What does ‘affordable housing’ mean in Yellowknife?

At a municipal meeting on Monday, councillors were surprised to learn that Yellowknife has no clear definition of the term “affordable housing.”

Despite frequent use of the phrase in press releases, reports and on the city’s website, the municipality has no specific cut-off between an unaffordable apartment and an affordable one.

In a response to a question by Councillor Tom McLennan about how proposed infill could create more affordable housing, planning director Charlsey White said the city assumes that creating more units will help with affordability.

“We don’t actually have a definition of what affordable housing is,” said White.

“There’s a generally accepted definition that it’s where a household is spending no less than 30 percent of its gross income on housing.”

White said the development the city hopes to see in infill areas may not specifically result in affordable housing, “but it will have that ripple effect of creating new available units.”

McLennan, in response, said he wanted to “take the time as council to provide a formal definition for the city at some point.”

Yellowknife’s mayor, Rebecca Alty, said she doesn’t think the city needs its own definition of affordable housing.

If the city does choose to define what’s affordable, Alty said, it would likely use an approach that already exists.

“I don’t think we’d invent a new formula or definition, but we’d look at the variety of definitions and see what would work best for Yellowknife,” Alty wrote in an email. “Then we’d need to add the Yellowknife data to determine what’s affordable.”

What’s the federal definition?

Often, the city looks to a territorial or federal precedent when talking about affordability in Yellowknife.

However, establishing a clear federal definition can be tricky.

The Canada Mortgage and Housing Corporation, the country’s housing body, states that affordability means nobody spending more than 30 percent of their income on housing.

But the definitions used in practice tend to vary. Many CMHC programs, such as a national co-investment fund or its Rental Construction Financing Initiative, define affordability differently: as households paying no more than 30 percent of a given area’s median household income for housing.

In Yellowknife, where salaries are considerably higher than most Canadian cities, the median household income according to 2021 census data is $148,000. This would mean anything below $44,400 a year – or $3,700 a month – could be considered affordable rent. The same census data suggests there are at least 500 households in Yellowknife who do not even earn $44,400 a year.

Canada has spent billions of dollars subsidizing housing projects that meet the federal affordability target, incentivizing the private sector to build more units. But recent reports and a federal audit found this had not had a clear impact toward meeting the federal definition of affordability. Cabin Radio reached out to CMHC for comment, as well as clarification on different formulas for calculating affordability, but did not receive a response.

Some advocates say a clear national definition of affordability is the answer, but national income-based definitions don’t take into account location-specific factors.

A definition of affordable housing purely based on a percentage of income does not require housing to be in good repair, to include enough rooms to prevent overcrowding, to be appropriately located for people who can’t afford a vehicle or the price of gas, or to have reasonable utility rates for water and heat.

That could allow people to say they are creating affordable housing without meeting the most acute needs of Yellowknife’s low-income tenants.

Basing affordability on a universal salary percentage also neglects to take into account that other goods and services aren’t valued the same way. If you earn $300,000 a year, having $210,000 left to cover other costs is practically very different to making $30,000 and having $21,000 left.

Does the GNWT have a solution?

This isn’t the first time the issue has arisen at council.

In September 2022, as part of an agreement allowing a company to purchase a downtown lot for just $1, the city included the condition that a percentage of housing units created by that company must be “affordable” for a number of years. Details of the agreement have not yet been made public.

Speaking at a council meeting that month, Councillor Cynthia Mufandaedza was concerned that without a clear legal definition of what affordability entails, that condition would be open to interpretation.

“Hopefully we will get that definition of what affordable housing in Yellowknife looks like,” she told colleagues at a meeting that month. “Without the city’s definition, it could be, you know, $3,000 a month to $12,000 a month.”

Councillors have also discussed using a territorial definition, without specifying which one.

The NWT government broadly uses CMHC’s definition, meaning the threshold of 30 percent of a household’s monthly income. But that isn’t the only territorial approach available.

Housing NWT, for example, relies on core need income thresholds to help decide eligibility for public housing. Those thresholds take into account differences in each NWT community, an approach that might provide a more accurate measurement of affordability.

In Yellowknife, the 2021 monthly income threshold for a renting resident was $5,033 for two bedrooms or less, or $5,842 for three bedrooms or more. Applying that to affordable housing could mean declaring that rents must be affordable to people meeting those same income thresholds.

A Housing NWT spokesperson said those thresholds are updated every two to three years, a pace of change that may not be quick enough to capture rapid shifts in costs of living.

In a scathing November report produced by Canada’s auditor general, the CMHC was criticized for a lack of data collection and analysis, and reminded to focus on helping small governments create local, targeted, evidence-based responses to housing issues.

Increasingly, Ottawa is asking communities to articulate their specific needs to the solve housing affordability crises their residents face. At present, Yellowknife may not have a clear answer.