Housing crunch puts Abbotsford families in tight spot

Skyrocketing home prices and a record-low vacancy rate make affordable housing increasingly hard to find.

Michelle Bissonnette, husband Kevin, and children River and Rory, currently lived in a cramped two-bedroom apartment. Michelle has been looking for a new home for years, but has found little to  choose from.

Michelle Bissonnette, husband Kevin, and children River and Rory, currently lived in a cramped two-bedroom apartment. Michelle has been looking for a new home for years, but has found little to choose from.

By Laura Rodgers and Tyler Olsen

Michelle Bissonette’s two children, four-year-old Rory and five-year-old River, currently share a room in a cramped central Abbotsford apartment in a building that has frequent plumbing issues.

Michelle and her husband Kevin have been searching for a larger place to live since 2014, but they haven’t been able to find anything within their budget.

River has special needs, and Michelle is a stay-at-home mom and his full-time caregiver. Kevin works as a plumber, which in another era would have been enough for the family to buy a home. But at present, they’re struggling to find a decent place to rent – let alone save for a down payment to buy a home.

“It’s very frustrating to not be able to find suitable housing,” said Michelle. “The kids need food, clothes, therapy … there’s no way to save.”

They’re far from the only family facing such struggles. Abbotsford is facing a real estate and rental crunch – and it’s only intensifying.

According to BC Assessment and the Fraser Valley Real Estate Board, home prices in Abbotsford are on the rise because the hot real estate market in Vancouver is pushing families eastward, toward the Fraser Valley.

“Single-family homes further west are, on average, a million dollars and above in particular neighbourhoods,” said Brian Smith, the acting deputy assessor for BC Assessment’s South Fraser region. “People have to start looking to more affordable options, so they start moving further and further out.”

The cost of an average single-family home in Abbotsford stayed relatively steady from 2007 to 2012. But since then, it’s risen dramatically, with the price of that average home increasing by nearly $100,000 in just three years. In January 2013, the average home cost $434,018. By December 2015, that number had risen to $528,264, and most of that increase has come in just the last 12 months, with average home prices increasing 16.7 per cent.

That average price is slightly higher than a typical “benchmark” house, which has a value of $495,709.

This echoes the picture further west, with home prices in Surrey, North Delta and Langley all increasing at an even faster rate.

“It’s a standard trend,” said Jorda Maisey, president of the Fraser Valley Real Estate Board. “What happens is, as prices get too high in the city, [people] start to move out. When you start having more buyers and less inventory, it’s supply and demand. The activity starts to shift, and get further and further out.”

Competition for rental housing is just as fierce, with the area’s vacancy rate plunging to record-low levels. Just 0.6 per cent of units were vacant, down from 3.1 per cent in 2014. The availability rate, which includes properties where the tenant intends to move, also declined significantly, from 4.6 to 1.3 per cent.

Unlike housing prices, rental rates can only increase as much as permitted by the Residential Tenancy Branch, which last year set the maximum rental hike at 2.5 per cent. Even with that cap, the Canadian Mortgage Housing Corporation found a 2.9 average rent increase in samples of similar properties in Abbotsford and Mission.

Some of the housing crunch has been attributed to the market in Metro Vancouver – which some attribute to foreign investment. And there are concerns there that home prices no longer reflect income levels.

But in the Fraser Valley, there are indications that at least some of the housing demand is tied to a booming economy.

Statistics Canada recently reported unemployment rates to be on a steady decline in the city, from 8.8 per cent in 2011 to 6.4 per cent in 2015. And the CMHC has attributed demand to an improving labour market bolstered, in part, by a manufacturing sector aided by the low dollar.

The CMHC expects the Abbotsford-Mission area to welcome 1,300 new residents in each of the next two years, and predicts that the region would see total employment growth of 8.7 per cent from 2015 to 2017.

“There’s only so much land available in the Lower Mainland. The further away from the [Vancouver] core, the more affordable it is,” said Maisey. “Industry moves further out as well. And if land is more affordable [for] businesses, there’s more ability to have income in the perimeter areas of the Fraser Valley.”

