Cohort progress toward household formation and homeownership: young immigrant cohorts in Los Angeles and Toronto compared

Abstract

As immigrants adapt to their new country, they experience both increased access to homeownership and an increase in independent household formation. This paper examines residential assimilation, as measured by homeownership and household formation, among five young immigrant cohorts in Los Angeles and Toronto over a five-year period in the early 2000s. Results show that while differences between groups are evident already at the beginning of the study period, residential assimilation occurs for all groups over time, relative to the native-born. This assimilation, however, seems to occur differently by group; the Chinese, for example, attain high homeownership rates by creating relatively few households, whereas black immigrants form many more households but much lower homeownership rates, over time. Comparing across countries, immigrants consistently have lower rates of household formation and mostly higher homeownership levels in Toronto than they do in Los Angeles.

Keywords:

• Homeownership
• household formation
• assimilation
• cohort analysis
• comparative study

Notes

1. The recent economic downturn in the USA has caused a substantial increase in home foreclosures. While it is inconclusive whether immigrants have suffered disproportionately in the housing market, it is clear that homeownership is not suitable for everyone, and that some caution should be used when talking about the benefits of ownership.

2. The terms new immigrants or newcomers refer to those who have come to the host country in the last five years.

3. For Toronto, we include those who were born in 1966–75. For immigrants, we only include those who came to Canada in 1986–95. We track them from 2001 to 2006.

4. Owner heads refer to those who are the householders of owner-occupied housing units. Renter heads refer to those who are the householders of renter-occupied housing units. Non-heads refer to those who are not household heads or householders. Once again, the sample only includes people who worked more than thirty hours per week.

5. The formerly married group includes people who are widowed or divorced.