16th Annual Demographia International Housing Affordability Survey: 2020 Rating Middle-Income Housing Affordability Australia  Canada  China (Hong Kong) Ireland Japan  New Zealand  Singapore United Kingdom  United States With special coverage of Housing Affordability in Russia Introduction: Focus on Singapore Data for 3rd Quarter 2019 16th Annual Demographia International Housing Affordability Survey Rating Middle-Income Housing Affordability (2020 Edition: Data from 3rd Quarter 2019) INTRODUCTION: FOCUS ON SINGAPORE By Wendell Cox (Demographia) & Hugh Pavletich (Performance Urban Planning) Background Over the six decades since Singapore achieved its independence, it has transitioned from a comparatively poor nation to one of the most affluent in the world. In 1960, Singapore’s gross domestic product per capita was one-seveth that of the United States, according to the Maddison Historical Statistics. Today, according to the World Bank, Singapore’s GDP per capita is third highest among world sovereign nations (only Qatar and Luxembourg are higher), and obviously higher than that of any nation covered by the Demographia International Housing Affordability Survey. Singapore’s enabling of broad home ownership has been an important element in its economic advance. Present at the Creation: Singapore’s Housing Crisis In 1960, the new nation faced a dire housing situation. Most households lived in “unhygienic slums and crowded squatter settlements.” According to the 1947 British Colony of Singapore government Housing Committee Report, Singapore had one of the world’s worst slums, calling it “a disgrace to a civilized community.” Solving the problem would be a daunting task. Singapore’s Unequaled Housing Challenge No major metropolitan area in the high-income world faces the housing affordability challenge of Singapore. Singapore’s six million people live on a a fully developed island nation so small that it could fit into one-half of Tokyo Bay. As a result, Singapore lacks the “safety valve” of low-cost suburban or exurban land that moderates house prices across an urban area. Further, Singapore is by far the most densely populated sovereign nation outside the microstate of Monaco. Indeed, Singapore is approximately 75 percent as dense as the core city of New York and 50 percent more dense than London (GLA). Singapore’s topographics and international barriers constitute, in effect, a rigid and inflexible urban containment boundary. Nature and international boundaries preclude its elimination or reform. 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) i Inside an urban containment boundary, effective land management is necessary to maintain housing affordability, because demand tends to exceed supply. Singapore has effectively managed its scarce land supply and established a market that produces middle-income housing affordability. According to the 2018 UBS Global Real Estate Bubble Index, “there has been no difference between house price and income growth in Singapore over the last 30 years.” This contrasts with the most severely unaffordable markets in, for example, Australia, Canada and the United States, where middle-income households have been largely priced out of the median price housing by spiraling cost increases. This is despite their plentiful supplies of developable land. (Sections 3.1, 3.2, 3.8 and 4). Prioritizing Home Ownership and Housing Affordability Singapore established the Housing and Development Board (HDB) in 1960 to solve the problem. In the early years, HDB focused on producing rental housing. This was and remains the emphasis of many subsidized low-income housing programs around the world. But the HDB vision was not confined to subsidized housing. The 1964 HDB Annual Report expressed the intention to: ...encourage a property-owning democracy in Singapore and to enable Singapore citizens in the lower middle income group to own their own homes. HDB has viewed home ownership as important to maintaining social stability and building neighbourhoods. Home ownership was also favoured because it encouraged a work ethic among households, which was necessary to save for and maintain their homes. Singapore considers home ownership as the “cornerstone” of the HDB program. By 1968, the government began to allow purchasers to access funds from their social security (Central Provident Fund) accounts both for down payments and to assist in servicing their mortgages. More recently (2006): … the Additional CPF Housing Grant Scheme was introduced to help lower income families own their first homes. Since then, other grants have been put in place and enhanced from time to time to help home buyers afford HDB flats. With these measures, buyers would need to use less than a quarter of their monthly household income to pay for the mortgage instalment of their first flat, a figure lower than the international benchmarks for affordable housing. HDB housing is referred to locally as “public housing,” yet unlike other public housing programs, HDB houses are owned (under 99 year leases) by purchasers who are able to sell their units after five years of occupancy. The primary market is new houses, which are built and sold by HDB. The secondary market is sales by home owners who may have purchased their houses from HDB or 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) ii from other owners. New houses are sold at subsidized prices, which makes the nation’s mainstream housing market accessible to lower income households. Including lower income households in the middle-income HDB housing market avoids the social stigma that has often been observed in nations where lower-income housing estates are separate from the middle-class market. This is particularly important in Singapore, whose citizens have among the most diverse origins in the world. Results HDB has supplied more than 1,000,000 homes in Singapore, 9 in 10 of which are owner occupied. As a result, Singapore has one of the highest home ownership rates in the world. The after-grant price for averaged sized new houses (approximately 90 square meters or 970 square feet) was 3.3 times the median household income. Fundamentals of HDB Strategy To successfully meet its goals, HDB adopted a housing strategy with three “crucial fundamentals:” The concept of a sole agency: A sole agency in charge of public housing enabled more effective resource planning and allocation. This concept made it possible to secure the land, raw materials , and manpower for large-scale construction to optimise results and achieve economies of scale. A total approach to housing: By adopting a total approach covering planning and design, land assembly, development and rejuvenation, the housing task was carried out as a seamless whole – through allocation, management, and maintenance. Strong government support: Support from the government in the form of political and financial commitment, complemented by legislation, helped put early public housing on the right track quickly, which made housing the nation that much smoother and fruitful a journey. Social Objectives HDB also seeks to achieve social objectives through its policies, such as to: Promote progressivity by giving a higher grant amount to the lower income. Promote family formation by providing bigger grant amounts for families than for singles Promote mutual care and support by encouraging families to live with or close to their parents or children 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) iii In addition, the Singapore government “heavily invests” in upgrading and renewal of HDB neighborhoods. This helps to “forestall urban decay” in older areas and allows home owners of all income levels a quality living environment comparable to newer neighborhoods. The Singapore Model: Lessons Singapore’s success is particularly notable in light of the international threat to the middle -income standard of living, as described by the by Organisation for Economic Cooperation and Development (OECD) in Under Pressure: The Squeezed Middle-Class. Noting that the middle-class costs of living risen much faster than incomes, OECD indicates that “Housing has been the main driver of rising middle-class expenditure” (Section 4). For over one-half century Singapore has enabled lower income to upper middle-income households to own their own homes. An important key to Singapore’s success lies in its recognition of the value of home ownership to households and to the nation. Moreover, according to HDB, the program “is widely understood to have supported the country’s overall economic, social, and political stability.” The lesson of Singapore for the world is not so much the intricacies of its housing market design. Rather, it is that Singapore pro-actively and successfully prioritized affordable home ownership for its citizens, and developed means to accomplish that objective based upon its unique conditions. No metropolitan area is the same as Singapore. Yet, virtually every metropolitan area has the ability to facilitate housing affordability by prioritizing the issue and implementing measures to produce the intended policy outcomes (sometimes this requires multiple governments acting cooperatively). Intentions are not enough --- they must be converted into tangible results. Singapore’s success is in facilitating results consistent with intentions, that are both meaningful and routinely evaluated. The net effect of Singapore’s housing policy is “to improve outcomes for people,” which Paul C. Cheshire, Max Nathan and Henry G. Overman of the London School of Economics have called the “ultimate objective of urban policy.” Note: This Introduction relies on Internet and academic sources and information from the Housing and Development Board (HDB) of Singapore. 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) iv Highlights from Previous Introductions to the Demographia International Housing Affordability Survey Alain Bertaud, New York University Formerly The World Bank (#15: 2019) An already high or increasing Price-Income Ratio (PIR) should immediately signal to urban managers that they should take urgent correcting action after conducting a detailed diagnosis that would explain the high PIR figure. We know that unaffordable housing causes a lot of hardship for households that do not yet own their home, in particular, the youngest ones. High housing prices misallocate resources toward real estate at the expense of the rest of the economy. The tradeoff between housing standards, like housing sizes, densities, lot sizes, and location are always better left to the decision of the consumer, and not the whim of the regulator The main objective of the planner should be to maintain mobility and housing affordability Felipe Carrozi, Paul Cheshire and Christian Hilbur London School of Economics (#14 2018) Apart from the median multiple being simple and useful, it is also the only measure out there for purposes of international comparison. ... the first paradox of housing ‘affordability’: housing is both an asset and a good providing a flow of housing services – a place to live. The interests of house owners do not align with those of would be house owners. Rising house prices relative to incomes pit the old against the young and the rich against the poor. ... focusing on high and low-income groups within housing markets suggests, not surprisingly, that housing is most unaffordable for the lower income groups even though they buy cheaper houses Oliver Hartwich, Executive Director. The New Zealand (#13: 2017) Senator Bob Day, AO, Senate of Australia (#12: 2016) We should not accept extreme price levels in our housing markets. High house prices are not a sign of city’s success but a sign of failure to deliver the housing that its citizens need. Fortunately, the media are waking up to the realisation that housing and land supply matters. The most powerful infographic of 2016 was produced by The Wall Street Journal. It showed what happened to house prices in US cities that had expanded their residential areas between 1980 and 2010 – and those that had not. As was to be expected, greater land supply went hand in hand with lower price increases. The distortion in the housing market… resulting from the supply-demand imbalance is enormous … and affects every other area of a country’s economy. New home owners pay a much higher percentage of their income on house payments than they should. However, the real culprit … was the refusal of … governments … to provide an adequate and affordable supply of land for new housing stock to meet demand. … the "scarcity" that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of restrictions imposed through planning regulation and zoning. 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) v Dr. Shlomo Angel, New York University (#11: 2015) We all understand what it means to prepare adequate lands for urban expansion, enough land to accommodate both residences and workplaces, so as to ensure that land—and particularly residential land—remains affordable for all. Unfortunately, municipalities of many rapidly growing cities often underestimate the amount of land needed to accommodate urban expansion. In the minority of cases where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents. Alain Bertaud, New York University (#10: 2014) \ Hon. Bill English, Deputy Prime Minister, New Zealand Later Prime Minister (2016-2017) (#9: 2013) Robert Bruegmann, PhD, University of Illinois, Chicago (#8: 2012) Joel Kotkin, Chapman University (#7: 2011) Dr. Tony Recsei, Save Our Suburbs, Sydney (#6: 2010) It is time for planners to abandon abstract objectives and to focus their efforts on two measurable outcomes that have always mattered since the growth of large cities during the 19th century’s industrial revolution: workers’ spatial mobility and housing affordability. As a city develops, nothing is more important than maintaining mobility and housing affordability. Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another; and second, the ability to trade dwellings easily with low transactions costs. Housing affordability is complex in the detail – governments intervene in many ways – but is conceptually simple. It costs too much +and takes too long to build a house in New Zealand. Land has been made artificially scarce by regulation that locks up land for development. This regulation has made land supply unresponsive to demand. … I think it is fair to say that a growing number of people who have looked at the figures have tended to agree that a good many well-meaning policies involving housing may be pushing up prices to such an extent that the negative side-effects are more harmful than the problems the policies were intended to correct. Although usually thought of as “progressive” in the English speaking world, the addiction to “smart growth” can more readily be seen as socially “regressive”. In contrast to the traditional policies of left of center governments that promoted the expansion of ownership and access to the suburban “dream” for the middle class, today regressive “progressives” actually advocate the closing off of such options for potential homeowners. During the 18th century, especially after the industrial revolution, rural dwellers desperate to make a living streamed into the cities, converting many areas into overcrowded slums. However, as the new economic order began to generate wealth, standards of living improved, allowing an increase in personal living space. Unless we are vigilant, high-density zealots will do their best to reverse centuries of gains and drive us back towards a Dickensian gloom. 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) vi Dr. Shlomo Angel, New York University (#5: 2009) Dr. Donald Brash, Fomer Governor, Reserve Bank of New Zealand (#4: 2008) 2007: 3rd Edition For cities to expand outward at their current pace ─ to accommodate their growing populations or the increased demand for space resulting from higher incomes ─ the supply of land must not be artificially constrained. The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land is very difficult to come by, housing becomes unaffordable. ...the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land. Australia is perhaps the least densely populated major country in the world, but state governments there have contrived to drive land prices in major urban areas to very high levels, with the result that in that country housing in major state capitals has become severely unaffordable... 2006: 2nd Edition 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) 2005: 1st Edition vii Demographia International Housing Affordability Survey TABLE OF CONTENTS Introduction: Focus on Singapore i Highlights from Introductions to Previous Editions v Executive Summary 1 1. Middle-Income Housing Affordability 5 1.1What is Middle-Income Housing Affordability 1.2 The Median Multiple: Measuring Housing Affordability 1.3 The Median Multiple: Historical & International Consistency 1.4 Middle-Income Housing Affordability Driving the Need for Low-Income Housing 2. Housing Affordability in 2019: International Summary 2.1 Major Housing Markets 2.2 All Housing Markets 3. Housing Affordability in 2019: National Summaries 3.1 Australia 3.2 Canada 3.3 China (Hong Kong) 3.4 Ireland 3.5 New Zealand 3.6 Singapore 3.7 United Kingdom 3.8 United States 6 7 8 10 10 11 12 14 14 15 19 20 20 22 23 24 4. Threat to the Middle-Class Standard of Living 29 5. Special Coverage: Housing Affordability in Russia 33 Schedule 1: Major Housing Markets Ranked by Affordability 36 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) viii Schedule 2: All Housing Markets Ranked by Affordability Schedule 3: All Housing Markets Ranked by Nation 37 41 Contact Information 48 Annex: Uses, Methods and Sources 48 Author Biographies 52 FIGURES 1. International House Price to Income Ratios: 1987/1992 to 2019 2. Housing Affordability: 2004-2018: Major Metropolitan Markets 3: Housing Affordability & Land Regulation: 2,000,000+ Population: 2018 4: Middle-Income Housing Affordability: Australia: Major Markets: 2004-2018 5: Middle-Income Housing Affordability: Canada: Major Markets: 2004-2018 6: Preference and Purchase: Detached Houses: Young Urban Families (Canada) 7: Share of Median Pre-Tax Income Required: Average Priced House: Vancouver and Toronto 8: Housing Affordability Deterioration: Nearby Toronto Markets 9: Middle-Income Affordability History: Canada: 1970-2008 10: Middle-Income Housing Affordability: New Zealand 3 Largest Markets: 2004-2018 11: Median House Price to Median Earnings Ratio: England and Regions: 1997-2018 12: Qualifying Income for Median Priced House: Least Affordable US Markets: 2017 13: % Middle-Income Households Qualifying for the Median Price House: US 2017 14: California & the US Compared: Middle-Income Housing Affordability from 1950 15: Housing Share of Excess Cost of Living: Least Expensive US Markets 16: Urban Containment Effect on House Prices (Urban Growth Boundary Conceptual) 17: Russia: Major Metropolitan Areas (Map) 10 12 12 15 16 17 18 18 19 22 24 26 26 28 30 31 35 TABLES ES-1 Demographia Housing Affordability Ratings ES-2: Housing Affordability by Nation: Major Housing Markets ES-3 Housing Affordability by Nation: All Housing Markets 1 2 3 1: Demographia Housing Affordability Ratings 2: Definition of an Affordable Housing Market 6 8 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) ix 3: Liberal Regulation v. Urban Containment: Land Use Regulation Classifications 4: Housing Affordability Ratings by Nation: Major Housing Markets 5:Major Housing Markets: 10 Most Affordable 6: Severely Unaffordable Major Housing Markets (31 Least Affordable) 7: Housing Affordability Ratings by Nation: Major Housing Markets 8: All Housing Markets: 10 Most Affordable 9: Housing Affordability Ratings: Russia: Major Housing Markets 10: Russia: All Major Metropolitan Area Markets: 2019: Third Quarter 11: Housing Market Selection Criteria 12: Footer Illustrations 9 11 12 13 13 14 33 35 51 51 Permission granted to quote with attribution. Permission granted for links to this report http://www.demographia.com/dhi.pdf Permission granted for links to the websites http://www.demographia.com/ http://www.performanceurbanplanning.org/ 16th Annual Demographia International Housing Affordability Survey (2018: 3rd Quarter) x 16th Annual Demographia International Housing Affordability Survey Rating Middle-Income Housing Affordability (2020 Edition: Data from 3rd Quarter 2019) By Wendell Cox (Demographia) & Hugh Pavletich (Performance Urban Planning) …to encourage a property-owning democracy … and to enable … citizens in the lower middle income group to own their own homes -Singapore Housing and Development Board 1964 Annual Report EXECUTIVE SUMMARY T he 16th Annual Demographia International Housing Affordability Survey covers 309 metropolitan housing markets (metropolitan areas) in eight countries (Australia, Canada, China [Hong Kong Only], Ireland, New Zealand, Singapore, the United Kingdom and the United States) for the third quarter of 2019. Ninety-two major metropolitan markets (housing markets) are evaluated, including three megacities, with more than 10 million residents, New York, London and Los Angeles. Middle-Income Housing Affordability The Demographia International Housing Affordability Survey rates middle-income housing affordability (Section 1) using the “Median Multiple,” which is the median house price divided by the median household income. The Median Multiple is widely used for evaluating housing markets. It has been recommended by the World Bank and the United Nations and has been used Table ES-1 by the Joint Center for Housing Studies Demographia International Housing Affordability Survey Housing Af f ordability Ratings at Harvard University. The Median Housing Affordability Rating Median Multiple Multiple and other price-to-income Affordable 3.0 & Under multiples (housing affordability Moderately Unaffordable 3.1 to 4.0 multiples) are used to compare housing Seriously Unaffordable 4.1 to 5.0 affordability between markets by the Severely Unaffordable 5.1 & Over Organization for Economic Median multiple: Median house price divided by median household income Cooperation and Development, the International Monetary Fund, The Economist, and other organizations. Historically, liberally regulated markets have exhibited median house prices that are three times or less that of median household incomes (a Median Multiple of 3.0 or less). Demographia uses the housing affordability ratings in Table ES-1. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 1 Middle-Income Housing Affordability Drives the Need for Low-Income Housing Because eligibility for housing subsidies is based on the inability to afford market rate housing, higher house prices increase the cost of subsidized housing programs and increase the number of households that are eligible. More often than not, at least in the nations surveyed, low-income housing subsidies have not been sufficient to meet the need as defined in law and policy. In fact, the most effective strategy for reducing the shortage of subsidized housing is to improve middle -income housing affordability. Lower house prices make market rate housing affordable to more low-income households (Section 1.4). Housing Affordability in 2019 Over the past year, there has been moderation of house price increases in some of the least affordable major markets. However, the trends were insufficient to materially improve housing affordability (Section 2). ` Major market housing affordability is summarized by nation in Section 3. Schedule 1 includes Median Multiples for all 92 major markets. Nation Australia Canada China: Hong Kong Ireland New Zealand Singapore United Kingdom United States TOTAL Table ES-2 Housing Affordability Ratings by Nation: Major Housing Markets Affordable Moderately Seriously Severely (3.0 & Unaffordable Unaffordable Unaffordable Under) (3.1-4.0) (4.1-5.0) (5.1 & Over) 0 0 0 5 0 2 2 2 0 0 0 1 0 0 1 0 0 0 0 1 0 0 1 0 0 3 10 8 10 23 9 14 10 28 23 31 Total 5 6 1 1 1 1 21 56 92 Median Market 6.9 4.4 20.8 4.7 8.6 4.6 4.6 3.9 4.3 The most affordable major housing markets are in the United States, with the median market having a moderately unaffordable Median Multiple of 3.9, followed by Canada’s median market, at 4.4. Singapore and the United Kingdom at 4.6 and Ireland at 4.7. The median markets of Australia (6.9), New Zealand (8.6) and China (20.8) are severely unaffordable (Table ES-2). This year, there are 10 affordable major housing markets, all in the United States. There are 31 severely unaffordable major housing markets, including all in Australia (5), New Zealand (1) and China (1). Fourteen of the major markets in the United States are severely unaffordable (out of 56), eight in the United Kingdom (out of 21) and two in Canada (out of six). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 2 The affordable major housing markets include Rochester, with a Median Multiple of 2.5. Oklahoma City and Cleveland (2.7), Buffalo, Cincinnati, Pittsburgh and St. Louis (2.8), Indianapolis and Hartford (2.9) and Tulsa (3.0). There are 31 severely unaffordable major housing markets in 2019. Hong Kong is the least affordable, with a Median Multiple of 20.8, modestly improved from 20.9 last year. Vancouver is the second least affordable, with a Median Multiple of 11.9. Sydney’s Median Multiple dropped to 11.0. Melbourne (9.5), Los Angeles (9.0 were fourth and fifth least affordable. Auckland and Toronto had Median Multiples of 8.6. San Francisco (8.8), Honolulu (8.6). San Jose (8.5), San Francisco (8.4) and London (Greater London Authority), at 8.2, were also among the 10 least affordable major markets. Table ES-3 summarizes housing affordability in all markets. Schedule 2 includes Median Multiples for all 309 markets. Nation Australia Canada China: Hong Kong Ireland New Zealand Singapore United Kingdom United States TOTAL Table ES-3 Housing Affordability Ratings by Nation: All Markets Affordable Moderately Seriously Severely (3.0 & Unaffordable Unaffordable Unaffordable Under) (3.1-4.0) (4.1-5.0) (5.1 & Over) 1 3 5 14 8 18 6 18 0 0 0 1 1 1 3 0 0 0 0 8 0 0 1 0 0 7 16 10 44 79 36 29 54 108 67 80 Total 23 50 1 5 8 1 33 188 309 Median Market 5.9 3.9 20.8 4.1 7.0 4.6 4.5 3.6 3.9 Threat to the Middle-Class Standard of Living One of the principal advances of the past two centuries has been the drastic reduction in poverty and the rise of a large middle-class, which is detailed by economists Diedre McClosky and Robert Gordon. At the heart of this trend was increasing home ownership. Yet there has been material deterioration of middle-income affluence in many metropolitan areas, some that are covered in the Demographia International Housing Affordability Survey. In short, the middleclass is under threat. This is the subject of the Organization for Economic Cooperation and Development (OECD) report, Under Pressure: The Squeezed Middle-Class, which indicated that “there are now signs that this bedrock of our democracies and economic growth is not as stable as in the past.” OECD emphasizes that the threats to the middle-class crisis are in large measure the result of costs of living that have risen at rates far greater than incomes. The OECD particularly note s that: “…, the cost of essential parts of the middle-class lifestyle have increased faster than inflation; house 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 3 prices have been growing three times faster than household median income over the last two decades.” These higher housing costs are a threat to the middle-income lifestyle, because they reduce discretionary income and thus, the standard of living. As a result, adult children can no longer depend on having higher incomes than their parents, at least in the United States, the United Kingdom, Canada, Australia, New Zealand, Ireland and elsewhere. It is not surprising that there is increasing concern about income inequality. Facilitating broadly affluent living standards is a fundamental function of domestic public policy. This requires elimination of planning requirements that undermine prosperity, which has not been recognized in many nations. There are important exceptions, such as Singapore (See: Introduction: Focus on Singapore), which has had housing affordability as a core strategy for half a century and New Zealand, which is seeking to implement substantive proposals to restore housing affordability. It took millennia to create the incomparably broad prosperity of the modern middle-class. It is worth both preserving and restoring. Special Coverage: Housing Affordability in Russia Housing affordability in the major metropolitan areas of Russia is reported, using information from a report published by the Institute for Urban Economics in Moscow (IUE). Like the Demographia Survey, the IUE report uses a price-to-income ratio (Median Multiple) as the basis of its housing affordability evaluation. Among the 17 markets, two are seriously unaffordable, three are moderately unaffordable and 12 are affordable The median market has an affordable Median Multiple of 2.6. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 4 16th Annual Demographia International Housing Affordability Survey Rating Middle-Income Housing Affordability (2020 Edition: Data from 3rd Quarter 2019) By Wendell Cox (Demographia) & Hugh Pavletich (Performance Urban Planning) …to encourage a property-owning democracy … and to enable … citizens in the lower middle income group to own their own homes 1 -Singapore Housing and Development Board 1964 Annual Report 1: MIDDLE-INCOME HOUSING AFFORDABILITY T he 16th Annual Demographia International Housing Affordability Survey measures middle-income housing affordability in 92 major metropolitan housing markets 2 in Australia, Canada, China (Hong Kong only), Ireland, New Zealand, Singapore, the United Kingdom and the United States. These include three megacities 3 New York, Los Angeles, and London. 4 In total, the 16th Annual Demographia International Housing Affordability Survey provides ratings for 309 housing markets located in the same eight nations, with data principally from the third quarter of 2019 (September quarter). 5 The Demographia Survey is the world’s largest known collection of housing affordability data at the housing market level. Most international economic analysis of housing markets focuses on national indicators. However, national measures can mask significant differences between housing affordability among metropolitan areas within countries. For example, during the housing bubble in the United States, some markets retained Median Multiples (price-to-income ratios) of 3.0 or less, while others rose to over 10, 6 yet this dispersion of housing market performance was missed in aggregate analyses. The Demographia International Housing Affordability Survey focuses on middle-income housing affordability. Middle-income housing affordability is different from subsidized low – income housing affordability (which is often referred to as “affordable housing”). 7 Shelter is a fundamental 1 Housing and Development Board 1964 Annual Report. http://www.globalurban.org/GUDMag07Vol3Iss1/Yuen.htm. Metropolitan areas with 1,000,000+ population. 3 Metropolitan areas with more than 10 million population. 4 Metropolitan areas are labor markets and housing markets. 2 5 6 7 Sources and methods are described in the Annex: Sources, Methods and Uses. There is the most variation between markets within Canada and within the United States. Including social housing. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 5 need and subsidies are required when market prices or rents are unaffordable. Where middle-income housing is affordable, there is less need for subsidized housing, because more lower-income households can afford market priced houses (Section 1.4). Middle-income housing affordability is also different from luxury housing affordability, which is reported upon by a number of organizations (such as the Knight Frank Wealth Report). In the vernacular of this populist era, middle-income housing affordability might be characterized as relating to the "99 percent," with the “one percent” relating to the luxury market. 1.1: What is Middle-Income Housing Affordability? Housing affordability is measured by comparison of house prices to household incomes. 8 Mere comparisons of price levels between metropolitan areas are not a sufficient indicator of housing affordability. Evaluation of housing affordability requires comparison to incomes in the same housing market. According to the United Nations, 9 “If there is a single indicator that conveys the greatest amount of information on the overall performance of housing markets, it is the house price-to-income ratio.” The Demographia International Housing Affordability Survey measures middle-income housing affordability at the metropolitan areas “If there is a single level, which is also the labor market and the housing market. indicator that conveys the Metropolitan areas are the economic (or functional) dimension of greatest amount of cities and include both the built up urban area and exurban areas information on the overall from which a significant share of workers commute. 10 Entire performance of housing housing markets are used, rather than neighborhoods or parts of markets, it is the house housing markets, because they represent the selection of housing price-to-income ratio.” that is locally available to households and from which businesses draw their employees. Housing affordability is evaluated on two overall market levels, between housing markets (such as between Adelaide and Melbourne) and over time within the same housing market (such as Adelaide from 1980 to 2015). 8 See, for example, Jason Furman, Barriers to Shared Growth: The Case of Land Use Regulation and Economic Rents, Address to the Urban Institute, November 20, 2016. https://obamawhitehouse.archives.gov/sites/default/files/page/files/20151120_barriers_shared_growth_land_use_regulation_and_ economic_rents.pdf 9 Shlomo Angel, Stephen K. Mayo and William L. Stephens, Jr., “The Housing Indicators Program: A Report on Progress and Plans for the Future,” Netherlands Journal of Housing and the Built Environment 8, no. 1 (1993): 13-48. http://sollyangel.com/wp-content/uploads/2013/10/38.-1993-The-Housing-Indicators-Program.pdf. 10 The physical dimension of cities is the built-up urban area, which is surrounded by rural territory (see Demographia World Urban Areas (see: http://demographia.com/db-worldua.pdf). These definitions exclude the administrative unit or “municipality,” which is simply a political construct that may be smaller than the metropolitan area (generally in the West) or larger (such as in China). For further information see: Paul Cheshire, Max Nathan and Henry G. Overman of the London School of Economics in their recent book, Urban Economics and Urban Policy: Challenging Conventional Policy Wisdom 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 6 1.2: The Median Multiple: Measuring Housing Affordability The Demographia International Housing Affordability Survey uses the “Median Multiple” (median house price divided by median annual gross pre-tax household income 11) to assess housing affordability. The Median Multiple is a house price to Table 1 income ratio that is widely used for Demographia International Housing Affordability Survey evaluating housing markets. It has been Housing Af f ordability Ratings recommended by the World Bank 12 and Housing Affordability Rating Median Multiple Affordable 3.0 & Under the United Nations and is used by the Moderately Unaffordable 3.1 to 4.0 Joint Center for Housing Studies, Harvard 13 Seriously Unaffordable 4.1 to 5.0 University. Similar house price to Severely Unaffordable 5.1 & Over income ratios (housing affordability Median multiple: Median house price divided by median multiples) are used to compare housing household income affordability between markets by the Organization for Economic Cooperation and Development, the International Monetary Fund, international credit rating services, media outlets (such as The Economist14) and others. More elaborate indicators, which often mix housing affordability and mortgage affordability can mask the structural elements of house pricing and are often not well understood outside the financial sector. The mixed indicators provide only a "snapshot," because interest rates can vary over the term of a mortgage; however the price paid for the house does not change. The Median Multiple is a reliable, easily understood and essential structural indicator for measuring the health of residential markets and facilitates meaningful and transparent comparisons of housing affordability. The Median Multiple provides a solid foundation for the consideration of structural policy options for restoring and maintaining housing affordability in local housing markets. The Demographia International Housing Affordability Survey housing affordability ratings are shown in Table 1 and discussed in more detail in Table 2. 1.3: The Median Multiple: Historical & International Consistency Available data shows that house costs have generally risen at a rate similar to that of household incomes until comparatively recently. This is consistent with cost trends among other basic necessities, such as personal transport, food and clothing. 11 This is to be contrasted with median "family" income. The Housing Indicators Program, http://siteresources.worldbank.org/INTURBANDEVELOPMENT/Resources/3363871169578899171/rd-hs7.htm. Also see Shlomo Angel, Housing Policy Matters: A Global Analysis. Oxford University Press, 2000. 13 Indicators of Sustainable Development: House Price-to-income Ratio: http://esl.jrc.it/envind/un_meths/UN_ME050.htm. 14 For example, The Economist publishes a housing affordability index for metropolitan areas in China (see Section 4). 12 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 7 Historically, the Median Multiple has been remarkably similar in nations that had liberal land use regulation within recent decades. The Median Multiple was 3.0 or less until the late 1980s or 1990s, in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States (Figure 1). 15 Table 2 DEFINITION OF AN AFFORDABLE HOUSING MARKET For metropolitan areas to rate as 'affordable' and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer Demographia Survey Schedules for guidance). The critically important Development Ratios for this new fringe starter housing, should be 17 - 23% serviced lot / section cost - to balance the actual housing construction. Ideally through a normal building cycle, the Median Multiple should move from a Floor Multiple of 2.3, through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7 - to ensure maximum stability and optimal medium and long term performance of the residential construction sector. ... so that today … different forms of dwellings should be about or below these Median Multiples to rate as ‘affordable’ … … 1. 2. 3. 