Ontario Municipal Board, Official Plan update, appeals hearing
Expert witness statement
Doug Norris, Ph.D.
3 December 2010
Name, address and qualifications
Doug Norris, Ph.D.
Senior Vice President and Chief Demographer
Environics Analytics
55 York Street, 10th Floor
Toronto, ON, M5H 1R7
613-592-3402
Email: dougnorris@rogers.com
Doug Norris is currently Senior Vice President and Chief Demographer of Environics Analytics, where he works with companies, governments, and non-profit sector organizations in using census and other demographic information in a variety of planning and marketing applications. Before joining Environics Analytics, Doug had 30 years of experience at Statistics Canada, most recently as Director General of Social and Demographic Statistics. A nationally known speaker and commentator on Canadian social and demographic trends, Dr. Norris is a frequent presenter at seminars and conferences across Canada, helping business and mainstream audiences understand the major forces affecting Canada’s diverse population groups. He has authored many demographic articles and given numerous presentations to clients and professional organizations on the impact demographic change on various aspects of Canadian society. In 2006, Statistics Canada honoured Doug with a lifetime achievement Award for Career Excellence in recognition of his exceptional contribution to the agency. The Canadian Population Society also awarded Doug a Lifetime Achievement Award for “Outstanding Contributions to Canadian Demography”. He is currently adjunct professor at Carleton University and the University of Alberta. He holds BSc and MSc degrees from McGill University and a PhD from Johns Hopkins University. .
Witness statement
The purpose of this statement is to demonstrate that the projections of population and households underlying the urban boundary discussion are likely on the high side and therefore overestimate the need for expansion of the urban boundary.
1. Background
The requirement for an expansion to the current urban area of Ottawa is based in part on projections of the growth in the number of households and in particular the demand for single family dwellings, over the period up to 2031. These projections are in turn based on projections of the total population by age and sex.
Projections over a 20-25 year period are very sensitive to underlying assumptions re: population growth, growth in number of households, translation of household counts to dwelling counts, and dwelling type housing propensities. Fairly small changes in any of these parameters can lead to results that may raise questions about the need for expansion of the Ottawa urban boundary
It is my opinion that, although the projections were done using sound, well accepted methodologies, the underlying assumptions are such that the projections represent a high growth scenario.
2. Population Projections
The projections of total population by age and sex were done in 2007 and were based on the 2001 census and demographic trends observed as reported by Statistics Canada.
Although historically population growth in Ottawa, as in most parts of Canada, has been driven by an excess of births over deaths (so called natural increase), the continuing low fertility rates coupled with an ageing population that increases the number of deaths, means that in the future population growth will be increasingly dependent on the level of migration rather than natural increase. Moreover, in the case of Ottawa, it is the level of immigration from outside Canada that is likely to be of most importance.
The City of Ottawa documentation of the population projections recognized this in saying
“In a growing city such as Ottawa, in-migration, specifically international immigration, is the most important driver of future population growth, and much of the report deals with that issue. Consequently, the proposed projection scenarios are strongly focused on immigration.”[1]
The City projections presented three scenarios and the medium level projection Scenario 2 was used as the “reference scenario” that formed the basis of household and dwelling projections used in the Official Plan review.
The key migration assumption for scenario 2 was stated as
” Under Scenario 2, net migration would be 7,600 in the 2006-2011 period and would rise to 8,900 by the 2026-2031 period. Under this scenario, Ottawa’s share of immigration to Canada would rise from 5.4% in 2006 to 6.0% in 2031.”[2]
Appendix Table 1 shows the Statistics Canada estimates of immigration over the period 1996-97 to 2008-2009. Note that over the last decade the percentage of immigrants to Canada that came to Ottawa declined from 3% to just over 2%. This decline was part of a shift in immigration patterns that saw a lower proportion of immigrants to Canada settling in Ontario’s two largest urban areas, Toronto and Ottawa. Over the decade the share of immigrants going to the Census Metropolitan Area (CMA) of Toronto declined from 47% to just over 34%. This move away from Ontario’s largest urban areas is likely a result of the increasing competition to attract immigrants to other parts of Canada. Given that in the future population growth will be highly dependent on attracting immigrants, it is expected that competition for immigrants will increase and therefore Ottawa’s share of immigrants will likely remain at around 2% rather than the 5%-6% assumption in the population projections. Given the anticipated slow growth in the federal public service, at least over the medium term, it seems unlikely that internal migration will make up for this shortfall. The result of lower immigration would be somewhat less growth than projected in the reference scenario.
