The projections of population from 2001 to 2031 were used to estimate the total number of households and household growth for 2011, 2021, and 2031. Estimates were developed for each of the 16 Census Divisions in the Greater Golden Horseshoe study area. In this section, results are summarized for three aggregated areas (the Inner Ring, the Outer Ring, and the GGH). More details are provided in Appendix A.3.
Method
The method in this section is quite simple:
- The 2001 census provides data on the number of households by the age of the primary household maintainer (or household head). This data is used to estimate household headship rates by age group as of 2001 for each of the Census Divisions.
- The age-specific headship rates are applied to the population projections (for the same age groups), to estimate the number of households by age group for 2001, 2011, 2021, and 2031. Then the age groups are combined to estimate the total number of households as of 2001, 2011, 2021, and 2031.*
- The amounts of growth in households are calculated for each period. These indicate the requirements for new housing.
- Finally, these requirements are allocated to dwelling types, using the shares seen in recent CMHC housing starts data (for 1999 to 2004).
This method assumes that age-specific headship rates will not change over the 30-year period. However, headship rates do vary over time. As part of this research project, attempts were made to interpret headship rates as a function of economic variables. While the research found some relationships, the results were weak and could not be used in projections. Therefore, constant headship rates were used. The research on headship rates is described in Appendixes A.5 and A.6.
Projection of Household Formation
Household formation varies by age group, as seen in Table 13, which shows the headship rates by age groups for the Inner Ring, the Outer Ring, and the GGH. Headship rates are lowest for young adults, and rise in each of the subsequent age groups. The data also indicates that headship rates are lower in the Inner Ring than in the Outer Ring, which is not surprising, given that housing costs are higher in the Inner Ring.
Table 13: Household Headship Rates in the Greater Golden Horseshoe, 2001
Age Group | Inner Ring (%) | Outer Ring (%) | GGH (%) |
15-24 | 6.4 | 8.7 | 7.0 |
25-34 | 38.4 | 44.4 | 39.7 |
35-44 | 51.9 | 52.9 | 52.1 |
45-54 | 55.3 | 55.4 | 55.3 |
55-64 | 55.8 | 56.4 | 56.0 |
65-74 | 57.8 | 61.3 | 58.8 |
75 + | 59.0 | 62.6 | 60.1 |
Source: Statistics Canada, 2001 Census; calculations by Will Dunning Inc.
For each of the 16 Census Divisions, the headship rates are applied to the projections of population, to derive the total number of households at 10-year intervals. Table 14 shows the summarized results for the GGH. The projections suggest that the number of households will increase by almost one-half (47.6 percent), to about 4.15 million in 2031, compared to 2.81 million in 2001.
Table 14: Households by Age Group in the Greater Golden Horseshoe, 2001 to 2031
Age Group | 2001 | 2011 | 2021 | 2031 |
15-24 | 73,474 | 78,888 | 74,177 | 72,229 |
25-34 | 466,534 | 489,383 | 526,863 | 500,912 |
35-44 | 720,249 | 708,519 | 730,835 | 771,624 |
45-54 | 605,545 | 793,476 | 774,422 | 791,067 |
55-64 | 390,681 | 601,680 | 779,329 | 757,954 |
65-74 | 308,658 | 373,680 | 563,411 | 722,421 |
75 + | 244,665 | 311,705 | 375,020 | 531,516 |
Total | 2,809,807 | 3,357,330 | 3,824,056 | 4,147,722 |
Source: Will Dunning Inc.
Table 15 summarizes the results for the Inner Ring, the Outer Ring, and the GGH as a whole. The number of households is projected to increase by 1.34 million between 2001 and 2031, an average of about 44,600 households per year. Of this growth, 62.5 percent would be in the Inner Ring and 37.5 percent in the Outer Ring. By 2001, the Outer Ring would have 30.5 percent of the GGH households, up from 27.2 percent in 2001.
Table 15: Projections of Households and Household Growth in the Greater Golden Horseshoe, 2001 to 2031
| Inner Ring | Outer Ring | GGH |
Number of Households | |||
2001 | 2,046,711 | 763,097 | 2,809,807 |
2011 | 2,406,214 | 951,116 | 3,357,330 |
2021 | 2,695,414 | 1,128,642 | 3,824,056 |
2031 | 2,882,649 | 1,265,073 | 4,147,722 |
Total Household Formation | |||
2001-2011 | 359,503 | 188,019 | 547,522 |
2011-2021 | 289,200 | 177,526 | 466,726 |
2021-2031 | 187,236 | 136,430 | 323,666 |
Total | 835,939 | 501,976 | 1,337,915 |
Annual Household Formation | |||
2001-2011 | 35,950 | 18,802 | 54,752 |
2011-2021 | 28,920 | 17,753 | 46,673 |
2021-2031 | 18,724 | 13,643 | 32,367 |
Total | 27,865 | 16,733 | 44,597 |
Number of Adults per Household | |||
2001 | 2.29 | 2.15 | 2.25 |
2011 | 2.27 | 2.11 | 2.22 |
2021 | 2.23 | 2.03 | 2.17 |
2031 | 2.21 | 1.99 | 2.14 |
Total Population per Household | |||
2001 | 2.85 | 2.68 | 2.80 |
2011 | 2.74 | 2.50 | 2.67 |
2021 | 2.66 | 2.37 | 2.58 |
2031 | 2.62 | 2.31 | 2.53 |
Source: Will Dunning Inc.
