Filtering, City Change and the Supply of Low-priced Housing in Canada

Abstract

This paper examines the filtering process and shows the extent of the forces that are gentrifying Canadian cities. The 1996 census micro data are used to develop rent- and price-age profiles of dwellings in each of Canada's census metropolitan areas. The analysis shows that the filtering process is both too slow and, at best, can have too small an effect to be a part of a government strategy for reducing the housing burdens of low-income people. Filtering is not helping lower-income households. The most important finding shows the reversal in the direction of filtering in all Canadian metropolitan areas since 1981. The rents and prices of older dwellings have been rising faster than those of the newer units. The steep 1971 rent- and price-age profiles for Montreal and Toronto are explained to show that government policies would not be able to induce the amount of filtering needed to have a noticeable effect on the welfare of lower-income households. The pressures that eventually find expression in gentrified neighbourhoods are affecting much of the older housing stock. Cities in other countries that are experiencing gentrification may be subject to the same pressures.