4. Standard detached housing should not cost any more than 3.0 times annual household incomes of specific metros (refer Annual Demographia Surveys ; recent Glaeser & Gyourko paper ; Recent Reserve Bank of Australia paper ); Harvard JCHR Median Multiple Tables (accessible top left column front page this website). New fringe starter house and land packages should cost around 2.5 times … at development ratios of 20% serviced lot and the balance construction (Definition of an affordable housing market www.PerformanceUrbanPlanning.org). Apartment / townhouses should be around 2.0 times ( about 70% of detached … to illustrate refer Houston Association of Realtors Monthly Report ). Fringe manufactured house (prefab) and land packages should be around 1.5 times ( refer Leaky Homes And An Architect’s Musing’s Scoop News March 2010 published Interest Co NZ as ‘Houston: We have a housing affordability problem’ -Hugh Pavletich Performance Urban Planning The Demographia International Housing Affordability Survey has been published for 16 years to emphasize the importance of housing affordability to an affluent standard of living. More severely unaffordable housing is strongly correlated with higher overall costs of living and thus lower standards of living between housing markets. In some metropolitan markets As this report indicates, many major metropolitan markets are house prices have doubled, severely unaffordable and their higher costs of living, largely tripled, or even quadrupled attributable to housing, deny affluent standards of living to relative to household incomes . many of their residents. Yet, higher standards of living and 15 See: Anthony Richards, Some Observations on the Cost of Housing in Australia, Address to 2008 Economic and Social Outlook Conference The Melbourne Institute, 27 March 2008 http://www.rba.gov.au/speeches/2008/sp-so-270308.html. This research included all nations covered in the Demographia International Housing Affordability Survey except for Ireland. The Richards research is also illustrated in the of the National Housing Council of Australia, http://www.fahcsia.gov.au/sa/housing/pubs/housing/national_housing_supply/Documents/default.htm (Figure 1.1). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 8 lower poverty rates are principal domestic policy priorities in virtually all nations. This requires attention to housing affordability (Section 4). Table 3 LIBERAL V. URBAN CONTAINMENT: LAND USE REGULATION CLASSIFICATIONS The Demographia International Housing Affordability Survey uses the following land use regulation classifications: Liberal Land Use Policy (Traditionally Regulated Markets) applies in markets not classified as having urban containment policy, which does not permit competitive land markets to operate on the urban fringe). In contrast, in liberal markets, residential development is allowed to occur based upon consumer preferences, subject to basic environmental regulation. 16 Generally, liberal land use regulation is “demanddriven” Land is allowed to be developed, except in limited areas, such as parks and environmentally sensitive areas. By allowing development on the urban fringe, liberal land use regulation allows the "supply vent" to operate, which keeps house prices affordable. Less restrictive regulation can also be called traditional or liberal regulation. In addition to lower housing costs relative to incomes, the lower population densities typical of liberal markets are associated with less intense traffic congestion and shorter average work trip journey times. Liberal land use regulation has also been called “traditional” regulation. Urban Containment Policy does not permit 17 the competitive market for land to operate on the urban fringe. More restrictive land use regulation seeks to outlaw the liberal regulation that produced middle-income housing affordability. Typically, urban containment includes urban containment boundaries and related variations (such as urban growth boundaries, green belts, urban service districts, “growth areas” and other strategies that substantially reduce the amount of land available for house building). 18 Urban containment policy may also be characterized by terms such as "densification policy," “compact development”, or “urban consolidation.” Another strategy, “virtual” urban containment boundaries can be established independently by multiple jurisdictions in suburban or exurban areas. 19 Urban containment may be imposed public policy by any level of government and by multiple governments. By severely limiting or even prohibiting development on the urban fringe, urban containment eliminates the "supply vent" of u rban fringe development, by not allowing the supply of housing to keep up with demand, except at prices elevated well above historic norms. Urban containment policies are often accompanied by costly development impact fee regimes that disproportionately charge the cost of the necessary infrastructure for growth on new house buyers. There is particular concern about the cost increasing impacts of these fees and levies, especially in Australia, Canada (Canada Mortgage and Housing Corporation), New Zealand (New Zealand Productivity Commission) and California. Classification of Major Markets: The classification of major markets (metropolitan areas with more than 2,000,000 population) is described in Figure 4 and in the Annex. In recent decades, house prices have escalated far above household incomes in many parts of the world. In some metropolitan markets house prices have doubled, tripled, or even quadrupled relative to household incomes. Each of the major metropolitan areas with "severely unaffordable" housing has "urban containment," (Table 3) which has been associated with deteriorating housing affordability. The Organisation for Economic Cooperation and Development (OECD) has recently published a report, Under Pressure: The Squeezed Middle-Class, which documents the threat to the future 16 Liberal land use policy may vary widely, from the near deregulation in some areas of Texas to the "light-handed" zoning regulations operating throughout much of the rest of the United States. 17 Called urban consolidation in Australia. 18 See: Wendell Cox, “Restrictive Land-Use Regulation: Strategies, Effects and Solutions,” Frontier Centre for Public Policy, https://fcpp.org/wp-content/uploads/FC197_RestrictiveLandUse_JN2817_F2.pdf. 19 Robert W. Burchell (2002)., George Lowenstein, William R. Dolphin, Catherine C. Galley, Anthony Downs, Samuel Seskin, Katherine Gray Still and Terry Moore. Costs of Sprawl – 2000. Transportation Research Board of the National Research Council (2002). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 9 of the middle-class in a number of nations and cites house price increases as an important driving factor (Section 4). 1.4: Middle-Income Housing Affordability: Driving the Need for Low-Income Housing The consequences of the middle-income housing affordability crisis extend beyond the threat to the middle-class standard of living, which as documented by Each of the major OECD. Low-income households are also victims of the metropolitan areas with housing affordability crisis because the cost of subsidized "severely unaffordable" housing rises with market prices. housing has "urban containment," The result is that fewer households can afford housing and the need for subsidized housing increases. At the same time, higher house prices tend to increase the per unit cost of subsidized housing. International House Price to Income Ratios 1987/1992 TO 2019 8 7 Price to Income Multiple With pressure on governments to control public expenditure, there may be little public support for additional spending on affordable housing. Many metropolitan areas have waiting lists for subsidized housing. Public officials make frequent statements about the need to provide more low-income housing, but may fail to recognize that its greater need and rising costs is driven in large measure by inordinately rising house prices. 1987 or 1992 (Earliest Data) 2019 Median Market 6 5 4 3 2 1 0 In fact, the most effective strategy for Australia Canada Ireland New Zealand United Kingdom United States reducing the shortage of subsidized housing Figure 1 Source: See Notes on Figures is to improve middle-income housing affordability. Lower house prices make market rate housing affordable to more low-income households. 2: HOUSING AFFORDABILITY IN 2019: INTERNATIONAL SUMMARY T he 16th Annual Demographia International Housing Affordability Survey provides housing affordability ratings for 92 major housing markets and overall, 309 markets in eight nations. Over the past year, there has been moderation of house prices in a number of the most unaffordable markets. However, in none of these has the improvement been substantial enough to materially improve housing affordability or the standard of living. Where middle-income housing is affordable, there is less need for subsidized housing, because more lowerincome households can afford market priced houses. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 10 2.1: Major Housing Markets There are 10 “affordable” major metropolitan areas, all in the United States. There are 31 “severely unaffordable” major markets. Only Singapore and Ireland do not have severely unaffordable markets. Nation Australia Canada China: Hong Kong Ireland New Zealand Singapore United Kingdom United States TOTAL Table 4 Housing Affordability Ratings by Nation: Major Housing Markets Affordable Moderately Seriously Severely (3.0 & Unaffordable Unaffordable Unaffordable Under) (3.1-4.0) (4.1-5.0) (5.1 & Over) 0 0 0 5 0 2 2 2 0 0 0 1 0 0 1 0 0 0 0 1 0 0 1 0 0 3 10 8 10 23 9 14 10 28 23 31 Total 5 6 1 1 1 1 21 56 92 Median Market 6.9 4.4 20.8 4.7 8.6 4.6 4.6 3.9 4.3 For the sixth year in a row, the United States has the most affordable housing costs among major housing markets. The median market in the US has a moderately affordable Median Multiple 3.9 20 The median market of Canada has a Median Multiple of 4.4, Singapore and the United Kingdom are at 4.6 and Ireland (Dublin) is at 4.7, all of which are seriously unaffordable. The major metropolitan markets are severely unaffordable in Table 5 Australia, China (Hong Kong) and New Major Housing Markets: 10 Most Affordable Zealand (Table 4). The trend in annual Rank (Out of Median Multiples among median markets is 92) Nation Metropolitan Market Median Multiple shown in Figure 2). 1 U.S. Rochester, NY 2.5 2 2 4 4 4 4 8 8 10 U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Cleveland, OH Oklahoma City, OK Buffalo, NY Cincinnati, OH-KY-IN Pittsburgh, PA St. Louis,, MO-IL Hartford, CT Indianapolis. IN Tulsa, OK 2.7 2.7 2.8 2.8 2.8 2.8 2.9 2.9 3.0 Most Affordable Major Housing Markets: The 10 affordable major housing markets are all in the United States (Table 5). Rochester is the most affordable, with a Median Multiple of 2.5. Oklahoma City and Cleveland are second most affordable, with Median Multiples of 2.7. Buffalo, Cincinnati, Pittsburgh and St. Louis Median Multiples of 2.8. Indianapolis and Hartford have Median Multiples of 2.9 and Tulsa has a Median Multiple of 3.0. All of the affordable markets have liberal land use regulation. 20 This is the Median Multiple of the median market (not the average of the Median Multiples). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 11 The 31 severely unaffordable major housing markets are shown in Table 6. Hong Kong has a Median Multiple of 20.8, slightly improved from 2018. For the tenth year in a row, Hong Kong has the least affordable housing among the markets included in the Demographia International Housing Affordability Survey. Median Multiple Least Affordable Major Housing Markets: The severely unaffordable major markets include all in Australia (5), New Zealand (1) and China (1). Two of Canada’s six markets Housing Affordability: 2004-2019 are severely unaffordable. Eight of the MAJOR MARKETS (1,000,000+ POPULATION) 24 21 major markets in the United Kingdom, and 14 of the 56 major 21 markets in the United States are 18 severely unaffordable. Australia Canada China (Hong Kong) Ireland New Zealand Singapore United Kingdom United States 15 12 9 6 3 0 2004 2006 2008 2010 2012 2014 2016 2018 Figure 2 Vancouver is second least affordable major housing market, with a Median Multiple of 11.9. Sydney ranks third least affordable, at 11.0, followed by Melbourne, at 9.5 and Los Angeles, at 9.0. Toronto and Auckland are tied for sixth least affordable, at a Median Multiple of 8.6. San Jose has a Median Multiple of 8.5 and San Francisco 8.6. London (Greater London Authority) has a Median Multiple of 8.2 and is the 10 th least affordable major market (Table 6). The housing affordability performance and general regulatory structure (urban containment or equivalent versus liberal land use policy) is illustrated for the largest markets in Figure 3. All of the severely unaffordable major markets have urban containment (Table 3). Housing Affordability & Land Regulation 2+ MILLION METROPOLITAN AREAS: 2019 Hong Kong Vancouver Sydney Melbourne Los Angeles Toronto San Francisco London (GLA) San Diego London Exurbs Brisbane Seattle Miami New York Riverside-SB Denver Boston Sacramento Portland Birmingham (UK) Las Vegas Montreal Manchester Singapore Orlando Leeds Phoenix Tampa-STP Austin San Antonio Charlotte Washington Dallas-FTW Houston Chicago Baltimore Philadelphia Minneapolis-STP Atlanta Kansas City Columbus Detroit Indianapolis St. Louis Cincinnati Pittsburgh Cleveland Three of the seven markets rated by the UBS Global Real Estate Bubble Index 2018 as having the greatest bubble risk are included in the 16th Annual Demographia International Housing MEDIAN MULTIPLE→ Affordability Survey, each with severely 0 3 6 9 12 unaffordable ratings. This includes Toronto (#2), Hong Kong (#3, tied with Amsterdam), and Vancouver (#7). Liberal Urban Containment See Figure Notes Figure 3 15 18 21 Major market data is summarized in Schedule 1, with additional information in Schedule 3. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 12 Table 6 Severely Unaffordable Major Housing Markets (Least Affordable) Rank 62 63 63 65 65 67 67 67 67 71 72 73 74 74 76 77 Nation U.S. U.S. U.S. U.S. U.S. U.K. U.S. U.S. U.S. U.S. U.K. U.K. Australia U.K. Australia U.K. Metropolitan Market Portland, OR-WA Fresno, CA Sacramento, CA Boston, MA-NH Denver, CO Leicester & Leicestershire Miami, FL New York, NY-NJ-PA Riverside-San Bernardino, CA Seattle, WA Northampton & Northamptonshire Swindon & Wiltshire Perth, WA Plymouth & Devon Brisbane, QLD Bristol-Bath Median Multiple 5.1 5.2 5.2 5.3 5.3 5.4 5.4 5.4 5.4 5.5 5.7 5.8 6.0 6.0 6.3 6.5 Rank 78 79 79 81 82 83 84 85 86 86 88 89 90 91 92 Nation U.K. Australia U.K. U.S. U.S. U.K. U.S. U.S. N.Z. Canada U.S. Australia Australia Canada China Metropolitan Market London Exurbs (E & SE England) Adelaide, SA Bournemouth & Dorsett San Diego, CA Honolulu, HI London (Greater London Authority) San Francisco, CA San Jose, CA Auckland Toronto, ON Los Angeles, CA Melbourne, VIC Sydney, NSW Vancouver, BC Hong Kong Median Multiple 6.6 6.9 6.9 7.3 8.0 8.2 8.4 8.5 8.6 8.6 9.0 9.5 11.0 11.9 20.8 2.2: All Housing Markets Among all 309 markets, the United States has the most affordable housing costs, with a Median Multiple of 3.6 in the median market. The median market in Canada has a Median Multiple of 3.9, followed by Ireland (4.1), the United Kingdom (4.5) and Singapore(4.6). Overall, the least affordable median market Median Multiples are in China (Hong Kong), at 20.8, Australia (6.0) and New Zealand (7.0), each severely unaffordable. Table 7 summarizes housing affordability ratings by nation for all 309 markets. All markets are ranked by housing affordability in Schedule 2 and listed alphabetically in Schedule 3. Nation Australia Canada China: Hong Kong Ireland New Zealand Singapore United Kingdom United States TOTAL Table 7 Housing Affordability Ratings by Nation: All Markets Affordable Moderately Seriously Severely (3.0 & Unaffordable Unaffordable Unaffordable Under) (3.1-4.0) (4.1-5.0) (5.1 & Over) 1 3 5 14 8 18 6 18 0 0 0 1 1 1 3 0 0 0 0 8 0 0 1 0 0 7 16 10 44 79 36 29 54 108 67 80 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Total 23 50 1 5 8 1 33 188 309 Median Market 5.9 3.9 20.8 4.1 7.0 4.6 4.5 3.6 3.9 13 Among all markets, 54 are affordable (Median Multiple of 3.0 or less). The affordable markets are in Australia (1), Canada (8), Ireland (1), and the United States (44). There are no affordable markets in China (Hong Kong), New Zealand, Table 8 Singapore or the United Kingdom. All Housing Markets: 10 Most Affordable Canada has the most affordable market, in Fort MacMurray, AB, at a Median Multiple of 1.8. For MacMurray has suffered serious economic disruption as a result of petroleum market developments and product transport shortages. Two other Canadian markets are in the most affordable ten, Fredericton, NB and Saint John, NB (Table 8). Rank 1 2 3 3 5 6 6 6 6 6 Nation Metropolitan Market Canada U.S. U.S. U.S. U.S. U.S. Canada U.S. Canada U.S. Fort MacMurray, AB Peoria, IL Davenport, IA-IL Rockford, IL Utica-Rome, NY Akron, OH Fredericton, NB McAllen, TX Saint John, NB Syracuse, NY Median Multiple 1.8 2.1 2.2 2.2 2.3 2.4 2.4 2.4 2.4 2.4 Among the 79 severely unaffordable markets, most are in the United States (29), Canada (18) and Australia (14). 3: HOUSING AFFORDABILITY IN 2019: NATIONAL SUMMARIES T he housing affordability situation is summarized by nation below. The housing affordability data for each housing market is ranked in Schedule 1 for the major markets and Schedule 2 for all markets. Schedule 3 lists all markets, alphabetically, with additional data. 3.1: Australia Again, as in each of the previous 15 Demographia International Housing Affordability Surveys, all of Australia's five major housing markets are severely unaffordable (Figure 4). Even so, housing remains severely unaffordable in all of the major markets, and by a substantial margin in Sydney and Melbourne. Despite what has been called the largest Sydney price reduction in 35 years, house prices relative to incomes are more than double the rate of the early 1980s. In Sydney and Melbourne, median income Sydney is again the third least affordable households need at least three years’ more income market, with a 11.0, while Melbourne is to pay for the median priced house than in 2004, fourth least affordable at 9.5 when the first Demographia Survey was published. OECD expressed the following assessment of the Australian housing market (December 2018): “Australia’s housing market is a source of vulnerability. Prices have more than doubled in real terms since the early 2000s and household debt has surged. The market has started to cool over the last year, with prices falling most notably in Melbourne and Sydney. So far, 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 14 data point to a soft landing without substantial consequence for the overall economy. Nevertheless, risk of a hard landing remains.” Major Markets: Sydney is again Australia’s least affordable market, with a Median Multiple of 11.0, and ranks third least affordable overall, trailing Hong Kong and Vancouver. Melbourne has a Median Multiple of 9.5 and is the fourth least affordable major housing market internationally. Only Hong Kong, Vancouver, and Sydney are less affordable than Melbourne. Adelaide has a severely unaffordable 6.9 Median Multiple and is the 14 th least affordable of the 92 major markets. Brisbane has a Median Multiple is 6.3 and is ranked 17 th least affordable, while Perth, with a Median Multiple of 6.0 is the 19 th least Middle-Income Housing Affordability affordable major housing market in this year’s AUSTRALIA: CAPITAL CITY HOUSING MARKETS: 1981-2019 Demographia Survey. 