Housing Review Background Report No. 3

Transcription

Durham Region
Housing Review
Housing Affordability
Background Report No. 3
May 2011
Durham Housing Review Background Report No. 3
TABLE OF CONTENTS
1.
Preamble
i
Household Income and the Cost of Ownership and
Rental Housing
1
1.1
Average Household Incomes Have Risen
1
1.2
Durham Maintains a Competitive Housing Price Advantage
Within the GTA
3
Rental Housing Costs Have Been Relatively Stable
6
1.3
2.
3.
What is Considered “Affordable”?
8
2.1
Affordable Ownership Housing
9
2.2
Affordable Rental Housing
11
Affordability of the Housing Stock
3.1
Resale Housing Provides the Bulk of Affordable Ownership
Housing Throughout the Region
13
3.2
Affordable Ownership Housing Varies by Family Household Type
17
3.3
Rental Housing is Affordable to the Majority of Renter
Households
19
Affordability for Renter Family Households Differs by Unit Type
21
3.4
4.
5.
6.
13
Affordability Problems Faced by Existing Home Owners
and Tenants
4.1
The Majority of Households Are Able to Afford Their Current
Accommodations
23
4.2
Housing is Affordable for Most Home Owners
27
4.3
Affordability for Renters Lags Behind Owners
28
23
Summary of Key Messages
30
5.1
33
Next Report
Glossary
Appendix
Appendix A: Tables for Report Figures
34
LIST OF FIGURES
FIGURE 1.1
Average Household Income in Ontario and the GTA,
1995, 2000 and 2005
1
Average Price of a New and Resale Single Detached
Dwelling in Durham, 2000 to 2009
3
Average Price of a New and Resale Single Detached
Dwelling in Durham, 2009
4
Average Price of a New Single Detached Dwelling
in the GTA, 2009
4
Average Monthly Rent (Nominal Dollars) by Unit Type
in Durham, 2000-2009
6
Average Monthly Rent (Real Dollars) by Unit Type
in Durham, 2000-2009
7
FIGURE 2.1
Income Thresholds for Housing in Durham
9
FIGURE 2.2
Affordability Thresholds for Ownership Housing in Durham
10
FIGURE 2.3
Affordability Thresholds for Rental Housing in Durham
12
FIGURE 4.1
Total Households by Household Income Spent on
Housing in Durham, 2001 and 2006
24
FIGURE 1.2
FIGURE 1.3
FIGURE 1.4
FIGURE 1.5
FIGURE 1.6
Note: Data used as the basis for the above FIGURES are in table format in
Appendix A: Tables for Report Figures.
LIST OF TABLES
TABLE 1.1
TABLE 1.2
TABLE 2.1
TABLE 2.2
TABLE 3.1
TABLE 3.2
TABLE 3.3
TABLE 3.4
TABLE 3.5
TABLE 3.6
TABLE 3.7
TABLE 4.1
TABLE 4.2
TABLE 4.3
Owner and Tenant Average Household Income by
Family Household Type in Durham, 1995, 2000 and 2005
2
Average Monthly Rent (Real Dollars) by Private
Apartment Unit Type in Durham, 2000 and 2009
7
Affordable Ownership Housing Costs for Households
in Durham, 2009
10
Affordable Rental Housing Costs for Renter Households
in Durham, 2009
11
New Sales of Affordable Housing in Durham by
Area Municipality, 2005-2009
14
Resales of Affordable Housing in Durham by
Area Municipality, 2005-2009
14
New Sales of Affordable Housing in Durham by
Dwelling Type, 2005-2009
15
Resales of Affordable Housing in Durham by
Dwelling Type, 2005-2009
16
Total Family Households that Can Afford Resale
Ownership Housing in Durham, 2009
18
Affordable Rental Units in Durham for Renter
Households, 2009
20
Renter Family Households that Can Afford Rental
Units in Durham, 2009
21
Household Income Spent on Housing Costs by
Family Household Type in Durham, 2006
25
Owner Households by Household Income Spent on
27
Renter Households by Household Income Spent on
28
PREAMBLE
Establishing the Background for a Regional Housing Review
Housing Review Background Report No. 3 is the third in a series comprising
the Durham Region Housing Review, addressing:

Housing policy context, trends and indicators (released May 4, 2010);

Supply of housing and development activity (released September 28,
2010);

Housing affordability; and

Specialized housing needs.
This series of reports serves to:

address housing issues 1 within Durham; and

establish a basis for monitoring the effectiveness of the Region’s policies
influencing housing market conditions.
The Housing Review Background Reports are being prepared jointly by the
Planning, Housing Services Division of Social Services and Finance
Departments and are being released consecutively. The reports will be
circulated to each area municipality for information and will be available to the
public online at www.durham.ca/housingreview.
Developing a Durham Region Housing Strategy
The findings of the Housing Review Background Reports will form the basis
for the Durham Housing Strategy, the final component of the Housing Review.
The Strategy will recommend:

potential policy changes to the Regional Official Plan (ROP); and/or

directions and/or actions necessary to reinforce the Region’s primary role
as housing facilitator, researcher, monitor, and social housing provider.
The Strategy will be available online at www.durham.ca/housingreview for
public consultation, and be circulated to the area municipalities and Regional
Social Housing Providers for formal review and comment.
1
Housing issues may include, but are not limited to: the range and supply of housing, in terms of type and
tenure, size, location; price and affordability; residential intensification; land supply and servicing;
maintenance and improvement of existing housing stock; and the planning approval process.
i
The Housing Strategy will satisfy the provisions of the Provincial Growth Plan
for the Greater Golden Horseshoe which requires upper- and single-tier
municipalities to develop a housing strategy that, “will set out a plan, including
policies for official plans, to meet the needs of all residents, including the
need for affordable housing – both home ownership and rental housing,” and
“will include the planning and development of a range of housing types and
densities to support the achievement of … intensification and density
targets.” 2
The Strategy will also consider the Province’s Strong Communities through
Affordable Housing Act, 2010, which requires municipalities to establish
official plan policies and zoning by-law provisions allowing secondary units in
houses.
Housing Affordability
As reported in “Housing Review Background Report No. 2 – Supply of
Housing and Development Activity,” the examination of Durham’s housing
stock and future housing supply aids in determining the Region’s ability to
meet the future housing needs of residents. However, the Region’s ability to
adequately meet housing needs is also contingent upon the provision of
affordable housing to all residents, regardless of household income and
tenure.
This Housing Review Background Report on Housing Affordability is
comprised of four sections:
2

reviewing household incomes and the cost of housing within the Region;

defining “affordable housing” in Durham;

