John Engeland, Roger Lewis, Canada Mortgage and Housing Corporation

John Engeland and Roger Lewis are Senior Researchers with Housing Indicators and Demographics of Canada Mortgage and Housing Corporation

Housing influences many facets of the lives of Canadians. It provides a foundation for obtaining employment, for raising children, and for building relationships with neighbours and the broader community. Dwelling units that are well maintained and suited to the needs of occupants contribute to general health, well-being, and social interaction. Housing that is affordable leaves households with sufficient financial resources to participate fully in the community at large. Households unable to access good housing are potentially at a disadvantage from a variety of perspectives.

Canada Mortgage and Housing Corporation (CMHC) defines acceptable housing as housing that is adequate in condition, suitable in size, and affordable.

  • Adequate dwelling units are those reported by their occupants as not requiring major repairs.1

  • Suitable dwelling units have enough bedrooms for the size and make-up of resident households, according to National Occupancy Standard requirements.2

  • Affordable dwelling units cost less than 30% of before-tax household income.3

When households live in housing that is below one or more of the adequacy, suitability, or affordability standards, and have incomes that are too low to allow them to rent alternative local market dwellings that meet acceptable standards for less than 30% of their before-tax income, CMHC considers them to be in core housing need. By definition, these households are excluded from acceptable housing and from the benefits such housing confers.

This article draws on data derived from the 2001 Census to explore the nature of the difficulties faced by Canadians in core housing need.4 It links exclusion from acceptable housing to factors, such as low incomes and weak labour force ties. It also identifies groups most at risk of falling into core housing need and describes the characteristics of neighbourhoods in which core housing need is prevalent. The notion of exclusion underlies all these pieces – exclusion from acceptable housing, from neighbourhoods, and more generally from full participation in the economy and society at large.

Core Housing Need, Labour Force Ties, and Income from Government

Unlike everyday purchases of food, clothing, and other basic goods, accessing housing generally requires households to make long-term financial commitments. To enter into such commitments, all households, other than those with assets they can draw down, require a minimum stable monthly income. Households experiencing prolonged or repeated bouts of unemployment can be expected to pay high fractions of what income they do have on shelter.

There is, in fact, a strong association between core housing need and labour force ties. Households with weak ties to the labour force have lower incomes, are more likely to rent, and are much more likely to be in core housing need than other households.5 In 2001, 15.8% of households in Canada were in core need. By contrast, 45.6% of working-age renter households whose maintainers had weak ties to the labour force were in core housing need (see Table 1).6 These households spent more than half of their very low incomes on shelter.

TABLE 1 Household Income and Core Housing Need, Canada, 20011
 OwnersRenters
 Not in Housing NeedIn Housing NeedNot in Housing NeedIn Housing Need
 #%#%#%#%
A) Working-age2 households                
All households 5,150,330 92.4 420,760 7.6 2,105,100 72.5 797,380 27.5
Average income $84,090   $22,812   $50,893   $16,835  
Average STIR3 15.9%   48.9%   18.9%   49.0%  
Households with weak labour force ties4 1,178,775 85.8 195,580 14.2 568,225 54.4 476,725 45.6
Average income $68,980   $18,720   $40,550   $14,432  
Average STIR3 15.2%   48.2%   21.2%   51.0%  
B) Senior households                
All households 1,456,830 87.8 201,750 12.2 383,710 57.0 289,755 43.0
Average income $50,555   $18,866   $35,014   $16,371  
Average STIR3 13.2%   39.8%   22.6%   44.7%  
Major source of income                
Gov’t income 698,620 79.5 180,630 20.5 233,645 46.4 270,380 53.6
Non-gov’t income 758,205 97.3 21,120 2.7 150,075 88.6 19,380 11.4

Notes:

  1. Data exclude farm, band, and reserve households; households with incomes of zero or less; and households whose shelter costs equal or exceed their incomes.
  2. Working-age households are those with primary maintainers aged 15 to 64.
  3. Shelter-cost-to-income ratio = shelter costs/before-tax household income.
  4. Households with weak labour force ties are those with primary maintainers who are either not in the labour force or in the labour force but unemployed or employed part-time.

