The Homelessness Income Cut Off

Abstract

Most people with income below Canada’s official poverty line avoid homelessness. They do so by making extraordinary efforts to minimize out-of-pocket expenses and so conserve income for rent. These efforts involve moving to less expensive accommodations, living in more crowded housing, forgoing non-necessities, and relying on charities to reduce expenditures on food, clothing, and other necessities. These efforts to minimize expenditures mean that the poverty line is a poor measure of the income required to avoid homelessness. The absence of such a measure means we are unable to determine whether income supports are adequate for keeping people from experiencing homelessness. The Homeless Income Cut Off (HICO) measures the amount of income families and individuals need to minimize their risk of becoming homeless after they have exhausted their own efforts to remain housed. This paper explains how the HICO is calculated and how it can be used to gauge the adequacy of income support policies intended to keep Canadians from becoming homeless. Since income supports and the costs of necessities vary across Canada and over time, this paper presents calculations of the HICO for seven cities (Vancouver, Edmonton, Calgary, Winnipeg, Toronto, Montreal and Halifax) and for eight years (2015–22). The HICO does not describe what people with low-income must do before they receive income assistance. Rather, it shows how bad the affordability crisis is for them — a crisis caused by rising housing costs and food prices, lagging incomes and holes in the social safety net. The calculations show the extent to which Canadians with low income must rely on food banks and other charities to hang on to their housing, a reliance made necessary by income supports that are frequently inadequate for this purpose. The HICO provides policymakers with a gauge against which they can evaluate the adequacy on income supports for preventing homelessness. Income supports need, at the very least, to be sufficient to enable families and individuals to maintain their housing after they have exhausted their own efforts to do so.