3. Households
The projections of households build on the population projections. The projections are done in two stages using well accepted methodologies. The first stage is to estimate the number of households. This is done by using the so called “headship rates” by age. The headship rates by age have been fairly stable over the past few decades and holding them constant at the 2001 rates is a reasonable assumption.
The second step is the projection of dwellings by type. This is done by applying a set of type of dwelling propensities (proportion of households in various types of dwellings) to the projected number of households.
The propensities for various housing types reflect many different factors such as life stage and life style, family size, income as well as the availability of various types of housing. For example in recent years there has been an increasing interest in an “urban lifestyle” that new condominiums offer.
Over the next two decades, Ottawa, as the rest of Canada, will undergo unprecedented demographic change as the large group of Baby Boomers move into their 60’s and 70’s. A Supplementary Report in support of Waterloo Region’s Growth Management Strategy cites Clayton Research as concluding that in terms of housing demand ““the most significant events in the next 10 years will be demographic”. The Waterloo report concludes “While economic trends will no doubt continue to cause cyclical fluctuations in the housing industry, it is demographic trends that will shape demand for housing on a more permanent and comprehensive basis.”[3]
Given future demographic trends, an important question for future housing demand is the extent to which Boomers preferences for housing in their senior years will differ from the preferences of today’s seniors.
The background to the City’s housing projections summarized the situation today as follows:
“The argument has been made that people generally wish to “age in place” and this means that seniors are expected (and often encouraged) to stay in their homes (typically single detached dwellings) until they need institutional care. Looking at today’s senior-age cohort, this appears to be the case. However, these homes were built between the mid-1940s and the late 1960s, which means that they would typically be of significantly smaller sizes, and in locations that are more central, than the much larger single detached dwellings built over the last 30 years at more peripheral
locations.
Can seniors reasonably be expected to age in place in the future in 2,500 square-foot homes at similar rates to which they do today in 1,200 square-foot homes? Staff believe they will not, especially if there are homeownership options available to seniors in the form of condominium apartments at locations that are close to services and amenities.”[4]
Tomorrow’s seniors, i.e. the Baby Boomers, are known to differ in many ways from the generation that preceded them. In terms of housing they are more likely to live in housing built over the last thirty years and much of this housing is larger in size than the older housing and is more likely to be found in the outer suburbs of Ottawa (e.g. Kanata, Barrhaven and Orleans).
In addition to the characteristics of their current housing, Boomers differ from their predecessors in many other ways, including their life histories and experiences and their social values. A recent new book by Michael Adams “Stayin’ Alive” discusses the Boomers, how they are different and how they may play out the second half of their adult years.[5]
The
issue of the impact of demographic change on housing choice was also the
topic of a one day workshop “The Past is NOT the Future: Housing Choice and
Demographic Change” held June 15, 2010 and
sponsored
by the Region of Waterloo and CMHC. At this workshop Kevin Eby from the Region
of Waterloo presented an overview of issues related to demographics and housing
choice, including an initial analysis of housing trends in the Waterloo Region.
The results of the analysis were not definitive but again pointed to the very
different situation of Boomers compared to today’s seniors suggesting that
future housing decisions may also be different.[6]
Associated with this workshop in June 2010, the Region of Waterloo, in partnership with the Kitchener Waterloo Real Estate Board held a focus group with several local realtors. Participants were asked a series of questions relating to their knowledge and experience of the housing market. Discussions focused primarily on why some people make the housing choices they do, what people in certain demographic segments look for in a residence and what some of the challenges and opportunities may be for the industry in the future. The summary of this discussion [7] once again points to many reasons why the preferences of tomorrows’ seniors may be different than the seniors of today.
