HOMELESSNESS IN CANADA BIGGER PROBLEM FOR SINGLES AND POOR SINGLE PARENT FAMILIES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

(The author of this blog applauds Ron Kneebone and Margarita Wilkins for their study on homelessness for single employables in this country.  Words in italics are the words of the author of this blog.  Caveat: While we don’t agree with everything that comes out of Schools of Public Policy, we agree with the premise of this study, that is, single employables (singles and single parents) are having a very difficult time surviving on low wages and lack of affordable housing.)

The following excerpts are taken from “Shrinking the need for homeless shelter spaces” (policthat is, yschool.ucalgary.ca) by Ron Kneebone and Margarita Wilkins from the University of Calgary School of Public Policy and the opinion letter “The secrets of reducing homelessness” (calgaryherald) by Ron  Kneebone also refers to this study.

‘In 2009, an estimated 147,000 people, or about one in 230 Canadians, stayed in an emergency homeless shelter.

….The chronically homeless, whether for long periods or with repeated episodes, are a minority (one-third due to personal challenges (sic such as alcoholism and drug addiction) not immediately associated with the economic conditions of the city in which they live) of those experiencing homelessness.  An implication is that the majority of emergency shelter beds are provided to meet the needs of people who experience homelessness for short and infrequent periods and do so as a result of poverty.  The remaining two-thirds of shelter beds are filled by people who make relatively infrequent use of shelters and are more likely forced into shelters by economic conditions….

A role is also possibly played by discrimination in the housing market; discrimination that leaves some people with no option but to use a shelter and for social agencies to provide for them.

But our main focus was on housing affordability. We found that cities where the income support provided by the provincial social assistance system to a single person was small relative to rent — that is, in cities where housing was expensive for a very poor person — social agencies found it necessary to provide more emergency shelter beds.

The policy implications of this result are clear; increase the affordability of housing to very poor people and the need for emergency shelter spaces will fall. There are a number of ways of accomplishing this goal and it would likely be wise to act on all of these policy fronts…

We show that providing a relatively small income increase — just $1,500 per year — to single people on social assistance would enable the closing of about 20 per cent of emergency shelter beds.

Attacking housing affordability from the other side, by reducing housing costs, would also be effective. There are many options available here, from increased rent supplements to tax and regulatory changes that enable housing to be built that is affordable to those with low incomes….

  Policy-makers need not focus too narrowly on just a few policy responses, and need not rely solely on publicly funded construction of low-income housing.  Many, more subtle, adjustments to policy levers can have equally important influences on the housing market and hence homelessness….

…We continue to be perplexed why governments fail to index for inflation the income support provided to those in poverty….

…two broad sets of policy responses are possible, those aimed at treating causes of homelessness closely tied to individual circumstances and those aimed at treating causes of homelessness related to housing market conditions….

…The theoretical connection between homelessness and housing market conditions is straightforward:  even if one can pay for the minimum quality of housing available in a city, if there is little income left over for other of life’s necessities (food, clothing, etc.) one might rationally choose to forgo conventional housing and try one’s luck doubling up with relatives or friends, or temporarily using a city’s shelter system.  Thus, to the extent that minimum-quality housing is priced such that it would consume an extremely high proportion of one’s income, a person may become homeless….

….Rapid population growth and strong labour markets (sic such as occurred in cities like Vancouver, Toronto, and Calgary) influence prices by increasing the demand for housing. For those unable to benefit from strong economic growth, housing costs can quickly rise out of reach. Changes in income distribution may also play a role as the types of housing available in a city with income skewed toward the high end will differ from housing options available in a city with income skewed in the other direction.

Public policy choices can also be expected to influence the affordability of housing.  Interest rates and tax policies influence the housing market by affecting new construction costs, the costs of rehabilitating old buildings, and the costs of maintenance and building abandonment….

…Report by TD Economics. (Affordable Housing in Canada):  Using data from 2002, the report provides information that allows one to identify what percentage of the total cost of building a modest rental apartment is due to local infrastructure charges, application fees and building permits. These local charges ranged from a low of 1.7 per cent of total cost in Montreal to a high of 11 per cent in Ottawa. In a study using U.S. data, Stephen Malpezzi and Richard Green show that moving from a relatively unregulated to a heavily regulated metropolitan area increases rents among the lowest-income renters by one-fifth and increases home values for the lowest quality single family homes by more than three-fifths. The largest price effects of such regulations occur at the bottom of the distribution in units that are disproportionately occupied by low- and moderate-income households….