15 Other Housing Markets: Overall, Australia’s 12 Median Multiple housing markets have a severely unaffordable Median Multiple of 5.9. There is only one affordable market, Gladstone, Queensland, with a Median Multiple of 2.8. Overall 14 markets in Australia are rated severely unaffordable. The least affordable are the Sunshine Coast, Queensland (8.4) and the Gold Coast, Queensland (8.0). Sydney Melbourne Brisbane Adelaide Perth Hobart Canberra 9 6 3 0 1981 1996 2011 Figure 4 Subsidized Low-Income Housing: Australia’s high house prices have increased the cost and demand for subsidized housing. The Australian Housing and Urban Research Institute estimated that “current housing need in Australia to be 1.3 million households,” and expected the need to worsen. A Parliamentary briefing book found that “ …the stock of social housing is not increasing at a rate sufficient to keep up with demand, and waiting lists for social housing remain long. ” Historical Context: Australia’s generally unfavorable housing affordability is in significant contrast to the broad affordability that existed before implementation of urban containment (called “urban consolidation” in Australia). The price-to-income ratio in Australia was below 3.0 three decades ago (Figure 1). 3.2: Canada There has long been concern about deteriorating housing affordability in Canada. In addition to its international attention to the middle-class standard of living, OECD has expressed concern about decline of the middle-class in Canada and the substantial role of house price increases in that phenomenon. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 15 Canada’s new Liberal Party led government has appointed a Minister of Middle-Class Prosperity. The principal threat to the standard of living is that house prices have been rising strongly ahead of income. A 2016 Frontier Centre for Public Policy research report reviewed the strongly rising house prices relative to incomes in 35 markets since 2000. 21 Major Housing Markets: Canada has two of the 10 least affordable major markets in the Demographia Survey (Figure 5). Vancouver has the second least affordable housing among the major markets, with a Median Multiple of 11.9, trailing only Hong Kong. Vancouver has the second least British Columbia imposed a foreign buyers tax in 2016. affordable housing among the This year’s Median Multiple is below last year’s 12.6, but is major markets, with a Median approximately the same as when the foreign buyers tax Multiple of 11.9. was imposed. The 2019 UBS Global Real Estate Bubble Index rates Vancouver as having the sixth worst housing "bubble risk" in the world. Middle-Income Housing Affordability CANADA: MAJOR MARKETS: 2004-2019 15 12 Median Multiple By the time of the first Demographia International Housing Affordability Survey, Vancouver had already developed severely unaffordable housing, which has been associated with its urban containment policy, adopted more than four decades ago. Vancouver has experienced significant housing affordability deterioration among major markets, with its Median Multiple deteriorating from 5.3 to 11.9, equivalent to an additional 6.6 years of pre-tax median household income. Toronto Montreal Vancouver Ottawa Calgary Edmonton 9 6 3 0 2004 2006 2008 2010 2012 2014 2016 2018 Figure 5 Toronto also has severely unaffordable housing, with its Median Multiple deteriorating to 8.6 from 8.3 in 2018 and 3.9 in 2004 (the first Demographic International Housing Affordability Survey) The 2019 UBS Global Real Estate Bubble Index rates Toronto as having the second worst housing "bubble risk" in the world (after Munich), worse than least affordable Hong Kong and second least affordable Vancouver. The province of Ontario imposed a foreign buyers tax in 2017. Since that time, Toronto’s house prices have become less volatile, especially in more expensive housing. However, housing affordability in Toronto has continued to deteriorate at the middle of the market. In Toronto, house prices have deteriorated from 3.9 to 8.6 times annual incomes in 15 years Wendell Cox and Ailin He (2016), Canada’s Middle-Income Housing Affordability Crisis, Frontier Centre for Public Policy, https://fcpp.org/wp-content/uploads/2016/06/Cox-He-Middle-Income-Housing-Crisis.pdf. 21 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 16 In Toronto, the housing affordability loss has been associated with the mid-2000s adoption of urban containment policy (“Places to Grow”), including a Green Belt and other draconian restrictions. A Demographia Survey co-author predicted at the time that this would lead to worsened housing affordability. 22 Montréal has seriously unaffordable housing (4.7), having deteriorated from a moderately unaffordable 3.1 in 2004. Calgary has a moderately unaffordable Median Multiple of 3.9, which is down somewhat, due to the economic reversals in the petroleum industry of Alberta. Even so, the present Median Multiple is a significant deterioration from an affordable 3.0 in 2004. Ottawa-Gatineau became seriously unaffordable, with a Median Multiple of 4.1. This is a deterioration from an affordable Median Multiple of 2.9 in 2004. Canada’s most affordable major market is Edmonton (3.8), which is rated as moderately unaffordable. This is a deterioration from the affordable 2.8 Median Multiple in 2005, when Edmonton's was first covered in the Demographia Survey. Housing Choice Denied in Major Metropolitan Areas: A Sotheby’s Real Estate International poll reported that a large percentage of households prefer detached housing, as has historically been the case in Canada. Yet rising prices have, in effect, limited housing choice, forcing many new buyers into attached housing (such as row houses, semi-detached and row houses) and apartment condominiums (Figure 6). In Vancouver, Toronto, Montréal, and Calgary from 78 to 91 percent of young urban households were found to prefer detached housing. Each of these four metropolitan areas have urban containment. Preference & Purchase: Detached Houses YOUNG URBAN FAMILIES: CANADA (2018) Preferred House Type Purchased House Type 100% 90% 83% 78% 80% 70% 74% 61% 60% 50% 91% 84% 82% 50% 56% 46% 40% 30% 20% 10% 0% Toronto Montreal Vancouver Calgary Source: Home Ownership Trends (Sotheby’s International Real Estate) Average Figure 6 Ryerson University researchers have responded to the serious housing affordability concerns by proposing a substantial expansion of the lower density ground oriented housing (detached, semi-detached, attached and row houses) preferred by the market. 23 Current policy is skewed against the development of such housing. The RBC Economics Affordability Measure: The RBC Economics Housing Affordability Report for the third quarter of 2019 illustrates the financial impossibilities faced by middle-income households 22 Wendell Cox (2004), Myths about Urban Growth and the Toronto Greenbelt, Fraser Institute. Frank Clayton (2017), "Countering Myths about Rising Ground-Related Housing Prices in the GTA: New Supply Really Matters," Centre for Urban Research and Land Development Ryerson University 2017 23 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 17 % of Pre-Tax Median Household Income in Canada's severely unaffordable markets. In Vancouver, the median income household would need to pay all of its pre-tax income in housing costs Share of Median Pre-Tax Income Required to afford the median priced house. This is about AVERAGE PRICED HOUSE: VANCOUVER & TORONTO AREAS 120% triple or more the amount of household income 104.9% that would be required in Winnipeg, Halifax, All Dwellings Single-Family Detached Regina, St. John’s or Saskatoon. In Toronto, it 90% Apartment Condominium 78.6% 77.3% requires nearly 80 percent, about double that of 65.6% 3 Quarter 2019 Calgary or Edmonton. In both Vancouver and (September Quarter) 60% 47.6% Toronto, affording the least expensive housing, 43.0% apartment condominiums is considerably above CHMC STANDARD 30% the Canada Mortgage and Housing Corporation 30 percent housing affordability guideline (Figure 0% 7). Vancouver Area Toronto Area rd Figure 7 Source: RBC Economics Other Housing Markets: The overall Median Multiple for the 50 markets in Canada is a moderately unaffordable 3.9, a slight improvement from last year’s 4.0. As in California (Section 3.8), severely unaffordable housing has spread from the least affordable major markets. In British Columbia, this is evident in Victoria (8.1), the Fraser Valley (7.8), Nanaimo (7.5), Comox Valley (7.5), Chilliwack (7.3) and Kelowna (6.7). Similarly, markets in the extended Toronto area (generally the “Greater Golden Horseshoe”) have become severely unaffordable, including Hamilton (7.0), Guelph (6.5), Kitchener-Waterloo (6.4), Cambridge (6.0), Oshawa (5.9), Peterborough (5.9), St. Catharines-Niagara (5.5), Barrie (5.5), Brantford (5.6) and London (5.1). This indicates housing affordability deterioration (Median Multiple increases) of 40 percent to 90 percent in just a decade (Figure 8). Housing Affordability Deterioration: 10 Years NEARBY TORONTO MARKETS 2009 - 2019 8 2009 7.0 7 6.4 2019 5.9 6 Median Multiple Outside of the severely unaffordable markets of Ontario and British Columbia, Canada’s house prices are much more affordable. There are eight affordable markets, with Fort MacMurray as the most affordable market in any nation in this year’s Demographia Survey (Median Multiple of 1.8). Fort MacMurray is suffering a severe economic decline as a result of negative petroleum market dynamics. Other affordable markets include Fredericton (NB) and Saint John (NB) at 2.4, Cape Breton (NS) at 2.6, Moncton (NB) at 2.6, Saguenay (QC) at 2.7, Trois Rivieres (QC) at 2.8 and Thunder Bay (ON) at 3.0. 5.4 5.6 5.1 5 4.2 4 3.4 4.1 3.4 3.8 3.2 3 2 1 0 Barrie Hamilton KitchenerWaterloo See: Notes on Figures 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) London Peterborough St. CatharinesNiagara Figure 8 18 Subsidized Low-Income Housing: The escalation of house prices has increased the number of households eligible for subsidized housing, while substantially increasing costs. In Vancouver and Toronto there are waiting lists. In Vancouver, “…new residential projects “are not affordable for lower income households.” Land cost escalation around transit stations “can foster gentrification and demolition of rental stock” that can cause displacement of low-income households. Historical Context: Until recently, most of Median Multiple In Toronto, RBC reports that there has been a huge increase in apartment rental construction, but it is largely unaffordable to lower-income households. The supply of such housing is expected to fall far short of the need in coming years. Data in the Ontario Non-Profit Housing Association Middle-Income Affordability History CANADA: MAJOR HOUSING MARKETS: 1970-2019 indicated that there were more than 100,000 15 households on waiting lists in the Toronto Toronto Montreal metropolitan area. Vancouver 12 9 Ottawa Calgary Edmonton Canada had been characterized by house prices 6 that were affordable. From the early 1970s to the first Demographia International Housing Affordability 3 Surveys 2005 housing affordability was maintained or improved in the major markets 0 (Figure 9). The exception was Vancouver, with 1970 2004-2005 2019 Figure 9 its long-standing urban containment policy. Since the middle 2000s, rapidly escalating prices have been associated with wider adoption of urban containment policies. 3.3: China (Hong Kong) Hong Kong is China's only market in the Demographia International Housing Affordability Survey. Hong Kong has the least affordable housing for the tenth straight year, with a Median Multiple of 20.8. This is improved from last year’s Median Multiple of 20.9. Hong Kong has improved its position in the UBS Global Real Estate Bubble Index. Last year, Hong Kong had the greatest “bubble risk” of any rated market. The 2019 report places Hong Kong behind Toronto and Hong Kong has the least Amsterdam, which have greater bubble risks. affordable housing in the Survey, with a Median At the end of 2018 the Task Force on Land Supply proposed Multiple of 20.8. designation or reclamation of significant new areas for housing development, in the hope of improving both housing supply and housing affordability. In 2019, private housing developers contributed portions of their land holdings to alleviate the housing shortage. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 19 Subsidized Low-Income Housing: Hong Kong has a large subsidized housing program. Nonetheless, there is a shortage of subsidized housing and the Hong Kong Housing Authority reports the average waiting time for general applicants to have been 5.4 years in September 2019. Historical Context: Since colonial times (at least 1970), new residential development has been strongly controlled by government, which has been the sole supplier of new land to residential developers. This is unlike nations that have had liberal land use regimes (Section 1.3). Higher house prices have been associated with this restrictive regulatory environment, 24 which includes the urban containment strategy of greenbelts. 3.4: Ireland Overall, Ireland's median market Median Multiple is a moderately unaffordable 4.1. Major Housing Market: Dublin is Ireland’s only major metropolitan area market and has a seriously unaffordable Median Multiple, of 4.7, a slight improvement from last year’s 4.8. Even so, housing affordability has worsened by nearly 50 percent since 2011 from a Median Multiple of 3.3. Other Housing Markets: Galway and Cork are seriously unaffordable, both with a Median Multiple of 4.1. Waterford deteriorated to moderately unaffordable (3.2) while Limerick (3.0) remains affordable. Historical Context: Ireland had a price-to-income multiple of less than 3.0 in the early 1990s and remained affordable to the late 1990s (Figure 1). 3.5: New Zealand Recent New Zealand Median Multiple trends have been influenced by government restatement of median income data. 25 Largest Markets: Auckland, New Zealand’s only major housing market has a severely unaffordable 8.6 Median Multiple. This is an improvement from 9.0 in 2018. Even so, Auckland’s housing affordability has deteriorated from a Median Multiple of 5.9 in the first Demographia Survey (2004), thus adding nearly three years in pre-tax median household income to the house prices.. Auckland26 is the sixth least Auckland has been severely unaffordable in all 16 Demographia Surveys 24 C. M. Hui & F. K. Wong (2003), "Dynamic Impact of Land Supply on Population Mobility with Evidence from Hong Kong," http://www.prres.net/Papers/Hui_Dynamic_impact_of_land_supply_on_population_mobility.pdf. 25 The national median household income was restated to show a 25 percent increase, instead of a 10 percent increase from the census year of 2013 to 2017. See: "Household income and housing-cost statistics: Year ended June 2017 corrected" (December 7, 2017). https://www.stats.govt.nz/news/household-income-and-housing-cost-statistics-year-ended-june-2017-corrected. 26 The city of Auckland governs virtually the entire metropolitan area (housing market area or labor market area). Auckland and Honolulu are unusual among major metropolitan markets, with local governance by a single local authority. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 20 affordable among the 92 major housing markets, and has been severely unaffordable in all 16 Demographia International Housing Affordability Surveys. New Zealand’s’ second and third largest markets have experienced significantly different housing affordability trends over the last decade. Second largest Christchurch has a Median Multiple of 5.4, an improvement of 0.7 points from the 6 th annual Demographia International Housing Affordability Survey. Third largest Wellington has a Median Multiple of 6.8, a deterioration of 1.2 points over the past decade (Figure 10). Subsidized Low-Income Housing: New Zealand’s middle-income housing crisis has strained government low-income housing budgets. Emergency aid has been increased to accommodate some low-income households in motels and waiting lists have been growing. Housing Affordability and Public Policy Initiatives: Housing affordability remains an issue of considerable public concern in New Zealand. The latest IPSOS New Zealand Issues Monitor (November 2019), with 62 percent respondents believing that they cannot afford to purchase a house in their own market. Housing affordability has been a principal issue from the time of the lead – up to the 2008 election and Parliaments 2007-8 Commerce Committee Housing Affordability Inquiry, chaired by the National Party’s Hon. Gerry Brownlee. National’s then Housing Spokesman and later Minister Hon. Phil Heatley toured the United States and United Kingdom prior to the election to study housing. The Labour Party led coalition government’s Urban Growth agenda calls for intensified residential development, both greenfield and infill. This includes the abolishment of the Auckland urban containment boundary. The government is also proceeding with plans to reform infrastructure finance to rely on debt to be serviced by residents of new developments, rather than public expenditures. During the December 1 st Reading of the Infrastructure Funding and Financing Bill , Urban Development Minister Twyford acknowledged the broad political support for the Bill. Just prior to this, the Urban Development Bill was introduced in Parliament. Twyford addressed the Government Economics Network Conference in December, reiterating the government’s commitment to improving housing affordability. The argument I want to make to you is that generations of urban land use policy have lacked a decent grounding in economics. The consequences of that have been disastrous. And if we want to turn it around it is going to take bold reform and policies informed by an understanding of urban spatial economics. He continued, noting that the potential economic advantages of cities can only be realised if workers, consumers and suppliers are able to exchange their labour, products and ideas with minimum friction. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 21 Historical Context: In New Zealand, as in Middle-Income Housing Affordability NEW ZEALAND: 3 LARGEST MARKETS: 2004-2019 10 8 Median Multiple Consider the effect on the country’s labour productivity of two-thirds of Kiwis not being able to afford to buy into the Auckland housing market and thus not being available for the city’s jobs. Real estate is so expensive it distorts the allocation of labour and capital to the detriment of our productive economy. 6 Auckland Christchurch Wellington 4 Australia, housing had been affordable until 2 approximately a quarter century ago. However, 0 urban containment policies were adopted across 2004 2006 2008 2010 2012 2014 2016 2018 the country, and consistent with the Figure 10 2013-2017 Scaled based on Statistics New Zealand household income restatement. international experience, housing became severely unaffordable in all three of New Zealand’s largest housing markets, Auckland, Christchurch and Wellington (Figure 10). As indicated in Figure 1 (above), New Zealand’s price-to-income ratio was below 3.0 in the early 1990s. 3.6: Singapore The Introduction to this year’s Demographia Survey is “Focus on Singapore,” which contains additional information. Singapore’s Median Multiple is 4.6, seriously unaffordable. As is indicated in the Introduction: Focus on Singapore (above), obtaining and maintaining housing Singapore has avoided the rampant affordability is a far greater challenge in Singapore housing affordability deterioration than virtually any other major metropolitan area, typical of highly regulated markets. confined to a small island and constrained by international borders. The Singapore housing market is dominated by a publicly sponsored construction program, which sells houses to consumers (which though still called "public housing" are privately owned). The result is a vibrant competitive housing market. According to the Housing and Development Board (HDB), which administers the program, approximately 80 percent of residents live in HDB housing. Further, Singapore has an overall 91 percent rate of home ownership, the highest of any country in the Demographia Survey. Buyers are free to sell their own houses as in other nations with private ownership. Further, there are restrictions on foreign ownership, which may have shielded Singapore from the heightened cost escalation occurring from globalization of the real estate markets. Comparison to Other Highly Regulated Markets: Singapore has avoided the rampant housing affordability deterioration typical of highly regulated markets. This includes markets that have followed the British urban containment model, which can be largely traced to the Town and Country Planning Act of 1947. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 22 Historical Context: According to the 2018 UBS Global Real Estate Bubble Index, “there has been no difference between house price and income growth in Singapore over the last 30 years.” 3.7: United Kingdom The United Kingdom has a seriously unaffordable Median Multiple of 4.6 for major markets and 4.5 for all markets. Major Housing Markets: Eighteen of the United Kingdom’s 21 major housing markets are either severely unaffordable or seriously unaffordable. Three major markets, Blackpool & Lancashire (3.9), Sheffield & South Yorkshire (3.9) and Glasgow (4.0) are all moderately unaffordable. London (the Greater London Authority, inside the greenbelt) is the least affordable market, with a Median Multiple of 8.2 and is rated the 10 th least affordable major market in the Demographia Survey. Seven other major markets are severely unaffordable, including Bournemouth & Dorset, at 6.9, the London Exurbs (East and Southeast England, virtually all outside the London greenbelt) at 6.6, Bristol-Bath at 6.5, Plymouth & Devon at 6.0, Swindon & Wiltshire at 5.8, Northampton & Northamtptonshire at 5.7 and Leicester & Leicestershire at 5.4. Other Housing Markets:. None of the other housing Britain:"originator of the ideas and mechanisms of planning which have contributed so much to the problem: Green Belts and planning by unpredictable Subsidized Low-Income Housing: The high house prices political processes” in the UK have had the expected impact on low-income housing, with a House of Commons research briefing paper indicating the need to increase the rate of construction. More than 800,000 households were reported to be remaining on waiting lists. markets in the United Kingdom is affordable. Four are moderately unaffordable, including Dundee (3.9), Swansea (3.9), Aberdeen (3.9) and Falkirk (3.8). Urban Containment and Housing Affordability in the UK: Various analyses have documented the association between UK's urban containment policies and its excessively high house prices. For example, the Blair government commissioned reports by Kate Barker (2004 and 2006), and then a member of the Monetary Policy Committee of the Bank of England, which attributed much of the nation’s housing affordability loss to its urban containment policies. Sir Peter Hall, et al, expressed concerns about the housing affordability losses associated with urban containment in the early 1970s. 27 A report by the International Monetary Fund28 indicated the need to alleviate supply-side constraints, “notably pertaining to planning restrictions…” 27 Hall, Peter Geoffrey, Ray Thomas, Harry Gracey and Roy Drewett. The Containment of Urban England: The Planning System: Objectives Operations, Impacts. Vol. 2 Allen and Unwin [for] PEP, 1973. 28 International Monetary Fund, Country Report: United Kingdom: Selected Issues, http://www.imf.org/external/pubs/ft/scr/2015/cr14234.pdf, 2015. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 23 In their Introduction (Measuring Affordability: Alternative Measures) to the 14 th Annual Demographia International Housing Affordability Survey, Felipe Carozzi, Paul Cheshire and Christian Hilber of the London School of Economics refer to Britain as the cradle of housing unaffordability, and its role as "originator of the ideas and mechanisms of planning which have contributed so much to the problem: Green Belts and planning by unpredictable political processes!” The loss of middle-income housing affordability is indicated by the escalation of house prices in English regions relative to earnings (Figure 12). In London (GLA), house prices rose 3.3 times as rapidly as earnings in little more than two decades (1997 to 2018). Even in the comparatively depressed North East, house prices rose at 1.8 times earnings, while in all of the regions, house prices were nearly double their 1997 ratio to earnings. Historical Context: The Town and Country Median House Price to Median Earnings ENGLAND & REGIONS: 1997 TO 2018 Ratio: House Price to Earnings (Median) Despite the perception that there is little rural land left in the United Kingdom, 2011 census data indicates that less than 10 percent of the land in England and Wales was in built-up urban areas. 29 14 12 10 1997 2018 8 6 Planning Act (1947) enacted the first important 4 urban containment restrictions and has been a 2 model for such restrictions around the world. 0 Urban containment policy was substantially strengthened during the 1990s and early 2000s. All markets are subject to urban containment Source: Data.gov.uk & Office for National Statistics policy. As Figure 1 (above) indicates, the priceto-income ratio in the United Kingdom was 3.0 in the early 1990s. Figure 11 3.8: United States Overall, the United States has a moderately unaffordable Median Multiple of 3.6, the best housing affordability in this year’s Demographia Survey. This has been aided by recent household income increases that have finally exceeded30 late 1990s levels (inflation adjusted). This has been driven by improved economic growth and record lows in unemployment across all ethnic groups. Major Housing Markets: The United States has a moderately unaffordable Median Multiple of 3.9 in its major markets. This is the most favorable major market housing affordability in this year’s Demographia Survey. There are 10 affordable major housing markets in the United States and 14 severely unaffordable markets. 29 Calculated from 2011 Census data. Federal Reserve Bank of St. Louis, “Real Median Household Income in the United States,” https://fred.stlouisfed.org/series/MEHOINUSA672N 30 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 24 The most affordable major housing markets are Rochester (NY), with a Median Multiple of 2.5. Cleveland (OH) and Oklahoma City follow with a Median Multiple of 2.7. Buffalo (NY), Cincinnati (OH-KY-IN), Pittsburgh (PA) and St. Louis (MO-IL) all have a Median Multiple of 2.8. Hartford (CT) and Indianapolis (IN) have a Median Multiple of 2.9. Tulsa (OK) ranks 10 th, with a Median Multiple of 3.0. The five major housing markets with the poorest U.S. housing affordability are in California and Hawaii. Los Angeles (CA) has the worst housing affordability, with a Median Multiple of 9.2, followed by San Jose (CA) at 8.5 and San Francisco at (CA) at 8.4. These latter two markets are in the San Francisco Bay Area, which has the world’s strongest information technology industry. Honolulu (HI) has a Median Multiple of 8.0 and San Diego (CA) has a Median Multiple of 7.3. There are nine additional severely unaffordable major housing markets in the United States, including Seattle, (WA) at 5.5, Miami (FL), Riverside-San Bernardino (CA), and New York (NY-NJPA) at 5.4, Denver (CO) and Boston (MA-NH) at 5.3, Sacramento (CA) and Fresno (CA) at 5.2 and Portland (OR-WA) at 5.1. All Housing Markets: Overall, 44 of the 188 U.S. housing markets are affordable. The most affordable markets in this year’s Demographia Survey are Peoria, (IL) with a Median Multiple of 2.1, Davenport (IA-IL) and Rockford (IL) at 2.2, Utica-Rome (NY) at 2.3 as well as Akron (OH), McAllen (TX) and Syracuse (NY), at 2.4. Among markets outside the United States, only Fort MacMurray (AB), Canada is more affordable than these markets. The California markets of Salinas, Santa Cruz and San Luis Obispo are the least affordable among the other markets, each with a Median Multiple of 8.4. Affordability Concerns: Despite the more favorable housing affordability in the United States, a recent poll by the National Association of Home Builders (NAHB) found that four of five households believe there is a housing affordability crisis. According to NAHB Chair Greg Ugalde, “Policymakers must roll The US median lot value back inefficient zoning rules, costly impact fees and outmoded was $49,500 in 2018, and land development regulations that are driving up housing costs, less in parts of the contributing to the mounting lack of affordable housing and nation. hurting middle- and low-income households.” A National Association of Home Builders compilation of US Census Bureau data found that the median value of building lots (sections) for new single-family houses in the United States reached a record $49,500 in 2018, though were less in more affordable parts of the nation. The lowest median lot values were in two Census Divisions, at $38,000 and $40,000. Included in these Divisions are metropolitan areas such as Atlanta, Charlotte, Nashville and Louisville, as well as the generally less affordable metropolitan areas of Florida. Even with the recent increase, lot values have risen little over the past two decades, adjusted for inflation (Link to NAHB Chart). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 25 Decline of the Middle Class Evident in US Mortgage Qualification Data: The decline of the middle-class in the United States is evident from data from the minimum qualifying incomes for median priced house mortgages made by the National Association of Realtors. Qualifying Income for Median Priced House LEAST AFFORDABLE MARKETS: HOUSEHOLD INCOME: 2017 Generally, the middle-class has been $300,000 priced out of the median house price Top Income Quintile Floor Minimum Qualifying Income market in the least affordable $250,000 metropolitan areas. $200,000 Only three percent of middle-class $150,000 households had sufficient income to qualify for a mortgage on the median $100,000 priced house among the five least $50,000 affordable metropolitan areas (Los Angeles, San Diego, San Francisco and $0 San Jose, CA Honolulu, HI San Los Angeles, CA San Diego, CA San Jose as well as Honolulu). Each of Francisco, CA these markets has severely unaffordable Figure 12 Derived from ACS 2017 & National Association of Realtors and Demographia data housing. 31 (This analysis defines the middle-class as comprising the middle three quintiles, encompassing the 20 th to 80 th percentiles of household income). In San Jose and Honolulu, no middle-class households would have qualified , with the qualifying income being in the high income quintile. In Los Angeles, San Francisco and San Diego, the qualifying income nearly reaches the threshold of the top quintile (Figure 12). In seriously unaffordable markets, it is estimated that 58 percent of middleincome households would have qualified. The figure rises to 67 percent in moderately unaffordable markets. In the % Middle-Income Households Qualifying FOR THE MEDIAN PRICED HOUSE: 2017 100% % Of Households (Estimated) In the nine severely unaffordable markets outside coastal California and Honolulu, only 33 percent of households had sufficient incomes to qualify. Among all severely unaffordable markets (coastal California and Honolulu included) 22 percent of middle-income households had sufficient income to qualify for a mortgage on the median priced house. 90% 80% 70% 26% 33% 48% 42% 68% 60% 97% 50% 40% 30% 20% 74% 67% 52% 58% 32% 10% 0% All Major Metropolitan Areas Affordable Moderately Unaffordable Do Not Qualify Qualify 3% Seriously Severely Severely Unaffordable Unaffordable: Unaffordable: Not Coastal Coastal California & California & Honolulu Honolulu Modeled from US Census Bureau, NAR and Demographia data Figure 13 31 Estimates modeled using American Community Survey and Current Population Survey data, with middle-incomes defined as Quintiles 2 through 4. The national distribution of households by income within these quintiles is applied to the quintiles in the metropolitan areas. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 26 affordable markets, 74 percent of middle-income households are estimated to have had enough income to qualify for a mortgage on the median priced house (Figure 13). It is estimated that approximately 52 percent of US middle-income households in major metropolitan areas had sufficient income to qualify for a mortgage on the median priced house under typical terms (2017). Before the imposition of stronger land use regulations in some markets (1970 Census), the Median Multiple among US major metropolitan areas was 2.1, well within the “affordable” range and well below the present 3.9 average. It is likely that nearly all households had sufficient income to qualify for the median priced house in 1970. Subsidized Low-Income Housing: The United States has had a long standing shortage of affordable housing for low-income households. The Center for Housing Policy reported in 2016 that 21 percent of “working households” had “severe housing cost burdens.” California had the most serious problem, and the Los Angeles metropolitan area had the highest percentage of households with severe housing cost burdens” among the major metropolitan areas. Recently, the California Department of Housing and Community Development estimated a shortfall of 550,000 affordable housing units in the extended Los Angeles metropolitan area 32 alone. In 2016, 21% of working households in the United States Many jurisdictions in the United States have long had severe housing cost burdens – waiting lists for subsidized housing and it is not unusual Center for Housing Policy for such lists to be closed to additional households. The Housing Crisis in California: California has the three least affordable major metropolitan areas in the nation and all of its metropolitan areas are severely unaffordable (Figure 14). Prospects for improvement appear to be bleak. Already, the inexpensive new urban fringe housing, which drives housing affordability, is prohibited or severely limited by state and local policy. At the same time, California has had the highest housing cost adjusted poverty rate of any US state for as long as such data has been reported (8 years). California also has the highest rate in the nation of homelessness, which is getting more severe. 33 Informal homeless encampments now exist, for example in San Jose and San Francisco, which have the two highest median household incomes in the United States, as well as in Los Angeles. The state continues to shed residents, losing a 900,000 net domestic migrants since 2010. The exodus is accelerating. The average loss was under 50,000 from 2011 through 2015, and rose to 32 Los Angeles combined statistical area. For example, John M. Quigley and Stephen Raphael (2001), "The Economics of Homelessness: The Evidence from North America," European Journal of Housing Policy find a relationship between poorly functioning housing markets and greater homelessness. 33 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 27 130,000 from 2016 to 2018. In 2019, the loss was more than 200,000, the largest of any state. 34 Domestic migration losses have accelerated in the extended Los Angeles metropolitan area (combined statistical area) and the San Francisco Bay Area, which have among the least affordable housing in the United States. There is also a significant outflow of business investment. 35 As is occurring in Canada, markets nearby the least affordable major markets in California have become severely affordable, including major markets Riverside-San Bernardino, Sacramento and Fresno. Other nearby San Francisco, San Jose and Los California has had the highest Angeles have also become severely unaffordable, including Vallejo, Oxnard, Santa Cruz, Santa Rosa. housing cost adjusted poverty rate Stockton and Modesto (the latter two in the San Joaquin of any US state for 8 years. Valley). San Luis Obispo and Santa Barbara are also severely unaffordable. Median Multiple (Price/Income Ratio) There is an increasing recognition that solving California's housing affordability requires an increase in housing supply. However, proposals thus far are limited to densification within the existing urban footprint, and would not restore the competitive land market on the urban fringe. As a result, most housing that is affordable for middle-income households could not be built. Without the safety value of urban expansion on California & the United States Compared competitively priced land, California's MIDDLE-INCOME HOUSING AFFORDABILITY: FROM 1950 housing affordability is unlikely to 10 materially improve. Severely Unaffordable: California (Latest Year) 9 8 Severely Unaffordable: Elsewhere (Latest Year) Not Severely Unaffordable (Latest Year) It has been suggested that urban Severely Unaffordable: Median Multiple >5.0 7 fringe development is impossible All severely unaffordable markets have 6 because of topographic barriers in Urban containment policy 5 some California metropolitan areas. The reality is that all of California's 4 major metropolitan areas have 3 sufficient adjacent land to 2 accommodate a healthy expansion of 1 suburban development. Meanwhile, 0 California has the highest urban 1950 1960 1970 1980 1985 1990 1995 2000 2005 2010 2015 density in the nation, as detached Figure 14 Derived from Census Bureau, Harvard University and Demographia. housing peripheral development across the state has been on much smaller lots (sections) than average for the United States. Wendell Cox (2020), "U.S. Population Growth Down 1/3 in 5 Years, California Down 85%.” http://www.newgeography.com/content/006519-us-population-growth-down-13-5-years-california -down-85. 35 See Joseph Vranich (2015), "California Companies Head for Greatness - Out of California," newgeography.com. Wendell Cox (2018), California Lithium Battery Manufacturer Heads to Appalachia, http://www.newgeography.com/content/005840-california -lithium-battery-maker-heads-appalachia . 34 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 28 Historical Perspective: The United States had generally affordable housing through much of the period following World War II. Median Multiples in the United States were virtually all “affordable” (3.0 or below) until the 1970s and the major median market Median Multiple remained an affordable 3.0 until 2000, early in the housing bubble. The key was tract housing built on competitively priced land in the suburbs, the beginnings of which have been credited to entrepreneurs such as William Levitt, who built “Levittowns” and other similar developments in New York, New Jersey, Pennsylvania and Maryland. These communities were copied and improved upon, increasing the number of households able to live a Median Multiples in the United States were middle-income quality of life. Similar virtually all below 3.0 until the 1970s and the communities emerged from Canada, major metropolitan area average remained Australia and New Zealand to other parts affordable until 2000. of the high income world. More recently, middle-income housing has been increasing in emerging economies, on the urban fringes of Mexico, the Philippines, Chile, Indonesia, Thailand, Malaysia and countries in Central America. 