examining the affordability of the current housing stock within Durham;
and

examining the housing affordability situation experienced by current
residents of the Region.
Ministry of Public Infrastructure Renewal. June 2006. Places to Grow – Growth Plan for the Greater
Golden Horseshoe, Section 3.2.6 (6.), page 28.
ii
1.
Household Income and the Cost of Ownership and Rental Housing
1.1
Average Household Incomes Have Risen
Average household incomes 1 within the Greater Toronto Area (GTA) and
Ontario as a whole steadily increased over the 10 year period from 1995 to
2005 (Figure 1.1). The average household income in Durham increased
approximately 40% between 1995 and 2005, from $61,911 to $86,391.
Durham’s 2005 average household income ($86,391) was higher than the
average household income in Ontario ($77,967) and the City of Toronto
($80,343). However, it was lower than the Regions of Peel ($87,765), York
($103,420) and Halton ($108,126).
FIGURE 1.1
Average Household Income in Ontario and the GTA,
1995, 2000 and 2005
Average Household Income
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Ontario
Durham
York
1995
Toronto
2000
Peel
Halton
2005
Source: Statistics Canada Census, 1996, 2001 and 2006. Refer to Appendix A (Table I).
Key
Message
The overall rise in average household income experienced in the Province
and the GTA over the past three Census periods is a positive indicator of the
economic prosperity of the GTA, including Durham.
Average household income increased for all family household types of home
owners between 1995 and 2005 (Table 1.1). Overall, average income for
owner households increased by 36.6%. Couples with children who owned
their home experienced the greatest increase (44.5%) in average household
income, from $80,210 in 1995 to $115,909 in 2005.
1
Income figures throughout this Housing Review Background Report are based on household income
earned in the year prior to the Census, unless otherwise stated.
1
Tenant average household income also increased for all family household
types, but to a lesser degree. Overall, average income for tenant households
increased by 21.1%, from $35,835 in 1995 to $43,403 in 2005 (Table 1.1).
TABLE 1.1
Owner and Tenant Average Household Income
by Family Household Type in Durham, 1995, 2000 and 2005
Owner's Income
Tenant's Income
$70,234
$83,799
$95,916
%
Change
95-05
36.6%
Married or common-law couples
without children
$64,325
$77,290
$89,156
38.6%
$43,552
$51,371
$52,961
21.6%
with children
Lone parents
Other/Multiple-family households
One person households
Two or more person households
$80,210
$47,677
$87,382
$35,382
$62,793
$97,442
$56,984
$108,068
$41,463
$63,636
$115,909
$65,992
$116,069
$49,428
$80,307
44.5%
38.4%
32.8%
39.7%
27.9%
$46,617
$24,052
$53,594
$25,248
$43,742
$56,941
$30,676
$66,217
$26,591
$74,300
$61,278
$33,389
$72,888
$30,549
$52,471
31.4%
38.8%
36.0%
21.0%
20.0%
Family Household Type
Total – Family Households
1995
2000
2005
1995
2000
2005
$35,835
$40,938
$43,403
%
Change
95-05
21.1%
Source: Statistics Canada Census, 1996, 2001 and 2006.
Key
Message
Although the incomes of renter households increased for all family household
types over the 1995 to 2005 period, the average household income of tenants
was approximately half that of owner households.
Section Highlights
Average household incomes increased over the 1995 to 2005 period in
Ontario and throughout the GTA, indicating a prosperous decade for
many households in Southern Ontario, including Durham.
Although overall increases were experienced among both home owner
(36.6%) and tenant (21.1%) households in Durham, tenant household
incomes increased to a lesser degree and remained at approximately
half that of owner households.
2
1.2
Durham Maintains a Competitive Housing Price Advantage Within the GTA
The average price of housing in Durham increased between 2000 and 2009
(Figure 1.2). According to the Municipal Property Assessment Corportation
(MPAC), the average price of a new single detached dwelling 2 increased by
52.4%, from $219,910 in 2000 to $335,103 in 2009. During the same period,
the average price of a resale single detached dwelling 3 increased by 53.7%,
from $197,362 in 2000 to $303,336 in 2009.
Key
Message
Despite historically low mortgage rates and the continuous upward trend in
housing prices between 2000 and 2008, 2009 experienced a decrease in
average sale price for both new and resale single detached dwellings (Figure
1.2). This reflects the weak economic climate and uncertain conditions of the
time.
FIGURE 1.2
Average Price of a New and Resale
Single Detached Dwelling in Durham, 2000 to 2009
$390,000
$370,000
$350,000
$330,000
$310,000
$290,000
$270,000
$250,000
$230,000
$210,000
$190,000
$170,000
2000
2001
2002
2003
2004
New
2005
2006
2007
2008
2009
Resale
Source: Municipal Property Assessment Corp. (MPAC). Durham Region Planning
Department. Refer to Appendix A (Table II).
The average price of housing in Durham varies considerably among the
Region’s area municipalities. In 2009, the average sale price of new single
detached dwellings ranged from $287,787 in Brock to $558,990 in Pickering.
The average price for resale single detached dwellings was generally more
affordable, ranging from $239,838 in Oshawa to $383,387 in Uxbridge (Figure
1.3).
2
The average price of only single detached dwellings was reviewed in this section for illustrative
purposes. A scoped review of housing sales by dwelling type is outlined in Section 3 (Table 3.3 and
Table 3.4).
3
Ibid.
3
FIGURE 1.3
Average Price of a New and Resale
Single Detached Dwelling in Durham, 2009
$600,000
$550,000
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Ajax
Brock
Clarington Oshawa
Pickering
New Sales
Scugog
Uxbridge
Whitby
Resales
Source: Municipal Property Assessment Corp. (MPAC). Durham Region Planning
Department. Refer to Appendix A (Table III).
According to the Canada Mortgage and Housing Corporation (CMHC), in
2009 the average price of a new single detached dwelling was considerably
less in Durham ($396,274), than Toronto ($940,566), Halton ($580,762), York
($549,909) or Peel ($512,627) (Figure 1.4).
FIGURE 1.4
Average Price of a New* Single Detached Dwelling
in the GTA, 2009
$1,000,000
$940,566
$900,000
$800,000
$700,000
$600,000
$549,909
$580,762
$512,627
$500,000
$396,274
$400,000
$300,000
$200,000
$100,000
$0
York
Toronto
Peel
Halton
Durham
Source: CMHC, Housing Now - Greater Toronto Area, January 2010. Refer to Appendix A (Table IV).
* "New" refers to housing units that have been absorbed (i.e. sold and no longer on the market), once a binding
contract is secured by a non-refundable deposit and signed by a qualified purchaser.
4
Key
Message
Key
Message
Durham’s competitive price advantage is one of the factors that has produced
strong demand for housing throughout the Region.
Forecasts in the Provincial Growth Plan for the Greater Golden Horseshoe
anticipate continued growth in Southern Ontario over the next 20 years. 4
Attractive house prices, combined with the availability of a range of housing
types, will be primary factors influencing migration to Durham.
Section Highlights
Over the past 10 years, the average price of both new and resale single
detached dwellings in Durham have increased by over 50%.
Notwithstanding this significant increase, Durham has maintained the
lowest average price of new single detached dwellings ($396,274)
compared to other areas of the GTA.
As the GTA continues to experience consistent population growth, the
competitive price of housing will be one of the factors that make
Durham an attractive place to live.
4
Ministry of Public Infrastructure Renewal. June 2006. Places to Grow – Growth Plan for the Greater
Golden Horseshoe, Schedule 3.
5
1.3
Rental Housing Costs Have Been Relatively Stable
The cost of rental housing in Durham increased for all unit types between
2000 and 2009 (Figure 1.5). The average monthly rent for one, two and three
or more bedroom units increased 15.1%, 14.7% and 15.6% respectively.
Bachelor units increased the most (23.3%), from a monthly rent of $502 in
2000 to $619 in 2009 (Figure 1.5).
FIGURE 1.5
Average Monthly Rent (Nominal Dollars 5 )
by Unit Type in Durham, 6 2000-2009
$1,100
Monthly Rent
$1,000
$900
$800
$700
$600
$500
$400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bachelor
1-Bedroom
2-Bedroom
3+ Bedrooms
Source: CMHC Rental Housing Market Reports, 2000-2009. Durham Region Planning
Department. Refer to Appendix A (Table V).
However, when average monthly rents are indexed to 2009 dollars, the cost
of rental accommodation in 2009 was slightly less than the average monthly
rent in 2000 for all unit types, except bachelor units (Table 1.2 and Figure
1.6). Therefore, when inflation is taken into account, the relative cost of rental
accommodation remained stable over the period from 2000 to 2009.
