Housing is the largest item in the budget of most households. Over
recent decades the growth in the gap between rich and poor has manifested
itself in the housing system. Although there is one land price and
housing cost structure in urban areas there are now two groups of
housing consumers. One, homeowners, has more than double the income
of the other, renters.
The gap between the median income of homeowners and renters grew
by 16% between 1984 and 1999 (from $19,800 in 1984 to $22,500 in 1999).
In 1984, homeowners had almost double the income of renters (192%).
By 1999, the gap had increased to more than double (208%). This represents
an average growth in the income gap between owners and renters of
about 1% a year. During the same period the wealth of homeowners increased
from being 29 times that of renters in 1984 to 70 times that of renters
in 1999. In the late 1960's, when a great deal of private rental housing
was built, the income gap between homeowners and renters was about
20%. Poverty and housing tenure are now much more closely connected.
(1)
The need and demand for housing in Canada is increasingly concentrated.
In 2001 51% of Canada's 30 million people lived in four metropolitan
areas, compared to 41% in 1971. The 1996-2001 growth rate in these
four was 7.6% compared to 0.5% in the rest of the country. The greater
Toronto region alone accounts for 22% of the country's population
(6.7 million). It grew by 9.2% between 1996 and 2001, making Toronto
one of the fastest growing urban regions in North America.
In the City of Toronto, where half of all households are renters,
vacancy rates have been below 1% for most of the past two decades.
There has also been a very low rate of construction of new rental
housing. Private sector completions averaged about 1,000 units per
year during the 1980's and about 100 units (not buildings) per year
during the 1990's. Toronto has over 500,000 renter households. About
half of all immigrants to Canada settle in the Toronto area.
More renter households are now living in overcrowded conditions
in an aging rental housing stock. Many thousands live in makeshift
basement apartments in houses. About 5% of the City's rental stock
is comprised of condominium units. These do not provide security of
tenure (the owner can decided to occupy the unit at anytime).
Public policy has exacerbated the problem. In 1985 the federal government
began annual cuts in the number of social housing units built and
in 1993 discontinued the program altogether. In 1995 the Ontario government
ended its social housing supply program. As a result Canada now has
the most private sector market-based housing system of any Western
nation, including the U.S. A 1996 Cambridge University study comparing
the housing systems and housing policies in 12 Western nations found
that, compared to all the other countries, "Canada has an essentially
free market approach to housing finance. Owner-occupation has the
advantage of not paying capital gains tax whilst there is very little
support for investment in the private rental sector and tenants receive
very little support in paying rents." (2)
Properly functioning markets will meet demand with supply. This
happens in the home ownership sector of Canada's housing system but
not in the rental sector. Given the polarization in income between
owners and renters, given the very market oriented nature of the housing
system, given the limited role of government in the rental and social
housing sectors of the housing system, the only possible outcome is
a lack of rental construction and rising rents. This means the existing
stock of rental housing is aging, rents rise as demand and need increase
without there being any increase in supply.
Two very different Toronto's are emerging. One is adequately housed,
paying an increasingly smaller amount of household income for very
high quality housing. The other has fewer options within in an aging
and relatively poor quality rental stock, and is paying a greater
percentage of household income on housing, leaving less money for
other essentials. From time-to-time some of these households find
themselves unhoused -- unable to pay the rent or unable to find another
place in time. Over 5,000 people use Toronto's homeless shelters every
evening, up from about 2,000 in the early 1990s.
In addition, there are geographic, ethno-racial and gender implications.
Municipal zoning has produced relatively homogeneous districts with
concentrations of low-density homeownership housing and higher density
rental housing. The gap between the better quality neighbourhoods
and the less desirable neighbourhoods is increasing in Toronto as
households are sorted by market dynamics on the basis of their social-economic
status. This has always been the case to some degree. What has been
added to the 'sorting process' over the recent two decades is the
'colour' and gender of households living in poverty and increased
concentration in a number of deteriorating districts of the city.
Housing consists of four key aspects, with each playing an important
role in overall well-being: house, the physical structure, its design
and characteristics; home, the social, emotional and psychological
aspects of the physical house; neighbourhood, the immediate physical
area around the house; and community, the social characteristics and
range of important services in a neighbourhood. There are many indicators
pointing to a huge quality gap developing in the residential living
conditions of Canadians. For some, each of these four inter-related
aspects of housing is deteriorating. Thus far there has been limited
focus on this trend and virtually no effective public response.
(1) Hulchanski, J.D.(2001) A Tale of Two Canadas:
Homeowners Getting Richer, Renters Getting Poorer, 1984 and 1999,
Toronto: Centre for Urban and Community Studies, University of Toronto,
Research Bulletin #2.
(2) Freeman, A.J.M., A.E. Holmans and C.M.E. Whitehead
(1996) Is the UK Different? International Comparisons of Tenure Patterns,
London: Council of Mortgage Lenders, a study carried out by the Property
Research Unit of Cambridge University.
J. David Hulchanski, Professor and Director
Centre for Urban and Community Studies, University of Toronto
455 Spadina Avenue, Suite 400, Toronto, Ontario M5S 2G8
tel. 416 978-4093; fax 416 978-2072; email: david.hulchanski@utoronto.ca
The
Role of Housing in Social Inequality and Spatial Segregation : A Tale
of Two Toronto's