POVERTY AND HOUSING AFFORDABILITY IN ALBERTAS 7 CITIES RON - - PowerPoint PPT Presentation

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POVERTY AND HOUSING AFFORDABILITY IN ALBERTA’S 7 CITIES

RON KNEEBONE

AND

MARGARITA WILKINS THE SCHOOL OF PUBLIC POLICY

APRIL 19, 2017 (UNDER CONSTRUCTION: PLEASE DO NOT CITE WITHOUT PERMISSION)

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• To compare the cost of living for a poor person
• r family in each of Alberta’s 7 Cities
• To propose an idea for responding to what we

have found

OUR GOAL

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• We use social assistance income to represent

the income level of those experiencing poverty

• SA income is a policy variable
• SA income is less than the average after-tax earned

income of the lowest quintile of income earners and so well represents the income of the very poor

THE APPROACH

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THE INCOME OF THE VERY POOR

Social-Assistance Income and After-Tax Income for Lowest Quintile, 2011

British Columbia

22,005 27,200 7,947 7,000

Alberta

22,297 36,700 7,248 10,400

Saskatchewan

24,161 31,000 8,891 11,800

Manitoba

21,662 29,400 6,922 8,200

Ontario

24,631 29,600 8,104 7,500

Quebec

23,271 28,000 7,560 8,300

New Brunswick

20,162 26,700 6,796 9,000

Nova Scotia

21,919 28,300 6,954 8,300

Prince Edward Island

25,892 26,400 7,152 11,400

Newfoundland & Labrador

23,072 27,100 10,071 9,300

Source: Cansim Table 2020703 and the Caledon Institute. Social-Assistance Income, Single Employable Lowest Quintile After-Tax Average Income, Unattached Individuals Province Social-Assistance Income, Couple with Two Children Lowest Quintile After-Tax Average Income, Two or More Persons

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THE INCOME OF THE VERY POOR

Social-Assistance Income and After-Tax Income for Lowest Quintile, 2011

British Columbia

22,005 27,200 7,947 7,000

Alberta

22,297 36,700 7,248 10,400

Saskatchewan

24,161 31,000 8,891 11,800

Manitoba

21,662 29,400 6,922 8,200

Ontario

24,631 29,600 8,104 7,500

Quebec

23,271 28,000 7,560 8,300

New Brunswick

20,162 26,700 6,796 9,000

Nova Scotia

21,919 28,300 6,954 8,300

Prince Edward Island

25,892 26,400 7,152 11,400

Newfoundland & Labrador

23,072 27,100 10,071 9,300

Source: Cansim Table 2020703 and the Caledon Institute. Social-Assistance Income, Single Employable Lowest Quintile After-Tax Average Income, Unattached Individuals Province Social-Assistance Income, Couple with Two Children Lowest Quintile After-Tax Average Income, Two or More Persons

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THE INCOME OF THE VERY POOR

Social-Assistance Income and After-Tax Income for Lowest Quintile, 2011

British Columbia

22,005 27,200 7,947 7,000

Alberta

22,297 36,700 7,248 10,400

Saskatchewan

24,161 31,000 8,891 11,800

Manitoba

21,662 29,400 6,922 8,200

Ontario

24,631 29,600 8,104 7,500

Quebec

23,271 28,000 7,560 8,300

New Brunswick

20,162 26,700 6,796 9,000

Nova Scotia

21,919 28,300 6,954 8,300

Prince Edward Island

25,892 26,400 7,152 11,400

Newfoundland & Labrador

23,072 27,100 10,071 9,300

Source: Cansim Table 2020703 and the Caledon Institute. Social-Assistance Income, Single Employable Lowest Quintile After-Tax Average Income, Unattached Individuals Province Social-Assistance Income, Couple with Two Children Lowest Quintile After-Tax Average Income, Two or More Persons

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• Social assistance varies by family characteristic

but the amount received is the same regardless

• f where the family lives in the province
• But the cost of living can vary significantly by

area of the province

• By how much?
• What is the implication?
• Is there another approach?