5
Nominal Dollars refers to dollars that are not adjusted for inflation.
Rental stock in Durham refers to Oshawa, Whitby and Clarington from the Oshawa CMA, and Ajax,
Pickering and Uxbridge from the Toronto CMA. Information for the Townships of Brock and Scugog are
not included in CMHC Rental Market Reports.
6
6
TABLE 1.2
Average Monthly Rent (Real Dollars 7 ) by Private Apartment
Unit Type in Durham, 8 2000 and 2009
Private Apartment
Unit Type
2000
2009
Bachelor
$603
$619
2.7%
1-Bedroom
$822
$789
-4.0%
2-Bedroom
3+ Bedrooms
% Change
$951
$909
-4.4%
$1,119
$1,079
-3.6%
Source: CMHC Rental Housing Market Report, 2000 and 2009. Bank of Canada,
Consumer Price Index, 2000-2009. Durham Region Planning Department.
FIGURE 1.6
Average Monthly Rent (Real Dollars 9 )
by Unit Type in Durham, 10 2000-2009
$1,150
Monthly Rent
$1,050
$950
$850
$750
$650
$550
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bachelor
1-Bedroom
2-Bedroom
3+ Bedrooms
Source: CMHC Rental Housing Market Reports, 2000-2009. Bank of Canada, Consumer Price
Index, 2000-2009. Durham Region Planning Department. Refer to Appendix A (Table VI).
Key
Message
The relative decrease in average monthly rent (in 2009 dollars) for one, two
and three or more bedroom units reflects, in part, the transition of more
renters to home ownership due to lower mortgage rates over the past several
years.
7
Real Dollars refers to dollars that have been adjusted for inflation (i.e. indexed to 2009 dollar value).
9
Ibid.
10
Ibid.
8
7
2.
What is Considered “Affordable”?
A goal of the Durham Regional Official Plan (ROP) is “to provide a wide
diversity of residential dwellings by type, size and tenure…to satisfy the social
and economic needs of the present and future residents of the Region”
(Policy 4.1.1). Monitoring housing affordability is a key aspect of this goal.
Since what is affordable is relative to a household’s income, affordable
housing can be any type of dwelling (i.e. single detached, semi-detached, row
house or condominium apartment) or either tenure (ownership or rental).
The ROP requires at least 25% of all new residential units produced in each
area municipality to be affordable to low and moderate income households 11
(Policy 4.2.4). For ownership households, the 60th percentile of income
distribution has been established as an overall affordability threshold.
Households above the 60th percentile (i.e. higher income households) are
generally recognized as not having problems with affordability as they are
adequately served by the market (Figure 2.1). Households below the 60th
percentile, representing the majority of all (193,700) households in the
Region, could have problems with affordability. This majority is the focus of
the analysis presented in this Housing Review.
The 60th percentile affordability threshold also applies to renter households,
as a distinct group. In 2006, there were 34,660 renter households in the
Region.
Key
Message
11
For purposes of the Housing Review, another threshold has also been
established to recognize affordability for households that are not adequately
served by the housing market. To address this need, an analysis of
households in the lowest 40% (40th percentile) of the income distribution for
both ownership households and renter households was conducted. 12 This
group is referred to as “core need” households, representing the minority
(40%) of the households in the Region.
Low and Moderate Income Households: means:
a) in the case of ownership housing, households with incomes in the lowest 60% of the income
distribution for the Region; or
b) in the case of rental housing, households with incomes in the lowest 60% of the income distribution
for renter households for the Region.
(Durham Regional Official Plan Amendment 128, Adopted by Regional Council June 3, 2009)
12
The lowest 40% of the income distribution was used in accordance with the definition of affordable
housing developed for the Durham Region Affordable Housing Task Force Report (December 5, 2001).
8
FIGURE 2.1
Income Thresholds for Housing in Durham
2.1
Affordable Ownership Housing
The ROP defines affordable ownership housing as the least expensive of:
a) housing where the purchase price results in annual accommodation
costs 13 not exceeding 30% of gross annual household income for low
and moderate income households; or
b) housing where the purchase price is at least 10% below the average
purchase price of a resale dwelling in the Region.
According to the most recent Statistics Canada Census (2006), the income
threshold for low and moderate income households (60th percentile) is
$88,949 (Table 2.1). Based on this level of income, an affordable purchase
price for a dwelling is $328,380 (Table 2.1).
On the other hand, the average purchase price of a resale dwelling in Durham
in 2009 was $278,650. The cost of a dwelling 10% below this average
($278,650) is therefore $250,785 (Table 2.1).
According to the ROP definition of affordable ownership housing, given that a
purchase price of $250,785 is less than $328,380, the home ownership
affordability threshold is $250,785. Based on this cost, households earning
$67,931 annually can afford to purchase a dwelling based on 30% of their
gross annual household income being spent on annual accommodation costs.
This represents households within the 45th percentile of income
distribution (87,165 households) in the Region (Table 2.1).
13
Annual accommodation costs for ownership housing are calculated based on the following
assumptions: a monthly tax rate equal to 0.121% of the house value; a mortgage interest rate consistent
with average rates in 2009 (5.63%); a 10% down payment; and a 25 year amortization period. Housing
costs exclude insurance and utilities expenses. Changes in mortgage insurance rules may impact these
assumptions on an annual basis.
9
TABLE 2.1
Affordable Ownership Housing Costs
for Households in Durham, 2009
Households
Affordable Ownership
(Dwelling Cost)
No.
%
40th
$62,393
77,480
40%
$230,340
45th
$67,931
87,165
45%
$250,785
60th
$88,949
116,220
60%
$328,380
Source: Statistics Canada Census, 2006. Municipal Property Assessment Corporation (MPAC).
Durham Regional Planning Department.
Note: Income is based on income earned in the year prior to the 2006 Census.
The affordable ownership cost for the 45th income percentile ($250,785) represents 10% below
the average price of a resale dwelling in Durham ($278,650) in 2009.
Income
Percentile
Key
Message
Key
Message
Household
Income
This analysis confirms that households above the 45th percentile are generally
being adequately served by the market. Therefore, an affordable purchase
price of $250,785 is the standard for which additional analysis of home
ownership affordability will be completed in this Review (hereafter refered to
as the “ROP definition”) (Figure 2.2).
The income threshold for core need ownership households (i.e. 40th
percentile) is $62,393. Based on this level of income, an affordable purchase
price for a dwelling is $230,340 or less (Table 2.1). This applies to 77,480
households in the Region (Figure 2.2). Households at or below the 40th
percentile that are not adequately served by the ownership housing market
will seek opportunities in the rental market.
FIGURE 2.2
Affordability Thresholds for Ownership Housing in Durham
10
2.2
Affordable Rental Housing
The ROP defines affordable rental housing as the least expensive of:
a) housing where the rent does not exceed 30% of gross annual
household income for low and moderate income households; or
b) housing where the rent is at or below the average market rent of a unit
in the Region.
According to the most recent Statistics Canada Census (2006), the income
threshold for low and moderate income renter households (60th percentile) is
$43,031 (Table 2.2). Based on this level of income, an affordable monthly
rent level is $1,076 (Table 2.2). The average market rent for units in Durham
in 2009 was $1,079 per month. Therefore, in accordance with the ROP
definition, units at or below $1,076 per month are considered affordable.
This applies to 20,799 renter households in the Region.
Key
Message
An affordable rental unit for core need renter households (i.e. 40th
percentile), based on rent costs that do not exceed 30% of monthly gross
household income is $733 per month. This applies to 13,866 renter
households in the Region that have a household income of $29,300 or less
(Table 2.2).
TABLE 2.2
Affordable Rental Housing Costs for Rental Households
in Durham, 2009
Income
Percentile
Renter Household
Income
Renter Households
No.
%
Affordable Rent
(Monthly)
40th
$29,300
13,866
40%
$733
60th
$43,031
20,799
60%
$1,076
61st
$43,994
21,146
61%
$1,079
Source: Statistics Canada Census, 2006. CMHC Rental Market Report - Greater Toronto Area, October 2009.
Durham Regional Planning Department.
