low incomes in high value housing areas - david...
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Low Income Households in High Value Housing in Vancouver Prepared by: Jens von Bergmann and Alejandro Cervantes July 14, 2016
MOUNTAINMATH REPORTS
OVERVIEW
Inthisreportwegiveanoverviewoflowincomehouseholdsinhighhousingvalueareasbasedonstandardcensusreleasedatafromthe2006and2011CanadaCensusinVancouver.Thisphenomenonhasbeenobservedbyothersandbyuspreviously.
ThepurposeofthisreportistorefinepreviousargumentsandputthemintothecontextofotherregionsinCanadaandprovidevisualsexplainingthearguments.
WeconcludethatpovertyinhighdwellingvalueareasishigherandbehavesdifferentlyinVancouvercomparedtootherregionsinCanada.Wecan’tusethisdatatoesEmatetheeffect,ifany,thatthisphenomenonhasontheVancouverpropertymarket.ButwebelieveitisimportanttomonitorthisphenomenonbyobtainingandanalyzingmorecurrentdatalinkingincomestohousingtransacEonsandhousingvaluesinordertobeJerunderstandtheVancouverpropertymarketandinformpolicy.
HIGHVALUEHOUSING
MOUNTAINMATH REPORTS
Figure 1. Median Dwelling Values, Focus on High Value Areas (2011)
Inthisreportwearemostlyfocusingonhighvaluehousing.Wedefinehighvaluehousingareasasthoseareaswithmediandwellingvalue50%abovethecity-widenumbersin2011.Forreferenceweincludeamapofmediandwellingvalues,starEngat50%abovetheMetroVancouvermediandwellingvalueof$600,000inFigure1.AninteracEveversioncanbefoundathJps://censusmapper.ca/maps/422,whichalsolinkstoasimilarmapusing2006data.Asexpected,wecanseehowhighvaluehousingisconcentratedonthewestsideofVancouver.
MEASURES OF POVERTY
Forthisreportweconcentrateontwomainmeasuresofpoverty.PovertyisalwaysmeasuredthroughincomeasreportedonCRAtaxreturns.
Astandardmeasureofpovertyisthea_er-taxlowincomethresholdusedbyStaEsEcsCanada,whichclassifieshouseholdsaslowincomebasedonthea_ertaxhouseholdincomeandhouseholdsize.ExactdefiniEonsforthe2006and2011censusyearsarelistedinAppendixA.
Figure 2. Prevalence of Poverty (2010)
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ThegeographicdistribuEonofpovertyratescanbeexploredinaseriesofinteracEvemapsthatwemadeavailableathJps://censusmapper.ca/maps/119,anoverviewmapforVancouverisincludedinFigure2.Asexpected,weseethatdowntowneastsidehaselevatedpovertyrates,howeveritissurprisingthatsomeareasinWestSideneighbourhoodsalsoshowhighratesofpoverty.ThiscanbeexploredinmoredetailinourinteracEvemaps.
Thesecondmeasureweuseisthenumberofhouseholdsthatspend100%ormoreoftheirreportedpre-taxincomeonsheltercosts.Sheltercostsincludemortgagepayments(ifany),propertytaxesanduEliEesforownerhouseholdsandrentanduEliEesfortenanthouseholds.Thisisanindirectmeasurederivedfromcensusdatathatistypicallyusedtoexcludeoddcasesinhousingaffordabilityanalyses.FocusingonownerhouseholdsweexploitthistohighlighttheunusualprevalenceofthesecasesinVancouver.SeniorhouseholdswouldtypicallydrawincomefromRRSPstopayforrunningsheltercostsandlivingexpensesandthuswouldnotfallintothiscategory.
Anumberofscenarioscouldexplaincaseswithsheltercostshigherthanincomes:studenthouseholdsthatmaynothaveincomeandreceivemoneyfromparents,householdswhere
Figure 3. Owner Households with Shelter Cost Higher than Income
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themaintainerisbetweenjobsandlivesoffofsavingstobridgethegap.However,onewouldnotexpecttofindthesekindofcasesinhighhousingvalueareas.
