Some Yellowknife tenants feel more vulnerable than ever

House prices may be falling across many parts of the country, but that’s cold comfort for many Yellowknife renters.

According to a recent report by the Canada Mortgage and Housing Corporation, more than half of Yellowknife’s residents don’t earn enough to be able to buy a home.

With rental unit availability at an all-time low, some renters are concerned and fearful about holding on to their apartments.

The CMHC reported the city’s vacancy rate at 1.8 percent in October 2021 – but the number can feel more like zero in practice.

Some property management companies are no longer posting ads when units become available, instead using their vacancies to chip away at waiting lists of previous applicants.

Housing-related Facebook pages and classified listings on YK Trader have become dominated by people seeking rooms and roommates rather than entire houses and apartments. For anyone with children or looking for their own accommodation – especially with pets – the situation can feel challenging.

“My landlord is selling the building and as of right now, I’m not sure if it’s being sold as a rental or not,” one Yellowknife resident recently told Cabin Radio, asking to remain anonymous to discuss their living arrangements.

“I’ve been looking for another place to rent but, being a single mother with a dog, I’m stressed to the max and not sure what I’m going to do.”

The woman said she would like to see policies in place that require more notice from landlords if they are choosing to sell.

“There was no communication. I had no idea she was putting the place up for sale until a couple of days prior to viewings,” the tenant said.

“I asked if it was being sold as rental or if I should be looking elsewhere. All she said was, ‘I’m looking for anyone to buy this place.'”

On top of that, the tenant said, her landlord is raising the rent. The tenant said she feels stuck there until she can find another place to live – a task beginning to feel impossible – or she is forced to move without any guarantee of finding somewhere new, which makes homelessness a possibility.

“I’m already struggling to keep up with bills, and buying just isn’t an option for me right now with my credit,” she said.

“I don’t have a plan B if I can’t find something. I’m just going day by day.”

Another Yellowknife renter, living in a house with roommates and similarly seeking anonymity to discuss their situation, also discovered their building was going on the market.

“We have recently been forced to move and find new housing because our landlord decided to sell our building,” they said. “It’s incredibly scary and stressful finding a new place to live right now.”

At first, the roommates tried to find somewhere they could move together. It didn’t take long to realize that was going to be impossible. The renter said breaking up a household of people who got along and enjoyed living together – and potentially having to move in with strangers – added to the stress.

Another couple, who again requested anonymity, learned their rent would increase by $100 monthly and they would have to begin shouldering the burden of an estimated $700 in monthly utilities, previously covered by the landlord.

“I was shocked they could increase our monthly expenses so much,” one of the two said. “In a market where options for living are limited, it makes you feel trapped.

“Housing in Yellowknife is a huge challenge, regardless of the job opportunities available here. It’s difficult to find anything under the $400,000 mark and, for young professionals, the ability to reach 20-percent down to avoid CMHC feels out of reach,” they said, referring to the federal requirement that homebuyers take out mortgage insurance if their downpayment is less than 20 percent of a home’s value.

“Trailers are going for over $500,000 and there is only a small amount of inventory to choose from. Houses appear to be going for over asking, instantly.”

Is a rent cap a solution?

There are multiple issues behind the housing insecurity experienced by Yellowknife renters. How tenancies work in the NWT is one of them.

In the Northwest Territories, tenants of subsidized public housing can have their tenancy ended by their landlord once the agreement ends. The territory has fewer protections for tenants in those circumstances than can be found in some southern jurisdictions.

There is also no limit to rent increases in the territory, while in provinces like Ontario, Nova Scotia and British Columbia, rent increases are capped – generally at around two percent annually – or tied to inflation rates.

The Yukon’s rent cap, billed as a temporary measure when introduced as a Yukon NDP request to guarantee support for a minority Liberal government in the territory, is now in its second of two years. This year, increases are capped at 3.3 percent.

In April, the opposition Yukon Party said: “Rent is going up across the board. Landlords are selling units. Tenants are being evicted. An investment in new construction of rentals will suffer. The facts are clear that this policy simply doesn’t work.”

The Yukon NDP, though, said the cap had “helped people fighting against unfair, unaffordable and unsustainable rent hikes.”