Note: Income is based on income earned in the year prior to the 2006 Census.
The affordable monthly rent for the 61st income percentile ($1,079) represents the average market rent for
units in Durham in 2009.
CMHC does not report on rental market data for Scugog and Brock Townships.
11
FIGURE 2.3
Affordability Thresholds for Rental Housing in Durham
Section Highlights
The Provincial Policy Statement and Regional Official Plan established
parameters for measures of housing affordability to low and moderate
income households within the lowest 60th percentile of income
distribution.
For the purposes of the Housing Review, a deeper threshold was
utilized to assess housing affordability for “core need” households in
Durham (i.e. households within the lowest 40th percentile of income
distribution).
This deeper threshold for both ownership and rental housing was
necessary to achieve a true reflection of “affordable housing,” as the
PPS and ROP definition does not adequately address those
households that are most in need of accommodation that is within
their means.
As a result of using a deeper threshold to identify affordable housing
for core need households in Durham, affordable ownership housing
for this group represents units that would sell for $230,340 or less, and
affordable rental housing represents units that would have a monthly
rent at or below $733.
12
3.
Affordability of the Housing Stock
The previous section defined “affordable housing” and then established levels
of affordability for ownership and rental housing in the Region. This section
examines the affordability of the current housing stock within Durham.
3.1
Resale Housing Provides the Bulk of Affordable Ownership Housing
Throughout the Region
Table 3.1 presents an analysis of affordable new dwellings in Durham from
2005 to 2009. It shows that, an average of, 28.4% of new housing sales
were affordable, based on the ROP definition. These homes sold for equal to
or less than $250,785, which is affordable to households earning less than
$67,931 per year.
However, only 16.7% of new housing sales in the Region were affordable to
core need households (40th percentile). These homes sold for equal to or
less than $230,340, which is affordable to households earning less than
$62,393 per year.
For new residential dwellings, Brock (62.9%) had the highest level of
affordability, based on the ROP definition, whereas Clarington (37.6%) had
the highest level of affordability for core need households. Scugog had the
lowest level of affordability based on both the ROP definition (4.7%) and core
need definition (0.7%), respectively (Table 3.1). However, it is important to
note that there is a significant difference in total number of sales between the
area municipalities (ranging from 35 new sales in Brock compared to 2,680
new sales in Ajax) and that the levels of affordability are based on Regionwide household incomes, as detailed in Section 2. Variances in affordability
between area municipalities may exist if calculated at the local level.
13
TABLE 3.1
New Sales of Affordable Housing in Durham
by Area Municipality, 2005-2009
ROP Definition
Municipality
Ajax
Brock
Clarington
Oshawa
Pickering
Scugog
Uxbridge
Whitby
Durham Total
Affordable
Dwellings
675
22
747
378
80
7
20
637
2,566
Total
Dwellings
2,680
35
1,497
1,564
456
149
306
2,360
9,047
Core Need
%
Affordable
25.2%
62.9%
49.9%
24.2%
17.5%
4.7%
6.5%
27.0%
28.4%
Affordable
Dwellings
380
5
563
226
20
1
5
314
1,514
Total
Dwellings
2,680
35
1,497
1,564
456
149
306
2,360
9,047
%
Affordable
14.2%
14.3%
37.6%
14.5%
4.4%
0.7%
1.6%
13.3%
16.7%
Source: Municipal Property Assessment Corporation (MPAC). Durham Regional Planning Department.
Notes: "Affordable" housing sales for households, based on the ROP definition (45th percentile),
represent dwellings that sold for $250,785 or less.
"Affordable" housing sales for core need households (40th percentile) represent dwellings that sold
for $230,340 or less.
Resale housing sales provide an important contribution to the overall
affordability of ownership housing in the Region. Table 3.2 presents an
analysis of affordable resale dwellings in Durham from 2005 to 2009. 51.4%
of resale dwellings were affordable, based on the ROP definition, whereas
39.9% were affordable to core need households. Oshawa had the highest
levels of affordability in resale dwellings at 76.6% and 67.4%, while Uxbridge
had the lowest levels of affordability at 17.3% and 12.9% for households
based on the ROP definition and core need definition, respectively (Table
3.2).
TABLE 3.2
Resales of Affordable Housing in Durham
by Area Municipality, 2005-2009
ROP Definition
Municipality
Ajax
Brock
Clarington
Oshawa
Pickering
Scugog
Uxbridge
Whitby
Durham Total
Affordable
Dwellings
2,332
496
3,946
7,304
1,897
439
190
2,988
19,592
Total
Dwellings
6,119
771
5,868
9,534
5,514
1,334
1,099
7,887
38,126
Core Need
%
Affordable
38.1%
64.3%
67.2%
76.6%
34.4%
32.9%
17.3%
37.9%
51.4%
Affordable
Dwellings
1,470
447
3,112
6,429
1,381
308
142
1,923
15,212
Total
Dwellings
6,119
771
5,868
9,534
5,514
1,334
1,099
7,887
38,126
%
Affordable
24.0%
58.0%
53.0%
67.4%
25.0%
23.1%
12.9%
24.4%
39.9%
14
Key
Message
Over the past 5 years, almost 30% of new home sales were affordable (ROP
definition) at or below $250,785 (28.4%). However, less than 20% of new
dwellings were affordable to core need households at or below $230,340
(16.7%). Resale housing, on the other hand, accounted for the majority of
affordable ownership housing in Durham, with over 50% affordable to most
households (ROP definition) and almost 40% affordable to core need
households.
Generally, there is a direct correlation between the size of dwelling types and
affordability. Higher density dwellings, which tend to be smaller in size, are
generally more affordable than lower density dwellings, which tend to be
larger in size. As illustrated in Table 3.3, sales of new single detached
dwellings were the least affordable dwelling type from 2005 to 2009, based on
both the ROP definition (17.6%) and core need (9.4%) household categories.
By comparison, sales of new semi-detached (67.6% and 40.5%), townhouses
(79.1% and 52.4%) and condominium apartments (76.9% and 69.2%) were
considerably more affordable to households in both categories.
TABLE 3.3
New Sales of Affordable Housing in Durham
by Dwelling Type, 2005-2009
Dwelling
Type
Singles
Semis
Towns
Condo Apts
Total
ROP Definition
Affordable
Dwellings
1,303
302
951
10
2,566
Total
Dwellings
7,385
447
1,202
13
9,047
Core Need
%
Affordable
17.6%
67.6%
79.1%
76.9%
28.4%
Affordable
Dwellings
694
181
630
9
1,514
Total
Dwellings
7,385
447
1,202
13
9,047
%
Affordable
9.4%
40.5%
52.4%
69.2%
16.7%
Key
Message
The affordability of resale housing also increases as the dwelling size
decreases. Overall, resale dwellings were more affordable than new
dwellings based on both the ROP definition and core need household
categories (Table 3.4).
15
TABLE 3.4
Resales of Affordable Housing in Durham
by Dwelling Type, 2005-2009
Dwelling
Type
Singles
Semis
Towns
Condo Apts
Total
ROP Definition
Affordable
Dwellings
10,666
2,423
5,032
1,471
19,592
Total
Dwellings
27,753
3,002
5,705
1,666
38,126
Core Need
%
Affordable
38.4%
80.7%
88.2%
88.3%
51.4%
Affordable
Dwellings
7,538
2,069
4,197
1,408
15,212
Total
Dwellings
27,753
3,002
5,705
1,666
38,126
%
Affordable
27.2%
68.9%
73.6%
84.5%
39.9%
As noted in Housing Review Background Report No. 2, single detached
dwellings dominate the existing housing stock in the Region, with an
approximate 70% share.
Key
Message
The dominance of single detached dwellings will continue to influence the
overall affordability of ownership housing within Durham, until such time as
the trend towards smaller average household sizes results in an increase in
medium- to high-density housing.
Section Highlights
Between 2005 and 2009, 28.4% of new housing sales were affordable,
based on the ROP definition. However, only 16.7% of new housing
sales in the Region were affordable to core needs households (40th
percentile).
Over the same period, 51.4% of resale dwelling were affordable, based
on the ROP definition, whereas 39.9% were affordable to core need
households.
Generally, dwellings increase in affordability as they decrease in size,
from low-density (i.e. single detached dwellings) to high-density (i.e.
condominium apartment units).
Overall, resale housing is providing the majority of affordable
ownership housing within the Region, based on both the ROP
definition and core need household categories.
16
3.2
Affordable Ownership Housing Varies by Family Household Type
The affordability of current resale housing stock was further examined for
different family household types to assess whether there are any notable
observations.
The results, outlined in Table 3.5, show that:
Key
Message