Source: CMHC (census-based housing indicators and data).

Working-age households accounted for seven out of ten households in core housing need in 2001. The remaining three in ten households in core need comprised those maintained by seniors. Senior households whose major source of income is independent from government are much less likely to fall into housing need than those dependent on government for the bulk of their income. Over half of senior renter households whose major source of income was government lived in housing need in 2001 compared to just 11.4% of those whose incomes were derived primarily from other sources (see Table 1).

Households at High Risk of Exclusion from Acceptable Housing

A number of specific groups of Canadian households are at high risk of falling into core housing need. They include:

  • Aboriginal households,7 especially renters;

  • three groups of non-Aboriginal renters (recent immigrant households, 8 people living alone, and lone-parent households).

TABLE 2 Core Housing Need by Household Type, Canada, 20011
 All HouseholdsHouseholds in Core Housing Need
  Number in NeedIn NeedAverage IncomeAverage STIR2
Household type##(%)($)(%)
All households 10,805,615 1,709,650 15.8 18,467 47.1
Aboriginal households 297,285 73,850 24.8 17,712 45.5
Owners 148,170 17,510 11.8 21,518 41.6
Renters 149,115 56,335 37.8 16,530 46.7
Non-Aboriginal households 10,508,330 1,635,800 15.6 18,501 47.2
Renters 3,426,835 1,030,800 30.1 16,721 47.9
Seniors living alone 456,335 243,385 53.3 15,319 45.4
Non-seniors living alone 1,003,495 326,785 32.6 13,572 51.0
Lone-parent households 483,200 204,320 42.3 17,819 47.9
Recent immigrant households3 225,055 75,025 33.3 21,503 51.1
Owners 72,385 16,660 23.0 27,868 54.1
Renters 152,675 58,360 38.2 19,686 50.2

Notes:

  1. Data exclude farm, band, and reserve households; households with incomes of zero or less; and households whose shelter costs equal or exceed their incomes.
  2. Shelter-cost-to-income ratio = shelter costs/before-tax household income.
  3. Recent immigrant households are households whose primary maintainers became landed immigrants during the period from 1996 through May 15, 2001 (the date of the 2001 Census of Canada).

Source: CMHC (census-based housing indicators and data).

Aboriginal households fall into housing need 1.6 times more often than non-Aboriginal households (see Table 2) and, when in housing need, are about 2.5 times more likely than non-Aboriginal households to live in dwellings that are crowded or in need of major repairs. They have lower incomes than non-Aboriginal households and are 1.4 times more likely to have weak labour force ties. In 2001, almost half of Aboriginal households and consequently almost half of those in need (around 35,000 households) resided in Canada’s census metropolitan areas (CMAs). In these centres, the percentage of Aboriginal renters in core need was highest in Regina (45.5%), followed by three other western CMAs: Saskatoon (44.5%), Vancouver (42.3%), and Winnipeg (40.1%).

Recent immigrants – the first of the three groups of non-Aboriginal renters that experience high rates of housing need – usually attempt to find housing in Canada’s biggest cities. Most immigrants settle in large urban centres where there are established immigrant communities and opportunities for employment.9 In 2001, over 90% of Canada’s 225,000 recent immigrant households lived in CMAs – more than 70% in Toronto, Vancouver, and Montréal alone. In Toronto, 43.5% of recent immigrant renter households were in housing need. The percentages of recent immigrant renters in need in Vancouver and Montréal were 39.2% and 33.3%, respectively. In Canada as a whole, 38.2% of recent immigrant renters were in housing need. In 2001, these households spent half of their average before-tax incomes of just under $20,000 on shelter. Although finding affordable housing is clearly the biggest housing challenge for these households, recent immigrants, like Aboriginal people, are much more likely than other groups to be in need, because they live in housing that is crowded or in need of repair.