4: THREAT TO THE MIDDLE-CLASS STANDARD OF LIVING If planning helps people, they ought to be better off as a result, not worse off. -Jane Jacobs36 O one of the principal advances of the past two centuries has been the drastic reduction in poverty and the rise of a large middle-class, which is detailed by economists Diedre McClosky and Robert Gordon. At the heart of this trend was the increase in the home ownership rate among the rapidly growing metropolitan population, which increasingly located in the suburbs, where land and houses were less … this bedrock (the middle-class) of expensive per square foot and which had good access our democracies and economic growth to jobs, shopping and recreation. is not as stable as in the past - OECD. Yet there has been material deterioration of middle-income affluence in many metropolitan areas, some that are covered in the Demographia International Housing Affordability Survey. In short, the middleclass is under threat. This is evident in recently published research by the Organization for Economic Cooperation and Development (OECD). OECD: The Squeezed Middle-Class This is happening broadly through the western world and beyond. In a report entitled Under Pressure: The Squeezed Middle-Class, the OECD noted: 36 Jane Jacobs: The Last Interview, Melville House (2016), p. 10. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 29 The middle class used to be an aspiration. For many generations it meant the assurance of living in a comfortable house and affording a rewarding lifestyle, thanks to a stable job with career opportunities. It was also a basis from which families aspired to an even better future for their children. At the macro level, the presence of a strong and prosperous middle class supports healthy economies and societies. Through their consumption, investment in education, health, and housing, their support for good quality public services, their intolerance of corruption, and their trust in others and in democratic institutions they are the very foundations of inclusive growth. However, there are now signs that this bedrock of our democracies and economic growth is not as stable as in the past. OECD added: “...the current generation is one of the most educated, and yet has lower chances of achieving the same standard of living as its parents.” The report further noted that households of the millennial generation are being “squeezed out of the ranks of the middle class” in advanced economies around the world. Housing has been the main driver of rising middle-class expenditure - OECD. The strongest evidence of the middle-income decline is in rising costs of living, which has been far more significant than the well documented income stagnation. OECD emphasizes that the threats to the middle-class crisis are in large measure the result of costs of living that have risen at rates far greater than incomes. Higher costs of living are a threat to the middle-income lifestyle, because they reduce the share of discretionary income and in doing so, reduce the standard of living. The OECD particularly notes that: “…, the cost of essential parts of the middle-class lifestyle have increased faster than inflation; house prices have been growing three times faster than household median income over the last two decades.” Further OECD finds that “Housing has been the main driver of rising middle-class expenditure,” and that the largest housing cost increases are in the costs of ownership, rather than rents. The Cost of Living and Land Use Regulation Housing tends to be the largest item of household expenditure. Moreover, the cost of living is largely driven by housing costs. In the United States, for example, housing accounts for nearly all (87%) of the higher costs of living in the most expensive markets (Figure 15). This cost differential largely also correlates with land use regulation stringency, which in the United States varies the most among the nations covered in the Demographia Survey. Housing Share of Excess Costs of Living MOST EXPENSIVE UNITED STATES MARKETS: 2017 Services 6.8% Goods 5.8% Housing 87.4% Metropolitan areas with cost of living 10% or more above the national average. Estimated from Bureau of Economic Analysis & American Community Survey Data 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Figure 15 30 Generally, house prices (to a greater extent than other major expenditure categories) have disproportionately increased relative to incomes where land use regulation has become significantly more rigid (especially with urban containment). Even in metropolitan areas with administrative mechanisms to ensure sufficient land supplies, housing affordability has deteriorated markedly (such as in Portland, Toronto, and Melbourne). Land Prices, House Prices and Subsidized Housing Urban containment policy, generally favored in urban planning, has been associated with driving up land prices on the urban periphery, and as a consequence, throughout the urban area (Figure 16). In the process, housing affordability has deteriorated. Urban Containment Effect on House Prices URBAN GROWTH BOUNDARY EXAMPLE (CONCEPTUAL) Housing affordability deteriorates because supply measures Insufficiently executed Land & House Prices For example, the United States Federal Home Loan Mortgage Corporation (Freddie Mac) reports that land costs can account for “upward of 70 percent of the cost of building a home” in Los Angeles and San Francisco area markets. This compares to the national average of “about 23 percent,” according to Freddie Mac. The land cost differences can be substantially greater. Finished lot costs up to 13 times that of liberally regulated markets have been identified in US urban containment markets. 5 3 → Distance from City Center → 1 City Center See Figure Notes. Suburbs Rural & Exurbs Figure 16 Further, higher housing costs increase the cost of subsidized housing programs and increase the number of households that are dependent on such programs. Paradoxically, a principal rationale for urban containment has been an expectation that housing will become affordable for low-income residents. The reality is the opposite. Where house prices are higher relative to incomes, subsidized housing becomes less affordable. Incorporating Economics Into Urban Policy In his recent book (Order without Design: How Markets Shape Cities) former World Bank principal planner Alain Bertaud suggests the necessity of applying “basic economic principles to the practice of urban planning.” He adds: “Poorly conceived urban strategies are not just innocent utopias. They misdirect scarce urban investments toward locations where they are the least needed and, in doing so, greatly reduce the welfare of urban households.” One of the most important ways that household welfare is reduced is by excluding the middle-class from middle-class housing. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 31 The increasing exclusion is illustrated in the United States, where no level of middle-class income is sufficient to qualify for a mortgage on the median priced house in the least affordable metropolitan areas. Only 22 percent qualified in the 14 severely unaffordable markets (Section 3.8). The financial stress on middle-income households is likely at least as intense in the severely unaffordable markets outside the United States. “Equality Clearly Matters” A defining characteristic of the improved standard of living has been that children have generally had higher incomes than their parents. There are indications that this is no longer the case, both in academic literature and in public perceptions. This has been indicated in (at least) the United States, the United Kingdom, Canada, Australia, New Zealand, Ireland and elsewhere. A United Kingdom study indicates that millennials will be the first generation to be worse off than their parents since the 1800s. Given these developments, it is not surprising that there is increasing concern about income inequality. In his The Moral Consequences of Economic Growth, Harvard University economist Benjamin Friedman suggested that “equality clearly matters.” According to Friedman: …what matters most is not so much how people’s incomes and living standards compare to the year before or even the year before that but whether the average citizen can see the evidence of progress over the last decade or even over the last generation: whether people have a sense of getting ahead compared to how their par ents live, and whether their experience gives them confidence that their children will do even better. Much of the rising inequality is due to rising housing costs. Matthew Rognlie, now at Northwestern University, found that virtually all of the rising inequality identified by French economist Thomas Piketty has been in the increase in housing values. ... [T]he literature studying markets with high housing costs finds that these costs are driven in large part by artificial scarcity through land use regulation .... A natural first step to combat the increasing role of housing wealth would be to reexamine [sic] these regulations and expand the housing supply. 37 That will require fundamental reform in urban planning. Bertaud suggests the appropriate focus: “The main objective of the planner should be to maintain mobility and housing affordability .” More recently, New Zealand’s Minister of Urban Development Phil Twyford reiterated the point, saying that “affordability and mobility” … “must be the primary objectives of urban policy.” Twyford further referred to “the consequences of this market dysfunction have had a harmful systemic effect on the health of our urban economies.” Similar points have been made on the “A note on Piketty and diminishing returns to capital,” June 15, 2014. Available online at http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf. 37 MatthewRognlie, 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 32 consequences of restrictive land use regulation on national economies and inequality, such as by Herkenhoff, Ohanian and Prescott (2017), and Hseih and Moretti (2015) as well as by La Cava (2016) Urban policy should focus Facilitating better standards of living is a principal domestic on “people rather than policy function. This requires urban policy that focuses on places” – LSE Economists “people rather than places,” as Paul C. Cheshire, Max Nathan and Henry G. Overman of the London School of Economics have posited. Planning requirements that undermine prosperity need to be eliminated. It took millennia to create the incomparably broad prosperity of the modern middle-class. Where a prosperous middle-class remains it is worth preserving and where it has been lost it should be restored. 5: SPECIAL COVERAGE: HOUSING AFFORDABILITY IN RUSSIA For some years, the Institute for Urban Economics (IUE) has analyzed housing affordability in the 17 metropolitan areas in Russia with more than one million residents. Most recently, IUE has published results for the third quarter (September quarter) of 2019. Demographia is pleased to share results from the IUE report. IUE provides data on median house prices, median household income and price to income ratios (the Median Multiple). Useful contextual information is also provided, such as metropolitan area populations, population growth rates and new housing unit build rates. This information is summarized below. The report, Housing affordability in the major Russian metropolitan areas:3rd quarter 2019. Russia’s house prices are generally within the “affordable” range, with 12 of the 17 metropolitan areas having a Median Multiple of 3.0 or below. 38 (Table 9). The median market has a Median Multiple of 2.6. 39 This is considerably better than in any of the nations in the Demographia International Housing Affordability Survey. Table 9 Relative to incomes, housing is Housing Affordability Ratings: Russia: Major Housing Markets 50% more expensive in the Rating Median Multiple # of Markets United States, where the Severely Unaffordable 5.1 & Over 0 median market has a Median Seriously Unaffordable 4.1 to 5.0 2 Multiple of 3.9. The US major Moderately Unaffordable 3.1 to 4.0 3 market Median Multiple was Affordable 3.0 & Under 12 an affordable 2.8 as late as Median Market/Total Markets 2.6 17 2000. 38 39 Affordability ratings are shown in Table 1. This is the Median Multiple of the median market (not the average of the Median Multiples). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 33 Among the major metropolitan areas, none in Russia are “severely unaffordable. ” Two are rated “seriously unaffordable,” three “moderately unaffordable” and 12 “affordable.” Data on the individual metropolitan areas is in Table 10, which also includes population estimates. The metropolitan area locations are illustrated in Figure 17. The largest metropolitan area and national capital, Moscow, is also Russia’s one megacity (over 10,000,000 population). Moscow is growing very quickly, having added nearly 10 percent to its population between 2010 and 2016. This is stronger growth than in any of the three megacities reported upon in the Demographia Survey, somewhat faster than Greater London and far faster than New York and Los Angeles. Moscow’s Median Multiple is a seriously unaffordable 4.2. The long-time historic capital, Baltic port, and second largest metropolitan area, St. Petersburg, also has a Median Multiple of 4.2. The other 15 metropolitan areas are considerably more affordable, ranging from a Median Multiple of 2.0 to 3.3. Krasnoyarsk, in Siberia and Kazan, on the Volga River have Median Multiples of 3.3 and the Pacific port of Vladivostok has a Median Multiple of 3.2 (all rated moderately unaffordable). The most affordable major metropolitan area is Krasnodar (in the north Caucasus), with a Median Multiple of 2.0. This is more affordable than Rochester (NY) in the US, which at 2.5 is the most affordable major metropolitan area in the Demographia Survey. Krasnodar is also has the fastest growth rate among the major metropolitan areas, at more than 15 percent from 2010 to 2016. This is more than 50 percent greater than Moscow’s growth rate, which is the second largest. Six of the 17 metropolitan areas are more affordable than Rochester and two more are as affordable. As a matter of interest, Volgograd, site of the definitive World War II Battle of Stalingrad, is among the affordable major metropolitan areas, with a Median Multiple of 2.7. The IUE report also provides an analysis of build rates by metropolitan area (new housing units per 1,000 population). Generally, IUE finds Russia’s build rates to be high by international comparisons. IUE notes that “liberal urban planning and land use policy in the Russian metropolitan areas which induced high levels of housing construction” According to the IUE report “the relatively high housing affordability rate in Russia is accompanied with the set of urban development problems such as excessive high-rise residential construction and population density at the metropolitan fringe, traffic congestion, lack of public infrastructure, and substantial part of deteriorating housing. It is also important to take into account the relatively low standards of housing (still very small floor space of units)”. Demographia notes that Russia’s superior housing affordability is an important strength. Russia needs to retain affordability to foster a growing and affluent middle-class and to avoid the ”squeezed middle-class” that OECD has found in many nations (Section 4). 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 34 Rank 1 2 3 3 5 6 7 7 9 10 10 12 13 14 14 16 17 Table 10 RUSSIA ALL MAJOR METROPOLITAN AREA HOUSING MARKETS: 2019: Third Quarter From: Institute for Urban Economics (IUE) Price to Income Median Price Median Ratio (Median (In Russian Household Population Metropolitan Market Multiple Rubles: ₽ ) Income (Annual) in Millions Krasnodar 2.0 ₽2,448,000 ₽1,250,000 1.6 Voronezh 2.1 ₽2,240,000 ₽1,051,000 1.5 Yekaterinburg 2.2 ₽2,738,000 ₽1,245,000 2.3 Nizhny Novgorod 2.2 ₽2,607,000 ₽1,204,000 2.1 Saratov 2.3 ₽1,855,000 ₽811,000 1.2 Rostov-on-Don 2.4 ₽2,450,000 ₽1,012,000 2.1 Chelyabinsk 2.5 ₽1,850,000 ₽731,000 1.6 Samara (Togliatti) 2.5 ₽2,300,000 ₽909,000 2.7 Novosibirsk 2.6 ₽2,840,000 ₽1,080,000 2.3 Volgograd 2.7 ₽2,173,000 ₽806,000 1.5 Ufa 2.7 ₽3,035,000 ₽1,137,000 1.5 Perm 3.0 ₽2,500,000 ₽846,000 1.4 Vladivostok 3.2 ₽4,133,000 ₽1,275,000 1.0 Kazan 3.3 ₽3,549,000 ₽1,069,000 1.7 Krasnoyarsk 3.3 ₽2,570,000 ₽776,000 1.4 Saint Petersburg 4.2 ₽5,013,000 ₽1,184,000 6.4 Moscow 4.2 ₽6,849,000 ₽1,641,000 17.7 Median Market 2.6 Russia: Major Metropolitan Areas Adapted from Institute for Urban Economics 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Figure 17 35 SCHEDULE 1 MAJOR HOUSING MARKETS RANKED BY AFFORDABILITY: Most Affordable to Least Affordable Median Multiple (Median House Price/Median Household Income): 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey Rank 1 2 2 4 4 4 4 8 8 10 11 11 13 13 13 16 16 18 18 20 20 20 23 23 25 25 25 25 25 30 30 30 30 30 35 35 35 35 39 39 39 39 39 44 44 46 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. U.K. Canada U.S. U.K. U.S. U.S. U.S. U.K. U.S. U.K. U.S. Canada U.S. U.S. U.K. U.S. U.K. Metropolitan Market Rochester, NY Cleveland, OH Oklahoma City, OK Buffalo, NY Cincinnati, OH-KY-IN Pittsburgh, PA St. Louis,, MO-IL Hartford, CT Indianapolis. IN Tulsa, OK Detroit, MI Grand Rapids, MI Birmingham, AL Columbus, OH Louisville, KY-IN Atlanta, GA Kansas City, MO-KS Minneapolis-St. Paul, MN-WI Philadelphia, PA-NJ-DE-MD Baltimore, MD Chicago, IL-IN-WI Virginia Beach-Norfolk, VA-NC Houston, TX Memphis, TN-MS-AR Dallas-Fort Worth, TX Edmonton, AB Milwaukee, WI Raleigh, NC Richmond, VA Blackpool & Lancashire Calgary, AB Jacksonville, FL Sheffield & South Yorkshire Washington, DC-VA-MD-WV Austin, TX Charlotte, NC-SC Glasgow San Antonio, TX Liverpool & Merseyside Nashville, TN Ottawa-Gatineau, ON-QC Tampa-St. Petersburg, FL Tucson, AZ Leeds & West Yorkshire Phoenix, AZ Derby & Derbyshire Median Multiple 2.5 2.7 2.7 2.8 2.8 2.8 2.8 2.9 2.9 3.0 3.1 3.1 3.2 3.2 3.2 3.3 3.3 3.4 3.4 3.5 3.5 3.5 3.6 3.6 3.8 3.8 3.8 3.8 3.8 3.9 3.9 3.9 3.9 3.9 4.0 4.0 4.0 4.0 4.1 4.1 4.1 4.1 4.1 4.2 4.2 4.3 Rank 46 48 48 48 51 51 53 53 53 53 57 57 57 60 60 62 63 63 65 65 67 67 67 67 71 72 73 74 74 76 77 78 79 79 81 82 83 84 85 86 86 88 89 90 91 92 Nation U.S. U.S. U.S. U.K. U.K. U.K. U.K. U.K. U.S. Singapore Ireland U.K. Canada U.K. U.S. U.S. U.S. U.S. U.S. U.S. U.K. U.S. U.S. U.S. U.S. U.K. U.K. Australia U.K. Australia U.K. U.K. Australia U.K. U.S. U.S. U.K. U.S. U.S. N.Z. Canada U.S. Australia Australia Canada China Metropolitan Market New Orleans. LA Orlando, FL Providence, RI-MA Stoke on Trent & Staffordshire Newcastle & Tyneside Nottingham & Nottinghamshire Hull & Humber Manchester & Greater Manchester Salt Lake City, UT Singapore Dublin Middlesbrough & Durham Montreal, QC Birmingham & West Midlands Las Vegas, NV Portland, OR-WA Fresno, CA Sacramento, CA Boston, MA-NH Denver, CO Leicester & Leicestershire Miami, FL New York, NY-NJ-PA Riverside-San Bernardino, CA Seattle, WA Northampton & Northamptonshire Swindon & Wiltshire Perth, WA Plymouth & Devon Brisbane, QLD Bristol-Bath London Exurbs (E & SE England) Adelaide, SA Bournemouth & Dorsett San Diego, CA Honolulu, HI London (Greater London Authority) San Francisco, CA San Jose, CA Auckland Toronto, ON Los Angeles, CA Melbourne, VIC Sydney, NSW Vancouver, BC Hong Kong 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Multiple 4.3 4.4 4.4 4.4 4.5 4.5 4.6 4.6 4.6 4.6 4.7 4.7 4.7 5.0 5.0 5.1 5.2 5.2 5.3 5.3 5.4 5.4 5.4 5.4 5.5 5.7 5.8 6.0 6.0 6.3 6.5 6.6 6.9 6.9 7.3 8.0 8.2 8.4 8.5 8.6 8.6 9.0 9.5 11.0 11.9 20.8 36 SCHEDULE 2 ALL HOUSING MARKETS RANKED BY AFFORDABILITY: Most Affordable to Least Affordable Median Multiple (Median House Price/Median Household Income): 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey Rank 1 2 3 3 5 6 6 6 6 6 11 11 11 11 11 16 16 16 16 16 16 16 23 23 23 23 23 23 29 29 29 29 29 29 29 29 37 37 37 37 37 37 37 37 37 46 Nation Canada U.S. U.S. U.S. U.S. U.S. Canada