ontario inc and hsg afford trends may 2008

8/12/2019 Ontario Inc and Hsg Afford Trends May 2008

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Ontario Income and HousingAffordability Trends

New Data from the 2006 Census and Statscan SLID series

By Vince Brescia

May 2008


2/43

Income Trends 1976 to 2006

From Statscan SLID Database


3/43

Family Average Versus MedianMarket1 Income Ontario, $2006

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

AverageMedian

Source: FRPO based on Statscan Income Trends in Canada, 2006.

Trendline

Trendline

Average up but median down =changing earnings distribution

1. Market income is income excluding government transfers.


4/43

Median Family After-tax1 IncomeOntario, $2006

$40,000

$42,000

$44,000

$46,000

$48,000

$50,000

$52,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006


Increasing income redistribution bygovernment has more than offsetdeclining median market incomes

Early 90s recessionwas deep

1. After-tax income reflects income after government transfers and taxes, and is the best indicator of household

income after government redistributive measures.


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Lowest quintile after-tax familyincome in Ontario, $2006

$10,000

$11,000

$12,000

$13,000

$14,000

$15,000

$16,000

$17,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: FRPO based on Statistics Canada Cansim Table 202-0706.

The poor are getting richer, contraryto what you might hear in the news

Up 22% since 1976


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Highest quintile after-tax income inOntario, $2006

$50,000

$55,000

$60,000

$65,000

$70,000

$75,000

$80,000

$85,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: FRPO based on Statistics Canada Cansim Table 202-0706.

Up 32% since 1976


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Percent of Families in Low-Income, or with

Market or After-tax incomes below $10,000,$2006, Ontario

0

5

10

15

20

25

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Low Income

Market Income under $10K

After-tax income under $10


Incidence of low income on thedecline since the mid-1990s

Early 90s recessiondramatically increasedlow income incidence


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Growth in After-tax Family IncomeBetween 1976 & 2006 by Quintile, Ontario

0%

5%

10%

15%

20%

25%

30%

35%

AllFamilies

Lowestquintile

Secondquintile

Thirdquintile

Fourthquintile

Highestquintile

Source: FRPO based on Statistics Canada Cansim Table 202-0706

Strong growth in standard of livingfor all quintiles. Highest quintilegrowth significantly higher


9/43

Median After-tax Income by FamilyType, Ontario, $2006

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

All family un its Elder ly married cou ples Elder ly females

Seniors have seen the greatestimprovement in incomes

Seniors Versus All Families


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$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000$75,000

$80,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2-parent family with children, 1 earner

2-parent families with children, 2 earners

A big divergence between 1earner and 2 earner families


One-Earner Vs. Two-Earner Families


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$18,000

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

$34,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Non-elderly males

Non-elderly females


Non-Elderly Males Vs. FemalesBoth Earners and Non-earners

Single male incomesdecline by one-thirdduring recession


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$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

$34,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Non-elderly males, earner

Non-elderly females, earner


Non-Elderly Males Vs. FemalesEarners Only

Male earners heavilyimpacted by 1990s recession


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$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Non-elderly males, earner

Non-elderly females, earner Non-elderly females, non-earner Non-elderly males, non-earner


Non-Elderly Males Vs. FemalesEarners Only


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$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Male lone-parent families

Female lone-parent families


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Census Income2000 to 2005


16/43


17/43

Ontario Families Percent by IncomeRange, 2000 and 2005, $2005

0%

2%

4%

6%

8%

10%12%

14%


18/43

Change in % of Families in SelectIncome Ranges, 2000 & 2005, $2005

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Below$30,000

$30,000-$44,900

$45,000-$99,999

$100,000+

Source: Statistics Canada, Census data.

Positive movement on each side of

the median. Median alone does

not tell this story.


19/43

Change in # of Families in SelectIncome Ranges, 2000 to 2005

(adjusted to 2005 population based on percentages), $2005

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

40,00050,000

60,000

Below$30,000

$30,000-$44,900

$45,000-$99,999

$100,000+

Source: Statistics Canada, Census data.


20/43

Renters by Income Groups, Ontario

1995 and 2000, $2001

0

50,000

100,000

150,000200,000

250,000

300,000

350,000

400,000

Under

$10K

$10-19K $20,29K $30,39K $40-49K $50-59K $60K +

1995 2000

The 2000-2005 trend is a continuation of the 1995-2000 trend.


21/43

Census Historic Rents


22/43

Average Gross Rent

Ontario, Constant $2006

600

650

700

750

800

850

900

1981 1986 1991 1996 2001 2006

Source: Statistics Canada Census, various years


23/43

Average Owners Major Payments

Ontario, Constant $2006

600

700

800

900

1000

1100

1200

1981 1986 1991 1996 2001 2006



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25/43


26/43

Census Historic Incomes


27/43

Average Renter HouseholdIncome, Ontario, Constant $2006

$30,000

$32,000

$34,000

$36,000

$38,000

$40,000

$42,000

$44,000$46,000

$48,000

1980 1985 1990 1995 2000 2005



28/43

Average Owner Household

Income, Ontario, Constant $2006

$50,000$55,000

$60,000

$65,000

$70,000$75,000

$80,000

$85,000

$90,000

$95,000

$100,000

1980 1985 1990 1995 2000 2005



29/43

Census HistoricAffordability Averages


30/43

Average Rent Percent of

Average Household Income

0

2

4

6

8

10

12

14

16

1981 1986 1991 1996 2001 2006

Source: Census, various years.


31/43

Average Rent Percent of Average

Per Capita Income, Ontario

20

25

30

35

40

45

1981 1986 1991 1996 2001 2006

Source: FRPO based on Census and Statistics Canada data.


32/43

Average Rent Percent of Income

by Income Type, Ontario

0

10

20

30

40

50

1981 1986 1991 1996 2001 2006

Per Capita IncomeHousehold Income


Implication: disposable

income per capita, after

housing costs, is increasing


33/43

Average Gross Rent Vs. Lowest

Quintile Family Income, Ontario

40

45

50

55

60

65

70

75

80

Percent

1981 1986 1991 1996 2001 2006


Improving

livingstandards


34/43

Average Rent Vs. Lowest Quintile

Per Capita Income, Ontario

120

130

140

150

160

170

180

190200

210

Percent

1981 1986 1991 1996 2001 2006



35/43

Average Rent Percent of Average

Renter Household Income, Ontario

10%

15%

20%

25%

30%

1981 1986 1991 1996 2001 2006


This is not how housing affordability should be

gauged for society Pool of renters is shrinking.


36/43

Census Number of HouseholdsPaying 30-50% Income on Housing


37/43

Households Paying More Than 50% of

Income on Housing Costs, Ontario

0

100,000

200,000

300,000

400,000

500,000

600,000

1981 1986 1991 1996 2001 2006



38/43

Renter Households Paying More Than

50% of Income in Rent, Ontario

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1981 1986 1991 1996 2001 2006



39/43

Renter Households Paying More Than

30% of Income in Rent, Ontario

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1981 1986 1991 1996 2001 2006



40/43

Owner Households Paying More Than

50% of Income on Housing Costs, Ontario

0

50,000

100,000

150,000

200,000

250,000

300,000

1981 1986 1991 1996 2001 2006



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42/43

Census Age of Rental Stock


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ontario inc and hsg afford trends may 2008

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