The Ottawa City document “Residential Land Strategy for Ottawa 2006-2031” [8] identifies three different scenarios for future housing requirements. The scenarios differ in the assumptions concerning dwelling type propensities. All scenarios recognize that in the future there will likely be some shift away from single family dwellings. However they differ on the assumptions about the extent of this shift and in particular the housing preferences for the Boomers.
Scenario 3 was chosen as the preferred scenario for future housing growth.
In 2006 Boomers were roughly aged 40-59. By 2031 they will be aged 65-84. The following table compares the housing propensities for seniors of today vs. the Boomers who will be the seniors in 2031 according to this scenario.
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Housing Propensities for Single Detached Dwellings |
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Scenario 3 |
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2006 |
2031 |
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65-69 |
0.501 |
0.513 |
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70-74 |
0.484 |
0.484 |
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75 + |
0.414 |
0.426 |
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Source: City of Ottawa, “Residential Land Strategy for Ottawa 2006-2031” |
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As can be seen, for the Boomers, Scenario 3 actually reflects a small increase in the propensity for single family dwellings compared to today’s seniors. This is somewhat inconsistent with the views expressed in the background to the Ottawa projections documentation cited earlier.
Scenario 3 seems also inconsistent with the observed recent trends for Boomers. Data from the 1981, 1991 and 2001 censuses can be used to trace the propensities for single detached dwellings as a birth cohort ages. The results are shown in Appendix Table 2 and are summarized in Figure 1 below.
As illustrated in Figure 1, the propensity of the late war time birth cohort (born 1942-46) for single detached homes was 47% at age 35-39 in 1981. This increased to 58% when they were aged 45-49 ten years later and then dropped to 56% when they were 55-59. It is projected to drop to 50% at ages 65-69. The Boomer cohort born 1952-56 was less likely to be in single detached dwellings at ages 35-39 and 45-49. However, Scenario 3 actually assumes an increase in their propensity for single detached homes by ages 55-59 and only a slight drop off by ages 65-69. A later Boomer cohort has an even lower propensity for singles at ages 35-39 but again the assumed propensities show very little drop off between ages 45-49 and 65-69.
Figure 1
That such a large proportion of these Boomer cohorts should continue to opt for single detached dwellings as they age is inconsistent with their past dwelling type propensities.
Appendix Table 3 summarizes the projected need for single family dwellings under two scenarios. Under Scenario 3 there will be a need for 148,000 new dwellings in Ottawa over the period 2006-2031 and 56,960 would be single detached (Appendix 2 Scenario 3[9]). An alternative Scenario 1, which seems more consistent past Census trends, and likely future housing choices for seniors, showed a need for 42,909 singles, over 14,000 fewer single detached homes compared to Scenario 3. Moreover, Scenario 1 is based on a very modest shift for seniors away from single detached homes. An even greater shift by Boomers away from singles than is reflected in Scenario 1seems quite possible.
As a result of this analysis, in my opinion, the chosen scenario is a high estimate of the future demand for single detached dwellings.
Summary
The City of Ottawa has used well accepted and sound methodology for developing the projections of population and housing for the period 2006-2031. As with all projections, the assumptions about future trends are crucial in determining future trends. Fairly small changes in these assumptions would affect the amount of urban land required to accommodate future growth.
The most questionable assumptions used in the projections are the dwelling type propensities for the Baby Boom generation as they move into their senior years over the next two decades. There is no doubt that the Boomers are very different from today’s seniors and a key issue is the extent to which the Boomers are likely to “age in place” to the same extent as today’s seniors. Clearly it is too early to know the answer to this but recent trends suggest Boomers are less likely to age in place compared with the seniors of today. Many observers also point to possible change. Factors citied to support this view include
i) Boomers current housing is more likely to be in larger homes in the outer suburbs of Ottawa, that many consider less attractive especially as health begins to deteriorate
ii) The development of condominiums and other “adult community” housing offers attractive alternatives for Boomers who choose to remain active, travel and pursue other activities
Over the next decade we will begin to see the Boomers housing decisions play out.
