At the end of December, the Lethbridge Herald published an article with the title “Lethbridge still affordable for renters”. The first sentence read, “Lethbridge remains one of Canada’s most reasonably priced cities for renters.”
The article then goes on to list the average cost of rent in Lethbridge: $923 for a 1-bedroom apartment and $1,051 for a 2-bedroom apartment.
However, it never goes on to say how those prices are “affordable” or “reasonable”. So, I decided to do the research the reporter didn’t do to see if rent in Lethbridge indeed is affordable.
CMHC says that “housing is considered “affordable” if it costs less than 30% of a household’s before-tax income.”
Well, $923 a month for 12 months comes to $11,076, which is a third of $36,920. For the average rent of a 1-bedroom apartment to be affordable in Lethbridge, the renter needs to make $36,920 a year, before tax. For reference, that’s about $17.75 an hour for full-time work.
I decided to check the census data for income level in Lethbridge. The most recent census we have is for 2016, so it may not be entirely representative of current numbers, but I haven’t been able to find anything closer.
What I discovered is that about 38,320 people in Lethbridge make under $40,000, which is less than the salary needed for the average rent of a 1-bedroom apartment to be affordable. That’s 53% of all those employed in Lethbridge.
That means more than half of those employed in Lethbridge cannot afford the average rent of a 1-bedroom apartment in Lethbridge.
Now, keep in mind that the 30% I mentioned above, which CMHC considers the cutoff for what is affordable, includes not only rent but also utilities (electricity, heating, water, etc). It’s not clear from the December 2019 Rent Report that the Herald cites whether their data includes utilities. If they don’t, then that likely changes the affordability of rent in Lethbridge.
The Utilities Consumer Advocate website shows a range of $250.62–257.90 a month for electricity and gas together for Lethbridge. My water, wastewater, recycling, and trash collection bill comes to just over $100 a month. So, assuming these rates can apply across the board, and we choose the UCA’s lowest rate, that’s about $350 more per month. That adds an extra $4,200 to our annual wage of $36,920, for a total of $41,120. That’s $19.77/hour, with full-time hours.
Statistics Canada groups workers in income levels in $10,000 increments, so it’s difficult to tell how many workers in Lethbridge make $41,120 or less. We do know 53% make under $40,000, and 64% make under $50,000, so the total percentage of the workforce unable to afford the average rent of a 1-bedroom apartment in Lethbridge is at least 53%, but possibly as high as 64%
Either way, the majority of workers in Lethbridge can’t afford it. So, in short, rent is not affordable in Lethbridge.
All it took was a bit of research to verify it, instead of just parroting the information in the press release.