THE ISSUE

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• We begin by calculating what percentage of

social assistance income needs to be devoted to renting a low-quality rental unit

• Our focus is on the price of the least expensive 20%
• f rental units
• We align support provided for each family

composition to appropriately sized rental unit

• Single parent, one child in a one bedroom
• Couple with two children in two bedroom
• Two singles sharing two bedroom

OUR APPROACH

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2nd Quintile 3rd Quintile 4th Quintile

$100-199

Dollar Range Amount of Monthly Rent

X

Average Monthly Rent

Y

Median Monthly Rent

Studio Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat

X

Red Deer

One-Bedroom Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat Red Deer

Two-Bedroom Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat Red Deer

X Y Y X Y X Y Y X Y X Y X Y X Y X Y X X Y Y X Y X Y X $400-499 $500-599 $600-699 $700-799 $800-899 $900-999 $1,000-1,099 $1,100-1,199 Y X X Y X Y X Y $1,200-1,299 $1,300-1,399 $1,400-1,499

ALBERTA MONTHLY RENT QUINTILES BY CMA OR CA AND TYPE OF APARTMENT, 2015

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2nd Quintile 3rd Quintile 4th Quintile

$100-199

Dollar Range Amount of Monthly Rent

X

Average Monthly Rent

Y

Median Monthly Rent

Studio Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat

X

Red Deer

One-Bedroom Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat Red Deer

Two-Bedroom Apartments:

Calgary Edmonton Grande Prarie Lethbridge Medicine Hat Red Deer

X Y Y X Y X Y Y X Y X Y X Y X Y X Y X X Y Y X Y X Y X $400-499 $500-599 $600-699 $700-799 $800-899 $900-999 $1,000-1,099 $1,100-1,199 Y X X Y X Y X Y $1,200-1,299 $1,300-1,399 $1,400-1,499

ALBERTA MONTHLY RENT QUINTILES BY CMA OR CA AND TYPE OF APARTMENT, 2015

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LONE PARENT WITH ONE CHILD RENTING A ONE-BEDROOM APARTMENT IN THE FIRST (LOWEST) QUINTILE OF RENTS

1990 1995 2000 2005 2010 2015 Calgary

46% 44% 55% 56% 60% 66%

Edmonton

41% 39% 42% 51% 57% 60%

Grande Prairie

48% 51% 53% 59% 49% 62%

Lethbridge

45% 48% 48% 48% 51% 49%

Medicine Hat

33% 37% 39% 44% 40% 42%

Red Deer

42% 44% 47% 49% 49% 52%

Wood Buffalo

78% 105% 125% 96%

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COUPLE WITH TWO CHILDREN RENTING A TWO-BEDROOM APARTMENT IN THE FIRST (LOWEST) QUINTILE OF RENTS

1990 1995 2000 2005 2010 2015 Calgary

38% 35% 42% 43% 50% 55%

Edmonton

33% 30% 33% 39% 48% 52%

Grande Prairie

36% 38% 37% 45% 40% 51%

Lethbridge

34% 34% 33% 36% 42% 41%

Medicine Hat

27% 27% 29% 32% 34% 35%

Red Deer

32% 32% 36% 37% 41% 43%

Wood Buffalo

56% 78% 103% 75%

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1990 1995 2000 2005 2010 2015 Calgary

61% 61% 77% 83% 77% 88%

Edmonton

52% 54% 60% 75% 74% 83%

Grande Prairie

58% 67% 68% 86% 62% 81%

Lethbridge

53% 59% 60% 70% 65% 65%

Medicine Hat

43% 47% 53% 62% 52% 56%

Red Deer

52% 57% 66% 71% 62% 69%

Wood Buffalo

101% 151% 157% 119%

TWO SINGLES RENTING AND SHARING A TWO-BEDROOM APARTMENT IN THE FIRST (LOWEST) QUINTILE OF RENTS

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• Almost all income of the very poor is dedicated

to rent, food, utilities

BUT THERE IS MORE THAN JUST RENT

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2016 SPATIAL PRICE INDEX

(PRICES RELATIVE TO EDMONTON)

Calgary 101.4 102.5 101.8 109.0 99.6 97.8 Edmonton 100.0 100.0 100.0 100.0 100.0 100.0 Grande Prairie 103.7 103.6 99.0 140.8 109.7 92.4 Lethbridge 97.2 102.0 91.5 103.1 97.2 94.0 Medicine Hat 91.1 105.5 68.4 75.9 103.9 94.9 Red Deer 98.3 102.4 95.6 111.3 97.5 95.2 Wood Buffalo 114.5 112.3 136.5 121.9 104.2 95.7

Source: Statistics Canada, Consumer Prices Division, "2016 Alberta Spatial Price Survey, A Place-to-Place Price Comparison Survey".

2016

Utilities Transportation Clothing All-items Food Shelter

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2016 SPATIAL PRICE INDEX

(PRICES RELATIVE TO EDMONTON)

Calgary 101.4 102.5 101.8 109.0 99.6 97.8 Edmonton 100.0 100.0 100.0 100.0 100.0 100.0 Grande Prairie 103.7 103.6 99.0 140.8 109.7 92.4 Lethbridge 97.2 102.0 91.5 103.1 97.2 94.0 Medicine Hat 91.1 105.5 68.4 75.9 103.9 94.9 Red Deer 98.3 102.4 95.6 111.3 97.5 95.2 Wood Buffalo 114.5 112.3 136.5 121.9 104.2 95.7

Source: Statistics Canada, Consumer Prices Division, "2016 Alberta Spatial Price Survey, A Place-to-Place Price Comparison Survey".

