Imagine you make minimum wage (it isn’t hard if you try).
In Saskatchewan minimum wage is $9.50/hour. For an 8 hour work day, a worker will gross $76. For a tax rate of about 26%, this leaves $56.24 before other deductions like CPP and EI.
Multiply by 5 workdays in the week. $281 per week.
Multiply that by four weeks in a month. $1125 per month.
Multiply the $281 by 52 work weeks to get a rough estimation of minimum wage income for the year that someone could have in their bank account. $14622 per year.
It’s the opinion of Regina City Council that “affordable housing” is defined by rental units “at or below market” rates. It’s quite common to now to see people paying $850/mon for a 1 bedroom apartment, or $1000/mon for a 2 bedroom apartment.
The 1 bedroom, at $850, costs 850/1125 = 76% of monthly income for housing.
The 2 bedroom at $1000, costs 1000/1125 = 89% of monthly income for housing.
“The first rule is that your monthly housing costs shouldn’t be more than 32% of your gross monthly income.”
$76 * 5 * 52 = $19760. If you chop that into months / 12 = $1647
$850 / $1647 = 52% of gross monthly income.
“The second rule is that your entire monthly debt load should not be more than 40% of your gross monthly income.”
What does 32% of 1647/month look like for rent or mortgage payments for people with $0 in debt?
UPDATE: Jessica writes:
“Just so you know minimum wage is $10.00/hr in Saskatchewan. As of Dec 2012.”
I was working from an old Google result it seems.
Let’s work with Conrad’s stat, the presumable average gross income of $21,000.
$21000 / 12 months = $1750 / month
850 / 1750 = 49%. Hmm, not much better. Still, not even good enough to get a mortgage. Let’s work longer as Conrad also suggests as a solution while in low income full time employment.
What’s 32% of $1750? $560 / month for rent or mortgage (if $0 debt)
Conrad Hewitt: “If you work two 4 hour shifts/weekend w/o overtime then you’ve still got $1K in the bank after $425 rent”
$10/h * 8 hours = $80 / week gross
Times 4 weeks = $240 / month gross
(240 + 1750 = 1990) * .32 = $637 / month available for CMHC’s definition of affordable housing. This is the definition banks use when lending you money for housing. Regina City Council is welcome to point out any legal, and up to code housing within city limits that is $640 or less for someone working 6 days a week, full time. If working FULL time isn’t working hard enough to deserve a safe place to live, what kind of society are we? Is it any wonder we’re tossing people with any inability to not work full time, into the street? Is that the way to run an economy? Certainly not.
For someone to attain the market rate $850 / month housing in Regina, they need to gross $2656 / month for income.
$2656/month / 4 weeks / 5 days / 8 hours = $16.60 / hour
If you’re on minimum wage, and work 6 full time days as Conrad suggests you do (and not paid OverTime as the SaskParty wishes) if you don’t just find a better paying job, that’s $13.83 / hour you need to earn before any deductions.
Now, I hope you don’t have a car loan, a student loan, or any loan too. Plus you have to pay for food and clothing to survive.
Read more about the Housing Summits.
ADDED: Here’s a random rental ad in June:
“965 square foot 2 bedroom, 1 bathroom condo in Regina’s east end for rent. Close to both SIAST and the University. Rent is $1400 and includes all utilities except power.”
ADDED: Another random rental in June:
“1 Bedroom Basement Suite For Rent in East Regina
This large (900sq. ft.) self contained suite located in Glencairn is available for July 1st. Appliances included (dishwasher, fridge, stove, washer and dryer.) Rent is $900/month and includes heat, A/C, electricity, water, cable and internet. It is walking distance to bus stops and all East end amenities. ”
ADDED Sept 24, 2013 Some notes on affordability in Saskatchewan.