In the NWT, the topic has received little discussion at territorial level. While Yellowknife North MLA Rylund Johnson says he would prefer to introduce a cap on rent increases, most mention of rent caps so far this century has involved MLAs concluding such a policy would be too expensive to implement.

But even some Yellowknife landlords think it’s worth a look.

“Landlords have too much economic power over a situation that’s already precarious,” said Kathryn Pakenham, a landlord in the city.

While Pakenham can understand why some landlords dislike rent caps – costs are rising, particularly for utilities, and the price of labour has increased significantly for repairs to premises – she argues tenants are more likely than their landlords to be the hardest-hit by those same factors.

“A lot of the people who aren’t in favour of a rent cap make a fairly high salary. Even with my salary, I’m solidly middle-class,” Pakenham said.

“I make around $65,000 a year. I don’t really have to worry if my landlord was to say, ‘Hey, we’re raising rent by $200, $300.’ I could cover that. But if you have any dependents, or if you are new to this community, it’s so difficult to do that.”

Pakenham believes it is in the territory’s best interest to minimize the insecurity and vulnerability associated with renting.

“I know the GNWT wants to attract new businesses because the mine is closing and employment is going to take a dip in three or four years,” she said, referring to the Diavik mine’s planned closure.

“So we’re trying to attract businesses and diversify the economy. But that’s impossible to do right now because if people can’t find housing, they’re not going to come up here.

“I’ve had instances myself of wanting to bring people on to my team. When my organization tries to hire people, they say yes. They want the job. But later they have to back out because they can’t find housing.

“No one is going to want to come up here if they know they’re going to be put in a way more precarious situation than other provinces.”

Developers aren’t sold

Rent caps and other policies to protect renters aren’t as attractive to the developers building Yellowknife’s housing.

Milan Mrdjenovich, the only multi-unit developer currently working in Yellowknife, told Cabin Radio: “I wouldn’t develop here if there was a rent cap. The cost to build now is outrageous, and profit margins are slim to none already.”

Mrdjenovich isn’t happy with the current system, either. His latest 70-unit housing project in Yellowknife’s Niven Lake area is being appealed by residents over the way a likely increase in traffic should be handled. It’s his third project in a row to face an appeal, and Mrdjenovich has consequently pledged to leave Yellowknife, arguing the NWT’s capital is “no good for me.”

But even if his latest project comes through an appeal without changes, there are few places for workers from down south to stay, and few workers in Yellowknife who can rely on short-term contracts that pay $23 an hour.

For Mrdjenovich, one of the factors that makes building in the North so challenging is the cost to fly out workers and put them up in hotels or find short-term stays. Temporary worker camps, intended to solve that problem, can be subject to the same appeals.

Rob Warburton, who runs Yellowknife real estate investment company Cloudworks, says providing accommodation for workers in the city is critical.

“The reality is, companies need to bring in crews to build all the things that need to be built in the city, and there’s simply not room to house a couple hundred employees right now in the current rental market,” Warburton said.

“Another option is to go to hotels, but I know those are kind-of at capacity as well.”

Warburton is concerned that Yellowknife’s low vacancy rate and a lack of short-term units for workers will go on to affect the city’s businesses in more ways than one.

“If you fill all the hotels, then tour operators can’t book any tours. We need those rooms for other economic activity here in the city,” Warburton said.

In Nova Scotia, similar factors have politicians across the spectrum acknowledging temporary rent controls may be required to stop the crisis getting out of hand. The province’s conservative government has extended an emergency rent control order until December 2023.

While the province is promising a multi-pronged approach to combating its housing crisis, rent caps are intended to ensure rents don’t spiral in the interim.

“The long-term solution for the housing crisis does not rest on rent control,” Premier Tim Houston told Global News. “But we know that more supply, more availability, cannot happen overnight.”

Additional housing is on the way in Yellowknife, the latest being the downtown Bellanca building’s newly announced conversion into a residential block. But how much those units will cost, and whether they’ll be a viable option for the city’s under-pressure renters, is not yet clear.

In the meantime, the territory’s landlords will decide how tight the squeeze will be for tenants, who worry there’s nowhere else to go.