The Goal of the Missing Middle Initiative: A Detailed Look
To solve any problem, you need to understand it. You also need to have a vision of what success looks like. What would having a strong young, urban-middle class look like?
We are big believers in creating a vision of success – a North Star that can help guide your thinking and choices. For Canada’s young, urban, middle-class, our vision of success is as follows:
Missing Middle Initiative’s North Star: Every middle-class individual or family in Canada should have a high-quality of life and access to both market-rate rental and market-rate ownership housing options that are affordable, adequate, suitable, resilient, and climate-friendly in every city in Canada.
This North Star is densely packed with a variety of different terms that require definition. Here is how we define each term, and why we have included each one in our North Star.
Middle-class: To help the middle-class, we must have some idea of who they are. There are many competing definitions of the middle-class. For example, the Pew Research Centre defines it as families with incomes between two-thirds and double the median family income. More nuanced definitions consider factors such as age, wealth, and local cost of living, such as this one from the Washington Post. Another income-based definition is provided by the Brookings Institute, which defines it as families in the middle 60-percent of the income distribution. In 2022, this definition would include Canadian families with incomes between $52,700 and $144,300. If using a strictly income-based definition, our preference would exclude the bottom 20 percent and top 10 percent of the income distribution, defining the Canadian middle-class family as being one with an income between $52,700 and $279,300.
High-quality of life: What we ultimately want for the young, urban, middle-class. This concept is even more nebulous and difficult to define than middle-class, but it is vital we have some notion of what success looks like. A number of organizations have attempted to define and measure the quality of life in our cities; the federal government also has a quality of life framework with 84 different quality-of-life indicators. Another indicator is the World Happiness Index, where Canada currently ranks 58th in happiness for adults under the age of 30. We should aspire to be #1.
Market-rate: Here we use the National League of Cities’ definition of market-rate housing: “Market-rate housing refers to non-subsidized properties that are rented or owned by those who pay market-rate rents or who paid market value to purchase the property. Unlike subsidized affordable housing, market-rate housing does not confer special government benefits.” We believe non-market housing, such as social housing, play a vital, and irreplaceable role in our housing ecosystem, and we need more of it, particularly for low-income families. We also recognize that this will not always be available for middle-class individuals and families, so they must have access to market-rate housing options.
Rental and ownership housing options: This should not be taken to mean that renting is preferrable to owning, or vice versa. Rather it is that the middle-class should not be locked-out of either option, and should be able to choose what best meets their needs. In a very real sense, freedom is a function of a person’s options, and being priced out limit’s one freedom and well-being.
Affordable: We have adopted the 30% of income threshold, which is part of the federal government’s definition of core housing need, as our definition for affordability: “Affordable housing costs less than 30% of before-tax household income. For renters, shelter costs include, as applicable, rent and payments for electricity, fuel, water and other municipal services. For owners, shelter costs include, as applicable, mortgage payments (principal and interest), property taxes, condominium fees, and payments for electricity, fuel, water and other municipal services.” We believe that middle-class individual families should be able to access market-rate rental and market-rate ownership housing options that have all-in shelter costs under 30% of pre-tax incomes. Families could choose to spend more, if they wish, but they should have options that are affordable (by this definition), adequate, suitable, resilient, and climate-friendly in every city in Canada.
Adequate: The definition of adequate also comes from the criteria for core housing need, and is defined as “housing [that] does not require any major repairs, according to residents. Major repairs include those to defective plumbing or electrical wiring, or structural repairs to walls, floors or ceilings.” We believe this is self-evidently important.
Suitable: This is defined by Canada’s National Occupancy Standard, but can be roughly thought of as any house that has enough bedrooms given the size and composition of the family. More specifically, the home should have enough bedrooms to allow for the following:
A maximum of 2 persons per bedroom.
Household members, of any age, living as part of a married or common-law couple share a bedroom with their spouse or common-law partner.
Lone parents, of any age, have a separate bedroom from their children.
Household members aged 18 or over have a separate bedroom, except those living as part of a married or common-law couple.
Household members under 18 years of age of the same sex may share a bedroom, except lone parents and those living as part of a married or common-law couple.
Household members under 5 years of age of the opposite sex may share a bedroom if doing so would reduce the number of required bedrooms. This situation would arise only in households with an odd number of males under 18, and odd number of females under 18 and at least one female and one male under the age of 5.
This condition is particularly important for our largest cities, as there is a real lack of homes that are suitable for families with children, by this definition. For example, between 2016 and 2021, the number of occupied private dwellings (a.k.a. homes) in the City of Toronto increased by nearly 48,000, but the number of homes with 3 or more bedrooms increased by less than 2,600. Over 94% of all the net new housing stock in the city had 2 or fewer bedrooms and, as such, would not be suitable for many families with children.
Resilient: Homes should be built in the right way, and the right places, to protect occupants from severe weather events such as flooding and wildfires, one of the four goals of the Blueprint for More and Better Housing. Homes that are not resilient put the occupants and their possessions at risk, and reduce affordability through higher insurance costs. Furthermore, the most expensive home is the one that you must build twice.
Climate-friendly: The Blueprint for More and Better Housing had the goal to “reduce Canada’s housing-related emissions to meet Canada’s 2030 climate targets”. This is a reasonable definition of climate-friendly, noting that housing-related emissions covers everything from the emissions used to heat and cool the home to transportation-related emissions related to travelling from home to work, school, or shop. Canada must find a way to create market-rate rental and market-rate ownership housing options that are affordable, adequate, suitable and resilient, while also ensuring that in building those homes, Canada can still meet its greenhouse gas emission targets.
Every city in Canada: Our cities will only thrive if they have a strong middle-class. The commonly-heard refrain “if people can’t afford to live in Toronto, they should move somewhere else” may seem sensible at the individual-level. However, at a societal level, we cannot have all the nurses live in Thunder Bay or Medicine Hat, and all the patients live in Toronto. It simply does not work. Our focus will be primarily on Canadian cities where the middle-class is being priced out. This is not just in the largest metros like Toronto and Vancouver, but is happening in mid-sized cities such as Halifax and London.