Question regarding affordable housing in Canada

[Hali87]

Does anyone know how "below-market rent" is defined in Canada?

For example, if all 1-bedroom apartments in "Neighbourhood A" rent for $400/month, and the city average for a 1-bedroom apartment is $700/month, would all of the apartments in Neighbourhood A be defined as "below-market"? Or none of them?

It's a term that seems to be used a lot, and in pretty important contexts, but it's surprisingly hard to find any info on how "the market" is defined in this particular case.

Any info on the topic would be greatly appreciated!

[hipster duck]

As far as I understand it, there is no formal calculation for "below market" rent. The term "below market" implies that households receive a subsidy on "market rate" rental housing (i.e. housing that is rented in the private market with an assumed profit motive) if they qualify based on their income and family arrangement/personal circumstances.

The way this is generally calculated is that "affordable shelter costs" are assumed to be 30% of your after-tax income. This is also referred to by the CMHC as 'core need'.

Another way to determine housing affordability, if you don't have a person's income handy, is to use a standard measure of poverty, like the "low income cut-off", and to infer what rental prices would have to be to still qualify as "affordable" using something like the core need measure.

[SignalHillHiker]

For us, it's:

NLHC owns and administers approximately 5,573 social housing units throughout various regions of the province, with the greatest concentration of units located in St. John’s (3,178) and Corner Brook (802). Low-income earners are the beneficiaries of the program with rental rates based on 25 per cent of monthly income. Approximately 55 per cent of tenants pay their own rent and are working or are on fixed income. There are an estimated 14,000 individuals housed in NLHC units under this program.

And these properties are created by:

This program is cost-shared 50/50 with the federal government and delivered by NLHC. The purpose of the Investment in Affordable Housing is to assist in the creation of modest, affordable rental housing which will benefit as many low-income households as possible. Eligible private sector or non-profit supportive housing sector proponents may receive capital funding in the form of a forgivable loan for the construction of affordable housing units for seniors, families, persons with disabilities or persons with complex needs.

So they receive funding to build them, and therefore eligible tenants are able to rent them for 25% of their monthly income. Seems more or less independent from the market as a whole.

[niwell]

It can be an extremely difficult calculation. In Ontario, it's generally done at the Regional / upper-tier municipality level. This is ok in some places, but falls completely flat in some of the suburban 905 Regions. What's "affordable" in Markham can be downright expensive in the northern reaches of York Region. Similarly, an affordable housing unit in a place like Caledon is completely untenable to build in Mississauga. This skews everything and helps contribute to the fact that most of these regions aren't even close to tackling the affordable housing problem.

The province is working towards assisting with these issues and I know some progress has been made, although the housing side of planning was never my forte.

[Steveston]

The BC Non-Profit Housing Association has just published a report, via an interactive webpage, which provides rental affordability stats on almost 100 BC communities, including availability of rental units by income quartiles and the 30% income measure. It also looks at extreme unaffordability, via the 50% income line, and also includes utility expenses (as they are also a monthly expense directly related to shelter costs).

While most people anecdotally understand where the most expensive rental housing markets are, this tool provides statistical data to identify them, and more importantly, how bad the situation is.

http://bcnpha.ca/