Like recent immigrant renters, non- Aboriginal renters who live alone are particularly prone to being in housing need. Over half of seniors and about a third of non-seniors who lived alone and rented in 2001 were in core housing need (see Table 2). Over four in ten renting lone-parent households also lived in housing need. Together, these three groups of non-Aboriginal renters in need totalled over three quarters of a million households in 2001. Not only were a great many of these households in housing need, but many spent 50% or more of their before-tax income on shelter. In 2001, for example, 26.5% of lone-parent households maintained by 15 to 24 year olds were in need and spending 50% or more of their average incomes of just under $12,000 on shelter. Well over half of all workingage renters living alone and in housing need, and of working-age lone-parent renters in housing need, had weak ties to the labour force. Among senior renters living alone and in housing need, more than 90% relied on government for the major part of their income.

FIGURE 1 Children, by Household Income Bracket, Showing Those Living in Core Housing Need, Canada, 2001

Children, by Household Income Bracket, Showing Those Living in Core Housing Need, Canada, 2001

Source: CMHC (census-based indicators and data).

Children in Housing Need

Most Canadian children live in twoparent families, less than one in ten of which are in core housing need. Still, in 2001 this placed 400,000 children of two-parent families in housing need. When four in ten children of lone parents living in housing need are added, the total number of Canadian children in housing need in 2001 swells to over three quarters of a million. With almost one in three living in core housing need, Aboriginal children are, on average, 2.3 times as likely as non-Aboriginal children to live in housing need, a result of the lower incomes of Aboriginal households (see Figure 1).

The households to which children in housing need belonged in 2001 had average before-tax incomes of just under $22,000, of which they spent 48% on shelter alone. Despite spending almost half of their low incomes on shelter, 25.5% of these households lived in dwellings that were too small, subjecting their children, particularly Aboriginal children, to crowded conditions. Furthermore, 17.4% of these households and their children in need lived in dwellings in need of major repairs, again with Aboriginal children growing up in such dwellings more often than non-Aboriginal children.

There is preliminary evidence that the quality of the housing and of the neighbourhoods in which these children will grow up could play an important role in their development. Research demonstrates a link between behaviour problems in Canadian children and the physical condition of their housing and neighbourhoods.10 In addition, research has shown that Canadian children living in housing that is both crowded and in need of major repair score lower on various development measures, such as academic performance and general health, than other children (CMHC, nd). Although preliminary, these studies support the contention that exclusion from acceptable housing deprives Canadians of important benefits.

TABLE 3 Average1 Characteristics: High-Need2 Neighbourhoods and Other Neighbourhoods All Census Metropolitan Areas, 2001
 CharacteristicAll Census Tracts3High-Need Census TractsOther Census Tracts
Households tested for core housing need4 % of households in core need 16.2 33.2 14.3
% crowded (below suitability standard) 7.1 14.1 6.4
% in need of major repair (below adequacy standard) 7.2 10.8 6.8
Average STIR5 22.0 28.4 21.3
% of households in core need that rent 57.0 84.4 53.9
All households % of all households that rent 36.6 71.6 32.7
Average monthly gross rent ($) 727 601 741
Median household income ($) 53,509 28,570 56,294
Unemployment rate (%) 6.9 11.7 6.3
% of income from transfer payments 11.8 20.6 10.8
% Aboriginal people 1.8 3.9 1.6
% recent immigrant 4.3 8.4 3.9
% one-person households 25.4 40.2 23.8
% lone-parent families 17.1 26.9 16.0
% of dwellings that are single-detached 50.7 17.9 54.4
Density - persons/km2 3,658 6,804 3,306

Notes:

  1. Averages are simple, unweighted averages computed from summary data for each census tract. As such, averages represent values for a typical census tract in each group of tracts.

  2. “High-need” refers to the 10% of tracts in each CMA with the highest incidence of core housing need.

  3. Data exclude tracts for which Statistics Canada suppressed data to preserve confidentiality.

  4. Households tested for core housing need exclude farm, band, and reserve households; households with incomes of zero or less; and households whose shelter costs equal or exceed their incomes.