U.S. Canada U.S. Canada U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. Australia U.S. U.S. Canada U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Metropolitan Market Fort MacMurray, AB Peoria, IL Davenport, IA-IL Rockford, IL Utica-Rome, NY Akron, OH Fredericton, NB McAllen, TX Saint John, NB Syracuse, NY Cape Breton, NS Lansing, MI Rochester, NY Scranton, PA Toledo, OH Canton, OH Cedar Rapids, IA Dayton, OH Erie, PA Harrisburg, PA Moncton, NB South Bend, IN-MI Cleveland, OH Flint, MI Fort Wayne, IN Oklahoma City, OK Reading, PA Saguenay, QC Buffalo, NY Cincinnati, OH-KY-IN Evansville, IN-KY Gladstone, QLD Pittsburgh, PA St. Louis,, MO-IL Trois-Rivieres, QC Wichita, KS Albany, NY Des Moines, IA Fayetteville, NC Fort Smith, AR-OK Hartford, CT Huntington, WV-KY-OH Indianapolis. IN Montgomery, AL Omaha, NE-IA Brownsville, TX Median Multiple 1.8 2.1 2.2 2.2 2.3 2.4 2.4 2.4 2.4 2.4 2.5 2.5 2.5 2.5 2.5 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.7 2.7 2.7 2.7 2.7 2.7 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 3.0 Rank 46 46 46 46 46 46 46 46 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 71 71 71 71 71 71 71 71 71 71 71 71 83 83 83 83 83 83 83 83 83 83 Nation U.S. U.S. U.S. U.S. Ireland U.S. Canada U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Canada Canada U.S. Canada U.S. U.S. U.S. Canada U.S. U.S. U.S. U.S. Canada U.S. Ireland U.S. U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. U.S. U.S. Metropolitan Market Green Bay, WI Hagerstown, MD-WV Jackson, MS Kalamazoo, MI Limerick Little Rock, AR Thunder Bay, ON Tulsa, OK Allentown, PA-NJ Amarillo, TX Atlantic City, NJ Augusta, GA-SC Columbia, SC Columbus, GA-AL Detroit, MI Duluth, MN-WI Grand Rapids, MI Hickory, NC Killeen, TX Lubbock, TX North Bay, ON Red Deer, AB Roanoke, VA St. John's, NL Beaumont-Port Arthur, TX Birmingham, AL Columbus, OH Drummondville, QC Fayetteville, AR-MO Gulfport, MS Huntsville, AL Louisville, KY-IN Regina, SK Trenton, NJ Waterford Youngstown, OH-PA Atlanta, GA Kansas City, MO-KS Lancaster, PA Laredo, TX Lethbridge, AB Lexington-Fayette, KY Lincoln, NE New Haven CT New London, CT Spartanburg, SC 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Multiple 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 37 SCHEDULE 2 ALL HOUSING MARKETS RANKED BY AFFORDABILITY: Most Affordable to Least Affordable Median Multiple (Median House Price/Median Household Income): 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey Rank 83 94 94 94 94 94 94 94 94 94 103 103 103 103 103 103 103 103 103 103 113 113 113 113 113 113 113 120 120 120 120 120 120 120 120 120 120 130 130 130 130 130 130 130 130 130 Nation U.S. Canada U.S. U.S. U.S. U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. U.S. U.S. Australia Canada U.S. U.S. U.S. U.S. Canada U.S. U.S. U.S. U.S. Canada U.S. U.S. Canada Canada U.S. U.S. Canada Canada U.S. Canada U.S. U.S. U.S. Australia Canada U.K. U.S. U.S. U.S. Metropolitan Market Springfield, MO Charlottetown, PEI Chattanooga, TN-GA Greensboro, NC Kingsport, TN-VA Lafayette, LA Minneapolis-St. Paul, MN-WI Mobile, AL Philadelphia, PA-NJ-DE-MD Quebec, QC Baltimore, MD Chicago, IL-IN-WI Clarksville, TN-KY Ocala, FL Pensacola, FL Rockhampton, QLD Sherbrooke, QC Sioux Falls, SD Virginia Beach-Norfolk, VA-NC Winston-Salem, NC Baton Rouge, LA Chatham, ON Houston, TX Lynchburg, VA Manchester, NH Memphis, TN-MS-AR Winnipeg, MB Corpus Christi, TX El Paso, TX Granby, QC Halifax, NS Knoxville, TN Melbourne, FL Sarnia, ON Saskatoon, SK Springfield, MA Windsor, ON Anchorage, AK Ann Arbor, MI Dallas-Fort Worth, TX Darwin, NT Edmonton, AB Falkirk Greenville, SC Lakeland, FL Milwaukee, WI Median Multiple 3.3 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 Rank 130 130 130 130 130 130 130 130 147 147 147 147 147 147 147 147 147 147 147 158 158 158 158 158 163 163 163 163 163 163 163 163 163 163 163 174 174 174 174 174 174 174 174 174 183 183 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.K. U.K. Canada U.K. U.S. U.S. U.K. U.S. U.K. Australia U.S. U.S. U.S. U.S. U.K. U.S. U.S. Ireland U.S. Ireland U.K. U.S. Canada U.S. U.S. U.S. U.S. U.S. Australia U.S. U.S. U.K. U.S. U.K. U.S. U.S. U.K. U.S. Metropolitan Market Ogden, UT Raleigh, NC Richmond, VA Salisbury, MD-DE Savannah, GA Tallahassee, FL Waco, TX Worcester, MA-CT Aberdeen Blackpool & Lancashire Calgary, AB Dundee Jacksonville, FL Madison, WI Sheffield & South Yorkshire Shreveport, LA Swansea Townsville, QLD Washington, DC-VA-MD-WV Austin, TX Charlotte, NC-SC Gainesville, FL Glasgow San Antonio, TX Cape Coral, FL Cork Daytona Beach, FL Galway Liverpool & Merseyside Nashville, TN Ottawa-Gatineau, ON-QC Port St. Lucie, FL Portland, ME Tampa-St. Petersburg, FL Tucson, AZ Albuquerque, NM Alice Springs, NT Fort Walton Beach, FL Kennewick, WA Leeds & West Yorkshire Myrtle Beach, SC-NC Perth Phoenix, AZ York, PA Belfast Charleston, SC 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Multiple 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 4.0 4.0 4.0 4.0 4.0 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.3 4.3 38 SCHEDULE 2 ALL HOUSING MARKETS RANKED BY AFFORDABILITY: Most Affordable to Least Affordable Median Multiple (Median House Price/Median Household Income): 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey Rank 183 183 183 183 189 189 189 189 189 189 189 189 197 197 197 197 197 197 197 197 197 206 206 206 206 206 206 206 213 213 213 213 217 217 217 217 217 222 222 222 222 222 222 228 228 230 Nation U.K. U.S. Canada U.S. U.S. U.K. Canada U.S. U.S. U.S. U.S. U.K. U.S. U.S. U.S. U.S. U.K. Australia U.K. U.K. U.S. U.S. U.K. U.K. U.S. U.S. Singapore Australia Ireland U.K. Canada U.K. Australia U.S. Australia U.S. U.S. U.S. Canada U.S. Canada U.S. U.K. U.K. U.S. Canada Metropolitan Market Derby & Derbyshire New Orleans. LA Whitehorse, YT Yakima, WA Bridgeport-Stamford, CT Cardiff Kingston, ON Orlando, FL Providence, RI-MA Sarasota, FL Spokane, WA Stoke on Trent & Staffordshire Bakersfield, CA College Station, TX Colorado Springs, CO Durham, NC Edinburgh Mackay, QLD Newcastle & Tyneside Nottingham & Nottinghamshire Olympia, WA Greeley, CO Hull & Humber Manchester & Greater Manchester Provo, UT Salt Lake City, UT Singapore Toowoomba, QLD Dublin Middlesbrough & Durham Montreal, QC Newport Albury-Wodonga, NSW-VIC Bremerton, WA Bundaberg, QLD Merced, CA Wilmington, NC Asheville, NC Belleville, ON Boise, ID Kamloops. BC Visalia, CA Warrington & Cheshire Birmingham & West Midlands Las Vegas, NV London, ON Median Multiple 4.3 4.3 4.3 4.3 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.7 4.7 4.7 4.7 4.8 4.8 4.8 4.8 4.8 4.9 4.9 4.9 4.9 4.9 4.9 5.0 5.0 5.1 Rank 230 230 230 234 234 234 234 234 239 239 239 242 242 242 242 242 242 242 249 249 251 251 251 251 255 255 257 258 258 258 261 261 261 261 261 266 266 268 269 269 269 269 273 274 275 276 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.K. U.S. Australia U.S. Canada Australia N.Z. U.K. U.S. U.S. U.S. U.S. U.S. Canada U.S. Canada U.K. U.K. U.S. U.K. Canada Canada U.S. Australia Canada N.Z. Australia U.K. Australia Australia Canada U.S. U.K. Australia Canada U.K. Canada N.Z. Australia Metropolitan Market Portland, OR-WA Salem, OR Vallejo, CA Fresno, CA Modesto, CA Naples, FL Sacramento, CA Telford & Shropshire Boston, MA-NH Cairns, QLD Denver, CO Barrie, ON Bendigo, VIC Christchurch Leicester & Leicestershire Miami, FL New York, NY-NJ-PA Riverside-San Bernardino, CA Eugene, OR Seattle, WA Brantford, ON Fort Collins, CO St. Catharines-Niagara, ON Warwickshire Northampton & Northamptonshire Stockton, CA Swindon & Wiltshire Oshawa, ON Peterborough, ON Reno, NV Ballarat, VIC Cambridge, ON Palmerston North Perth, WA Plymouth & Devon Brisbane, QLD Canberra, ACT Kitchener-Waterloo, ON Boulder, CO Bristol-Bath Fraser Coast, QLD Guelph, ON London Exurbs (E & SE England) Kelowna, BC Wellington Adelaide, SA 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Multiple 5.1 5.1 5.1 5.2 5.2 5.2 5.2 5.2 5.3 5.3 5.3 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.5 5.5 5.6 5.6 5.6 5.6 5.7 5.7 5.8 5.9 5.9 5.9 6.0 6.0 6.0 6.0 6.0 6.3 6.3 6.4 6.5 6.5 6.5 6.5 6.6 6.7 6.8 6.9 39 SCHEDULE 2 ALL HOUSING MARKETS RANKED BY AFFORDABILITY: Most Affordable to Least Affordable Median Multiple (Median House Price/Median Household Income): 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey Rank 276 276 279 279 279 279 283 283 283 286 286 288 288 290 291 292 292 Nation U.K. N.Z. N.Z. Canada Australia U.S. Canada U.S. U.S. Australia N.Z. Canada Canada Canada U.S. Australia U.S. Metropolitan Market Bournemouth & Dorsett Dunedin Hamilton Hamilton, ON Hobart, TAS Oxnard, CA Chilliwack, BC San Diego, CA Santa Rosa, CA Geelong, VIC Napier-Hastings Comox Valley, BC Nanaimo, BC Fraser Valley, BC Santa Barbara, CA Gold Coast, QLD Honolulu, HI Median Multiple 6.9 6.9 7.0 7.0 7.0 7.0 7.3 7.3 7.3 7.4 7.4 7.5 7.5 7.8 7.9 8.0 8.0 Rank 294 295 296 296 296 296 296 301 302 302 304 305 306 307 308 309 Nation Canada U.K. U.S. U.S. U.S. U.S. Australia U.S. N.Z. Canada U.S. N.Z. Australia Australia Canada China Metropolitan Market Victoria, BC London (Greater London Authority) Salinas, CA San Francisco, CA San Luis Obispo, CA Santa Cruz, CA Sunshine Coast, QLD San Jose, CA Auckland Toronto, ON Los Angeles, CA Taraunga-Western Bay of Plenty Melbourne, VIC Sydney, NSW Vancouver, BC Hong Kong 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Multiple 8.1 8.2 8.4 8.4 8.4 8.4 8.4 8.5 8.6 8.6 9.0 9.3 9.5 11.0 11.9 20.8 40 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 276 217 174 261 242 266 217 239 266 130 269 286 29 292 279 197 306 261 103 296 307 206 147 242 222 251 147 261 11 94 113 283 288 71 130 1 290 6 120 269 120 279 222 274 189 268 83 230 16 213 Major Market Rank 79 76 89 74 90 30 25 57 National Rank 17 8 5 12 11 14 8 10 14 3 16 19 1 20 18 6 22 12 2 21 23 7 4 34 31 35 26 39 4 15 18 44 45 12 25 1 47 2 20 41 20 43 31 42 29 40 14 33 5 30 Nation Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Housing market Adelaide, SA Albury-Wodonga, NSW-VIC Alice Springs, NT Ballarat, VIC Bendigo, VIC Brisbane, QLD Bundaberg, QLD Cairns, QLD Canberra, ACT Darwin, NT Fraser Coast, QLD Geelong, VIC Gladstone, QLD Gold Coast, QLD Hobart, TAS Mackay, QLD Melbourne, VIC Perth, WA Rockhampton, QLD Sunshine Coast, QLD Sydney, NSW Toowoomba, QLD Townsville, QLD Median Market Filler Barrie, ON Belleville, ON Brantford, ON Calgary, AB Cambridge, ON Cape Breton, NS Charlottetown, PEI Chatham, ON Chilliwack, BC Comox Valley, BC Drummondville, QC Edmonton, AB Fort MacMurray, AB Fraser Valley, BC Fredericton, NB Granby, QC Guelph, ON Halifax, NS Hamilton, ON Kamloops. BC Kelowna, BC Kingston, ON Kitchener-Waterloo, ON Lethbridge, AB London, ON Moncton, NB Montreal, QC Median Multiple* 6.9 4.8 4.2 6.0 5.4 6.3 4.8 5.3 6.3 3.8 6.5 7.4 2.8 8.0 7.0 4.5 9.5 6.0 3.5 8.4 11.0 4.6 3.9 6.0 Median Price $472,000 $332,000 $455,000 $397,000 $358,000 $546,000 $265,000 $397,000 $692,000 $460,000 $326,000 $551,000 $261,000 $625,000 $497,000 $358,000 $843,000 $504,000 $257,000 $593,000 $1,080,000 $335,000 $310,000 Median Household Income $68,600 $69,800 $107,200 $66,600 $66,700 $86,700 $55,100 $74,300 $109,800 $120,500 $50,300 $74,100 $93,800 $77,700 $71,000 $80,400 $88,700 $84,600 $72,700 $70,200 $97,900 $72,400 $80,000 5.4 4.9 5.6 3.9 6.0 2.5 3.4 3.6 7.3 7.5 3.2 3.8 1.8 7.8 2.4 3.7 6.5 3.7 7.0 4.9 6.7 4.4 6.4 3.3 5.1 2.6 4.7 $473,000 $338,000 $413,000 $399,000 $497,000 $141,000 $238,000 $225,000 $521,000 $511,000 $183,000 $363,000 $360,000 $661,000 $174,000 $229,000 $570,000 $277,000 $569,000 $387,000 $515,000 $338,000 $532,000 $251,000 $354,000 $175,000 $318,000 $87,400 $69,100 $74,400 $101,300 $83,500 $56,900 $69,700 $62,900 $71,300 $67,700 $57,900 $96,100 $196,900 $85,100 $72,100 $62,000 $87,900 $74,700 $81,600 $79,700 $77,200 $77,000 $83,500 $76,800 $70,000 $67,800 $68,200 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 41 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 288 55 258 163 258 94 55 71 23 6 120 120 103 251 55 46 302 29 308 294 183 120 113 Major Market Rank 309 92 163 213 163 46 71 39 86 91 57 National Rank 45 9 37 27 37 15 9 12 6 2 20 20 17 35 9 8 49 7 50 48 28 20 18 Nation Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada 1 China 3 5 3 1 2 Ireland Ireland Ireland Ireland Ireland 302 242 276 279 286 261 305 275 86 7 1 4 5 6 2 8 3 N.Z. N.Z. N.Z. N.Z. N.Z. N.Z. N.Z. N.Z. 206 53 1 Singapore 147 183 228 147 276 269 189 60 30 79 77 2 11 23 2 32 30 13 U.K. U.K. U.K. U.K. U.K. U.K. U.K. Housing market Nanaimo, BC North Bay, ON Oshawa, ON Ottawa-Gatineau, ON-QC Peterborough, ON Quebec, QC Red Deer, AB Regina, SK Saguenay, QC Saint John, NB Sarnia, ON Saskatoon, SK Sherbrooke, QC St. Catharines-Niagara, ON St. John's, NL Thunder Bay, ON Toronto, ON Trois-Rivieres, QC Vancouver, BC Victoria, BC Whitehorse, YT Windsor, ON Winnipeg, MB Median Market Filler Hong Kong Filler Cork Dublin Galway Limerick Waterford Median Market Filler Auckland Christchurch Dunedin Hamilton Napier-Hastings Palmerston North Taraunga-Western Bay of Plenty Wellington Median Market Filler Singapore Filler Aberdeen Belfast Birmingham & West Midlands Blackpool & Lancashire Bournemouth & Dorsett Bristol-Bath Cardiff Median Multiple* 7.5 3.1 5.9 4.1 5.9 3.4 3.1 3.2 2.7 2.4 3.7 3.7 3.5 5.6 3.1 3.0 8.6 2.8 11.9 8.1 4.3 3.7 3.6 3.9 Median Price $513,000 $221,000 $549,000 $365,000 $418,000 $243,000 $267,000 $283,000 $179,000 $168,000 $284,000 $326,000 $210,000 $391,000 $261,000 $222,000 $726,000 $162,000 $905,000 $617,000 $441,000 $264,000 $276,000 Median Household Income $68,300 $70,300 $92,700 $88,800 $71,100 $72,200 $87,300 $89,600 $65,400 $68,700 $76,600 $88,100 $59,300 $69,600 $83,000 $74,100 $84,800 $57,200 $75,800 $76,300 $103,200 $71,400 $76,000 20.8 $7,040,000 $338,000 4.1 4.7 4.1 3.0 3.2 4.1 €245,000 €325,000 €220,000 €185,000 €178,000 €59,400 €68,600 €53,600 €60,700 €55,900 8.6 5.4 6.9 7.0 7.4 6.0 9.3 6.8 7.0 $830,000 $461,000 $472,000 $580,000 $505,000 $402,000 $654,000 $637,000 $96,000 $85,000 $68,000 $83,000 $68,000 $67,000 $70,000 $93,000 4.6 $408,000 $88,000 3.9 4.3 5.0 3.9 6.9 6.5 4.4 £182,000 £147,000 £175,000 £138,000 £280,000 £275,000 £167,000 £47,100 £34,100 £34,800 £35,400 £40,400 £42,300 £37,900 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 42 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 183 147 197 130 158 206 174 242 163 295 273 206 213 197 213 255 197 174 261 147 189 147 257 234 222 251 6 37 174 55 55 130 130 222 83 55 55 158 197 103 113 71 71 222 239 269 217 189 46 29 16 Major Market Rank 46 35 53 44 67 39 83 78 53 57 51 72 51 74 30 48 73 16 35 20 13 65 4 National Rank 11 2 15 1 7 18 9 25 8 33 31 18 20 15 20 27 15 9 29 2 13 2 28 24 22 26 5 29 131 45 45 102 102 156 67 45 45 120 145 84 92 58 58 156 167 177 153 140 38 23 12 Nation U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.K. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Housing market Derby & Derbyshire Dundee Edinburgh Falkirk Glasgow Hull & Humber Leeds & West Yorkshire Leicester & Leicestershire Liverpool & Merseyside London (Greater London Authority) London Exurbs (E & SE England) Manchester & Greater Manchester Middlesbrough & Durham Newcastle & Tyneside Newport Northampton & Northamptonshire Nottingham & Nottinghamshire Perth Plymouth & Devon Sheffield & South Yorkshire Stoke on Trent & Staffordshire Swansea Swindon & Wiltshire Telford & Shropshire Warrington & Cheshire Warwickshire Median Market Filler Akron, OH Albany, NY Albuquerque, NM Allentown, PA-NJ Amarillo, TX Anchorage, AK Ann Arbor, MI Asheville, NC Atlanta, GA Atlantic City, NJ Augusta, GA-SC Austin, TX Bakersfield, CA Baltimore, MD Baton Rouge, LA Beaumont-Port Arthur, TX Birmingham, AL Boise, ID Boston, MA-NH Boulder, CO Bremerton, WA Bridgeport-Stamford, CT Brownsville, TX Buffalo, NY Canton, OH Median Multiple* 4.3 3.9 4.5 3.8 4.0 4.6 4.2 5.4 4.1 8.2 6.6 4.6 4.7 4.5 4.7 5.7 4.5 4.2 6.0 3.9 4.4 3.9 5.8 5.2 4.9 5.6 4.5 Median Price £170,000 £142,000 £194,000 £135,000 £146,000 £155,000 £150,000 £205,000 £140,000 £470,000 £305,000 £165,000 £125,000 £145,000 £179,000 £220,000 £161,000 £176,000 £228,000 £136,000 £169,000 £135,000 £247,000 £198,000 £210,000 £250,000 Median Household Income £39,200 £36,600 £43,000 £35,700 £36,900 £34,000 £35,600 £38,300 £34,200 £57,300 £46,400 £35,500 £26,400 £32,300 £37,900 £38,300 £35,400 £42,000 £38,000 £34,600 £38,100 £34,200 £42,300 £38,100 £43,000 £44,600 2.4 2.9 4.2 3.1 3.1 3.8 3.8 4.9 3.3 3.1 3.1 4.0 4.5 3.5 3.6 3.2 3.2 4.9 5.3 6.5 4.8 4.4 3.0 2.8 2.6 $154,000 $217,000 $227,000 $212,000 $172,000 $324,000 $291,000 $273,000 $243,000 $200,000 $172,000 $325,000 $247,000 $299,000 $217,000 $169,000 $192,000 $318,000 $491,000 $571,000 $386,000 $427,000 $120,000 $166,000 $140,000 $63,300 $75,200 $53,900 $69,500 $56,000 $85,400 $75,700 $55,200 $73,200 $64,500 $55,500 $81,100 $54,400 $84,800 $61,000 $53,100 $59,500 $64,700 $93,500 $88,300 $81,100 $96,000 $40,500 $59,200 $54,400 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 43 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 163 16 183 158 94 103 29 103 23 197 197 55 55 71 120 130 3 16 163 239 37 55 55 197 120 16 249 29 71 37 23 251 37 174 23 234 158 55 206 46 94 130 71 46 16 37 55 292 113 37 71 37 46 Major Market Rank 35 20 4 2 13 25 65 11 63 11 8 82 23 8 National Rank 124 12 137 120 77 84 23 84 18 145 145 45 45 58 97 102 2 12 124 167 29 45 45 145 97 12 172 23 58 29 18 174 29 131 18 163 120 45 150 38 77 102 58 38 12 29 45 182 92 29 58 29 38 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Housing market Cape Coral, FL Cedar Rapids, IA Charleston, SC Charlotte, NC-SC Chattanooga, TN-GA Chicago, IL-IN-WI Cincinnati, OH-KY-IN Clarksville, TN-KY Cleveland, OH College Station, TX Colorado Springs, CO Columbia, SC Columbus, GA-AL Columbus, OH Corpus Christi, TX Dallas-Fort Worth, TX Davenport, IA-IL Dayton, OH Daytona Beach, FL Denver, CO Des Moines, IA Detroit, MI Duluth, MN-WI Durham, NC El Paso, TX Erie, PA Eugene, OR Evansville, IN-KY Fayetteville, AR-MO Fayetteville, NC Flint, MI Fort Collins, CO Fort Smith, AR-OK Fort Walton Beach, FL Fort Wayne, IN Fresno, CA Gainesville, FL Grand Rapids, MI Greeley, CO Green Bay, WI Greensboro, NC Greenville, SC Gulfport, MS Hagerstown, MD-WV Harrisburg, PA Hartford, CT Hickory, NC Honolulu, HI Houston, TX Huntington, WV-KY-OH Huntsville, AL Indianapolis. IN Jackson, MS Median Multiple* 4.1 2.6 4.3 4.0 3.4 3.5 2.8 3.5 2.7 4.5 4.5 3.1 3.1 3.2 3.7 3.8 2.2 2.6 4.1 5.3 2.9 3.1 3.1 4.5 3.7 2.6 5.5 2.8 3.2 2.9 2.7 5.6 2.9 4.2 2.7 5.2 4.0 3.1 4.6 3.0 3.4 3.8 3.2 3.0 2.6 2.9 3.1 8.0 3.6 2.9 3.2 2.9 3.0 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Price $241,000 $173,000 $292,000 $260,000 $194,000 $260,000 $187,000 $188,000 $160,000 $240,000 $323,000 $177,000 $165,000 $215,000 $212,000 $277,000 $128,000 $153,000 $221,000 $443,000 $219,000 $195,000 $173,000 $294,000 $171,000 $132,000 $306,000 $164,000 $194,000 $143,000 $139,000 $423,000 $134,000 $285,000 $156,000 $290,000 $212,000 $208,000 $364,000 $196,000 $179,000 $225,000 $161,000 $194,000 $178,000 $235,000 $155,000 $709,000 $248,000 $139,000 $213,000 $189,000 $175,000 Median Household Income $59,200 $66,300 $67,800 $65,400 $57,700 $74,600 $66,100 $54,000 $59,200 $53,200 $71,100 $56,700 $52,400 $67,500 $57,200 $73,200 $58,600 $57,900 $54,100 $83,800 $75,200 $63,800 $56,700 $65,500 $46,200 $50,600 $56,000 $58,400 $61,000 $49,200 $50,700 $74,900 $46,700 $67,200 $58,500 $55,500 $53,200 $66,800 $80,000 $64,700 $52,700 $58,800 $50,000 $64,600 $67,700 $81,400 $50,100 $89,000 $68,900 $48,000 $67,200 $64,300 $58,700 44 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 147 46 83 174 55 94 120 94 130 83 11 83 228 83 83 46 304 71 55 113 147 113 6 120 113 217 242 130 94 94 234 37 174 234 163 83 83 183 242 103 130 23 197 37 189 279 103 2 94 