a high proportion of married or common-law couples with children and
other/multiple-family households can afford most resale housing. This
ranges from 65% that are able to afford the most expensive units (single
detached dwellings) to approximately 90% that are able to afford the most
inexpensive units (condominium units);

43% of married or common-law couples without children can afford resale
single detached dwellings and 78% can afford resale condominium units;

34% of two or more person non-family households can afford resale single
detached dwellings and 69% can afford resale condominium units;

a relatively low proportion of lone-parent family households can afford
resale housing, ranging from 18% (single detached dwellings) to 56%
(condominium units); and

a low proportion of one person non-family households can afford resale
housing, ranging from 5% (single detached dwellings) to 37%
(condominium units).
This analysis illustrates that as the number of primary household income
earners decreases, the affordability of dwelling types by size also decreases.
The largest family households (i.e. married or common-law couples with
children) can afford all types of dwellings. The smallest households (i.e. one
person non-family households), however, have the greatest difficulty finding
affordable housing.
17
TABLE 3.5
Total Family Households that Can Afford Resale
Ownership Housing in Durham, 2009
Lone parents
No.
3,357
%
18%
No.
7,087
%
38%
No.
7,087
%
38%
Condominium
Apartment
No.
%
10,444
56%
without children
18,744
43%
27,898
64%
27,898
64%
34,000
Total Family Households
Family
Households
Single Detached
Semi-Detached
Row House
78%
with children
49,244
65%
62,123
82%
62,123
82%
68,184
90%
10,501
65%
13,086
81%
13,086
81%
14,378
89%
Non-Family
1,750
5%
8,051
23%
8,051
23%
12,952
37%
Households
1,547
34%
2,548
56%
2,548
56%
3,140
69%
Source: Municipal Property Assessment Corporation (MPAC). Statistics Canada Census, 2006. Durham Region Planning Dept.
Notes: Income is based on income earned in the year prior to the 2006 Census.
Affordability by household type based on minimum household income required to purchase a resale single detached ($82,166)
with an average resale price of $303,336; semi-detached ($58,565) with an average resale price of $216,204; row house ($58,404)
with an average resale price of $215,611; and condominium apartment ($44,385) with an average resale price of $163,857.
Section Highlights
For family households, between 65% and 90% of married or commonlaw couples with children can afford all types of resale housing in
Durham (i.e. single detached, semi-detached, row house or
condominium apartment). A lower proportion of lone-parent
households (18% to 56%) can afford to purchase resale housing.
One person households have difficulty affording any type of resale
dwelling.
18
3.3
Rental Housing is Affordable to the Majority of Renter Households
Table 3.6 presents an analysis of the affordability of rental units by type in
Durham, utilizing average rents reported by CMHC for 2009.
Key
Message
Key
Message
The analysis shows that, in accordance with the ROP definition for affordable
rental housing, low and moderate income renter households (i.e. those at or
below the 60th percentile), earning an average household income of $43,031,
are able to afford most rental unit types at or below an average monthly rent
of $1,076. The only exception is a small percentage of three (or more)
bedroom units.
However, core need renter households (i.e. those at or below the 40th
percentile), earning an average household income of $29,300, are limited to
bachelor apartments and a minimal number of one-bedroom units at or below
an average monthly rent of $733.
The analysis also shows that:

bachelor apartments are affordable to 66% of renter households
(minimum household income of $25,079). However, a bachelor apartment
cannot be considered practical for all households, especially families;

one-bedroom apartments are affordable to 56% of renter households
(minimum household income of $31,917). Likewise, one-bedroom units
are not practical for families;

two-bedroom apartments are affordable to half of all renter households
(minimum household income of $35,844);

three-bedroom apartments are affordable to only 39% of renter
households (minimum household income of $43,994). As such, these
units are not affordable to the majority of lower income households.
Similar to the correlation between cost and density of ownership dwelling
types identified in Section 3.1, average monthly rental costs also increase
with the size of the rental unit. As such, the number of renter households that
can afford rental units decreases as the unit size increases.
19
TABLE 3.6
Affordable Rental Units in Durham for Renter Households, 2009
Unit Type
Bachelor
Total Units
No.
%
311
2.4%
40th Income Percentile
Average
Monthly Rent
(2009)
Minimum
Household
Income
Renter Households
Who Can Afford Rental Unit
No.
%
$619
$25,079
22,879
66.0%
$733
$29,300
18,051
56.6%
One-Bedroom
3,581
27.2%
$789
$31,917
19,412
56.0%
Two-Bedroom
7,624
57.9%
$909
$35,844
17,333
50.0%
$1,076
$43,031
11,118
34.8%
$1,079
$43,994
13,519
39.0%
60th Income Percentile
Three-Bedroom
1,648
12.5%
13,164 100.0%
Source: Statistics Canada Census, 2006. CMHC Rental Market Report - Greater Toronto Area, October
2009. Durham Region Planning Department.
Assumptions: Affordable Rent based on a maximum 30% of household income spent on housing.
Calculations based on 34,665 renter households in Durham (2006 Census).
Another area of concern for rental housing is that there has been a
substantial decline in new private and public rental housing unit production
since 2000. This decline coincides with the termination of funding for the
development of new social housing by the Province in 1995. As such,
Durham has had to rely primarily on the private market for the production of
new rental housing units. 14
Section Highlights
Although the majority of rental units are deemed “affordable” for low
and moderate income renter households (according to the ROP
definition), the households in greatest need of affordable housing
(core need) are limited to the smallest unit types (i.e. bachelor units).
14
Regional Municipality of Durham. September 2010. Housing Review Background Report No. 2 –
Supply of Housing and Development Activity, page 5.
20
3.4
Affordability for Renter Family Households Differs by Unit Type
Utilizing the average rents in Durham recorded in 2009, Table 3.7 presents an
analysis of the types of units that renter family households can afford. The
results of this analysis are summarized as follows:

a relatively high proportion of married or common-law couples with
children and other/multiple-family households can afford rental housing,
ranging from 63% able to afford the most expensive (three-bedroom) units
to 90% able to afford the most inexpensive (bachelor) units. However, it is
recognized that bachelor units are not practical for family households;

the majority of married or common-law couples without children can afford
rental housing, ranging from 55% (three-bedroom units) to 82% (bachelor
units);

the majority of two or more person non-family renter households can
afford rental housing, ranging from 54% (three-bedroom units) to 78%
(bachelor units);

a relatively low proportion of lone-parent family renter households can
afford rental housing, ranging from 24% (three-bedroom units) to 57%
(bachelor units); and

