Iron ore recovery triggers surge in housing demand in Lab West, with some residents feeling the pinch
With the boom in iron ore mining in western Labrador, the area’s housing stock is struggling to meet the growing demand of an influx of workers, sending rents skyrocketing and leaving some residents behind them.
Jay Torraville, a service worker in Labrador City, is struggling to make ends meet.
“Prices are going up for everything, for food, rent, gas, just to live on,” Torraville told CBC News.
Torraville said they can survive because they live in a room in another family’s house, keeping their housing costs low but sacrificing having their own place.
They consider themselves lucky to live with a family they love, but say their situation is not sustainable in the long term.
Nancy Bonnell Stoyles of Labrador City has experienced first-hand the housing volatility in the area, having been forced to move twice when her rent doubled since 2008.
She and her family finally managed to buy a house in 2018 for $25,000 near the end of a previous boom, and the most recent appraisal put its value at $144,000, according to Stoyles, who attributed it to the boom and bust cycle.
“It goes around a cycle. It goes around in circles and eventually this boom is going to end in a few years,” Stoyles said.
The deputy mayor of Labrador City said the town is addressing the housing shortage and has donated land to Labrador West Pioneer Living, a local business that plans to build cottages for the elderly.
“In the big turn of things, it’s going to get about 40 houses.” said Mitchell Marsh.
Although the homes are for seniors, Marsh said, they will still open up the wider market as seniors move in, making their old homes available for others to rent or buy. But the city can’t say when the project will be finished.
NDP MP for Labrador West Jordan Brown says the government needs to do more to fill the gaps.
“We need affordable rental housing, with a more mixed housing style,” said Brown, who said a combination of rent control and low-cost housing development would help ease the current housing crisis.
But the provincial government says rent control is not working.
In a statement to CBC, a spokesperson said: “The disadvantages of increased administrative burden and potential unintended consequences outweigh the potential benefits.”
Boom and bust cycle
The Lab West boom was driven by a surge in demand for iron ore as global manufacturing recovers from a pandemic crash. The price of iron ore has fallen to pre-pandemic levels, but demand has remained, fueling Lab West’s economy. The co-authors of A Canadian Mining History argue that major natural resource developments can overheat an economy built around a resource.
“This can lead to things like rapid development or even housing issues,” said Arn Keeling, co-author of Mining Country: A History of Canada’s Mines and Miners
“It’s almost like a community is thriving and growing so much that the social infrastructure can’t keep up,” said co-author John Sandlos.
When housing supply lags economic recovery, people whose incomes are not linked to the boom cannot afford the higher prices. But when cheaper housing is readily available as the economy cools, people often struggle to find jobs, nor can they necessarily afford lower prices.
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