Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Budget 2019 fiddles while climate crisis looms by Hadrian Mertins-Kirkwood (CCPA) Organizational Responses Canadian Centre for Policy […]
    Canadian Centre for Policy Alternatives
  • Boots Riley in Winnipeg May 11 February 22, 2019
    Founder of the political Hip-Hop group The Coup, Boots Riley is a musician, rapper, writer and activist, whose feature film directorial and screenwriting debut — 2018’s celebrated Sorry to Bother You — received the award for Best First Feature at the 2019 Independent Spirit Awards (amongst several other accolades and recognitions). "[A] reflection of the […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC welcomes Emira Mears as new Associate Director February 11, 2019
    This week the Canadian Centre for Policy Alternatives – BC Office is pleased to welcome Emira Mears to our staff team as our newly appointed Associate Director. Emira is an accomplished communications professional, digital strategist and entrepreneur. Through her former company Raised Eyebrow, she has had the opportunity to work with many organizations in the […]
    Canadian Centre for Policy Alternatives
  • Study explores media coverage of pipeline controversies December 14, 2018
    Supporters of fossil fuel infrastructure projects position themselves as friends of working people, framing climate action as antithetical to the more immediately pressing need to protect oil and gas workers’ livelihoods. And as the latest report from the CCPA-BC and Corporate Mapping Project confirms, this framing has become dominant across the media landscape. Focusing on pipeline […]
    Canadian Centre for Policy Alternatives
  • Study highlights ‘uncomfortable truth’ about racism in the job market December 12, 2018
    "Racialized workers in Ontario are significantly more likely to be concentrated in low-wage jobs and face persistent unemployment and earnings gaps compared to white employees — pointing to the “uncomfortable truth” about racism in the job market, according to a new study." Read the Toronto Star's coverage of our updated colour-coded labour market report, released […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Gimme shelter: is Core Housing Need a useful measure?

For a new CCPA blog post on housing (un)affordability, I dove into the latest Census data for Metro Vancouver. I used two series on shelter cost and shelter-to-income ratio, and found that 32% of households were paying more than 30% of income on shelter (all households, owners and renters) and 16% of households more than 50% of income on shelter. The latter number is pretty alarming: one in six households in Vancouver paying more than half their income just to keep a roof over their heads; that’s 150,430 households!

Then I noticed that “core housing need” (CHN) in Metro Vancouver was 17.6%, a figure that is way lower. I have always understood CHN as three dimensions: affordability, measured as households paying more than 30% of income; adequacy, whether the housing is in need of repair; and suitability, if you have enough rooms for everyone.

So, my thinking went, CHN should be all of the un-affordability I discovered, and then some to reflect the other two dimensions. How then could CHN be so much lower than the share of households with shelter-to-income ratio above 30%? My instinct was to go back and check my sources and my math, hoping I had not made a major error somewhere. But that was all solid. So I did a deeper dive on CHN to figure this out.

First, some households paying more than 30% of income on housing but are just taken out. Those who are paying more than 100% of income are pulled out. This would be folks who have a relative paying their bills, for example, but also people who are using debt or other income not captured in their total (perhaps capital gains or inheritances).

Also exempted are students, and I found this on the CHN entry in the Census dictionary:

Non-family households with at least one maintainer aged 15 to 29 attending school are considered not to be in ‘core housing need’ regardless of their housing circumstances. Attending school is considered a transitional phase, and low incomes earned by student households are viewed as being a temporary condition.

This seems odd to me, saying you are too young to be in housing need, even if you are spending a large share of income on housing.

Next, there is this page with the new Census data on CHN, which states that after tallying the three dimensions of CHN I cite above, then:

The second stage established whether the household could be expected to have affordable access to suitable and adequate alternative housing by comparing the household’s total income to an income threshold based on local housing costs. Only those households who could not afford alternative housing would be considered in core housing need.

That’s a bit of a muddle. I also found this 2008 article discussing the concept, which notes:

Much work has been, and is being done, to examine those who spend 30 per cent or more of their household income to determine if they do so out of choice, through having the means and preference to spend more than the norm for housing, or out of necessity, because of their low incomes.

In other words, there are some households who pay more than 30% of income, but do so by choice, and if they wanted to they could move into cheaper digs and no longer pay more than 30% of income for housing. There’s some logic to this, I suppose, but in Vancouver the vacancy rate is below 1%, and that’s driving up rents. For ownership, home prices have surged such that few can afford to buy the house they live in –  if they did not already own it. Unless you have a super-high income, on the margin you are looking at more than 30% of income in Vancouver for shelter.

The second stage is a black box, and perhaps that black box needs fixing. Whereas the share of households paying more than 30% is easy to understand, the determination of “comparing the household’s total income to an income threshold based on local housing costs” is not transparent. Rents in Vancouver according to CMHC have not gone up much in recent years, but that is because they are only counting decades-old purpose-built rental , while not counting the secondary suites and condos that have become a substantial part of the rental stock more recently. It is among the latter where loopholes allowing landlords “renovictions” and “fixed term leases” undermine rent controls, and have fed the dizzying cost of renting on the margin.

So Core Housing Need is looking to me more like the Low Income Cut Off is for measuring poverty: it is not straightforward in terms of measurement; was instead created by Canadian statisticians a long time ago to provide a more nuanced statistic; but, may no longer be relevant or helpful given changes in housing markets. There may also be some measurement issues.

Finally, I note that Steve Pomeroy makes some comments about CHN, welfare incomes and the feds’ national housing strategy plans in this piece for the Caledon Institute. He concludes:

As this analysis has revealed, core need is an ineffective and distorted measure of outcomes. Indeed, the federal and provincial/territorial governments could invest hundreds of millions of dollars to reform welfare and create a national housing benefit only to find that the levels of core need have not declined, even though housing affordability problems for many households had been alleviated.

So there you go, if you were wondering what the difference is between shelter cost greater than 30% of income and core housing need.

 

 

Enjoy and share:

Write a comment





Related articles