Wanted: rental units

First St. John’s apartment building in 30 years won’t eliminate housing problems

Published on April 18, 2012

It has been approximately 30 years since a new privately built apartment building with rental units has graced St. John’s, according to the city.

That is set to change with construction of a new building underway in Pleasantville, the city’s deputy mayor says more units are needed to accommodate people who cannot afford a mortgage in St. John’s.

As to why the city has not been able to attract private market rental housing builds, Shannie Duff said the issue boils down to economics.

“There are more incentives and more pay back in building condominium apartments, because you can get your money out and move on to your next project,” said Duff, who serves on the mayor's advisory committee on affordable housing.

Some former rental properties have been converted into condominiums, she added.

According to recent data from the Canada Mortgage and Housing Corp. (CMHC), the rental market vacancy rate for St. John’s is approximately 1.5 per cent.

“That’s the other side of our economic prosperity. Everybody’s very happy about it and things are great, but housing is one of the first areas where people who are not in that position of having rising incomes get hit, when you get speculation in the housing market.”

The new price home forecast in St. John’s for a single detached house is $360,000, according to CMHC.

“Supply has to be balanced with demand, and it hasn’t been in the case of rental housing,” said Duff.

Killam Properties Inc., a Halifax-based company, is already constructing a 71-unit rental property in the Pleasantville neighbourhood called Bennett House. The company eventually hopes to make 210 units available to residents of the city through a three-phase development, of which Bennett House is the first phase.

Duff notes the property is a market rental and not an affordable one.

“It won’t do a whole lot to deal with the affordable housing crunch, but I think it’s going to be a huge boon to seniors who may be empty-nesting and want to get more into rental than owning (a home). Everything helps, because housing is a continuum.”

Bruce Pearce, a community development officer with the St. John’s Community Advisory Committee on Homelessness, said there have been signs of progress. The Canadian Home Builders Association has worked with the city on finding incentives and tools for developers interested in building affordable rental units.

“It’s really encouraging to see that builders are seeing this as a market (and) as an opportunity,” said Pearce, who added the current housing crunch is also affecting modest and moderate-income households.

“There’s always barriers to any type of construction and development in delivery of housing ... but if we put our heads together across the sectors — government, community, and the private sector — we can come up with ways that will make (rentals) work in this economy in St. John’s.”

Pearce suggests people can look to what has been done in Halifax, where he said there has been more private sector development for rental accommodations.

The city itself operates more than 420 rental units, some of which are low-end-of-market units with costs linked to what is considered the low end of the private sector price range. Others are priced relative to a person’s income.

Duff said the city has not built any new low-end-of-market units since the mid-1980s, and new units with a price linked to income have not been built since 1992. A lack of federal funding for such initiatives has stalled further development, she said.

“Having federal financing in the mix is critically important. The city project manages, owns, and operates, but it’s very difficult for us to afford to build the housing without some programs that comes from the provincial and federal governments.”

The city is now making use of federal-provincial support to build 30 new units — 24 for seniors and six for young adults with disabilities.

“It’s a start,” said Duff. “We just need that federal government budget to allocate some more funding for housing.”


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