VANCOUVER (NEWS 1130) – It can be tough to keep your head above water on the West Coast when it comes to paying for housing — not just the price of the property itself but all the associated costs of keeping a roof over your head.
A rough calculation from the Canadian Centre for Economic Analysis suggests that 25 per cent of residents of Metro Vancouver, after paying for other necessities like food, clothing and childcare, could spend $0.70 of every remaining $1 on shelter.
The centre’s recently unveiled Shelter Consumption Affordability Ratio (SCAR) index is the first in Canada that measures the proportion of income that households devote to all their shelter-related needs, not just housing prices and mortgage rates. That includes transportation, utilities, and maintenance.
“The SCAR index is designed to consider the non-discretionary costs of ‘consuming’ shelter,” says CANCEA president Paul Smetanin. “The problem with a lot of affordability indexes is they are really investment indexes and they aren’t taking into account that to make a home a home, it takes many other expenses.”
He adds the index gives a much more realistic view of the pressures faced by different parts of the community as they try to house themselves.
CANCEA has found that a typical Canadian household spends close to $0.40 of every $1 of income it has left over on shelter after purchasing other necessities.
In BC, it is $0.43 on the $1, but Smetanin suggests the figure is much higher in major urban centres like Metro Vancouver. While he has not made specific calculations for the Lower Mainland, preliminary calculations indicate a resident here now has to spend $0.70 on the $1 just to put a roof over their head and make it functional.
“We are looking forward to working with the city in implementing the SCAR ratio for Vancouver,” he tells NEWS 1130. “We would like to think that by the end of the year that we will have greater analysis for Greater Vancouver.”
In the meantime, Smetanin admits people who live in Metro Vancouver are seeing their disposable income dwindle. “It doesn’t leave a lot of wiggle room to do other things like get an education, enjoy life and essentially do what we expect to do as Canadians.”
Smetanin will be speaking at a housing summit in Vancouver next week.