  5. Shelter-cost-to-income ratio = shelter costs/before-tax household income.

Source: CMHC (census-based housing indicators and data) and Statistics Canada (Census of Canada – Community Profiles data (95F0495XCB01005)).

Neighbourhoods and Core Housing Need

The concentration of core housing need among certain groups has parallels at the neighbourhood level. Neighbourhoods where core housing need is prevalent account for a disproportionate share of housing need in Canada’s major cities. In such high-need areas, the percentage of households in core housing need is typically more than double that in other neighbourhoods (see Table 3). The majority of these high-need districts are located in or near the centre of Canada’s 27 CMAs, although many CMAs also have pockets of core housing need in suburban areas.11

Neighbourhoods in which the incidence of core housing need is relatively high exhibit distinct physical, economic, and demographic characteristics. The central location of many of them translates into population densities that are, on average, double those of other neighbourhoods. Elevated densities, in turn, reflect a predominance of multiple-unit rental housing in these areas.

The extent of differences in the physical make-up of high-need and other neighbourhoods is just one indication of how different they are. The residents of these neighbourhoods are disproportionately drawn from demographic groups at risk of falling into core housing need. Aboriginal people, recent immigrants, one-person households, and lone-parent families are all far more common in the typical high-need neighbourhood than in other neighbourhoods.

Reflecting the high incidence of core housing need in these areas, housing in high-need neighbourhoods is much more likely to be crowded or in need of major repair than housing in other parts of Canada’s CMAs. In 2001, one out of seven dwellings was crowded and one out of nine in need of major repair. In addition to the difficulties posed by unsuitable or inadequate housing, households in these neighbourhoods spent high proportions of their before-tax incomes to procure shelter – 28% on average compared to just 21% in other neighbourhoods.

The high proportion of income spent on shelter reflects the limited incomes of households in these neighbourhoods. In 2001, median household incomes were, on average, only half those of other neighbourhoods. In the same year, the unemployment rate in the typical high-need neighbourhood was nearly double that in other neighbourhoods, and the proportion of income derived from transfer payments was twice that of other neighbourhoods.

Of course, such summary statistics cannot possibly capture the multitude of qualities that characterize individual neighbourhoods. They do however suggest that high-need neighbourhoods are quite different from other neighbourhoods. As noted previously, research has linked differences in neighbourhood quality to variations in the incidence of behaviour problems in children. Other research has reported a relationship between neighbourhood socio-economic status and health outcomes (Pickett and Pearl, 2001). While this list is hardly comprehensive and some of the research is preliminary, such findings suggest that the benefits that are lost to households when they are excluded from acceptable housing (i.e., when they are in core housing need) are likely not limited solely to the services provided by housing itself but would also include advantages intrinsic to the kinds of neighbourhoods in which high concentrations of acceptable housing tend to be found.

References

CMHC (Canada Mortgage and Housing Corporation). 2003. Housing Quality and Children’s Socoiemotional Health. Research Highlights Socio-Economic Series 03-021. Ottawa: Canada Mortgage and Housing Corporation.

———. 2004. 2001 Census Housing Series: Issue 2 The Geography of Household Growth and Core Housing Need, 1996-2001. Research Highlights Socio-Economic Series 04-001. Ottawa: Canada Mortgage and Housing Corporation.

———. nd. Special Studies on 1996 Census Data Housing Canada’s Children. Research Highlights Socio-Economic Series 55-4. Ottawa: Canada Mortgage and Housing Corporation.

Engeland, John, and Roger Lewis with Steven Ehrlich and Janet Che. 2004. Evolving Housing Conditions in Canada’s Census Metropolitan Areas, 1991-2001. Trends and Conditions in Census Metropolitan Areas Series. Catalogue No. XXX. Ottawa: Statistics Canada.

Heisz, Andrew, and Logan McLeod. 2004. Low-income in Census Metropolitan Areas, 1980-2000. Trends and Conditions in Census Metropolitan Areas Series. Catalogue No. 89- 613-MIE. Ottawa: Statistics Canada.

