With a 6% decline in jobs and a 5% contraction in economy, the recession in 2007 was one of the worst in the past 60 years. See the graphical display by the Bloomberg
The July 2011 housing starts at around 600,000 suggest that the US housing market is still in critical care. Down from the highs of 2.2 million annualised starts in 2066, the new housing market in the US continues to struggle at annualised 600,000 starts.
The foreclosed homes in the US have dented the housing market big time. With a lackluster economy that refuses to generate jobs for the millions who are now unemployed, the morale of the American consumer is low, thus keeping the housing markets down.
There were some celebrations by speculators since the starts were down by only 1.5% over the last month. Thus a less than expected decline in housing starts prove to be a good news!
The reality remains as unemployment rate remains consistently high over the years, the housing market continues to perform significantly lower than its historical highs.
“A bloated inventory of unsold homes and a weak economy are weighing down on the housing market, whose collapse was the main catalyst of the 2007-2009 recession. A large foreclosure pipeline also is not helping, leaving builders with little incentive to break ground on new projects.”
As violence spread through the immigrant dominated, low income, suburban neighbourhoods in UK, it has raised concerns about a similar violent breakdown in low-income neighbourhoods in Canada.
A recent report by Prof. David Hulchanski of the University of Toronto has pointed out the growing disparities between low- and high-income households in Toronto. In this post I argue that while income disparities have increased in central parts of Toronto, concerns about violent breakdown are largely misplaced for most Canadian cities, including Toronto.
In an earlier post I have argued that Professor’s Hulchanski’s results were influenced by the choice of spatial limits used to define ‘Toronto’. It is true that income disparities have worsened in Metropolitan Toronto, which is home to 2.5 million people and covers an area of 250 square miles. However, the increase in income disparities has resulted from outward migration of Toronto’s middle class to suburban municipalities that constitute the greater Toronto area (GTA).
For details see my earlier postings below:
A quick review of the 2006 Census data suggest that neighbourhoods in Toronto’s outer suburbs (municipalities that constitute the GTA along with with Metropolitan Toronto) are more egalitarian than the ones in Metropolitan Toronto. The outer suburbs are now the choice digs for Toronto’s middle class, which is lured by abundant supply of affordable housing and other amenities required by households with children. A large number of recent immigrants have also flocked to the suburban parts of the GTA in pursuit of affordable shelter.
One way of comparing Toronto to its neighbouring suburbs is to deploy the same income typology as was used by Professor Hulchanski to categorise neighbourhoods in Toronto. He categorised neighbourhoods (Census Tracts) as follows:
|Less than 40% average CMA income||134||13.36|
|Between 20% and 40% below average CMA income||276||27.52|
|Between 20% above and 20% below average CMA income||398||39.68|
|Between 20% and 40% above average CMA income||75||7.48|
|More than 40% above average CMA income||120||11.96|
CMA in the above table stands for the Census Metropolitan Area that comprises Toronto and most of its suburban municipalities. Toronto CMA has a population of about 5 million. The above table suggests that in 2006 over 40% neighbourhoods in Toronto region reported average household income below 20% of the regional average.
I produce below tabulations between immigrant population and income quintiles. To account for the impact of recent immigrant concentration on the socio-economics of a neighbourhood, I categorise neighbourhoods based on what percentage of immigrants within a neighbourhood arrived in Canada between 1995 and 2006. Furthermore, I produce two tabulations, one for Metropolitan Toronto, and one for all other municipalities that are part of the Toronto CMA.
The tabulation for Metropolitan Toronto is presented below. Similar to what Professor Hulchanski found, I report that 46% neighbourhoods falling under the highest recent immigrant concentration (category 4) belonged to lowest income category. In comparison, only 4% of the neighbourhoods that were categorised as having the lowest concentration of recent immigrants belonged to the lowest income category. Furthermore, the highest income neighbourhoods were predominantly the ones with lowest concentration of recent immigrants.
However, the situation is quite reversed when the same tabulation is generated for outer suburbs in the Toronto region. Consider the following table where 48% neighbourhoods with the highest recent immigrant concentration corresponded to middle or higher than middle income categories. Only 8% of the highest recent immigrant concentration neighbourhoods fell in the lowest income category in suburban Toronto.
Furthermore, across all concentrations of recent immigrants, i.e., from lowest to the highest, the most frequent income category was the mid income range, i.e., between 20% above and 20% below average CMA income.
In summary, a quick review of Census data from 2006 reveals that Toronto’s outer suburbs are home to the middle class where recent immigrants are enjoying the benefits of affordable housing and other amenities that are not available in Metropolitan Toronto. In addition, Metropolitan Toronto continues to experience higher income disparities that adversely affects recent immigrants at an increasing rate.