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SOMBA K'E/YELLOWKNIFE
The cost of living that leaves residents living pay cheque to pay cheque in the capital city is emerging as a hot button issue in the upcoming municipal election.

Crystal Hobson: "It's expensive. I live in a one-bedroom apartment and I pay $1,250 per month. I'm a student and I live with my boyfriend. It's hard to live on one income. I think they should lower it (the cost of rent) or offer help." - Sara Wilson/NNSL photo

Chief among those cost pressures is the high cost of housing.

Increasing rental rates and low vacancies are leaving Yellowknife residents struggling to afford the costs of daily life, and incentives need to be created by city council to help ease the burden, residents say.

The problem is aggravated by high real estate prices, which prevents renters from moving into starter homes, although one realtor says there is light at the end of the tunnel.

"We have the second highest rent in the country, which isn't affordable, and our average home prices are actually near the national average, which is affordable," said Adrian Bell, a realtor with Century 21.

The Canadian Mortgage and Housing Corporation (CMHC) likewise forecasts the resale of 390 homes this year, a five per cent increase over 2011 numbers, which were 375.

"The difference between the monthly mortgage payment for an average resale home and the monthly average two-bedroom apartment rent was $323 in 2011," the CMHC's Northern housing report reads.

"With the cost difference relatively low, this will help provide some renters the opportunity to move into home ownership."

The rate at which renters are entering into the real estate market is increasing slowly with the introduction of more condos available on the market, said Bell but he is quick to add, "you can't talk about housing affordability on the short term, because markets take a long time to react."

The price of new single detached homes emerging on the market are too pricey for most, as many of the projects are in neighbourhoods with high construction start-up costs, and those already in their homes are reluctant to sell, according to Bell.

According to the city's Creating Housing Affordability study release in 2009, low income households - those earning less than $40,000 gross income per year - represent 16 per cent of all households with an average of 63 per cent spending greater than 30 per cent of their income on housing costs.

That figure drops a bit with the moderate income bracket - earning a gross income between $40,000 to $100,000 per year - representing 34 per cent of all households with 17 per cent spending greater than 30 per cent of their income on housing costs.

Unjustifiably inflated

Trevor Duggan, a five-year Yellowknife resident and renter, believes rental prices are unjustifiably inflated.

"Sometimes I believe, based on the cost of a home, it may be justified but I also believe some people take advantage of the money they can make by over charging ... simply because they can," Duggan stated in an e-mail.

"This is what I have an issue with. Just because someone can make $2,500 a month on a rental property does not mean the home or apartment is worth $2,500."

Duggan believes the rental market, above all factors of living in Yellowknife, is what makes it expensive to live here.

"I do not think food, clothing, household items are any more expensive than what I am used to but rental costs make it difficult," he stated.

"Yes, I have been here for five years, and I will likely be here for (the) long term, but that does not mean I consider it affordable. I love Yellowknife, and the people I have met here ... that is why I stay."

Over at the two-year-old Facebook group "Yellowknife's cost of living is out of control," which has more than 1,200 members, weekly posts vent frustration on everything from rental rates to the price of gasoline.

While one might imagine that all the comments posted reflect the struggles of affording daily life in Yellowknife, there are some defenders of Yellowknife's high living costs.

"I wonder if this group was created to discuss the cost of living or to bash people who can afford high cost housing?" one Facebook user posted. "If you work hard why not spend the money and have a high-cost house?"

Still, the city's focus in recent years has been on less expensive townhomes and condos. The Copper Sky development on School Draw Avenue, coupled with Niven Heights, put 39 town homes and 160 condos on the Yellowknife market in recent years. Two bedroom condos at Copper Sky went for $219,900, and a one bedroom unit was listed at $199,900.

The city also announced this summer its plans to build a 24-unit "eco-housing" complex with a goal of building affordable, environmentally-friendly condos downtown.

"I think they need to be talking about what's next for residential development," said Bell, of city council.

"We've got some lots available in Phase VII, part two of Niven Lake. Then you've got Phase VIII after that, but following that and keep in mind those are very, very expensive lots, simply by virtue of the fact that they are built on a rock. But following Phase VIII, what do we have?"

