owner markets, estimating homelessness, increasing the supply of affordable housing, high-density housing and starter homes, and addressing commuter flow.
“We don’t really think of rural communities having homeless people in the traditional sense of an urban setting,” said Janzen. “But I can tell you that we see clients on a weekly basis that are couch-surfing, living with friends or family on a temporary or informal basis. While we don’t see people sleeping in Confederation Park, we have tons of people that live year-round in campers in the parks, or in their family’s farmyard. It’s not that they choose or want to live those situations, it’s because they can’t afford anything else.”
Jansen also recommended collating commuter flow information to help determine the trends impacting Taber and area.
“They found, over the census data, that there is really a varying amount of people either commuting in, or commuting out. Between 2000 and 2005, there was up to 1,000 people a day going from Taber to somewhere else. By 2016, it had almost reversed. There’s about 1,000 people a day driving into Taber than leaves Taber. The major communities that people are coming from are Barnwell, Coaldale and Lethbridge. There’s no real research as to why that is — everybody has an opinion. I think it might be useful to see if you can figure it out.”
Utilizing remaining funds allocated for the study, TDHF recommended further consultant work with ARDN, additional consultation with health and service agencies, and local employers; discussions with potential tenants, and further design work and financial feasibility study. An appropriate site needs to be located and secured, as well as “support — moral and financial — from local governments to find a local solution to the affordable housing issues in Taber and area.”
“The last thing is support — currently I think it’s moral — but eventually it will be financial,” said Janzen. “To successfully launch this, it will take some money. We hope that this would be one way to address both issues, one for our affordable housing — potentially those units are going to make housing more affordable and attainable for a specific sub-set of people. And if they move out of current units, it’s also going to make more housing available for other people as well.”
A proposal was submitted to the province in June 2018 for project funding consideration. In the near future, TDHF intends to search for partners or commercial tenants for the project, while finalizing design, layout, size and demand for the units at the price point. Also under consideration will be potential siting options.
“We haven’t had any feedback at all, which is kind of par for the course. They tend to tell you a day or two before the budget is released that they want you in Edmonton,” said Janzen.
Following discussion, council voted unanimously to accept as information the Affordable Housing Project Update presentation from Taber and District Housing Foundation, and directed administration to bring back additional detailed financial requests for approval as the project progresses.