the majority of one person non-family renter households cannot afford to
rent any unit type, regardless of size, and therefore have the greatest
affordability problem among all renter family household types.
TABLE 3.7
Renter Family Households that Can Afford
Rental Units in Durham, 2009
Renter Family Households
Family
Households
ThreeBedroom
TwoBedroom
OneBedroom
Bachelor
Lone parents
No.
1,498
%
24%
No.
2,246
%
36%
No.
2,621
%
42%
No.
3,557
%
57%
without children
3,069
55%
3,683
66%
4,073
73%
4,576
82%
with children
3,657 63% 4,296 74% 4,644 80% 5,050 87%
Other/Multiple-family households 1,458 72% 1,620 80% 1,701 84% 1,823 90%
Non-Family One person households
2,915 22% 4,108 31% 4,903 37% 6,360 48%
Households Two or more person households
950
54% 1,109 63% 1,197 68% 1,373 78%
Source: Statistics Canada Census, 2006. CMHC Rental Market Report – Greater Toronto Area, October 2009.
Durham Region Planning Department.
Notes: Income is based on income earned in the year prior to the 2006 Census.
Affordability by household type based on minimum renter household income required for a bachelor ($25,079),
one-bedroom ($31,917), two-bedroom ($35,844) and three-bedroom ($43,994).
21
Section Highlights
The majority of family renter households comprised of married or
common-law couples with or without children can afford any rental
unit type, regardless of size (i.e. bachelor, one, two or three-bedroom).
72% of other/multiple-family renter households can afford the average
rental cost of a three-bedroom apartment – the most expensive rental
unit. In contrast, a low proportion of lone-parent families can afford
rental housing, with only 24% able to afford a three-bedroom unit.
Non-family one person renter households face the most significant
rental affordability issues, with less than half (48%) able to afford the
basic bachelor unit and only 22% able to afford a three-bedroom unit.
As a result, single people need access to the rental market for longer
periods of time than other household types that may eventually be
able to enter the home ownership market.
22
4.
Affordability Problems Faced by Existing Home Owners and Tenants
The previous section examined the affordability of the current housing stock
in the Region. It is also important to know whether residents who already
own or rent are living in housing they can afford. This section will examine
whether residents who already own or rent are experiencing affordability
issues.
4.1
The Majority of Households Are Able to Afford Their Current Accommodations
According to the most recent Census (2006), Statistics Canada monitors the
allocation of a household’s income to housing costs. 15 This provides a useful
benchmark for assessing “affordability” for existing home owners and tenants.
Consistent with the PPS and ROP, Statistics Canada considers housing to be
“affordable” to existing home owners and tenants when a household pays
less than 30% of gross household income on housing costs.
In addition to household income, other household factors could impact the
measure of housing affordability (e.g. home equity and net worth). Statistics
Canada notes that “not all households spending 30% or more of incomes on
[housing] costs are necessarily experiencing housing affordability problems”
(i.e. households with higher incomes or households who choose to spend
more on shelter than on other goods). 16
In 2006, 74.1% of households (143,590) in Durham spent less than 30% of
household income on housing costs, and therefore did not have an
affordability problem. This represents a decrease of 3.3% from 2001, when
77.4% of households weren’t experiencing affordability problems (Figure 4.1).
Of the 25.9% of households that were experiencing affordability problems in
2006 (i.e. spending 30% or more of household income on housing):

16.1% (31,115) had a moderate affordability problem (i.e. spending 30%
to 49% of their household income on housing), compared to 14.3% in
2001;

4.5% (8,700) had a severe affordability problem (i.e. spending 50% to
69% of their household income on housing), compared to 3.7% in 2001;
and

5.3% (10,300) had a very severe affordability problem (i.e. spending 70%
or more of their household income on housing), compared to 4.7% in
2001.
15
Housing costs refer to the allocation of average monthly household income which is spent on owner’s
major payment (including mortgage, heating, municipal services, property taxes and condominium fees,
where applicable) or on gross rent (including rent, heating and municipal services) (Statistics Canada
Census, 2006).
16
Statistics Canada Census, 2006.
23
FIGURE 4.1
Total Households by Household Income
Spent on Housing in Durham, 2001 and 2006
100%
% of Total Households
90%
80%
4.7%
3.7%
5.3%
4.5%
14.3%
16.1%
77.4%
74.1%
2001
2006
70%
60%
50%
40%
30%
20%
10%
0%
<30%
30-49%
50-69%
70%+
So urce: Statistics Canada Census, 2001and 2006. Refer to A ppendix A (Table VII).
Table 4.1 illustrates the household income spent on housing costs by family
household type in Durham for 2006. This table identifies that the majority
(80%+) of couple housholds (married or common-law, with or without
children), as well as multiple-family households spend less than 30% of
household income on housing costs, suggesting few affordability problems
among these household types.
Conversely, almost half (±45%) of lone parent and one person households
spend 30% or more of their household income on housing costs (Table 4.1).
Key
Message
24
Generally, as the number of primary household income earners are reduced
(e.g. couple household to lone parent, or multiple-family household to one
person), the number of incomes within a household is decreased, and thus a
greater portion of household income is required to pay for housing costs.
TABLE 4.1
Household Income Spent on Housing Costs
by Family Household Type in Durham, 2006
Household Income Spent on Housing Costs
Family Household Type
Less than 30%
30% to 49%
50% to 69%
70% or More
Total
No.
%
No.
%
No.
%
No.
%
143,590
74.1%
31,115
16.1%
8,700
4.5%
10,300
5.3%
193,705
without children
36,310
83.3%
4,710
10.8%
1,185
2.7%
1,385
3.2%
43,590
with children
Lone parents
61,415
10,170
13,290
19,105
3,310
81.1%
54.5%
82.3%
54.6%
72.7%
10,055
4,820
1,890
8,970
665
13.3%
25.8%
11.7%
25.6%
14.6%
2,095
1,755
440
3,005
215
2.8%
9.4%
2.7%
8.6%
4.7%
2,195
1,900
535
3,925
355
2.9%
10.2%
3.3%
11.2%
7.8%
75,760
18,650
16,155
35,005
4,550
Total – Family Households
Source: Statistics Canada Census, 2006.
Rising Canadian household debt is a factor that could impact a household's
measure of affordability. Since the mid-1980s, total household debt as a
share of personal disposable income has almost tripled from 50 per cent to
over 150 per cent, which is an all-time high. 17 Canadian household
indebtedness is, in part, the result of record low interest rates stimulating
consumer spending on durable goods and the assumption of residential
mortgages. In addition, mortgage lending rules have become more appealing
over the past 10 years (i.e. longer amortization period and lower down
payment requirements). 18
While debt loads are still manageable for the majority of Canadian
households due to low interest rates, an increasing share of households are
at risk of financial stress. 19 This means that for many households, capacity to
spend (on housing costs) will be constrained by the rate of increase in their
personal disposable income. On that front, consumers will likely face an
income constraint, if borrowing costs continue to increase.
17
TD Economics. October 20, 2010. Special Report: Canadian Household Debt a Cause for Concern,
page 1.
18
Ibid, page 3.
19
Ibid, page 7; remarks by Mark Carney, Governor, Bank of Canada. December 13, 2010. Living with
Low for Long, page 7.
25
Section Highlights
Although the share of households spending 30% or more of their
gross household income on housing costs in Durham increased
slightly between 2001 and 2006, the majority of households (74.1%) are
not considered to have an affordability problem.
Couple- and multiple-family households are less likely to spend over
30% of household income on housing costs when compared to loneparent and one person households. Almost half (±45%) of lone parent
and one person households spend 30% or more of their household
income on housing costs.
Increased debt level is also a factor in the ability of households to
manage their housing costs.
26
4.2
Housing is Affordable for Most Home Owners
In 2006, 82.1% (159,040) of households in Durham owned their dwelling unit.
Of these households, 78.3% (124,530) were spending less than 30% of their
household income on housing costs, and therefore were not experiencing a
problem with affordability (Table 4.2). This compares to 82.3% of households
that spent less than 30% of their household income on housing costs in 2001.
Of the remaining 21.7% of ownership households in 2006:
Key
Message