Pickett, K.E., and M. Pearl. 2001. “Multilevel Analyses of Neighbourhood Socio-Economic Context and Health Outcomes: A Critical Review.” Journal of Epidemiology and Community Health, 55:111-122.

Statistics Canada. 2003. Longitudinal Survey of Immigrants to Canada: Process, Progress and Prospects. Catalogue No. 89-611-XIE. Ottawa: Statistics Canada.

Notes

  1. Census respondents rank the condition of their dwelling units with the aid of criteria provided in the census questionnaire.

  2. The National Occupancy Standard dictates that the maximum number of persons per bedroom should be two, with parents eligible for a bedroom separate from their children; members 18 years of age and older eligible for a separate bedroom unless married or cohabitating as spouses; and dependants aged five or more required to share a bedroom only with siblings of the same sex.

  3. For renters, shelter costs include rent and any payments for electricity, fuel, water, and other municipal services. For owners, shelter costs include mortgage payments (principal and interest), property taxes, and any condominium fees, along with payments for electricity, fuel, water, and other municipal services.

  4. Further information on acceptable housing and on core housing need can be obtained from CMHC (2004). The series is available on the CMHC web site <www.cmhc.ca>.

  5. Households with weak labour force ties are those with primary maintainers who are either out of the labour force, unemployed, or employed part time. The primary maintainer of a household is the first person in the household listed by census respondents as responsible for major household payments (e.g., rent or mortgage).

  6. Working-age households are those with primary maintainers aged from 15 to 64.

  7. Canada Mortgage and Housing Corporation defines an Aboriginal household as any family household in which at least one spouse, common-law partner, or lone parent self-identified as Aboriginal, or at least 50% of household members self-identified as Aboriginal; or any nonfamily household in which at least 50% of the household members self-identified as Aboriginal.

  8. Canada Mortgage and Housing Corporation defines recent immigrant households as households whose primary maintainers became landed immigrants during the period from 1996 through May 15, 2001 (the date of the 2001 Census of Canada).

  9. The Longitudinal Survey of Immigrants to Canada found that the presence of family and friends was the most important reason recent immigrants chose to settle in a given census metropolitan area. Job prospects were the second most important reason. See Statistics Canada (2003: 13-15).

  10. Canada Mortgage and Housing Corporation (2003). The study assessed the behaviour, and the housing and neighbourhood quality of a sample of children in Victoria and in Québec City.

  11. In this paper, “high-need” neighbourhoods comprise the 10% of census tracts in each CMA with the highest proportion of households in core housing need. For a more detailed account of the distribution of core housing need within CMAs, see Chapter 6 of Engeland and Lewis (2004).

Roundtable - Housing Research: Policy and Practice in the Context of Poverty and Exclusion

We have begun to consider resources and situations over the life course that contribute to a persistent lack of income or undermine the ability of those living in poverty to participate in the mainstream economy and society. Housing, as a fundamental component of physical capital, plays a unique role within this model of poverty and exclusion. As a place that should offer a sense of physical security, as well as physical and mental stability, housing can provide an individual with the constancy required to establish and nurture key assets and relationships that are vital in avoiding marginalization.

As a result of these special characteristics, housing issues have been identified as being inextricably linked to notions of poverty, both as a determinant and an outcome, requiring specific consideration within the PRI project, New Approaches for Addressing Poverty and Social Exclusion. To explore the dimensions of this relationship, the PRI, in partnership with the Social Sciences and Humanities Research Council of Canada, held a roundtable event to engage experts on the relationships that exist between housing issues, poverty, and exclusion. To capture and disseminate the key points of these discussions, the PRI is preparing a thematic primer based upon the presentations and contributions made during this roundtable. This paper will be available in the near future.

For more information on the work of the PRI on housing issues as they pertain to poverty and exclusion challenges, please contact Jeff Frank, Project Director, at 613 947.3905 or at j.frank@prs-srp.gc.ca.

2017-09-29