Rethinking Shelter-Cost-to-Income Ratios in Housing Allowances

The Canadian definition of housing affordability depends on a ratio, which states that housing is affordable if it costs less than 30% of gross household income. This ratio is used to determine both eligibility and benefit levels in many Canadian affordable housing programs, including social housing and housing allowances. However, this ratio is not a methodologically sound or equitable way to define housing affordability. The result is that affordable housing programs underserve large families living in high-rent urban regions. This study searches for an alternative method to define eligibility and allocate benefits within provincial housing allowances. British Columbia’s Rental Assistance Program is used to illustrate the application of concepts and measures. Four eligibility and two benefit allocation methods are evaluated. It is recommended that provincial housing authorities adopt Housing Income Limits and the Transfer method to determine eligibility and allocate benefits respectively in housing allowances targeted at families.