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In the United States, employer-assisted housing (EAH) is a term that is utilized to describe a variety of strategies used by both the private and public sectors to address workforce housing solutions (Jennings, 200l). The concept of EAH has an extensive history beginning with the “company town” movements that were created in the late 19^th and early 20^th century in industrial areas experiencing rapid population growth. Most historical examples of employer-based housing were for affordable rental housing with much of this being in the form of worker tenements and of questionable quality.

More recently key sectors such as oil and gas industry are also providing workforce housing. In places such as Fort McMurray, Alberta, employee camps have been

established to provide a highly skilled and paid workforce with housing. Overall, during the 20^th century, employer involvement in housing remained limited to executive-compensation and corporate-relocation-assistance perks (Pill, 2000). In the 1990s, the concept of EAH has been broadened as a means of facilitating homeownership for low- to moderate-income employees who were ineligible for public assistance targeted to the lowest-income groups.

According to Marcus (2004), EAH programs typically take the form of either financial assistance or education to help the employee become better prepared for homeownership.

The financial benefits include loans (forgivable, deferred or repayable) or grants (upfront or deferred matching savings) and these funds are typically used for down-payment and closing costs or as rental subsidies. Non-financial benefits include homebuyer education and financial literacy education.

Employer motivations to undertake employer-assisted housing initiatives relate primarily to recognition that recruitment and long-term retention of employees depends on the

availability of quality affordable housing (Jennings, 2000). EAH has proven an effective tool to promote affordability in areas experiencing abundant job opportunities and escalating housing costs (Snyderman, 2005). An EAH program benefits a full range of stakeholders. Employers benefit from a more stable workforce with reduced turnover and recruitment. Employees gain access to homeownership education and down-payment assistance to purchase a home. And the community benefits from new investment and property taxes, as well as less traffic and air pollution as workers live closer to work (DeKoven, 2005; Snyderman, 2005). Despite the benefits of employer-assisted housing, however, Jennings (2000) emphasizes that these programs do nothing to address the underlying shortage of housing or the policies and development practices that have created this shortage.

EAH programs are most prevalent in anchor institutions such as hospitals and

universities. Partnerships between the non-profit and public sectors also recruit multiple employers of varying size in a geographic area to deliver initiatives. Despite a variety of initiatives in the United States to address housing affordability, the provision of housing assistance remains uncommon and is an unfamiliar concept in the corporate world (Pill, 2000).

2.6 Summary

The overall objective of the literature review was to evaluate emerging concepts of poverty that are inclusive of labour and housing markets dynamics. This discussion has demonstrated the complexities of poverty and the need to understand factors that can create economic and social hardship for households that are not officially defined to be living in poverty. The issues of poverty, housing-induced poverty, and the working poor are all undoubtedly interconnected, and it will require a variety of responses among government and non-governmental organizations to address the issue. It is no longer enough for a person in Canada to simply have a job in order to earn a living wage; the stagnation of income growth, as well as a variety of household compositions and family types have all combined to create a situation where many of those working are unable to earn sufficient wages to pay for suitable accommodation in the private rental market or to

enter into homeownership. The burden of housing problems is not limited to unskilled workers but more frequently is now an issue for emerging professionals.

This literature review has demonstrated that further conceptualization of the dynamics of housing-induced poverty is essential to better understand those whose experience of poverty is related to housing costs. There are indications in the literature that those in housing-induced poverty are increasingly from middle-income groups that were once thought to be immune from housing affordability problems. As Bramley (2004) has proposed, a housing affordability index is required that incorporates degrees of the problem ranging from severe primary poverty and homelessness, through an intermediate level of risk, to a broader problem of access to the market. Moreover, he emphasizes that policy intervention is clearly relevant for these varying degrees of shelter poverty.

The solutions to the housing cost problems faced by middle-income households are not substantially different from those proposed for lower-income groups. Stegman and colleagues (2000) recommended that housing policies should strive to meet the housing needs of moderate- and middle-income [families], and not just the very poor. They went on to recommend that to remedy this situation, an increase in the income limit for government transfer payments is needed, in addition to the extension of such payments, which are often limited to renters, to home owners experiencing difficulties as well.

