Thank you, Mr. Speaker. The NWT Housing Corporation is committed to implementing a fair and sustainable public housing rent scale. It is one of the strategic actions outlined in Building for the Future: Northern Solutions for Northern Housing. It was also identified as a key component of the 17th Legislative Assembly’s priority to address housing needs.
Last month I released the public housing rent scale that will be implemented on July 1st. This rent scale addresses the many concerns we have heard from residents and Members of the Legislative Assembly over the past several years.
First, residents wanted the public housing rent scale to be simpler and more predictable. The previous approach was a complicated model with many adjustments in calculating rent. Tenants didn’t always know what their rent was going to be from month to month. As an example, last month there were 311 public housing tenants with incomes between $2,500 and $3,750. These tenants paid 167 different rents ranging from zero to $1,050. With the new rent scale, all household incomes in this range will pay between $325 and $365, depending on community. This will allow tenants to know their rent from month to month and plan their household budgets accordingly.
Residents also told us they wanted the public housing rent scale to address the disincentive to work. The new rent scale eliminates the bias against employment income, allows residents to earn extra income without rent changing, and provides for modest rent increases as income levels rise. The new minimum rent is set at between $70 and $80, depending on community, and
maximum rent at $1,445 to $1,625 with rent increasing as household income increases. This means that low-income tenants will pay about 4 percent of their income. Maximum rent will be 19.5 percent of income. The maximum rent under the old rent scale was up to 30 percent of income which translates into an overall 10.5 percent reduction in the maximum rents we can charge for higher income working Northerners in public housing. The overall changes to the rent scale will mean more money available to families to spend in the communities on their children and for the necessities of life.
The new maximum rents will be particularly beneficial for seasonal workers. During months that they are employed, seasonal workers often faced large rent increases, with rent as high as $4,600 per month in some communities. These workers often depend on this income for the entire year and the new maximum rent will ensure there is no disincentive to residents that depend on seasonal income.
Finally, residents also wanted the new public housing rent scale to be fair. The new scale means that rent for public housing tenants will be the same for tenants with similar incomes, regardless of the community they live in. This helps to address cost of living in our highest cost communities. For example, it costs about $42,000 per year to operate each public housing unit in Paulatuk. This is much higher than for lower cost communities like Hay River where costs are typically about $12,000 per unit per year. Keeping public housing rent similar, regardless of community, contributes to the sustainability of all NWT communities.
The changes we are making must be done in a manner that helps ensure the sustainability of the public housing program. One result of the introduction of the new minimum rent is that seniors will now pay rent in public housing. I understand this is a major change and that not everyone is going to be supportive. The reality is that the number of seniors residing in public housing is increasing as the population ages. At the same time, costs to operate public housing continue to increase and funding from the federal government to operate social housing is being eliminated.
Fairness is also a factor in this change. For example, last month using the old rent scale there were two households that earned essentially the same monthly income of $3,690. The first household is a single mother with two children who was charged $985 in rent, or 27 percent of the household income. The second household is two seniors living alone who paid zero rent. With the new rent scales, the single mother will pay $325 in rent, about 9 percent of income, and the seniors would pay $160 in rent or 4 percent of income.
The lower rent for the seniors with the new rent scale in this example, is because there will be an income exemption of $1,000 for each senior in the household as part of the calculation of income. This lowers rent for seniors compared with other households.
Mr. Speaker, the new public housing rent scale is simpler, more predictable and fairer. It addresses the disincentive to work and it does these things while ensuring the program remains sustainable, given the declining federal funding. This change will go into effect on July 1st and I will continue to keep the Assembly updated on this initiative. Thank you.
Thank you, Mr. McLeod. The honourable Minister of Industry, Tourism and Investment, Mr. Ramsay.
