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Priced out : a profile of tenant households and their capacity to enter homeownership in metropolitan Canada

University of British Columbia

A booming housing market in the early years of the twenty-first century has favoured hundreds of thousands of home-owning households in metropolitan Canada, doing much in the process to jumpstart an unwinding economy. But rapidly rising house prices have also revived the twin spectres of declining affordability and a widening economic gap between tenants and homeowners. Given the serious long-term negative consequences of tenure-driven polarisation, it becomes increasingly necessary to extend current research beyond its prevailing emphasis on the risk of downward housing mobility, and engage in complementary analyses of the ability of households to achieve an upward transition of tenure. My thesis therefore examines the financial capacity of tenant households to enter homeownership in Montreal, Toronto and Vancouver (MTV), exploring how various socio-demographic characteristics affect their likelihood to qualify for a mortgage on a moderate or average priced dwelling. My reference point in time is 2001, a year marked by a Census of Population, a bottoming out of real house prices, falling interest rates, and the first stirrings of a housing boom that took off in full stride the following year. Through a descriptive statistical analysis of 2001 Census data, I draw a profile of the more than one million tenant households which the market had already priced out of homeownership in MTV prior to the price explosion of 2002. Geography and economic class seemed to be more important determinants of homeownership accessibility than other household characteristics, but certain demographic subgroups were nonetheless found to exhibit polarising tendencies along the tenure line, especially in Vancouver, the most expensive housing market. Moreover, cohort effects related to age, economic cycles, and immigrants’ time of arrival appeared to interact in defining ways with other variables, particularly those related with the life-cycle model and with immigrant status. Finally, my findings suggest that post-facto analyses of homeownership attainment, when conducted on their own, cannot be relied upon for the purposes of studying the financial accessibility of owner occupancy. Market factors relative to tenants ’ incomes (such as current mortgage rates, borrowing conditions, and local dwelling prices) need to be incorporated as well.

Text

2010-01-12

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http://hdl.handle.net/2429/18079

Geography

University of British Columbia

UBCV

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