Additionally, they advocated meaningful coalitions between the business community, all levels of governments, and labour organizations, to find ways to decrease costs of both existing and new housing. Duncan Maclennan (2005), in a report for Canadian Policy Research Networks, noted that a continuum of action is needed from the homeless to the middle-income market.

In a related work, John Atlas (1994) called for a coalition of the poor and middle-income groups to advocate for increased government involvement in the housing market, or at least an increase in the kinds and amounts of transfer payments that could be made available. Atlas (1994) noted that housing programs that isolate and target the poor (whether working or not) are counter-productive in that they can seem to create pockets

of high-poverty neighbourhoods. However, he also pointed out the reality that

government dollars are always limited, and therefore have, by necessity, been allocated to the least well off. Atlas (1994) suggested that housing policy be reconceived along the lines of universal health care; that is, that affordable housing also be universal - or at least, that it ought to be the goal of housing policies, as it is with health policies. Atlas (1994) stresses that resources for the poor must be targeted by a national housing agenda that is broad enough to provide benefits to all those affected by the housing crisis

including middle-income groups.

Such policy responses require a better understanding of the unique characteristics and concerns of middle-income groups experiencing the phenomenon of housing-induced poverty. However, from the literature it is certainly the case that more households are beginning to feel the effects of a rising housing market.

3.0. Households Experiencing Housing-Induced Poverty

A lack of affordable housing is evident in many communities across Canada. At the same time, housing remains the single largest monthly expenditure for most households;

therefore accessing affordable, adequate, and suitable housing continues to be a pressing concern for many individuals and families.Prior research has shown that housing

affordability is a problem disproportionately faced by lower income households, such as those defined as being part of the working poor¹⁸. However, emerging evidence suggests that increasingly, workers who might have traditionally been categorized as belonging to the “middle-income” may also find that due to high rents and an inflationary real estate market, they too are unable to find adequate housing for themselves and their families.

The focus of this part of the report is to determine if there has been movement or “creep”

of housing affordability problems into middle-income households by examining data derived from the Census of Canada and the housing markets of five major urban centres in Canada (Calgary, Winnipeg, Toronto, Ottawa, and Halifax).

In this part of the report, the analysis commences with an overview of the housing affordability environment, followed by an examination of the change over time in the number of middle-income households (and the relative share of those households among all households) that have housing affordability issues. The discussion then shifts to the patterns and trends among middle-income households, and specifically, characteristics of those households with affordability issues. For comparative purposes, figures throughout the report describing middle-income households are contrasted with households with modest and upper incomes. For a broader examination of each of the five cities, please refer to Appendix E which contains a more comprehensive case study analysis of each city.

18The working poor sector is classified as all people living in a poor household with at least one household member working in excess of part time hours. As was documented in the literature review, the traditional definition of the working poor also notes that households earn low wages.

3.1. Sources of Information and Critical Definitions

The present investigation on issues of housing affordability is based on case studies containing tabular data that are presented in Appendix E and a spatial analysis found in Appendix F. The case studies and maps are used to outline the housing market and affordability conditions in five major Canadian cities including Calgary, Winnipeg, Toronto, Ottawa, and Halifax. These metropolitan centres were selected to represent a broad cross-section of Canadian cities to ensure that a range of incomes, as well as a range of growth in the housing market were included. It is important to note that this analysis does not include data based on characteristics of the individual, but rather, data on housing affordability relates specifically to the household.

The sources for this section are derived primarily from Statistics Canada and relate specifically to the entire Census Metropolitan Area (CMA) of each city. The data sources include the 1991 and 2001 Census of Canada, the Survey of Household Spending from 1997 to 2004, and Consumer Price Indices for shelter and utilities from 1979 to 2005. In addition, housing and rental market data were accessed from CMHC publications between 1991 and 2005.