Evidence of increased demand for housing in the Central Fraser Valley is reflected in the Abbotsford and Mission school districts. Administrators in both districts had been expecting enrolment drops. Instead, both Abbotsford and Mission saw triple-digit increases in the number of students, with officials speculating some of those were a result of more people moving to the area, thought to be either from Alberta, which has seen its economic fortunes slump as the price of oil sank, or from further west in the Lower Mainland, where home prices are even higher.

As prices rise, single-family houses can end up out of reach for many who earn an average income.

A 2013 report from the Abbotsford Community Foundation found that 24 per cent of homeowners and 39 per cent of tenants are spending more than 30 per cent of total household income on shelter costs. Overall, survey respondents gave housing affordability in the city a “C” grade. Housing in Abbotsford is less affordable than the national average, but close to the provincial average.

The Canadian Mortgage and Housing Corporation says a family would need an annual household income of $93,586 to buy a typical average home. Yet in 2013, the last year for which data was available, the median family income was $68,310.

To buy a townhome with a value of $284,339, a family would need annual income of $53,678, while the typical apartment would require a minimum income of just under $30,000.

For the Bissonettes, even housing that would be deemed unaffordable for them has thus far been impossible to find. They currently pay $800 per month for rent, but Michelle said she’s willing to go as high as $1,300 when they resume looking for a place once the school year draws to an end.

That is far in excess of one-third of the family income – the point at which many social agencies deem housing “unaffordable.” Even so, Michelle said there is a “slim to none” chance that they will be able to find a suitable home.

As for home ownership, Michelle says buying a house for a young family seems to increasingly require an unexpected financial windfall.

“Anybody I know who has done it has somehow fallen into money,” Michelle said.

•••••

Single-moms spend more than a third of income on rent: study

Hundreds of single mothers in Abbotsford spend the majority of their monthly income on rent, according to a study released in December.

Although they comprise just 10 per cent of renters, the 1,155 local single-mother renters counted in the last census spend an average of 38 per cent of their income on rent, according to the Rental Housing Index compiled by the BC Non-Profit Housing Association. And 36 per cent of those renters spend more than half their income on shelter.

The figures – which rely on data collected in the 2011 census – mirror those found across British Columbia, where one in three single mothers who rent housing spend more than half of their gross income on shelter.

The Rental Housing Index study is an expansion on one released in 2014 year that showed Abbotsford residents spend an average of $866 on rent plus utilities. The situation is worst for the poorest 25 per cent of renters. Those renters, who earn below $21,150 a year, on average spend nearly three-quarters – 74 per cent – of their income on housing.

The data show single mothers pay, on average, around $50 more per month than the Abbotsford average.

Seniors, who make up a slightly larger block of renters, are not as stretched by housing prices, the numbers suggest. They pay, on average, $772 on rent and utilities. And while 42 per cent spend more than a third of their income on rent – the point at which many organizations define housing as “unaffordable” – only 12 per cent spend more than half their income on shelter.

And while the index says more than a quarter of single-mother renters were living in “overcrowded” conditions, that figure was only around six per cent for seniors.

“The city in general, when we rank it against the rest of Canada, comes in 502 out of the 521 cities in the country, so clearly there’s a rental housing affordability challenge in Abbotsford as it’s one of the most constrained environments in the country,” said Tony Roy, the CEO of the B.C. Non-Profit Housing Association.

“Even though the rents may not be as high, neither are the incomes. The incomes are not high enough there to pay what the rent is.”

The index also breaks down renters by profession, and show that those employed in construction jobs constitute the largest chunk of renters. They’re also relatively well-off, with an average income of $35,246. The next-largest group of renters, hospitality workers, make slightly more than half of that figure. Retail, health care and social services, and manufacturing workers round out the professions with the most renters.

“I think there’s a perception that when we talk about renters, we’re talking about young people, maybe retail workers, maybe people working at Starbucks,” Roy said.

Abbotsford News