New report finds housing crisis is taking a huge toll on middle-class workers

“The housing crisis has transformed from a social issue to a business imperative where economic competitiveness is undermined and threatens the GTHA’s status as an economic hub and innovation centre,” the report says.

Leslie Woo, CEO of Civic Action — the group behind the report — says their research was prompted by concern that focus on the problem of mid-income workers squeezed out of major cities by high housing costs had waned since COVID-19 shined a light on issues affecting essential workers.

“There’s a vacuum of leadership that is the kind of leadership we saw during the crisis of the pandemic,” Woo said in an interview, describing the housing situation of key workers from firefighters to 9-1-1 operators as a “state of despair.”

Their report, to be released Tuesday, is the result of a group assembled by Civic Action last year, including representatives from development, construction, health care, politics, philanthropy and other sectors. It aimed to address what Woo called “inadequate co-ordination” to tackle the issue.

“Everyone is trying to move their own piece of the puzzle forward,” Woo said.

Using a definition of mid-income as $40,000 to $125,000 per year, the report warns that housing costs are eating up a growing percentage of workers’ incomes. When key workers cannot afford to live in the communities where their work is needed, the report warned of staggering financial impacts. 

Lost productivity due to increased commuting times, as well as staff turnover, overtime and agency staffing in health care alone were costing that sector approximately $575 million per year, the analysis found. 

The report adds that the stress of living in unaffordable housing, inadequate housing or housing that require workers to make lengthy commutes worsens absenteeism, productivity and staffing turnover, and leads to more positions sitting empty.

The report combines their own analysis of government data, surveys and other publicly available sources with references to other organizations’ research and reports.

For example, the report cited a 2022 survey of Toronto-area businesses where 68 per cent of respondents reported difficulty attracting talent because of the cost of housing, while 42 per cent said they’d considered uprooting and relocating their business operations “due to workforce housing challenges.”

In a separate survey of GTHA mid-income workers, the authors wrote that 29 per cent of respondents reported spending more than half their income on housing bills.

In a “preliminary” analysis of census, federal and real estate data, the authors wrote that 82 per cent of new jobs in “essential service categories” were located in places where less than 15 per cent of the housing stock would be available to workers on those incomes. The distance a worker who took one of those jobs would need to travel for their housing to be affordable had increased more than 40 per cent since 2010, the report said.

“These are people who give a lot,” Woo said. “For the cleanliness of our streets, and the care of our elderly, and the education of our young people.”

While the new report is the first in a series — with later publications to focus more heavily on solutions — it suggests employers with a “vested interest” in the housing of their employees could take on a more direct role by launching their own housing assistance programs or partnerships, contributing land for “workforce housing” or leasing rentals to offer at “favourable rates.”

Those models were used before by “forward-thinking businesses,” the report said. But Woo believes it’s an intervention that could be more broadly adopted.

“It’s to be tested, but we haven’t seen too much conversation about that yet.”