14.2% (22,640) had a moderate affordability problem (i.e. spending 30%
to 49% of their household income on housing), compared to 12.1% in
2001;

and

2001.
Although the share of owner households spending 30% or more of their gross
household income on housing costs has increased slightly since 2001, the
majority (78.3%) did not have a problem with affordability (Table 4.2).
TABLE 4.2
Owner Households by Household Income
Owners
Spending less than 30%
Spending 30% to 49%
Spending 50% to 69%
Spending 70% or more
Total Households
2001
No.
111,630
16,420
3,345
4,285
135,680
%
82.3%
12.1%
2.5%
3.2%
100.0%
2006
No.
124,530
22,640
5,335
6,540
159,040
%
78.3%
14.2%
3.4%
4.1%
100.0%
% Share
Change (01-06)
-4.0%
2.1%
0.9%
1.0%
Source: Statistics Canada Census, 2001 and 2006.
27
4.3
Affordability for Renters Lags Behind Owners
In 2006, 17.9% (34,660) of households in Durham were tenants. Of the
tenants, 55% (19,060) were spending less than 30% of their household
income on housing (i.e. no affordability problem) (Table 4.3). This compares
to 58.3% in 2001. The remaining 45% of renter households were
experiencing affordability issues in 2006, as follows:

24.4% (8,470) had a moderate affordability problem (i.e. spending 30% to

and

2001.
TABLE 4.3
Renter Households by Household Income
Renters
Spending 30% to 49%
Spending 50% to 69%
Total Households
2001
No.
20,180
7,880
2,900
3,670
34,625
%
58.3%
22.8%
8.4%
10.6%
100.0%
2006
No.
19,060
8,470
3,365
3,760
34,660
%
55.0%
24.4%
9.7%
10.8%
100.0%
% Share
Change (01-06)
-3.3%
1.7%
1.3%
0.2%
Source: Statistics Canada Census, 2001 and 2006.
Key
Message
28
The majority of renter households (55%) do not have an affordability problem.
However, the share of renter households spending 30% or more of their gross
household income on housing costs has increased between 2001 (41.7%)
and 2006 (45%), and far outweighs the current percentage of owner
households (78.3%) that do not have an affordability problem. Home owners
that experience affordability problems can still access rental tenure.
However, renters with severe affordability problems are forced to remain in
the rental market, with no alternative.
Section Highlights
In 2006, 82.1% of Durham’s households owned their dwelling, while the
remaining 17.9% of households were tenants.
Although household incomes have risen since 2001 and the majority
of both owner and renter households do not have affordability
problems, all households have experienced a slight decrease in their
ability to afford housing within the Region. This is particularly evident
among renter households with a larger share that are experiencing
moderate to severe affordability problems.
29
5.
Summary of Key Messages
There is a growing recognition of the vital role that suitable, affordable
housing has in supporting the social and economic vitality of communities.
Inadequate housing can result in significantly increased costs in health care,
education, public safety and employment security. The provision of
affordable housing can support neighbourhood revitalization by stabilizing
housing conditions for individuals and families facing economic challenges.
Based on the analysis presented in Housing Review Background Report No.
3, the following are the key messages:
Section 1. – Household Income and the Cost of Ownership and Rental
Housing

the past 10 years have been a relatively prosperous time, as average
household incomes have risen for both home owners and renters;

renter household incomes, however, have not increased at the same pace
as home owners;

the average price of ownership housing in Durham has steadily increased
over the past 10 years. Notwithstanding this increase, the average price
is low when compared to other areas of the GTA. Durham’s competitive
price advantage is one of the factors that has produced strong demand for
housing throughout the Region; and

the average cost of rental housing has been relatively stable, due in part
to the transition of more renters to home ownership due to lower mortgage
rates over the past several years.
Section 2. – What is Considered “Affordable”?
30

the Regional Official Plan established parameters for measuring
affordable housing to low and moderate income households, based on the
Provincial Policy Statement;

for ownership households, the 60th percentile of income distribution
has been established as an overall affordability threshold. Households
above the 60th percentile (i.e. higher income households) are generally
recognized as not having problems with affordability as they are
adequately served by the market. Households below the 60th percentile,
representing the majority of all (193,700) households in the Region, could
have problems with affordability;

the 60th percentile affordability threshold also applies to renter
households, as a distinct group. In 2006, there were 34,660 renter
households in the Region;

for purposes of the Housing Review, another threshold has also been
established to recognize affordability for households that are not
adequately served by the housing market. To address this need, an
analysis of households in the lowest 40% (40th percentile) of the income
distribution for both ownership households and renter households was
conducted. This group is referred to as “core need” households,
representing the minority (40%) of the households in the Region;

in accordance with the ROP definition for affordable ownership housing,
dwellings at or below $250,785 are considered affordable. Based on
this cost, households earning $67,931 annually can afford to purchase a
dwelling. This represents households within the 45th percentile of income
distribution (87,165 households) in the Region. Based on this analysis,
households above the 45th percentile are generally being adequately
served by the market;

for the purposes of the Housing Review, the income threshold for core
need ownership households (40th percentile) is $62,393. Based on this
level of income, an affordable purchase price for a dwelling is $230,340 or
less. This applies to 77,480 households in the Region. Households at or
below the 40th percentile that are not adequately served by the ownership
housing market will seek opportunities in the rental market;

in accordance with the ROP definition for affordable rental housing, units
at or below $1,076 per month are considered affordable. Based on
this monthly rent, households earning $43,031 annually can afford rental
accommodations. This represents renter households within the 60th
percentile of income distribution (20,799 renter households) in the Region;
and

for the purposes of the Housing Review, the income threshold for core
need renter households (40th percentile) is $29,300. Based on this level
of income, affordable rent is $733 per month. This applies to 13,866
renter households in the Region.
Section 3. – Affordability of the Housing Stock

almost 30% of new home sales were affordable (ROP definition) at a price
equal to or less than $250,785. However, less than 20% of new dwellings
were affordable to core need households (i.e. 40th percentile) at a price
equal to or less than $230,340;

resale housing, on the other hand, accounted for the majority of affordable
ownership housing in Durham, resulting in over 50% affordability based on
the ROP definition and almost 40% affordability to core need households;
31

generally, there is a direct correlation between the size of dwelling types
and affordability. Higher density dwellings, which tend to be smaller in
size, are generally more affordable than lower density dwellings, which
tend to be larger in size;

as the number of primary household income earners decreases, the
affordability of dwelling types by size decreases. The largest family
households (i.e. married or common-law couples with children) can afford
all types of dwellings, whereas the smallest households (i.e. one person
non-family households) have the greatest difficulty finding affordable
housing;

in accordance with the ROP definition for affordable rental housing, low
and moderate income renter households (i.e. those at or below the 60th
percentile) earning an average household income of $43,031, are able to
afford most rental unit types at or below an average monthly rent of
$1,076;

core need renter households (i.e. those at or below the 40th percentile)
earning an average household income of $29,300, are limited to bachelor
apartments and a minimal number of one-bedroom units at or below an
average monthly rent of $733. Bachelor and one-bedroom units are not
considered practical for all households, especially families; and

as with affordable ownership housing, non-family one person renter
households face the most significant rental affordability issues, with less
than half (48%) able to afford the basic bachelor unit and 22% able to
afford a three-bedroom unit. As a result, single people need access to the
rental market for longer periods of time than other household types that
may eventually be able to enter the home ownership market.
Section 4. – Affordability Problems Faced by Existing Home Owners and
Tenants
32

approximately 75% of households who already own or rent housing in
Durham did not have an affordability problem;

couple and multiple-family households experience less affordability
problems than lone parent and one person households, where there are
fewer primary household income earners. Almost half (±45%) of lone
parent and one person households spend 30% or more of their household
income on housing costs; and

