03/03/2012 05:00 EST | Updated 05/02/2012 05:12 EDT

Labrador Mining Boom: Housing Prices Skyrocket, Families Evicted To Make Way For Miners

ST. JOHN'S, N.L. - If there's a downside to Labrador's mining boom, Carrie Cabot and her family are living it.

"We're very stuck," she said from Wabush, N.L.

Cabot, her husband Damico and their two daughters, aged one and three, are being forced out of their apartment to make way for Labrador mine workers.

As expanding iron ore companies pay big money to buy up houses and apartment buildings in small communities closest to the mines, the Cabots are among those struggling to find affordable homes.

Rents have soared in Labrador West since the latest mining boom started four years ago, fuelled by demand for iron ore overseas. Provincial legislation does not restrict yearly increases.

Competition for scarce housing is so intense, it's not unusual for homeowners in Labrador City and Wabush to live in their summer cabins or basements while contractors pay $5,000 a month or more to rent their places.

The Cabots got an eviction notice on Dec. 1 and have to be out by the end of July. Tenants usually have to move within three months, but in this case were given extra time and assistance by the purchasing company to find new homes.

The trouble, Cabot says, is that even though her husband earns more than $65,000 a year working as a mechanic's assistant, housing prices of about $300,000 are out of reach until they've saved a down payment.

And there aren't many rentals they can afford, she said.

The family was paying just over $1,000 a month for a three-bedroom apartment before the building was sold. The best they've found so far, Cabot said, is a two-bedroom basement apartment with one window for $1,600 a month.

"If you're lucky enough to find something advertised, it's either for contracting companies only or it's so highly priced that an average family can't afford to rent it."

Even when displaced tenants manage to find something, many live in fear that it won't last.

Kathryn Hymers Batstone, who earns about $15 an hour at a retail job, was evicted from her apartment in Wabush last year when it was sold. She found a smaller unit in Labrador City when friends intervened to help, but she never feels secure.

"You're living on pins and needles all the time because you just don't know anymore," she said. "I know people who've had their rent doubled. You're paying $750 a month and all of a sudden it's $1,400 or $1,500.

"Most everybody I've known has left."

Demand for iron ore in China and India is driving a boom that is pricing many people out of a home, said Karen Oldford, deputy mayor of Labrador City and a volunteer with a local housing and homelessness coalition.

Not all landlords are gouging, but many people who've lived through cyclical boom-and-bust times are making money while they can, she said.

"We have townhouses that are being rented for $6,000 a month with four bedrooms."

Bungalows that sold for about $100,000 in 2007 are now fetching $350,000 "with no work done," Oldford said.

Labrador City and its twin community Wabush, with growing populations of about 10,000 and 2,000 respectively, are known as Labrador West. Construction of more than 500 homes and apartment units in the region has not kept up with demand, Oldford said.

Expansion is tricky because mining companies hold rights to much of the undeveloped land, she added.

"There's not the willingness to part with lands to allow us to grow in a timely fashion."

Still, there's intense resistance against Labrador West becoming a "fly in, fly out" hub of transient workers such as Fort McMurray, Alta., Oldford said. She cited concerns about lax community ties and increased crime.

The push for a more mobile workforce was a key sticking point in contract talks between the Iron Ore Company of Canada and the local United Steelworkers union before the company pulled a "fly in, fly out" proposal from the table.

As for those at the mercy of the rental market, Oldford wants more legal protections.

Intergovernmental Affairs Minister Nick McGrath, responsible for Labrador, isn't convinced that rent controls are the best way to handle what he calls a housing bottleneck.

"That's something that would have to be discussed at a government level."

McGrath has lived through mining recessions in the '80s and '90s.

"I remember one particular street, there were 88 vacant houses," he recalled. "You have to be very careful when you're developing.

"I think all levels of government as well as private enterprise are aware of the housing difficulties in Labrador West and they're working together to try to alleviate the problem."

Newfoundland and Labrador Housing Corp. raised its income threshold in Labrador West to $65,000 from $32,500 to help more people access affordable units.

CEO Len Simms says there are nine people on the regional low-income wait list. Anyone making more than $65,000 — but not enough to afford local housing prices — is caught in a different dilemma than his priority groups, he said.

"We deal with low-income families. The other issue that comes up is housing affordability."

Cabot says she may have to take a more affordable place in Happy Valley-Goose Bay, about 530 kilometres away, while her husband boards in Wabush and visits when he can. Or they may leave the province.

"It looks great on the outside," she said of the Labrador mining boom. "But come here and deal with it."

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