The analysis of the affordability situation for households of varying income levels is also supported by customized cross-tabular data from the Census of Canada for 1991 and 2001. The customized cross-tabular data is unique because it is not representative of the entire Canadian population. Instead, the customized cross-tabular data includes only households in which the identified head of the household worked in excess of part-time hours for the reference year.

For the customized cross-tabular data, households were sorted by income levels which were aggregated into ten income deciles. The deciles are representative of the income distribution of all working households in Canada in 2001. The first income decile represents the bottom 10 percent of working households, while the tenth decile is comprised of the top 10 percent of working households in relation to income level. One limitation of this data set that is important to document, however, is that the actual

income ranges that correspond to these income deciles are not included. The rationale is that comparison among the five cities is more effective when comparing households by percentiles instead of real income. To effectively compare the five centres a

categorization system was necessary to collapse the data for analysis. The categorization allowed the data to be examined within the context of four groups that were then assigned to the four representative categories below. The middle two categories represent the focus for this research and thus the discussion emphasizes the characteristics of households represented between the 3^rd and 8^th deciles.

• The moderate-income group represents those working households with salaries in the lowest two income deciles including those earning minimum wage and higher;

• The lower middle-income group includes higher wage earners whose incomes fall in the third to fifth income deciles;

• The upper middle-income group consists of high-wage earners in high income households with salaries in the sixth to eighth income deciles;

• The high-income group is represented by the highest salary earners in the workforce whose incomes fall in the ninth and tenth income deciles.

The customized cross-tabular data also provides information on tenure, household type, dwelling conditions, in addition to shelter-to-income ratios (STIR). This analysis utilizes Statistics Canada’s definition of housing affordability which defines households

registering a shelter-to-income ratio (STIR) of 30 percent or more to be experiencing housing affordability problems.

The customized cross-tabular data was also used to develop maps that portray the spatial attributes of housing affordability for the lower middle- and upper middle-income groups in the cities of the five case studies. The data was geo-coded and mapped using standard geographic information systems (GIS) techniques. As the customized data was

representative of only those households with an identified head who worked more than part-time hours, the small number of cases required that census tracts be combined into

CMHC market zones to ensure confidentiality. As a result of this data suppression, it was not possible to portray all available data. Nonetheless, the data analyzed for spatial differences using CMHC market zones does determine, at a broad level, that spatial differentiation can be observed.

Overall, the following analysis will demonstrate that the low-income groups are no longer the only households to experience problems affording adequate housing. The analysis also suggests that a shift began to occur between 1991 and 2001 as a greater number of middle-income households could be defined as having housing affordability issues. However, it is quite likely that the magnitude of this shift has increased since 2001 as the boom in the housing market gained momentum. However, without data from the 2006 Census of Canada, it was not possible to extend our understanding of the effect of housing-induced poverty on middle-income households in Canada during this period. It must also be acknowledged that a further limitation of the analysis is that while a focus on middle-income households illustrates that housing affordability has become an issue for a wider range of the population, this approach overlooks low-income households who are likely experiencing even greater stress in relation to housing affordability.

3.2. Trends in the Housing Market and Housing Affordability

This section reviews some of the key trends in Canada’s housing market, and in particular, trends in the five major cities being studied, and their impacts on housing affordability among households of all incomes. As is evident in Table 3.1, average

market rents grew significantly from 1991 to 2001 in each of the five cities being studied.

Over the four year period to 2005, there was only marginal growth in rental costs, with the exception of Winnipeg and Halifax, where rent continued to increase by

approximately 3 percent per year. This overall stabilization of rents in the other four cities may be reflective of both demographic changes such as the tail end of the baby boom market having matured and economic conditions including interest rates beginning to drop. Accordingly, many renters have also continued to enter the ownership market.

Table 3.1. Average Market Rent, Selected Canadian Cities, 1991-2005

* Figures for Toronto, Ottawa and Halifax are based on average change for each unit type.

** Based on 1994-2001 data.

Source: CMHC Rental Market Reports, 1991, 2001, and 2005.