although the majority of both home owners and renters did not have an
affordability problem, a much greater share of renters struggle with
housing affordability. Home owners that experience affordability problems
can still access rental tenure. However, renters with severe affordability
problems are forced to remain in the rental market, with no alternative.
5.1
Next Report
Housing Review Background Report No. 4, Specialized Housing Needs, will
examine the special needs of lower income households; the Region’s aging
population and related accessibility issues; the state of social housing and
housing integrated with support services; and housing program delivery and
its ability to meet the needs of individuals who require specific services to
maintain their well-being within the Region.
33
6.
Glossary
Affordable [Housing]: means:
a) in the case of ownership housing, the least expensive of:
i. housing for which the purchase price results in annual
accommodation costs which do not exceed 30% of gross annual
ii. housing for which the purchase price is at least 10% below the
average purchase price of a resale unit in the Region.
b) in the case of rental housing, the least expensive of:
i.
a unit for which the rent does not exceed 30% of gross annual
ii. a unit for which the rent is at or below the average market rent of a
unit in the Region.
(Durham Regional Official Plan Amendment 128, Adopted by Regional
Council June 3, 2009)
Annual Accommodation Costs: for ownership housing, are calculated
based on: a monthly tax rate equal to 0.121% of the house value; a mortgage
interest rate consistent with average rates in 2009 (5.63%); a 10% down
payment; and a 25 year amortization period. Housing costs exclude
insurance and utilities expenses.
CMA: Census Metropolitan Area.
CMHC: Canada Mortgage and Housing Corporation.
Consumer Price Index (CPI): refers to a measure of price movements,
produced by Statistics Canada and obtained by comparing the retail prices of
a representative “shopping basket” of goods and services at two different
points in time. (Bank of Canada, 2010)
Family Households: refers to either a “one-family household” consisting of a
single family household (i.e. a couple with or without children or a lone-parent
family), or a “multiple-family household” consisting of two or more families
occupying the same dwelling.
GTA: Greater Toronto Area, refers to the Regions of Durham, York, Peel,
Halton and the City of Toronto.
34
High-Density Dwellings: includes all apartments with less than or greater
than five-storeys.
Housing Costs: refer to the allocation of average monthly household income
which is spent on owner’s major payment (including mortgage, heating,
municipal services, property taxes and condominium fees, where applicable)
or on gross rent (including rent, heating and municipal services). (Statistics
Canada Census, 2006)
Inflation: refers to a persistent rise over time in the average price of goods
and services – in the “cost of living.” The most widely used measure of
inflation is the Consumer Price Index (CPI), or total CPI. (Bank of Canada,
2010)
Low-Density Dwellings: includes all single and semi-detached homes, as
well as “other” detached homes, as defined by Statistics Canada.
Low and Moderate Income Households: means:
a) in the case of ownership housing, households with incomes in the
lowest 60% of the income distribution for the Region; or
b) in the case of rental housing, households with incomes in the lowest
60% of the income distribution for renter households for the Region.
(Durham Regional Official Plan Amendment 128, Adopted by Regional
Council June 3, 2009)
Medium-Density Dwellings: includes all townhomes and apartments in
duplex.
Moderate Affordability Problem: refers to households spending 30% to
49% of their household income on housing.
MPAC: Municipal Property Assessment Corporation.
Nominal Dollars: refers to dollars that are not adjusted for inflation.
Non-Family Households: refers to either one person living alone or two or
more persons who share a dwelling, but do not constitute a family.
PPS: Provincial Policy Statement.
Real Dollars: refers to dollars that have been adjusted for inflation (i.e.
indexed to 2009 dollar value).
35
Recent Immigrants: refers to persons who moved from outside Canada to
Durham between 2001 and 2006.
ROP: Regional Official Plan.
Severe Affordability Problem: refers to households spending 50% to 69%
of their household income on housing.
Social Housing: or not-for-profit housing, refers to housing owned and
managed by municipal government or community organizations and provides
affordable housing mostly for people whose income, age, social needs or
health needs prevent them from finding adequate housing in the private rental
market.
Very Severe Affordability Problem: refers to households spending 70% or
more of their household income on housing.
36
APPENDIX
APPENDIX A:
Tables for Report Figures
Table I.
Average Household Income in Ontario and the GTA, 1995, 2000 and 2005
(FIGURE 1.1)
Year Ontario Durham
York
Toronto
Peel
Halton
2005 $77,967 $86,391 $103,420 $80,343 $87,765 $108,126
2000 $66,836 $75,058
$91,878
$69,125 $80,610
$92,523
1995 $54,291 $61,911
$74,277
$53,869 $65,363
$73,973
Source: Statistics Canada Census, 1996, 2001 and 2006.
Note: Income is based on income earned in the year prior to the Census.
Table II.
Average Price of a New and Resale Single Detached Dwelling in Durham,
2000 to 2009 (FIGURE 1.2)
Year
New
Resale
2000
$219,910
$197,362
2001
$229,131
$209,860
2002
$241,451
$221,199
2003
$249,093
$245,521
2004
$272,297
$284,004
2005
$296,785
$283,715
2006
$316,691
$292,228
2007
$324,646
$305,211
2008
$371,132
$306,516
2009
$335,103
$303,336
Source: Municipal Property Assessment Corp. (MPAC).
Table III.
Average Price of a New and Resale Single Detached Dwelling in Durham,
2009 (FIGURE 1.3)
Single Detached
Dwelling Sales (2009)
Ajax
Brock
Clarington
Oshawa
Pickering
Scugog
Uxbridge
Whitby
New Sales
$372,522
$287,787
$291,011
$318,432
$558,990
$426,647
$419,559
$365,476
Resales
$326,618
$270,102
$273,365
$239,838
$369,918
$326,908
$383,387
$325,937
Source: Municipal Property Assessment Corp. (MPAC). Durham Region Planning Department.
Table IV.
Average Price of a New* Single Detached Dwelling in the GTA, 2009
(FIGURE 1.4)
Average
New Sales Price
Location
Durham
York
Toronto
Peel
Halton
$396,274
$549,909
$940,566
$512,627
$580,762
Source: CMHC, Housing Now - Greater Toronto Area,
January 2010.
* "New" refers to housing units that have been absorbed
(i.e. sold and no longer on the market), once a binding
contract is secured by a non-refundable deposit and
signed by a qualified purchaser.
Table V.
Unit Type
Bachelor
1-Bedroom
2-Bedroom
3+ Bedrooms
Average Monthly Rent (Nominal Dollars 1 ) by Unit Type in Durham, 2
2000-2009 (FIGURE 1.5)
2000
$502
$685
$793
$933
2001
$533
$692
$810
$952
2002
$551
$714
$833
$904
2003
$578
$750
$876
$916
2004
$613
$750
$875
$972
2005
$589
$754
$874
$1,056
2006
$619
$758
$873
$1,067
2007
$614
$770
$883
$1,045
2008
$642
$787
$903
$1,058
2009
$619
$789
$909
$1,079
Source: CMHC Rental Housing Market Report, 2000-2009. Durham Region Planning Department.
Table VI.
Average Monthly Rent (Real Dollars 3 ) by Unit Type in Durham, 4
2000-2009 (FIGURE 1.6)
Unit Type
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Bachelor
$603
$624
$631
$644
$670
$630
$649
$630
$644
$619
1-Bedroom
$822
$810
$818
$836
$820
$806
$795
$790
$789
$789
2-Bedroom
$951
$948
$954
$976
$957
$935
$916
$907
$906
$909
3+ Bedrooms
$1,119
$1,113
$1,035
$1,020
$1,063
$1,129
$1,119
$1,073
$1,061
$1,079
Source: CMHC Rental Housing Market Report, 2000-2009. Bank of Canada, Consumer Price Index, 2000-2009.
1
Nominal Dollars refers to dollars that are not adjusted for inflation.
3
Real Dollars refers to dollars that have been adjusted for inflation (i.e. indexed to 2009 dollar value).
4
2
Table VII.
Total Households by Household Income Spent on Housing in Durham,
2001 and 2006 (FIGURE 4.1)
Household Income
Spent on Housing
Spending 30% to 49%
Spending 50% to 69%
Total Households
2001
No.
131,810
24,295
6,245
7,955
170,305
2006
%
77.4%
14.3%
3.7%
4.7%
100.0%
No.
143,590
31,115
8,700
10,300
193,705
%
74.1%
16.1%
4.5%
5.3%
100.0%
Source: Statistics Canada Census, 2001 and 2006 (Special Run, EO1163 - Table 1 and 2).

Housing Review Background Report No. 3

Transcription

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