The Differential Effect of Income Criteria on Access to Rental Housing

Accommodation on the Basis of Age and Race: 1996 Census Results

Michael Ornstein
Institute for Social Research
& Department of Sociology
York University

July 2000

The purpose of this Report is to demonstrate with more recent data the continuing validity of the findings concerning the effects of age and race of my October 1994 Report, titled Income and Rent: Equality Seeking Groups and Access to Rental Accommodation Restricted by Income Criteria. In that Report, I showed that the distribution of income was strongly related to age and race (pp. 20-24 and Tables 2 and 3). Then, systematically comparing incomes to the cost of rental accommodation, I showed that the use of income criteria in rental accommodation resulted in large age- and race-related differences in the proportions of prospective tenants eligible to rent (pp. 42-45 and Tables 12 and 13). These patterns, it was found, were not confined to Toronto but extended throughout the province. Most of my 1994 Report employed data from the 1991 Canadian Census.

This report makes use of the most recent, 1996 Census, which includes a series of questions about income in the 1995 calendar year. The focus is on the income distributions, examining age differences in detail and four categories of visible minorities. As measured below, personal income includes income from all sources, while the "household income" of (heterosexual) couples living in two-person households is simply the sum of their incomes.

1. Constructive Discrimination on the Basis of Age.

As Table 1 shows, there is a very strong relationship between age and personal income: only 9.1 percent of Ontarians who are 18 or 19 have at least $12,000 annual income in 1995, compared to 23.8 percent for people 20 and 21 years of age, 43.2 percent for age 22-23; 59.3 percent for age 24-25; and 65.1 percent for age 26-27. Beyond age 30 and up to age 54, roughly 70 percent of individuals have at least $12,000 of income. Of course, the pattern of age differences in the ability to meet an income criterion is a function of the specific criterion. For example, placing the limit at $24,000, less than 2 percent of Ontarians who are 18 or 19 years of age and less than 4 percent who are 20 or 21 qualify, along with 12.3 percent of individuals who are 22 or 23, and 25.3 percent who are 24 or 25. In comparison, about 40 percent of the population between 35 and 54 have at least $24,000 in annual income. With a sample of more than 60,000, these differences are all statistically significant.

The figures in Table 1 give a straightforward indication of the impact of income criteria on individuals who wish to rent accommodation on their own, but how the distributions affect access to accommodation when the individual is a member of a couple, or any different or larger household unit depends on whether and under what conditions household members are able to combine their incomes to meet the criterion. So, for example, one might use the figures for the proportion of individuals with at least $12,000 in income to predict the impact of income criteria on couples who are permitted to combine their income, have approximately equal incomes, and require a total income of $24,000 to rent. What can be seen from Table 1, however, is that the age differences in income are pervasive and large enough that the application of any reasonable income criterion would seriously disadvantage young people. This disadvantage extends at least to individuals in their mid-twenties, with much more severe disadvantage for people in their early 20s or younger.

Table 2 provides information on the household income of couples without a child or any another person in the household. The income categories are set higher than for the tabulation for individuals above, in order to pertain to realistic incomes in the context of current rents in Ontario (the slight differences in the income category boundaries in Tables 1 and 2 arise because the data file gives household income only in $5,000 categories). The use of household incomes is relevant to the situation where a couple is allowed to combine its members' incomes to meet an income criterion. A complication of Table 2 is that separate figures must be given for women and men in couples, since age is an individual attribute (the data file pertains to individuals, so it is not possible to examine couples with particular combinations of the partners' ages).

Again, no matter what specific income cut-off is employed or whether the reference is to the age of the female or male partner, young people have lower household incomes and are less likely to meet income criteria anywhere in the range from $25,000 to $50,000 annual income. Thus only 29.9 percent of couples in which the female partner is 18 or 19 years of age had a household income of at least $25,000, compared to 45.3 percent when she is 20 or 21, 61.0 percent when she is 22 or 23, and 74.6 percent when she is 24 or 25. Significant disadvantage affects women in couples until about their mid-20s. Classifying couples on the basis of the male partner's age, there is an even greater age differential - the result of men being older than their partners in couples, on average. Table 2 shows that the proportion of couples with at least $25,000 income increases from 9.5 percent when the man is 18 or 19, 27.2 percent when he is 20 or 21, 55.6 percent when he is 22 or 23, 64.7 percent when he is 24 or 25, and 74.1 percent when he is 26 or 27. Again, disadvantage extends until men are in their mid 20s.

For couples as well as individuals, the exact income criterion changes the particular figures, but not the finding that young people are less likely to qualify for income-restricted rental accommodation. The effects of age are statistically significant and, more, important, the observed differentials in access are clearly large enough to place young people in meaningfully worse position in the housing market.

2. Constructive Discrimination on the Basis of Race

Tables 3 and 4 provide the comparable figures for race. Of course, there is strong evidence that socio-economic divisions in Canadian society involve differences between minority and non-minority populations. Due to Statistics Canada's practices, designed to protect the identity of respondents in Census data, the data file provides a measure of race with only five categories: Black, South Asian, Chinese, other visible minority, and not a visible minority. The "other visible minority" category includes Census respondents who checked the responses for Arab/West Asian, Filipino, South East Asian, Latin American, Japanese and Korean.

Over the entire distribution of individual income in Table 3 - in other words no matter where the division is made - members of visible minorities have lower incomes than the non-minority population. The differences are statistically significant. For example, 65.2 percent of non-minorities have an income of $12,000 or more, compared to 50.1 percent of all minority-group members; 52.9 percent of Blacks, 47.1 of South Asians, 47.2 percent of Chinese, and 50.5 percent of members of other visible minorities. Raising the limit to $24,000 or more, the figures are 36.4 percent for non-minorities and 24.0 percent for minority-group members; and 26.6 percent for Blacks, 22.8 percent for South Asians, 24.6 percent for Chinese and 29.4 percent for other visible groups. The differences are statistically significant and represent a meaningful differential in access to the housing market, but the impact of age is greater.

