Exploring Rental Housing Market in Kitchener-Waterloo, Ontario by Xinyue Pi A thesis presented to the University of Waterloo in fulfilment of the thesis requirement for the degree of Master of Environmental Studies in Planning Waterloo, Ontario, Canada, 2017 © Xinyue Pi 2017 AUTHOR’S DECLARATION I hereby declare that I am the sole author of this thesis. This is a true copy of the thesis, including required final revisions, as accepted by my examiners. I understand that my thesis may be made electronically available to the public. ii Abstract Intensification is the key planning policy and growth management approach in Ontario, as well as across most of North America. Under this larger context, the Region of Waterloo, Ontario is building a Light Rail Transit (LRT) to provide alternative public transit option and help reshape land development, with the goal of increasing the development density in core areas, increasing mixed- use development, and curbing urban sprawl. To better understand how the upcoming LRT will influence housing choices and development patterns, this thesis explores households’ location choice decision and perceptions of LRT from a renters’ perspective. From June to November 2016, a random sample of 2912 households renting in Kitchener-Waterloo were invited to participate in a survey on residential location choice, renting behaviours and perceptions towards the upcoming LRT, after which a total of 290 surveys were analyzed. After a descriptive analysis of the survey results, a hedonic model was also developed to investigate the relationship between rental housing prices and corresponding household, residential, neighbourhood and behaviour characteristics. Unlike other aggregate level models, this hedonic model is implemented using individual level household information collected through the customized survey. The structure of rental housing demand is unveiled regarding different resident groups, as well their perceptions and preferences towards different residential and neighbourhood characteristics. Findings from this study could also be applied to inform housing polices, regarding housing development and housing affordability. iii Acknowledgements First, I would like to thank my advisor Dr. Dawn Parker for the mentorship, motivation and insights that contributed to all aspects of this research. I would also like to thank Dr. Xiongbing Jin for providing strong technical support throughout this study. In addition, I would like to thank Dr. Kevin Curtis for taking the time to be my reader and offer great advice. I would also like to thank my research team members for the collaboration and brainstorming. I am also grateful for the financial support from Social Sciences and Humanities Research Council: SSHRC Partnership Development Grant (SSHRC # 890-2013-0034) entitled “LIGHT RAIL TRANSIT AND CORE-AREA INTENSIFICATION: Unpacking Causal Relationships, and SSHRC Insight Grant (SSHRC # 435-2012-1697) entitled “Urban intensification vs. suburban flight: An integrated residential land-use and transportation model to evaluate residential land-market form and function”. My thesis would not have been possible without the support of my parents and friends. I would like to thank my parents for being supportive throughout all my years of education. I would also like to thank all my friends, especially my roommates in Waterloo, for all the positive influences. iv Table of Contents AUTHOR’S DECLARATION ..................................................................................................................... ii Abstract ............................................................................................................................. iii Acknowledgements ............................................................................................................................ iv Table of Contents .............................................................................................................................. v List of Figures ............................................................................................................................. ix List of Tables ............................................................................................................................. xi List of Equations ............................................................................................................................ xiii List of Abbreviations .......................................................................................................................... xiv Chapter 1. Introduction ........................................................................................................... 1 1.1 Intensification ................................................................................................................................ 1 1.2 Thesis Objectives and Research Questions ................................................................................... 3 1.3 Research Method Overview .......................................................................................................... 4 1.4 Thesis Layout ................................................................................................................................. 4 Chapter 2. Study Area ............................................................................................................. 5 2.1 Location ......................................................................................................................................... 5 2.2 Demographics ................................................................................................................................ 7 2.3 Policy Context ................................................................................................................................ 7 2.3.1 Overview of Planning Policies ................................................................................................ 8 2.3.2 Housing Tenure ...................................................................................................................... 9 2.3.3 Affordable Housing .............................................................................................................. 10 2.3.4 Complexity of Rental Housing Market ................................................................................. 10 Chapter 3. Survey Design and Sampling ................................................................................. 13 3.1 Survey Design ............................................................................................................................... 13 3.2 Conducting the Survey ................................................................................................................. 14 3.3 Sampling of the Mailing Approach .............................................................................................. 17 3.3.1 Sample Address Collection ................................................................................................... 17 3.3.2 Sampling Method ................................................................................................................. 17 3.4 Preliminary Survey Results .......................................................................................................... 20 v Chapter 4. Descriptive Statistical Analysis ............................................................................. 23 4.1 Survey Respondent Summary ...................................................................................................... 23 4.1.1 Demographics of Survey Respondents and Their Households ............................................ 25 4.2 Location Distribution of Respondents ......................................................................................... 38 4.3 Residential Location Choice ......................................................................................................... 40 4.3.1 Motivations of Choosing Current Home .............................................................................. 40 4.3.2 Residential Characteristics ................................................................................................... 41 4.3.3 Neighbourhood Characteristics ........................................................................................... 65 4.4 Renting Behaviours ...................................................................................................................... 73 4.4.1 Length of Lease/Contract ..................................................................................................... 73 4.4.2 Subletting ............................................................................................................................. 73 4.4.3 Sources of Rental Information ............................................................................................. 74 4.4.4 Searching for Current Residence .......................................................................................... 75 4.4.5 Comparison: Renting vs. Buying ........................................................................................... 76 4.5 Light Rail Transit and Location Choice ......................................................................................... 77 4.5.1 Central Transit Corridor and Location Choice ...................................................................... 77 4.5.2 General Attitude towards LRT and Important LRT features ...............................................