Ottawa is lending billions to developers. The result: $1,500 'affordable' rents
CBC
As Birch Meadows, a 76-unit apartment complex on the outskirts of Moncton, N.B., opens this fall, it will offer tenants a number of perks: underground heated parking, quartz countertops, storage lockers and an in-house gym.
Earlier this year, when federal Social Development Minister Ahmed Hussen announced Ottawa was handing the project's developer a $16-million loan with highly favourable terms, he detailed another significant bonus.
Half the units, he said, would be "deeply affordable" as part of the agreement, signed under the federal government's $25-billion rental construction financing initiative. It was a key consideration in a small city that's witnessed examples of huge rent increases, in a province considered the poorest in Canada.
But it turns out that "deeply affordable" is relative. Federal data released under access-to-information laws shows the "average affordable rent" of the Birch Meadows project is $1,500 a month — far higher than Moncton's average rent last year of $880.
Birch Meadows is hardly an outlier, according to a CBC analysis of the data related to more than 130 low-cost loans — some topping $300 million — that have been handed out across the country under the rental construction financing initiative.
Affordability requirements are a key condition of the loans. But in more than half of the cases, the average affordable rents are higher, or are projected to be higher, than what most tenants currently pay in the city or town where the project is located.
"It's a cruel joke," said Aditya Rao, a lawyer and an organizer with the New Brunswick Coalition for Tenants Rights. "We know that people who are trying to rent are struggling."