Quite similar results are found in Table 4, which deals with couples, again providing separate figures for couples divided according to the race of the female and male partners. The results are quite similar to those observed for individuals, above. With less than $25,000 of annual household income are 66.6 percent of couples whose female member is not from a visible minority, compared to 49.9 percent for all couples with a visible minority women, 57.8 percent for Black women, 42.4 percent for South Asians, 43.0 for Chinese an 42.8 percent for other minorities. Dividing couples according to the male partner's race, the figures are extremely similar, 69.0 percent of couples with non-minority men and 48.8 percent with minority men could meet a $25,000 income criterion. Again the differences are statistically significant.

There is considerable variation in the ages of the ethno-racial groups in Ontario and visible minority populations tend to have younger populations. So one might ask whether the effects of race on income, observed to be significant above, might merely reflect the underlying age variation. Statistical analysis using multiple regression shows that this is not the case: the income disadvantage of visible minorities, observed above, cannot be explained by their being younger on average.

Table 1. Individual Income in 1995 by Age, for Ontario Tenants.

Note: Excludes individuals who immigrated to Canada in 1995 or 1996 and individuals under the age of 18
Source: Statistics Canada 1996 Census; tabulation by Michael Ornstein

Table 2. Household Income in 1995 by Age, for Couples in 2-Person Households who are Tenants.

Annual Income (percentage distribution)
Sex	Age	under $24,999	$25,000- $29,999	$30,000- $39,999	$40,000- $49,999	$50,000 or more	Total	Number of Cases
Female	18-19	70.1	9.1	15.6	3.9	1.3	100.0	77
	20-21	54.7	10.7	22.6	3.8	8.2	100.0	159
	22-23	39.0	12.7	26.7	7.2	14.4	100.0	236
	24-25	25.4	9.4	24.3	11.0	29.8	100.0	362
	26-27	20.7	8.0	18.6	10.3	42.4	100.0	377
	28-29	17.9	4.7	16.0	9.7	51.7	100.0	319
	30-35	17.8	7.0	15.3	8.1	51.8	100.0	569
	35-54	30.0	5.9	16.0	6.2	42.0	100.0	1294
	55-64	42.8	11.0	18.1	6.2	21.9	100.0	645
	65 or more	45.6	14.9	19.9	5.6	14.0	100.0	1058
	Total	33.5	9.4	18.5	7.1	31.6	100.0	5096
Male	18-19	90.5	4.8	4.8	.0	.0	100.0	21
	20-21	72.8	7.4	13.6	4.9	1.2	100.0	81
	22-23	44.4	14.2	25.9	6.8	8.6	100.0	162
	24-25	35.3	9.5	22.3	10.6	22.3	100.0	283
	26-27	24.9	7.7	18.0	12.4	37.0	100.0	338
	28-29	22.9	7.4	15.8	9.5	44.3	100.0	336
	30-35	21.4	6.8	14.8	7.6	49.4	100.0	723
	35-54	25.6	7.4	16.1	7.8	43.1	100.0	1271
	55-64	37.4	8.6	19.9	4.6	29.6	100.0	690
	65 or more	46.0	15.6	19.4	4.4	14.6	100.0	1260
	Total	33.5	9.8	17.9	7.0	31.8	100.0	5165

Note: Excludes individuals who immigrated to Canada in 1995 or 1996 and individuals under the age of 18
Source: Statistics Canada 1996 Census; tabulation by Michael Ornstein

Table 3. Individual Income in 1995 by Visible Minority Status, for Ontario Tenants.

Note: Excludes individuals who immigrated to Canada in 1995 or 1996 and individuals under the age of 18
Source: Statistics Canada 1996 Census; tabulation by Michael Ornstein

Table 4. Household Income in 1995 by Visible Minority Status, for Couples in 2-Person Households who are Tenants.

Annual Income (percentage distribution)
Sex	Race	under $24,999	$25,000- $29,999	$30,000- $39,999	$40,000- $49,999	$50,000 or more	Total	Number of Cases
Female	Black	42.2	10.2	18.8	3.1	25.8	100.0	128
	South Asian	57.6	7.6	19.5	3.4	11.9	100.0	118
	Chinese	57.0	8.6	12.9	3.2	18.3	100.0	93
	other visible minority	47.8	11.2	16.1	4.9	20.1	100.0	224
	Total visible minority	50.1	9.8	16.9	3.9	19.4	100.0	563
	Not a visible minority	31.3	9.4	18.8	7.5	33.0	100.0	4532
	Total	33.4	9.4	18.6	7.1	31.5	100.0	5095
Male	Black	42.9	12.3	14.9	8.4	21.4	100.0	154
	South Asian	55.3	10.6	15.6	3.5	14.9	100.0	141
	Chinese	58.1	5.4	12.9	2.2	21.5	100.0	93
	Other visible minority	51.5	14.1	16.0	5.3	13.1	100.0	206
	Total visible minority	51.2	11.4	15.2	5.2	17.0	100.0	594
	Not a visible minority	31.0	9.5	18.5	7.3	33.7	100.0	4590
	Total	33.3	9.8	18.1	7.1	31.8	100.0	5184

Note: Excludes individuals who immigrated to Canada in 1995 or 1996 and individuals under the age of 18
Source: Statistics Canada 1996 Census; tabulation by Michael Ornstein