There’s a story in the Globe and Mail today about a study on affordability across canada. Apparently its expensive to live in the most expensive cities and 14% of Canadians spent 30% or more of their income on shelter. The 30% of income thing is a standard indicator of lack of affordability.
The concept of affordability has traditionally been based on a ratio of housing costs to total household income, Statscan said. A household paying 30 per cent or more of its pre-tax income for housing is considered to have affordability problem.
During Statscan’s survey period, 12 per cent of households spent between 30 per cent and 50 per cent of pre-tax income on housing. Two per cent spent 50 per cent or more to keep a roof above their heads.
Averaged across Canada, it was renters that were more inclined to have this affordability problem, so I’m guessing most other Canadian cities don’t have the situation we have in Vancouver where owners buying at current prices are subsidizing renters.
Renters were much more likely to fall into this category of people who struggle to afford housing, Statscan said. Thirty-one per cent of people who rented in 2004 spent 30 per cent or more of their budget on shelter, compared with 6 per cent of home owners.
â€œThese rental households consisted mostly of individuals living alone, those relying on government assistance, and those in low income,â€ Statscan said.
Not surprisingly, people who rented in Canada’s two most expensive cities, Toronto and Vancouver, incurred the highest cost in terms of rent.
The best line of the whole study is at the end:
Renters who earned less than $19,190 a year were 18 times more likely to be cost-burdened when it comes to housing than people in the top one-half of the income chain.
Yes, the startling fact: People with lower incomes have a more difficult time affording things. Thanks Statscan!