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A PROFILE OF POVERTY
IN MID-SIZED ALBERTA CITIES

by Kevin K. Lee and Cheryl Engler

January 2000

     

Section 6: Housing and poverty

Living in poverty affects expenditures in all household areas. Having little disposable income means that there is sometimes not enough money for necessities such as food, clothing and shelter. A household’s ability to afford shelter is one measure which reveals the clear disparities between the poor and non-poor populations.

Housing tenure and poverty

Being poor obviously affects an individual’s or family’s ability to purchase something as expensive as their own home. As such, it is not surprising that poor households were mostly renters. Although not shown in the figures, 26.8 per cent of all households were renters in the cities examined. However, renters accounted for 66.9 per cent of all poor households.

Figure 6.1 shows the poverty rates among renters and owners in each city. In every city, poverty rates were under 9 per cent among owners and over 23 per cent among renters. As well, renter poverty rates were at least four times higher than those for owners.

Shelter costs, housing affordability and poverty

Because poor families have less money to spend on essentials, one might assume that they save money by choosing less expensive housing. While poor families did spend less on shelter than did average families, their savings were minimal. Table 6.1 shows the average shelter costs for all families compared to poor families in three categories: owners with a mortgage, owners without a mortgage and renters.¹² In all the cities and in Alberta as a whole, poor owners with a mortgage had the highest monthly costs, followed by poor renters then poor owners without a mortgage. This pattern was the same for all families.

Monthly shelter costs of poor households differed by location. Poor owners’ payments for the aggregate of mid-sized cities were slightly lower than the provincial average. Gross rent for poor households was roughly the same at both geographic levels. Among cities, however, there was more variation in monthly costs.

Poor owners with a mortgage had the highest costs in Grande Prairie ($1,048) and the lowest in Medicine Hat ($737). Similarly, poor renters paid the most gross rent in Grande Prairie ($643) and the least in Medicine Hat ($523) – a difference of 22.9 per cent.

In each location, however, poor renters did not pay significantly less than the average renter. Poor families had lower than average housing costs that ran from 9.1 per cent lower in Grande Prairie to 2.2 per cent lower in Medicine Hat.

There are a number of possible reasons why poor families generally paid less than average for their shelter. The market rent for their housing may have been lower as the dwelling was of poorer quality or in a less desirable location. Alternately, these families may have been living in subsidized government housing, or receiving support from family or friends in the form of lost rental revenue. In whatever manner poor families were able to save money on their housing costs, they were not able to save much relative to the average. Given that their incomes were significantly lower than average but their shelter expenditures were not, poor renter families were much more likely to run into housing affordability problems than were average families.

Figure 6.2 shows the proportion of poor renter families that had a shelter affordability problem in the mid-sized cities. These households paid more than 30 per cent of their income on monthly shelter costs.¹³ Poor families in Red Deer were the most likely to experience an affordability problem (85.1 per cent), whereas families in Medicine Hat were the least likely (75.1 per cent). Despite the range in the proportion of poor families faced with this problem, there is little doubt that meeting shelter costs was a challenge for a significant percentage of poor families in all the mid-sized cities.

     

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