The2006Censusdataallowsustoseparateoutownerhouseholdswithincomelowerthanrunningsheltercosts,Figure3showsascreenshotfromourinteracEveCanada-widemapofsuchhouseholdsthatwehavemadeavailableathJps://censusmapper.ca/maps/420.InthismapwecanclearlyseehowsomeareasontheexpensiveWestSideofVancouverfeaturehighratesofhouseholdswithsheltercostlowerthanincome.Therewere6,800suchhouseholdsintheCityofVancouverand24,380inMetroVancouver.
FurtherwecomparetheratesinVancouvertootherCanadianmunicipaliEesandregionsinFigure4.WeseethatthisphenomenonismorepronouncedinVancouverthaninotherregions.JustlikewithpovertyrateswenoEceanunusualpaJernofclusteringinsomeareaswithhighhousingvalues.
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Calgary
Metro Montréal
Edmonton
Metro Victoria
Metro Toronto
Toronto
Metro Vancouver
Richmond
Burnaby
Vancouver
0.0% 2.5% 5.0% 7.5% 10.0%
Owner Households Shelter Cost > Income (2005)
Figure 4. Owner Households with Shelter Cost Higher than Income (2006)
Standardcensusreleasedatafrom2011doesnotallowtoseparateoutownerhouseholds,makingitmoredifficulttointerpretdataonhouseholdswithsheltercostshigherthanincomeasownershipratesvaryconsiderablyacrossregionsinCanadaandthisphenomenonismoreprevalentintenanthouseholds.Overall,theporEonofhouseholdsinthiscategoryhasincreasedmoreintheVancouverregionthaninotherregionsinCanada.
POVERTY AND DWELLING VALUES
ToexplorehowpovertyratesrelatetomediandwellingvalueswefirstgroupedthedisseminaEonareas(thesmallestcensusaggregaEonunitforwhichthisdataisavailable)inseveralmunicipaliEesandcensusmetropolitanareasintobinsaccordingtotheirmediandwellingvalue.Wethencomputedthepovertyrates,thatistheproporEonofthepopulaEonbelowthe2010a_er-taxlowincomecutoff,foreachofthosebinsandgraphtheresultinFigure5.
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Figure 5. Poverty Rates by Median Dwelling Value Areas (2010/2011)
Pove
rty R
ate
(201
0)
0.0%
12.5%
25.0%
37.5%
50.0%
Median Dwelling Value (2011)$100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,500,000 $2,000,000
Toronto Metro Vancouver Vancouver Calgary Richmond Burnaby Metro Toronto Metro Victoria Metro Montréal
OnewouldexpectpovertyratestodropdrasEcallyasdwellingvaluesincrease.However,inVancouverpovertyratesfailtodropoffinhighdwellingvalueareasastheydoincomparableregionsinCanada.Runningthesameanalysisagainstonly18to64yearoldsinpoverty,toexcludeseniorsandchildrenthatmightskewresultsbecauseofhighchildorseniorpovertyinsomeareas,yieldsverysimilarresults.
WhileweseethatoverallpovertyratesinVancouver,RichmondandBurnabyarehigherthancomparableregionsinCanada,wealsoseethatforregionswithdwellingvaluesabove$700,000MetroVancouverasawholedisplaysdisEnctlydifferentpovertyratesthancomparableregions.
Weconcludethatpoverty,asmeasuredbytaxdata,inhighhousingvaluearesintheVancouverregiondifferedsignificantlyfromthatinothercomparableregionsinCanadaandshouldbecloselymonitored.
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APPENDIX A
Thecut-offsusedtodefinelowincomehouseholdsinthe2006and2011censusfora_er-taxhouseholdincome,includinggovernmenttransferpaymentsandRRSPs,aresummarizedinthefollowingtable.
LOW INCOME CUT-OFFSHousehold size 2006 2011
1 17,219 19,460
2 20,956 27,521
3 26,095 33,706
4 32,556 38,920
5 37,071 43,514
6 41,113 47,667
7+ 45,155 51,486
MOUNTAINMATH REPORTS