…The influence seems to be large; providing an additional 100 rent-assisted units has been shown to reduce by four the number of people experiencing homelessness (from How to House the Homeless)….’

When conducting the study, Kneebone and Wilkins used the following variables:

‘….Our dependent variable is the number of emergency shelter beds (Beds) provided in each city as a fraction of that city’s total adult population (Pop). Our key policy-sensitive determinant of that dependent variable is a measure of housing affordability, the ratio of a relevant income measure to a relevant measure of housing cost….

…Our measure of income is the amount of social assistance income provided to a person defined in provincial social assistance programs as a single employable (Income). A person classified in this way is single and without an impediment to employment that is recognized by the provincial social assistance program. Our measure of housing cost is based on the average amount paid on a one-bedroom rental unit (Rent).

We use as our measure of income the aforementioned amount of social assistance paid to a single employable for three reasons.   First, the vast majority of homeless shelter users are single. Second, people most likely to experience homelessness are mainly, as emphasized by Burt et al.,  the “poorest of the poor.” At an average annual income of about $7,500 (our data are for 2011 and vary by province), social assistance is the income of last resort for a single person deemed healthy enough to find employment. Finally, our focus is on identifying public policies that might influence the perceived need to provide emergency shelter beds.  One possibly important policy lever is government-provided income support to the income-demographic group most likely to use emergency shelters….

…The estimated coefficient on our measure of housing affordability indicates that a one per cent increase in the ratio of social assistance income to rent is associated with a 1.15 per cent reduction in the ratio of shelter beds to adult population. An implication of this sensitivity is that increasing the annual amount of social assistance provided to a person identified as a single employable by $1,500 per year would, by increasing the ratio of income to rent, enable social agencies to close a total of 2,599 shelter beds across Canada, a reduction of 18 per cent….

An alternative policy – or perhaps one to be introduced in conjunction with the increase in income – would be to increase the size of the rent subsidy available to those with low Income.  Our results suggest that increasing rent subsidies by $100 per month would be sufficient to enable providers to close 2,975 shelter beds across Canada. Our two policy options therefore have similar effects.

DISCUSSION Our calculations suggest the potential efficacy of an approach that favours what might be broadly described as a market solution to shrinking the need for emergency shelter beds.  This is particularly so with respect to our suggestion to provide the very poor with a higher level of income support and allow them to purchase goods and services through the market.….What is important is that the income support enables the very poor the opportunity to be able to afford housing not otherwise available to them….Providing rent subsidies is another approach we have shown can be effective at shrinking the need for emergency shelter beds. That approach is somewhat more prescriptive – the very poor must use the support on housing – but is similar in the sense that rent subsidy effectively increases the income available to the very poor to purchase more of life’s necessities. If the declining stock of affordable housing is in part the result of rising income inequality and poverty, then providing the poor with income support in these ways is a direct way of addressing the cause of the affordable housing crisis.

This non-exhaustive list of possible influences on the low-end housing market emanating from public policy choices suggests that all levels of government have a role to play in addressing homelessness and that they have a wide variety of policy levers to adjust.  Policy-makers need not, therefore, focus too narrowly on just a few policy responses.  Policy responses that have more subtle and less direct influences on the housing market than, say, the publicly funded construction of low-income housing, may have far more pervasive influences on the housing market and hence homelessness.   What’s more, more subtle policy responses may prove to be less costly to the public treasury and may avoid the potential for direct government provision or subsidization of housing units to result in reductions in the unsubsidized housing stock….It is useful to emphasize that our suggestion to increase social assistance income is a one time expenditure made necessary by the failure of policy-makers to properly adjust those payments to inflation. For reasons that are unclear to us, provincial governments do not index social assistance payments to the cost of living in the same way they index income tax brackets relevant to better-off Canadians or pensions provided to seniors adjusted by the federal government. Instead, provincial governments periodically increase social assistance payments in a haphazard effort to enable the very poor to keep up with rising costs….Indexing social assistance payments to the costs of the key drivers of the welfare of the very poor – housing and food costs – would go a long way toward enabling them to stay housed and escape the necessity of having to sometimes rely on homeless shelters.

CONCLUSION Homelessness is an exceptionally complex social problem. It has root causes in the personal traits of those most likely at risk of a spell of homelessness and the structural factors that influence the housing options available to the poorest of the poor. The unintended consequences of public policies also play a role. Our focus in this paper has been on those persons who experience homelessness as a result of what we have described as structural factors, the state of housing and labour markets that destine the very poor to be unable to afford even minimum-quality housing.