2016

Utilities Transportation Clothing All-items Food Shelter

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2016 SPATIAL PRICE INDEX

(PRICES RELATIVE TO EDMONTON)

Calgary 101.4 102.5 101.8 109.0 99.6 97.8 Edmonton 100.0 100.0 100.0 100.0 100.0 100.0 Grande Prairie 103.7 103.6 99.0 140.8 109.7 92.4 Lethbridge 97.2 102.0 91.5 103.1 97.2 94.0 Medicine Hat 91.1 105.5 68.4 75.9 103.9 94.9 Red Deer 98.3 102.4 95.6 111.3 97.5 95.2 Wood Buffalo 114.5 112.3 136.5 121.9 104.2 95.7

Source: Statistics Canada, Consumer Prices Division, "2016 Alberta Spatial Price Survey, A Place-to-Place Price Comparison Survey".

2016

Utilities Transportation Clothing All-items Food Shelter

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• What would social assistance income need to

be for a person or family to devote the same percentage of income to rent as someone living in Medicine Hat?

• We use data for 2015
• In Medicine Hat, SA income devoted to rent is
• 42% for lone parent with one child in a 1 bedroom
• 35% for couple with two children in a 2 bedroom
• 56% for two singles sharing a 2 bedroom

WHAT IF SOCIAL ASSISTANCE INCOME VARIED BY LOCAL COST OF LIVING?

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Calgary

$17,403 $27,103

$9,700 Edmonton

$17,403 $24,963

$7,560 Grande Prairie

$17,403 $25,677

$8,274 Lethbridge

$17,403 $20,342

$2,939 Medicine Hat

$17,403 $17,403

$0 Red Deer

$17,403 $21,397

$3,994 Wood Buffalo

$17,403 $39,913

$22,510 Lone Parent with One Child (One Bedroom)

2015 First Quintiles of Rents

Annual Social Assistance Income (Actual) Social Assistance Income Required to Match Housing Affordiblity in Medicine Hat

Required Increase in Social Assistance Income

2015 TARGET SOCIAL ASSISTANCE TO MATCH MEDICINE HAT'S INDEX FOR THE 1ST (LOWEST) QUINTILE OF RENTS

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Calgary

$24,841 $39,060

$14,219 Edmonton

$24,841 $36,833

$11,992 Grande Prairie

$24,841 $35,977

$11,136 Lethbridge

$24,841 $28,781

$3,940 Medicine Hat

$24,841 $24,841

$0 Red Deer

$24,841 $30,666

$5,825 Wood Buffalo

$24,841 $53,074

$28,233 Couple with Two Children (Two Bedroom)

2015 First Quintiles of Rents

Annual Social Assistance Income (Actual) Social Assistance Income Required to Match Housing Affordiblity in Medicine Hat

Required Increase in Social Assistance Income

2015 TARGET SOCIAL ASSISTANCE TO MATCH MEDICINE HAT'S INDEX FOR THE 1ST (LOWEST) QUINTILE OF RENTS

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Calgary

$7,794 $12,255

$4,461 Edmonton

$7,794 $11,557

$3,763 Grande Prairie

$7,794 $11,288

$3,494 Lethbridge

$7,794 $9,030

$1,236 Medicine Hat

$7,794 $7,794

$0 Red Deer

$7,794 $9,622

$1,828 Wood Buffalo

$7,794 $16,652

$8,858 Single Employable (Sharing Two Bedroom)

2015 First Quintiles of Rents

Annual Social Assistance Income (Actual) Social Assistance Income Required to Match Housing Affordiblity in Medicine Hat

Required Increase in Social Assistance Income

2015 TARGET SOCIAL ASSISTANCE TO MATCH MEDICINE HAT'S INDEX FOR THE 1ST (LOWEST) QUINTILE OF RENTS

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• We have shown that the cost of those things

that consume almost all of a poor person’s income (rent, food, utilities) varies widely by locality / But income does not

• We have shown one calculation of how much

SA income would need to increase to match Medicine Hat’s housing cost

• Too weird to vary Social Assistance income by

region? What about EI?

VARIABLE SOCIAL ASSISTANCE INCOME

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• Could also vary social assistance income within

metropolitan areas

• So family on SA receives larger cheque if live in

more expensive parts of a city

• Idea is to enable poor families to not have to

congregate in low rent areas

• Which tend to become low service areas
• Such proposals are being considered in U.S.
• The devil will be living in his usual place

VARIABLE SOCIAL ASSISTANCE INCOME

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THANKS FOR LISTENING!