The future, according to city councillor Cory Vanthuyne, will include more housing development, but adds that "steady progress" is what's needed for the city.

"It's been a high concern for the city for a number of years," Vanthuyne said.

"The development that has taken place in the past few years, what's going on currently and what is forecast for the future is going to have a reasonable impact on those (rental) rates."

The situation now, according to Vanthuyne, is much better than it has been in previous years.

"Making sure that we're encouraging programs that will allow steady growth, that in turn has us creating developments - building houses of all shapes and sizes and at different price points," he said. "That means our door is open, before we couldn't do that ... we couldn't offer them a place to live because we were full."

The inclusion of more condos on the market has help ease the vacancy rate but the amount of affordable and available housing in the city still isn't where some feel it should be, and the idea of a rental cap is generating more discussion.

"I think it is something that should at least be considered," Duggan stated.

"If companies and homeowners had a maximum amount that was permitted to be charged for monthly rent then at least we as renters would feel more comfortable knowing that the rate we are paying is justified. Right now that is not the case."

Those within the industry don't agree with a government-controlled cap on a free market, and initiating legislation to cap rental rates would damage the already volatile market.

"Has to be a free market'

"No, there's has to be a free market, I don't believe in rental caps. I don't think the government has the right people to figure out what it actually costs to run a building," said Niels Konge, owner of Konge Construction, who announced this week he is running for city council.

According to Konge, unlocking city-owned land, and selling the lots at a reasonable price, is the key to bringing skyrocketing rental rates down, and that should be a key part of the election discussion.

"I do feel that the cost of our land is extremely high, and that is something the city controls," Konge said.

"If you look at Grace Lake, the newest (development) they had there, the price of the land, in my opinion, was so high that for somebody like myself to buy a lot and try to build a house and try and turn a profit on it, the profits are already taken out of the job with the cost of the land."

While the 'middle class' is struggling, those living in poverty are the ones struggling the most, and more incentives need to be in place to help breach the gap between transitional housing and the cost of renting on the private market.

The NWT Housing Corporation recently announced a program to subside rent up to $500 a month but that will only be available to 175 to 200 families territory-wide.

"The cost of a home or definitely an apartment for some of the guys is just so high," said Brian Birch, the program manager with the Yellowknife Salvation Army.

"The guys are doing the best they can. Some of them are on the lower end of the wage scale. They go to work everyday and they may be only bringing in $11 or $12 dollars an hour and it's just so hard for them to put out $1,200 or $1,300 a month on rent."

Repeat tenants

Bailey House, a transitional home run by the Salvation Army, rents out its apartments for $900 a month to those needing assistance to get back on their feet. A cap on the amount of time residents can stay - three years - was put in place, but the amount of repeat tenants is on the rise.

"I think council should really get on that. I do understand it's hard ... we are semi-isolated up here, it costs a lot to bring in materials, but something should or could be done. I think it could be looked into more," Birch said.

These thoughts were echoed by the Yellowknife YWCA, where its 39-suite Rockhill transition apartment complex is operating at maximum capacity, and is experiencing the highest wait list organizers have ever seen.

"What we've seen since Christmas is that the wait list for our transitional housing program at Rockhill has gone from an average of 25 families, to as of Aug. 15, 128 families," said Julie Green, the YWCA's director of community relations.

"It's the highest anyone has ever seen it. This program has been operating since 1997 - it's way over the top."

Tenants living in the Rockhill apartment complex pay $1,150 for a one-bedroom apartment and $1,350 for a two-bedroom unit.

While the client base that utilize the Rockhill program struggle with poverty on a daily basis, Green believes the disparity between those who can afford to meet their daily needs and those that cannot is rapidly growing in Yellowknife.

"I think everybody experiences it, whatever their income level is, the cost of housing - whether to buy or to rent - is crazy," she said.

"I think the city has to find a way to encourage property developers to build more affordable rental housing. I know there's a big building spree on now for condos and they are affordable if you are going to buy a house, but you've got this big segment of the population, maybe as much as 40 per cent, who cannot afford to buy a house.

"They don't have a down payment, they don't have the operating expenses, so there needs to be a way to meet their needs with affordable rental suites, which is not what they have now."

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