Playing to the crowd
Large households today are not housing demand tomorrow.
On January 23, Professor Mike Moffatt asked his Twitter followers this question:
“Suppose a natural disaster destroyed half of the homes in a community. miraculously, nobody was hurt, and the survivors went to live with other members of the town. Would that community need to build more or fewer homes in the future?”
Most people would argue that the community would need more because the survivors are only crowding into their friends’ houses until new dwelling options become available. But Dr. Moffatt pointed out that some schools of urban planning pay little attention to cramped living arrangements like the ones in his scenario. The reason this is overlooked is because a) the extra people living under the same roof are not considered to be an additional household and b) the size of that household is still considered to be a baseline for predicting future housing need. When cramped housing conditions push the average household size up, relying on this indicator waters down just how much housing a community really needs.
With this type of scenario in mind, planners are moving away from relying on average household sizes when projecting housing demand. This is because the figure tends to mask the true need of residents who may be living in suppressed households, or groups of individuals that would otherwise form their own households and families if housing market conditions were more favourable. Household suppression can be seen in many ways. Some examples include:
- Newlyweds renting with roommates because they can’t buy a starter home.
- Non-permanent residents and recent immigrants living in rooming houses as they study or try to settle in Canada.
- A grandmother moving in with her adult daughter’s family so both of them can cut down on housing costs.
- A couple forgoing having kids because they are unable to find a place with enough bedrooms to accommodate new young household members.
- A long-time renter who has been priced out due to chronic undersupply, and who now finds himself living in an encampment.
If you’ve never been in one of these living situations yourself, you probably know or have at least heard of someone who has. And if you haven’t, you may be the author of this recent piece in the Conversation.
A day before Dr. Moffatt posted his thread, York Professor Mark Winfield penned an opinion piece asking whether “Ontario’s housing ‘plan’ [has] been built on a foundation of evidentiary sand.” Professor Winfield’s overall argument is actually pretty reasonable: that the province’s housing legislation will undermine local governance and “accelerate urban sprawl and the accompanying losses of prime agricultural and natural heritage lands.” But Professor Winfield pins much of the responsibility for these policies on the province’s housing affordability task force, which last February called for 1.5 million homes to be built over a ten year period.
It’s easy to refute the claim that the task force is to blame for the direction taken by the province. The task force’s final report explicitly called for the protection of greenbelts and farmland, and emphasized the need for density in urban areas (see it for yourself on page 10). The bigger issue with Professor Winfield’s piece is his belief that Ontario is currently building more housing than needed to account for the province’s growing population.
His logic seems straightforward: the average household size in Ontario is 2.58 and the province is growing by around 155,000 people a year. If the current average is applied to recent population growth trends, then Ontario’s housing demand appears closer to 60,000 homes a year (less than half the annual amount recommended by the task force).
As stated previously, average household sizes are a product of existing market conditions — they are NOT an indicator of true housing demand. In addition to masking the suppressed formation of households, using average household sizes also discounts the experiences of individuals living in crowded households — living conditions in which the number of residents is unsuitable for the number of bedrooms.
You can learn more about how housing suitability is measured here. But in general, individuals are disproportionately more likely to be living in a crowded household if they are a renter, a newcomer, a member of a visible minority community, or a young adult. Applying multiple demographic lenses can actually magnify the problem.
But why this matters to Professor Winfield’s piece is that households in unsuitable housing conditions are much larger than their counterparts in suitable housing. This is true across all main forms of housing tenure.
And in Ontario, around 12.4 million people live in 5.1 million households that are considered suitable (2.42 people per household), while 1.6 million people live in 370,000 unsuitable households (4.5 people per household). If the average size of suitably sheltered households was applied to the province’s unsuitably housed population, there would be a requirement for almost 400,000 homes before even factoring in population growth. To satisfy this demand, the province’s total housing stock would have to increase by around 7%.
Putting aside that these figures represent an evidence-based estimate of Ontario’s structural housing shortage (albeit a conservative amount), there is a much better way for planners to predict longer term need. Headship rates indicate the share of the adult population that is listed as a head of their household. If that rate is applied to the projected number of new residents in Ontario (or rather, using age cohort-specific headship rates to account for demographic shifts), it is possible to demonstrate that the province needs to build around 150,000 homes a year. This is in line with the task force’s recommendation, and was corroborated by Dr. Moffatt himself in August 2022.
These results are also in line with similar findings by the CMHC in June 2022. The Crown corporation’s housing supply report noted that in 2030, the province would be 1.85 million units short of what is needed to restore affordability levels last seen in 2004. Across the country, that gap is expected to be around 3.5 million. Overcoming barriers to supply is an essential step to making housing affordable again in Ontario and the rest of Canada alike.
If housing stock continues to grow at a slower pace than the number of households, Canada’s housing crisis will only worsen, and more households will become crowded, suppressed, or forced to move to more affordable jurisdictions. This could be detrimental to Canada’s political, demographic, and economic health. And although Professor Winfield’s approach would have you convinced that the trends contributing these issues are okay, a growing number of unsuitably housed Canadians would beg to differ.