The rate of growth is expected to slow during the 30-year period:
- From 2001 to 2011, household formation would average about 36,000 per year in the Inner Ring and 18,800 per year in the Outer Ring for a GGH total of 54,800 per year.
- From 2011 to 2021, household formation would fall to less than 29,000 per year in the Inner Ring. The reduction in the Outer Ring would be less sharp, falling to about 17,800 per year. For the GGH as a whole, household formation would fall by about 15 percent, to 46,700 per year.
- From 2021 to 2031 there would be a sharper drop in household formation, to about 18,700 per year in the Inner Ring, 13,600 per year in the Outer Ring, and a total of 32,400 per year for the GGH.
Average household size is expected to fall during the 30-year period. By 2031, there would be an average of 2.53 people per household, about 10 percent lower than the 2001 average of 2.80 people per household.
The distribution of activity by area does not take into account the impacts of land use policies or land supply constraints. Thus the geographic distribution among the Census Divisions is imprecise. The totals for the Inner Ring, Outer Ring, and GGH are the most important result of these projections.
Projection of Housing Requirements by Dwelling Type
Housing requirements by dwelling types were based on the preceding projection of household growth. The analysis has shown that dwelling type mix varies in relation to housing cost. As the median real cost of single detached dwellings increases in the GTA, the share of apartments increases as homebuyers seek lower-cost options.
If we assume that housing costs remain the same over the 30-year projection period as in the recent past, we would expect the following projected demand for about 1.34 million units:
- About 762,000 single detached units would be required (57.0 percent of the total).
- About 114,000 units would be semi-detached (8.5 percent).
- About 194,000 units would be townhouses (14.5 percent).
- About 267,000 units would be apartments (20.0 percent).
In this analysis, housing demand was apportioned to the shares recorded in the CMHC housing starts data for the 1999-2004 period. These shares were applied separately for the Inner Ring and for the Outer Ring and then added to estimate total housing demand by dwelling type for the GGH. The resulting shares for each area by decade are shown in Table 16.
The actual distribution will depend on many factors, including housing costs and interest rates. Given that during the past half-decade, interest rates have been at the lowest level in a generation, over the 30-year projection period, housing affordability is more likely to deteriorate than to improve. In response, households will choose less expensive options, resulting in a reduced share for single detached houses and increased shares for row houses and apartments. Consequently, this projection represents a likely maximum scenario for single-detached production.
Table 16: Housing Demand in the GGH, by Type of Dwelling, 2001 to 2031
| Inner Ring | Outer Ring | GGH |
Shares by Dwelling Type, 2001 (CMHC Housing Starts 1999-2004) | |||
ingle detached | 46.5% | 74.4% | 53.7% |
emi-detached | 11.3% | 3.9% | 9.2% |
ow | 14.8% | 14.0% | 15.1% |
partment | 27.4% | 7.7% | 22.1% |
2001-2011 Allocation by Dwelling Type (Annual) | |||
ingle detached | 16,728 | 13,990 | 30,718 |
emi-detached | 4,075 | 732 | 4,807 |
ow | 5,305 | 2,640 | 7,945 |
partment | 9,842 | 1,440 | 11,282 |
otal | 35,950 | 18,802 | 54,752 |
2011-2021 Allocation by Dwelling Type (Annual) | |||
ingle detached | 13,457 | 13,209 | 26,666 |
emi-detached | 3,278 | 691 | 3,969 |
ow | 4,268 | 2,493 | 6,760 |
partment | 7,918 | 1,360 | 9,277 |
otal | 28,920 | 17,753 | 46,673 |
2021-2031 Allocation by Dwelling Type (Annual) | |||
ingle detached | 8,712 | 10,151 | 18,864 |
emi-detached | 2,122 | 531 | 2,653 |
ow | 2,763 | 1,916 | 4,679 |
partment | 5,126 | 1,045 | 6,171 |
otal | 18,724 | 13,643 | 32,367 |
Total Housing Demand over 2001-2031 | |||
ingle detached | 388,970 | 373,502 | 762,473 |
emi-detached | 94,754 | 19,541 | 114,295 |
ow | 123,357 | 70,485 | 193,842 |
partment | 228,857 | 38,448 | 267,305 |
otal | 835,939 | 501,976 | 1,337,915 |
Shares of Total Housing Demand over 2001-2031 | |||
ingle detached | 46.5% | 74.4% | 57.0% |
emi-detached | 11.3% | 3.9% | 8.5% |
ow | 14.8% | 14.0% | 14.5% |
partment | 27.4% | 7.7% | 20.0% |
otal | 100.0% | 100.0% | 100.0% |
Source: Will Dunning Inc.
Conclusions
Earlier projections indicated that population growth would decline between 2001 and 2031 period, partly because of reduced net migration, but primarily because of increased mortality. This section has extended that analysis, to estimate the requirement for new housing.
Not surprisingly, slower population growth results in a reduced need for new housing. From 2001 to 2011, the average annual requirement is projected to be very high, at an average of about 54,800 units per year. From 2011 to 2021, the annual requirement (46,700 units) would be about 15 percent lower. From 2021 to 2031, the annual requirement (32,400 units) would be 41 percent lower than the 2001-2011 requirement.
If recent trends continue, it is projected that 57 percent of the new housing across the GGH will be in the form of single detached units, 8.5 percent semi-detached, 14.5 percent row houses, and 20 percent apartments. If housing costs and interest rates increase, however, the share of new single detached units would decrease in favour of attached or multi-residential forms. Other factors (demographic change, the evolution of tastes, and the creation of new housing types) will affect the mix of housing. The combined impact of these factors cannot be predicted.