Contrary to popular belief, most people who become homeless will remain so for a few days or weeks but not become homeless again. The chronically homeless (sic due to drug abuse, alcoholism, etc.) whether for long periods or with repeated episodes, are a minority of those experiencing homelessness. An implication is that the majority of emergency shelter beds are provided to meet the needs of people who experience homelessness for short and infrequent periods and do so as a result of poverty. Our results, and similar results from research using U.S. data, suggest that relatively modest public policies can make significant differences in the perceived need to provide shelter beds. Directing support toward those for whom housing costs consume a very large share of their low incomes can have a significant impact on the number of people experiencing homelessness and thus on the need for emergency shelter beds.

….Data on the total adult population aged 15 years and over, the total aboriginal population aged 15 years and over, and the number of recent international migrants to a city are from the 2011 National Household Survey (NHS) available on the Statistics Canada website at http://www12.statcan.gc.ca/census-recensement/index-eng.cfm .

A recent international migrant is a person who lived outside of Canada one year prior to the census reference data of May 10, 2011.’ (end of Kneebone/Wilkins info.)

From “Encyclopedia of Canadian Social Work” (books.google.ca)

‘…..low rates in Newfoundland reflect severe cuts in 1996 to benefit levels for single employable persons and the low rates in Alberta reflect the steady decline in benefit levels under the conservative provincial government…. the current reality of less generous social assistance provision in Canada is reflective of the global ascendance of neo-conservative philosophies and the accompanying pressures of neo-liberal economic policies. Ideologies emphasizing individual blames, rather than collective responsibility, foster more restrictive social programs.  Restrictions to Canadian social assistance programs began in 1990 with a federal cap to limit expenditures under the Canada Assistance Plan, closely followed by provincial/territorial cutbacks through tighter eligibility criteria, lower benefit levels, and more stringent conditions.’

An example of the deterioration of social policies in Alberta was the introduction of 2001 Alberta flat tax rate of 10%.  While most of upper income level persons benefited from the 10% flat rate, the tax rate for bottom level income earners went from 8% to 10%.

It appears that the most common recipients in need of social welfare are single employable and single parents, yet the most emphasis today by governments and politicians appears to be on children of all family types when majority of focus should be placed on single parents.

Too often, current social assistance programs fail to distinguish a single employable family unit  from a married or coupled persons without children family unit.  There is no recognition that it costs a single employable family unit seventy per cent to live of what it costs married or coupled persons without children family unit.  When reviewing the literature on social programs many only look at the family units of singles, single parents with children, singles with a disability and married or coupled parents with children in their analysis.  To achieve financial fairness for singles, single person family units finances in relation to married/coupled persons without children family units also needs to be analyzed.

The single employable adult population that is often financially compromised includes aboriginals and recent immigrants.  Immigrant singles will often be more financially compromised than married or coupled immigrants with or without children family units.  An example is immigrant singles without family supports in this country working multiple jobs in order to send money home to their families (i.e. to buy necessary medications).  Some of these singles as result of over work unintentionally will suffer illnesses such as strokes from undiagnosed high blood pressure or undiagnosed diabetes or even death because they have not sought medical attention throughout their intensive work schedules involving multiple jobs.

How many different ways can it be said that Canadian singles are feeling financial despair in this country, one of the major factors being housing?

Yet another example is the financial profile of Jessica, an age 54 Ontarian single with three grown children  in ‘Home Ownership Possible But Tight’ (buying-a-home).  She would like to buy a home in the $150,000 range which is  pretty much impossible except in small town Ontario.   This is the same profile as several other presented in this blog (real-financial-lives-of-singles) Jessica has a take income of $3,315 per month or almost $40,000 per year.  Her rental income is $877 per month.  She has a company defined contribution plan.  The financial planner estimates that on retirement she will have approximately $2,300 monthly income for expenses.  Without home ownership, how does a senior single live on $2,300 per month with $900 per month rent?  If singles are unable to support themselves with a $60,000 – $70,000 pre-tax income (more than $15 per hour minimum wage), how are those at lower levels supposed to afford housing, (rental or home ownership)?

Single employables (singles and single parents) deserve the same financial dignity and respect as married/coupled persons with and without children.  Singles and single parents (white, aboriginal and of immigrant status) deserve to be included in financial formulas at the same level as married or coupled persons with and without children.

This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.