P.E.I. Rental Affordability Gap: Minimum Wage Workers Struggle to Find Housing
A new report highlights the growing affordability crisis in Prince Edward Island, revealing that minimum wage earners need to work significantly more hours to afford basic rental housing. The analysis, focusing on Charlottetown, Cornwall, and Stratford, underscores the challenges faced by many Islanders seeking affordable homes.
The Affordability Challenge on P.E.I.
For residents like Meghan Dewar, the reality of finding affordable housing in Charlottetown is a constant concern. While Dewar currently manages to afford her one-bedroom apartment, she acknowledges that this wouldn't be possible on a minimum wage income. "I don't feel that it's that attainable," Dewar told CBC News, emphasizing the difficulty for students and minimum wage workers.
The new report, based on data from the Canada Mortgage and Housing Corporation (CMHC) and analyzed by the Canadian Centre for Policy Alternatives (CCPA), confirms these concerns. It demonstrates that renters earning minimum wage would have needed to work approximately 75 hours per month in 2024 to afford a two-bedroom apartment on P.E.I.
Rental Wage vs. Minimum Wage
David Macdonald, a senior economist with the CCPA, explained that the "rental wage" – the hourly wage needed to afford rent while working a standard 40-hour week, allocating 30% of gross income to housing – significantly exceeds P.E.I.'s current minimum wage. "So if you're looking for a two-bedroom apartment, you'd need $23 an hour, and if you were looking for a one-bedroom apartment, you would need $19 an hour," said Macdonald.
Even with P.E.I.'s minimum wage increasing from $13.70 three years ago to $16 an hour currently, and a planned increase to $16.50 on October 1st, affordability remains a challenge. If rents rise at the same rate or faster than wages, any income gains are offset by increased housing costs, a trend observed in Charlottetown and Cornwall, according to the report.
The Need for Non-Profit Housing
While rent control measures offer short-term protection, Macdonald emphasizes the importance of building more affordable rental housing outside the private sector for a lasting solution. He advocates for increased investment in non-profit rental units, stating, "What we need is more units that are in the non-profit sectors. Their goal is not maximizing profit, it's not extracting as much rent as they can out of tenants, but is rather to pay their own bills, and that's about it."
He warns that relying solely on private developers may lead to an increase in luxury units, potentially raising average rent costs. Increasing non-profit housing can provide a long-term solution to affordability issues in Prince Edward Island.