The average value of dwellings, which is a self reported figure that estimates what price the dwelling could currently be sold at, also increased in the majority of the cities studied during the period of 1991 to 2001 (Table 3.2). The exception was Toronto which

experienced a downward correction in the real estate market, and the value of residential dwellings has only recently (2005) recovered to 1991 levels.

Table 3.2. Average Value of Dwellings, Selected Canadian Cities, 1991-2001

Source: Statistics Canada, 1991 and 2001 Census of Canada

In examining income and housing expenditures (Tables 3.3 and 3.4) key observations can be drawn. The median household incomes in each of the cities rose between 1.4 percent and 3.3 percent, comparable to the overall rate of inflation, but lower than the increase in housing costs in many of the cities (Table 3.3). Between 1991 and 2001, the number of

19 1991figures for Calgary and Winnipeg from Housing Ownership Patterns of Immigrants in Canada by Samuel A. Laryea, figures based on author's calculations from the 1991 Canadian Census Public Use Sample Tapes using sample sizes of 4,222 in Calgary and 3,671 in Winnipeg.

households spending at least 30 percent of their income on shelter increased significantly, and in fact, more than doubled in Calgary, Toronto and Halifax (Table 3.4).

Table 3.3. Median Household Incomes, Selected Canadian Cities, 1991-2001

Source: Statistics Canada, 1991 and 2001 Census of Canada,

Table 3.4. Households Spending 30% or More of Income on Housing, Selected Canadian Cities, 1991-2001

Source: Statistics Canada, 1991 and 2001 Census of Canada

Escalating rental and ownership costs from 1991 to 2001 resulted in the dramatic shift in the affordability environment. For the most part, household incomes did not keep pace with the increases in rent and ownership expenses. Generally speaking, however, ownership household incomes fared better than their rental counterparts in terms of keeping pace with housing cost increases over this period.

3.3. Housing Affordability Challenges for Lower Middle-Income Households The following section presents an analysis of the change over time in the number of working middle-income households that have housing affordability issues as well as their relative share of all households with affordability problems. Again, this section focuses on the use of customized Statistics Canada information that has been aggregated for those

1991

Calgary 30,915 85,420 176.3

Winnipeg 24,685 44,875 81.8

Toronto 105,790 304,690 188.0

Ottawa 57,260 65,620 14.6

Halifax 13,470 28,965 115.0

households with the primary income earner working at least part-time hours and presented in Table 3.5.

In 1991, the lower middle-income group represented between 23.1 percent and 34.9 percent (depending on the city) of all working households with affordability issues (based on shelter-to-income-ratios of 30 percent or more). This group represented a higher proportion of households with affordability issues in Calgary and Toronto, than in the other three cities studied. Comparatively, the upper middle-income group accounted for between 6.8 percent of households in Halifax and 18.4 percent of households in Toronto with affordability issues. Few, (less than 3.6 percent of) high-income households

exhibited affordability issues. The remaining 43.9 percent to 68.4 percent of households with affordability issues were from the moderate-income group.

Table 3.5. Households Spending 30% or More on Housing by Income Group, Selected Canadian Cities, 1991-2001 Toronto 34,955 45.0 6,290 10.4 -19,475 -59.7 -4,800 -75.8 - Ottawa 3,420 20.4 -2,755 -32.4 -2,070 -71.1 -560 -77.8 - Halifax 885 13.7 -195 -8.9 -250 -38.8 -80 -48.5 - Source: Statistics Canada, 1991 and 2001 Census of Canada

By 2001, the lower middle-income group represented a smaller proportion of all

households with affordability issues is each of the five cities studied, with the exception of Toronto. Likewise in each of the five cities, the upper middle-income group fell in the proportion it represents of all households with affordability issues. Moderate-income households now accounted for almost 75 percent of households with affordability issues in Winnipeg, Ottawa, and Halifax. This group represented 71.4 percent and 58.0 percent of households with affordability issues, in Calgary and Toronto, respectively.

In absolute terms, the number of lower middle-income households with affordability

In absolute terms, the number of lower middle-income households with affordability