Cost of Housing Article
More housing needed for Saanich Peninsula workforce
Published in the Peninsula News Review September 13th, 2023
Over the last 2 years the Saanich Peninsula Chamber of Commerce has been working with local small to large companies to identify and understand the biggest challenges they face doing business on the Peninsula. The Chamber identified one challenge that, if not urgently addressed, could lead to businesses being forced to leave the peninsula and a drastic increase in the daily cost of goods and services for residents. This challenge has been rapidly accelerating on the peninsula since 2001.
Lack of staff to effectively run businesses is the overwhelmingly the biggest current issue. It impacts companies from small businesses with local customers, to large local companies with international clientele. They are also struggling with a lack of technically qualified staff. These two things together are creating a recipe for an uncertain future for businesses on the Saanich Peninsula.
Working with Statistics Canada we have identified many contributing factors. A shrinking workforce population, poor public transportation systems, and a surging retired population are on the list, but there is one major cause driving this.
Extremely high housing and rental costs mean that the workforce is looking elsewhere for work.
Even highly qualified younger workers are not able to sustain themselves in the peninsula’s housing climate. Businesses now must list housing costs as a key threat to our businesses alongside supply chain and market conditions. Let’s compare the cost of housing on the Saanich Peninsula between 2001 and 2021 assuming a 20% down payment, a 25-year amortization period, and mortgage interest rates of 6.45% for 2001 and 4.79%. for 2021.
In 2001 the median household income was $59,100, the median house price was $288,983, and the down payment was $57,797 (one year’s salary). A typical family needed 32% of their GROSS household income (pre income tax) for their mortgage payment. They had a monthly income of $4,925 and their mortgage payment was $1,554 per month.
In 2021 the median household income was $100,333 and the median house price was $1,405,872 the down payment was $281,174 (three years’ salary). A typical family needed 77% of their GROSS household income (pre income tax) for their mortgage payment. They had a monthly income of $8,361 but their mortgage payment was $6,438 per month.
Even with household income doubling since 2001, housing costs have increased by nearly 5 times and the down payment you need is three times your yearly salary!
The only immediate solution that local businesses have is to increase staff wages. To return to 2001 levels, local businesses would have to increase salaries by two and a half times what they are now. This increased staffing cost would directly increase the sale price of our products and the price customers would be paying for their goods. That would mean that the cost of your food, coffee, and clothing would more than double.
The current high housing costs are a direct result of the long-standing historical lack of new housing units being approved and built on the Saanich Peninsula. The peninsula desperately needs our municipalities and municipal leaders to quickly approve and build more market housing to align the peninsula with the human right to adequate housing in Canada as laid out by Bill C-91 and the Canadian National Housing Strategy Act passed in 2019. Currently housing on the Saanich Peninsula does not meet the human right to adequate housing and is simply out of reach of the bulk of our younger workforce.