In addition to the dwelling type propensities, as discussed above the immigration assumptions in the underlying population projections seem to also be on the high side.
Overall both of these assumptions, in my opinion, point to estimates of housing demand, in particular for single family housing, that are on the high side.
Appendix Table 1
Immigration
Canada Ottawa Percent to Ottawa
1996-1997 224857 6117 2.7%
1997-1998 194459 5452 2.8%
1998-1999 173194 5194 3.0%
1999-2000 205710 7020 3.4%
2000-2001 252527 9440 3.7%
2001-2002 256405 7139 2.8%
2002-2003 199170 5647 2.8%
2003-2004 239083 5499 2.3%
2004-2005 244578 5105 2.0%
2006-2007 238125 5155 2.2%
2007-2008 249621 5517 2.2%
2008-2009 245275 5135 2.1%
Source: Statistics Canada, Annual Demographic Estimates, Census Divisions, 2009
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Appendix Table 2 |
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Observed and Projected Propensities for Single Family Dwellings |
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Year of Birth |
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Age |
1932-36 |
1942-46 |
1952-56 |
1962-67 |
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35-39 |
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0.474 |
0.455 |
0.4304 |
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45-49 |
0.565 |
0.578 |
0.527 |
0.5305 |
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55-59 |
0.549 |
0.5557 |
0.5328 |
0.5237 |
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65-69 |
0.508 |
0.501 |
0.5058 |
0.513 |
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Source: Statistics Canada 1981,1991,2001 Censuses and City of Ottawa Projections
Note: Shaded areas are projections according to Scenario 3. |
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Appendix Table 3 |
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Number of Single Family Dwellings, 2006 and 2031 |
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Scenario 1 |
Scenario 3 |
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Number of singles |
Difference 2006-2031 |
Number Singles |
Difference 2006-2031 |
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2006 |
2031 |
2006 |
2031 |
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15-19 |
118 |
61 |
-57 |
81 |
67 |
-14 |
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20-24 |
869 |
539 |
-330 |
686 |
508 |
-178 |
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25-29 |
4,083 |
2,898 |
-1185 |
3,485 |
3,178 |
-307 |
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30-34 |
9,769 |
8,899 |
-870 |
9,389 |
10,306 |
917 |
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35-39 |
15,588 |
15,545 |
-43 |
15,504 |
17,132 |
1628 |
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40-44 |
20,673 |
19,154 |
-1519 |
21,356 |
22,160 |
804 |
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45-49 |
21,827 |
22,418 |
591 |
21,996 |
24,525 |
2529 |
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50-54 |
19,509 |
24,812 |
5303 |
19,261 |
23,387 |
4126 |
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55-59 |
17,941 |
21,424 |
3483 |
17,182 |
20,942 |
3760 |
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60-64 |
12,415 |
19,557 |
7142 |
11,978 |
19,760 |
7782 |
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65-69 |
8,775 |
19,121 |
10346 |
8,640 |
20,564 |
11924 |
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70-74 |
7,322 |
16,131 |
8809 |
7,277 |
17,485 |
10208 |
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75 + |
12,400 |
23,639 |
11239 |
12,103 |
25,886 |
13783 |
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All Ages |
151,288 |
194,197 |
42909 |
148,939 |
205,899 |
56960 |
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15-64 |
122,792 |
135,307 |
12515 |
120,918 |
141,965 |
21047 |
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65 + |
28,497 |
58,891 |
30394 |
28,020 |
63,935 |
35915 |
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Source: City of Ottawa, "Residential Land Strategy for Ottawa 2006-2031", Appendix 2 |
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