174 29 163 163 Major Market Rank 30 16 60 88 13 23 67 25 18 39 46 67 2 48 18 44 4 National Rank 116 38 67 131 45 77 97 77 102 67 8 67 159 67 67 38 188 58 45 92 116 92 5 97 92 153 169 102 77 77 163 29 131 163 124 67 67 137 169 84 102 18 145 29 140 178 84 1 77 131 23 124 124 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Housing market Jacksonville, FL Kalamazoo, MI Kansas City, MO-KS Kennewick, WA Killeen, TX Kingsport, TN-VA Knoxville, TN Lafayette, LA Lakeland, FL Lancaster, PA Lansing, MI Laredo, TX Las Vegas, NV Lexington-Fayette, KY Lincoln, NE Little Rock, AR Los Angeles, CA Louisville, KY-IN Lubbock, TX Lynchburg, VA Madison, WI Manchester, NH McAllen, TX Melbourne, FL Memphis, TN-MS-AR Merced, CA Miami, FL Milwaukee, WI Minneapolis-St. Paul, MN-WI Mobile, AL Modesto, CA Montgomery, AL Myrtle Beach, SC-NC Naples, FL Nashville, TN New Haven CT New London, CT New Orleans. LA New York, NY-NJ-PA Ocala, FL Ogden, UT Oklahoma City, OK Olympia, WA Omaha, NE-IA Orlando, FL Oxnard, CA Pensacola, FL Peoria, IL Philadelphia, PA-NJ-DE-MD Phoenix, AZ Pittsburgh, PA Port St. Lucie, FL Portland, ME Median Multiple* 3.9 3.0 3.3 4.2 3.1 3.4 3.7 3.4 3.8 3.3 2.5 3.3 5.0 3.3 3.3 3.0 9.0 3.2 3.1 3.6 3.9 3.6 2.4 3.7 3.6 4.8 5.4 3.8 3.4 3.4 5.2 2.9 4.2 5.2 4.1 3.3 3.3 4.3 5.4 3.5 3.8 2.7 4.5 2.9 4.4 7.0 3.5 2.1 3.4 4.2 2.8 4.1 4.1 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Price $248,000 $179,000 $227,000 $288,000 $174,000 $151,000 $206,000 $183,000 $206,000 $231,000 $155,000 $162,000 $304,000 $198,000 $204,000 $166,000 $687,000 $193,000 $164,000 $192,000 $288,000 $303,000 $98,000 $227,000 $190,000 $293,000 $323,000 $243,000 $285,000 $153,000 $329,000 $160,000 $227,000 $380,000 $286,000 $234,000 $232,000 $227,000 $445,000 $165,000 $310,000 $165,000 $343,000 $204,000 $269,000 $627,000 $213,000 $127,000 $254,000 $284,000 $175,000 $240,000 $300,000 Median Household Income $63,500 $59,000 $69,300 $68,400 $56,600 $44,200 $56,400 $53,600 $54,500 $69,900 $62,700 $49,400 $60,200 $59,900 $61,700 $54,900 $76,500 $60,500 $52,700 $53,900 $74,300 $83,200 $41,300 $61,000 $53,100 $60,900 $59,400 $63,900 $83,900 $45,400 $63,600 $54,700 $54,400 $73,600 $69,500 $71,500 $70,800 $53,000 $82,700 $47,000 $80,800 $60,600 $76,600 $69,800 $61,800 $89,100 $61,100 $61,800 $74,600 $67,900 $62,900 $58,700 $73,800 45 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 230 189 206 130 23 258 130 242 55 11 3 234 230 296 130 206 158 283 296 301 296 291 296 283 189 130 11 249 147 103 16 83 189 120 83 29 255 6 130 163 11 71 163 46 5 230 103 222 130 147 29 217 103 Major Market Rank 62 48 25 25 67 1 63 53 35 81 84 85 71 4 39 39 10 20 30 National Rank 160 140 150 102 18 176 102 169 45 8 2 163 160 183 102 150 120 179 183 187 183 181 183 179 140 102 8 172 116 84 12 67 140 97 67 23 175 5 102 124 8 58 124 38 4 160 84 156 102 116 23 153 84 Nation U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. U.S. Housing market Portland, OR-WA Providence, RI-MA Provo, UT Raleigh, NC Reading, PA Reno, NV Richmond, VA Riverside-San Bernardino, CA Roanoke, VA Rochester, NY Rockford, IL Sacramento, CA Salem, OR Salinas, CA Salisbury, MD-DE Salt Lake City, UT San Antonio, TX San Diego, CA San Francisco, CA San Jose, CA San Luis Obispo, CA Santa Barbara, CA Santa Cruz, CA Santa Rosa, CA Sarasota, FL Savannah, GA Scranton, PA Seattle, WA Shreveport, LA Sioux Falls, SD South Bend, IN-MI Spartanburg, SC Spokane, WA Springfield, MA Springfield, MO St. Louis,, MO-IL Stockton, CA Syracuse, NY Tallahassee, FL Tampa-St. Petersburg, FL Toledo, OH Trenton, NJ Tucson, AZ Tulsa, OK Utica-Rome, NY Vallejo, CA Virginia Beach-Norfolk, VA-NC Visalia, CA Waco, TX Washington, DC-VA-MD-WV Wichita, KS Wilmington, NC Winston-Salem, NC Median Multiple* 5.1 4.4 4.6 3.8 2.7 5.9 3.8 5.4 3.1 2.5 2.2 5.2 5.1 8.4 3.8 4.6 4.0 7.3 8.4 8.5 8.4 7.9 8.4 7.3 4.4 3.8 2.5 5.5 3.9 3.5 2.6 3.3 4.4 3.7 3.3 2.8 5.7 2.4 3.8 4.1 2.5 3.2 4.1 3.0 2.3 5.1 3.5 4.9 3.8 3.9 2.8 4.8 3.5 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) Median Price $408,000 $302,000 $363,000 $303,000 $175,000 $394,000 $272,000 $375,000 $180,000 $159,000 $130,000 $404,000 $307,000 $624,000 $240,000 $356,000 $239,000 $609,000 $950,000 $1,120,000 $628,000 $648,000 $774,000 $629,000 $283,000 $230,000 $140,000 $508,000 $172,000 $224,000 $151,000 $178,000 $269,000 $224,000 $163,000 $188,000 $388,000 $149,000 $203,000 $235,000 $137,000 $268,000 $229,000 $175,000 $133,000 $450,000 $241,000 $250,000 $188,000 $425,000 $167,000 $267,000 $177,000 Median Household Income $79,700 $68,600 $79,400 $79,200 $65,900 $66,900 $71,400 $69,200 $58,100 $63,400 $58,800 $77,100 $60,200 $74,500 $62,400 $77,700 $60,500 $83,300 $113,700 $131,400 $75,000 $81,700 $91,600 $85,800 $64,200 $61,300 $57,000 $92,700 $44,200 $64,500 $57,700 $54,700 $61,700 $61,000 $49,400 $66,200 $67,600 $61,900 $53,400 $57,900 $54,100 $85,000 $56,400 $58,600 $58,300 $89,000 $69,100 $51,500 $49,900 $107,700 $60,000 $55,600 $51,300 46 SCHEDULE 3 ALL HOUSING MARKETS BY NATION: 2019: Third Quarter 16th Annual Demographia International Housing Affordability Survey International Affordability Rank 130 183 174 71 Major Market Rank National Rank 102 137 131 58 Nation U.S. U.S. U.S. U.S. Housing market Worcester, MA-CT Yakima, WA York, PA Youngstown, OH-PA Median Market Median Multiple* 3.8 4.3 4.2 3.2 3.6 Median Price $284,000 $235,000 $292,000 $161,000 Median Household Income $74,700 $54,300 $68,800 $50,000 Financial data in local currency. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 47 CONTACT INFORMATION Demographia St. Louis Metropolitan Area (MO-IL), United States www.demographia.com demographia@gmx.com Contact: Wendell Cox +1.618.632.8507 Performance Urban Planning Christchurch, New Zealand www.performanceurbanplanning.org/ hugh.pavletich@xtra.co.nz Contact: Hugh Pavletich +64.3.343.9944 Institute for Urban Economics 20, bldg. 1 Tverskaya Str., Moscow 125009 +7 (495) 787 45 20 www.urbaneconomics.ru Tatiana D. Polidi Executive Director polidi@urbaneconomics.ru ANNEX: SOURCES, METHODS AND USES House price data is obtained or estimated from sources that account for the majority of existing dwellings sold in each of the nations Most international housing affordability sources and "city" rating sources focus on higher end housing that would be demanded by executives who might be transferred from one nation to another (expatriates). The Demographia International Housing Affordability Survey is unique in focusing on the middle of the market --reporting on middle-income housing affordability. Further, the focus is on housing markets, rather than higher-cost inner areas or expensive neighborhoods. This is an important distinction. The data in the Demographia International Housing Affordability Survey does not relate, for example to Belgravia in London, New York's Upper East Side or Beverly Hills in Los Angeles. It rather encompasses entire metropolitan markets (where there is sufficient reporting), which for example, in the New York metropolitan area includes more than 20 counties in the states of New York, New Jersey and Pennsylvania40 (where included housing can be 75 miles [120 kilometers] or more from the upscale areas of the urban core, where prices are the highest). Geographical Coverage: The nine nations and corresponding housing markets that are included in the 16th Annual Demographia International Housing Affordability Survey have sufficient current sources of house prices and household income data to estimate housing affordability using the Median Multiple. 40 As defined by the United States Bureau of Management and the Budget. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 48 Demographia receives periodic requests to expand its coverage to other nations. The addition of continental European nations, mainland China and India has been most frequently requested. Demographia would be pleased to add other nations and will do so wherever consistent data of sufficient quality can be identified. Readers are encouraged to contact the authors with any such information. House Characteristics: The indexes and data on which the Survey is based reflect the majority of existing housing in each of the national markets. At the same time, there are differences in house types, housing characteristics and lot size between the included nations and markets. The Demographia International Housing Affordability Survey does not adjust the Median Multiples to reflect these differences. For example, the average size of housing, particularly new housing, is small by New World standards in the United Kingdom and Hong Kong.41 Methods: Median house prices are estimated based on published data and other publicly available data from government and industry reports, using the housing stock upon which they report. Official government produced sales registers are use where available (Ireland, Scotland, England and Wales). If average house prices are available, median house prices are estimated from historic conversion factors. The principal sources are real estate time series that have become established as authoritative, national sales transaction registries and other government sources. In a limited number of smaller market cases, insufficient data requires reliance on individual monthly data within the third quarter, or second quarter data. Median household incomes are estimated for the markets using national census or other official data. The income base is then adjusted to the current year, using the best available indicators of annual income changes. This requires periodic recalibration of base year data to reflect the latest available data. Caution is urged in time-series comparisons in individual markets. Changes in data sources, base year income information, housing data sources and geographical definitions can make precise year to year comparisons less reliable. The most reliable comparisons are between the housing affordability rating categories ("affordable," moderately unaffordable," "seriously unaffordable" and "severely unaffordable"). 42 Sources: The following principal sources have been consulted: Australian Bureau of Statistics Australian Property Monitors Bank of Canada Bank of England Bank of Ireland Calgary Real Estate Board Canada Mortgage and Housing Corporation Canadian Home Builders Association Canadian Real Estate Association Census and Statistical Office: Government of Hong Kong Central Statistics Office, Ireland Chambre immobilière du Grand Montréal 41 42 See 2nd Annual Demographia International Housing Affordability Survey, Pages 16-18. Demographia attempts to use the most representative available data at the time of report preparation. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 49 Communities and Local Government (Ministry), United Kingdom Conference Board of Canada Core Logic Department of the Environment, Heritage and Local Government (Ireland) Domain.com.au (Australia) Edmonton Real Estate Board Federal Reserve Board (United States) Fédération des chambres immobilières du Québec Harvard University Joint Center on Housing Housing and Development Board (Singapore) Housing Industry Association (Australia) HM Land Registry (England and Wales) Ireland Environment, Heritage and Local Government The Land Registry (Hong Kong) National Association of Home Builders (USA) National Association of Realtors (USA) National Statistics (United Kingdom) Northern Ireland Statistics and Research Agency Northern Territory Department of Treasury and Finance Property Services Regulatory Authority (Ireland) Real Estate Institute of Australia Real Estate Institute of New South Wales Real Estate Institute of New Zealand Real Estate Institute of Northern Territory Real Estate Institute of Queensland Real Estate Institute of Tasmania Real Estate Institute of Victoria Real Estate Institute of Western Australia Realestateview.com.au Registers of Scotland Reserve Bank of Australia Reserve Bank of New Zealand realestate.com.au Royal Bank of Canada Smartline.com (Queensland) Singapore Department of Statistics Singapore Real Estate Exchange (SRX) Statistics Canada Statistics New Zealand Title Guaranty Hawaii Toronto Real Estate Board United Kingdom Department of Communities and Local Government United States Department of Commerce: Bureau of Economic Analysis United States Department of Commerce: Bureau of the Census United States Department of Housing and Urban Development Urban Development Institute of Australia Yukon Government 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 50 Wells Fargo Bank Zillow.com Notes on Figures Figure 1: House Price-to-Income Ratios: 1987 & 1992 estimated from Reserve Bank of Australia data. This data was first portrayed in Figure 1 of the 11th Annual Demographia International Housing Affordability Survey. No comparable data identified for Hong Kong and Singapore. The 2019 data is the Median Multiple of the median market among all metropolitan areas surveyed in the Demographia Survey. Figure 3: Housing Affordability & Land Regulation: 2,000,000+ Population: 2019: In the United States, urban containment (Table 1) includes those classified as “growth management,” “growth control,” “containment” and “contain-lite” in From Traditional to Reformed A Review of the Land Use Regulations in the Nation’s 50 largest Metropolitan Areas (Brookings Institution, 2006) as well as additional markets Demographia has determined have urban containment policy (New York, Boston, Minneapolis-St. Paul, Washington and Honolulu). Outside the United States, more urban containment markets include all in the United Kingdom, Ireland, Australia, and New Zealand, as well as Hong Kong and Singapore. In Canada, urban containment policy has been adopted in Toronto, Montréal, Vancouver, Ottawa and Calgary. Markets not classified as urban containment are classified as liberal (see Table 3). Figure 8: Includes only markets covered in 2009 by the Demographia Survey. Figure 10: Middle-Income Housing Affordability: New Zealand: Median Multiple values for 2014 through 2016 are scaled using revised rate from 2013 to 2017 to account for restatement of median household incomes by Statistics New Zealand. Table 11 Housing Market Selection Criteria Nation Markets Included (Where Sufficient Public Data is Available) Australia Housing markets corresponding to urban centres over 50,000 population Canada Housing markets over 75,000 population China Hong Kong Ireland Housing markets over 50,000 population New Zealand Markets corresponding to urban areas over 75,000 population Singapore Singapore United Kingdom Markets corresponding to urban areas over 150,000 population and London Exurbs (E & SE England). United States Housing markets over 250,000 population Selected additional markets. Housing markets are generally metropolitan areas (labour market areas) or their equivalent. Table 12 Footer Illustrations: New Houses (Left to Right) • • • • Suburban Kansas City, United States Suburban Montréal, Canada East of England (London Exurbs), U.K. Suburban Tseung Kwan O (Hong Kong) • • • Suburban Dublin, Ireland Suburban Auckland, New Zealand Suburban Adelaide, Australia 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 51 AUTHOR BIOGRAPHIES Wendell Cox Wendell Cox is co-author of the Demographia International Housing Affordability Survey. He is a public policy consultant and principal of Demographia, an international public policy firm.. He is a senior fellow at the Center for Opportunity Urbanism (Houston), senior fellow for housing affordability and municipal policy at the Frontier Centre for Public Policy (Winnipeg) and a member of the advisory board of the Center for Demographics and Policy at Chapman University in California. Wendell Cox has also served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris (a national university). He has served as vice-president of CODATU, a Lyon (France) based international research organization dedicated to improving transport in developing world urban areas. He is author of the Evolving Urban Form series at newgeography.com. He authored the "Measuring Urban Cores and Suburbs" chapter in the Massachusetts Institute of Technology volume Infinite Suburbia, published by the Princeton Architectural Press. Among his most recent policy reports were A Question of Values: Urban Containment Policy and Middle-Income Housing Affordability, Canada’s Middle-Income Housing Affordability Crisis, Restrictive Land-Use Regulation: Strategies, Effects and Solutions, and Improving the Competitiveness of Metropolitan Areas for the Frontier Centre for Public Policy, Putting People First: An Alternative Perspective with and Evaluation of the NCE Cities “Trillion Dollar” Report, Best Cities for Minorities: Gauging the Economics of Opportunity (co-author with Joel Kotkin) for the Center for Opportunity Urbanism, Evaluation of Plan Bay Area for the Pacific Research Institute and a "framing essay" entitled Toward More Prosperous Cities. He is also author of the Demographia Residential Land and Regulation Cost Index. Wendell Cox has lectured widely, including a month long tour to all Australian state and territory capitals and university lectures in the United Kingdom, France, China, Egypt and Australia. He has also conducted transport and urban planning training seminars in Romania, Togo and Ethiopia, He has completed projects in the United States, Western Europe, Canada, Australia and New Zealand in urban policy, demographics and transport. He was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley and to the Amtrak Reform Council by Speaker of the U. S. House of Representatives Newt Gingrich. Demographia annually publishes Demographia World Urban Areas, the only annual list of world urban areas (agglomerations) over 500,000 population with coordinate urban land area, population and population density estimates. Demographia sponsors demographia.com and www.publicpurpose.com. The www.publicpurpose.com website has been twice honored by the National Journal as one of the nation’s top internet transport sites. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 52 In 2004 he teamed with Hugh Pavletich of Performance Urban Planning to develop the Demographia International Housing Affordability Survey. Hugh Pavletich Hugh Pavletich, the co-author of the Demographia International Housing Affordability Survey, resides in “severely unaffordable” (5.4 Median Multiple) Christchurch, New Zealand, which since September 2010 has experienced in excess of 13,000 earthquakes. He has written extensively on these issues. He operates the archival website Performance Urban Planning and is the Managing Director of Pavletich Properties Ltd, a commercial property development and investment company. He commenced his working life as a farm worker and wool classer (wool classifier) in 1967 and moved to Christchurch in 1980, where he started developing small factory units and has developed commercial and industrial property on freehold and Maori leasehold land in other centers of the South Island as well. His industry involvement commenced when elected President of the South Island Division of the Property Council of New Zealand (then the Building Owners & Managers Association – BOMA) soon after its inception in 1991, which he led for four years. He has had extensive involvement with public policy issues of local authority financial management, land use regulation and heritage. In 2004, he was elected a fellow of the Urban Development Institute of Australia (UDIA) for services to the industry. He felt there was a need for an international measure of housing affordability and teamed up with Wendell Cox in 2004, to develop the annual Demographia International Housing Affordability Survey. 16th Annual Demographia International Housing Affordability Survey (2019: 3rd Quarter) 53