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Winnipeg Free Press - PRINT EDITION

Housing crisis tests Thompson

With zero vacancy rate, northern city forced to innovate

By: Shauna MacKinnon

Posted: 04/29/2009 1:00 AM | Comments: 0 (including replies)

(M SCOTT)

While much has been written about the lack of affordable housing in Winnipeg, the situation in other Manitoba communities has also reached crisis proportions. Thompson, for example, has a zero per cent rental vacancy rate.

Thompson is Manitoba's "service hub of the North." With a population of 13,256, it also serves as a trade centre for an additional 65,000 Manitobans. Approximately 36 per cent of Thompson residents are aboriginal, the largest proportion in any Canadian municipality.

Thompson is also a city with extreme income disparity. Thirteen percent of individuals older than 15 reported income exceeding $80,000 in 2005, while 25 per cent earned less than $15,000. The disparity has grown considerably since 2001. The population increased by 3.7 per cent between 2001 and 2006. The number of individuals earning less than $15,000 decreased slightly (about five per cent). But more striking is the increasing number of high-income earners in this period -- a 65 per cent increase in those earning $80,000 plus.

This has had significant implications for housing. In a community with an increasing number of high-income transient workers and zero rental vacancies, there is considerable incentive for landlords to do whatever necessary to increase rents. But doing so without the creation of new low-cost units has resulted in the displacement of low-income families.

For example, one privately owned rental-housing complex was renovated in 2008 after years of neglect. In accordance with the Residential Tenancy Act, the owner was given exemption from rent guidelines resulting in a doubling of rents from $509 to $1,000 for a three-bedroom unit and $568 to $1,200 for a four bedroom. While the freshly renovated units provided a welcome source of housing for higher income earners, not so lucky were the many families displaced because they could no longer afford the rents. And with no other housing options available, many of the 96 families, including some 219 school age children, had no choice but to leave Thompson.

More recently, the owner of a 275-unit rental property informed tenants that units will be converted into condominiums. The purchase price of a one bedroom will be approximately $160,000. Many of the families and singles residing in the building can't afford the purchase price and are fearful of losing their homes. But other options are limited and new supply is not being built through the private market to replace affordable rental units lost.

People, meanwhile, continue to migrate to Thompson. The dire housing situation and lack of opportunity in small northern communities leads many to Thompson in search of employment, education and homes. But the lack of housing means that many are unable to stay, creating challenges for the local economy. For example, education enrolments have decreased and there is a shortage of professional, labour and service workers.

Like other municipalities, Thompson's city government continues to press the provincial and federal governments to build more subsidized rental housing. The province is beginning to respond. Progress, however, is slow. Plans are in place for 40 new 'affordable' units, half of which will be subsidized with rents set according to income. But more units are needed.

Thompson has not had a budget line for housing, although it has contributed land for affordable housing and has acted as a developer of residential land at a net cost to the city.

But Thompson is taking a new approach. It recently changed its land sale policy; will no longer subsidize market housing development; and is determined to take a more proactive approach to affordable housing.

In 2008, within the guidelines of the Municipal Revenue Act, the City of Thompson passed a bylaw that would allow it to raise local taxes and dedicate revenues to affordable housing, infrastructure and public safety.

Revenue from a two-per-cent hotel tax and restaurant meals was to be allocated to a reserve fund for infrastructure. Revenue from a two-per-cent tax on alcohol was to be allocated to public safety, and a half of a per cent tax on land transfers was to be allocated to a fund for affordable housing.

The government declined to approve the tax proposals and instead allowed Thompson to introduce a hotel tax of five per cent, similar to the City of Winnipeg tax that is primarily used to fund Destination Winnipeg.

Although disappointed with the rejection of its innovative plan, Thompson implemented the five-per-cent tax, but with a twist. The city will allocate revenue to reserve funds that have broader social benefit. In response to priorities determined by the community, 60 per cent of the hotel tax revenue is allocated to an infrastructure reserve, 20 per cent to a community safety reserve, and 20 per cent to an affordable housing reserve. At an estimated $465,000 per year, approximately $93,000 will now be available for affordable housing.

The new reserve fund won't solve Thompson's housing crisis. More financial support from the federal and provincial governments is desperately needed. But Thompson's willingness to take action and seek creative solutions to its housing crisis shows what city governments can do when they take leadership and put community first.

Shauna MacKinnon is the director of the Canadian Centre for Policy Alternatives -- Manitoba. Charlene Lafreniere, executive director of the Thompson Neighbourhood Renewal Corp. and a Thompson councillor, collaborated in writing this piece.

Republished from the Winnipeg Free Press print edition April 29, 2009 A12

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