canadian housing allowances inside 209 and outside the

Canadian Housing Allowances Inside and Outside the Welfare System209

CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL. XXIV , NO. 2 1998

Canadian Housing Allowances Insideand Outside the Welfare SystemMARION STEELE

University of GuelphGuelph, Ontarioand Centre for Urban and Community StudiesUniversity of TorontoToronto, Ontario

Cet article démontre que la conception des allocations de logement destinées aux gens sur le bien-être en Ontarioest loin d’être parfaite alors que les allocations de logement traditionnelles basées sur le loyer et le revenu, pourles gens qui ne sont pas sur le bien-être, sont bien conçues. Les allocations basées sur le loyer et le revenu paientun pourcentage de la différence entre loyer réel (sujet à un maximum) et loyer abordable, alors que les allocationsdestinées aux gens sur le bien-être paient le loyer réel (sujet à un maximum). Cette étude porte sur le Manitoba etl’Ontario. Les résultats suggèrent que les changements apportés par l’Ontario en 1989, incluant l’augmentationde la subvention marginale de quatre-vingt pour-cent du loyer à cent pour-cent, ont fait augmenter l’allocationmoyenne de plus de vingt-cinq pour-cent. De plus, les résultats suggèrent qu’en Ontario les allocations destinéesaux gens sur le bien-être ont soit augmenté la consommation de logements ou ont permis aux propriétaires louantprincipalement aux gens sur le bien-être de profiter de leur position de monopole pour gonfler les loyers. Lesrésultats indiquent que les allocations destinées aux gens sur le bien-être au Manitoba n’ont pas eu ces effets.L’article conclut que le fait de ne pas distinguer Toronto du reste de l’Ontario cause des inégalités importantes.

The aim of this paper is to demonstrate that the design of welfare housing allowances of the sort used in Ontariois badly flawed, while classic rent and income conditioned (RIC) housing allowances, for people who are not onwelfare, have a good design. RICs pay a percentage of the difference between actual rent (up to a maximum) andaffordable rent, while welfare allowances pay actual rent up to a maximum. The paper focuses on Manitoba andOntario. Evidence suggests that 1989 Ontario changes, including increasing the subsidy at the margin to 100percent of rent from 80 percent, increased average allowances much more than 25 per cent. Further evidencesuggests that in Ontario welfare allowances either increased housing consumption or “welfare landlords” exertedmonopoly power to inflate rents. Evidence indicates the Manitoba RIC did not have these effects. The paperargues that not differentiating between Toronto and the rest of Ontario results in major inequities.

INTRODUCTION

I f the 1960s and 1970s may be labelled the era ofhigh hopes for grand solutions to the needs of

the poor and the 1980s may be labelled the era ofrunaway spending, then the present decade is surelythe decade of programs modest in cost and modest

in expectations. A program that fits the temper ofthe times is the housing allowance program in Mani-toba and elsewhere, for people who are not receiv-ing welfare. Like proposed alternatives to welfarewhich require recipients to sacrifice leisure and workor train (Krashinsky 1995), Manitoba’s housing al-lowance program requires sacrifice and provides

210 Marion Steele


TABLE 1Expenditure on RIC Housing Allowances and on Selected ARM Allowances

RIC Allowances ARM Allowances

British Manitoba New NovaYear Columbia Elderly Families Quebec* Brunswick Scotia Manitoba Ontario

(millions of dollars)

1980 7.9 0.3 0.61981 n.a. 1.7 0.1 9.7 0.51982 7.9 2.6 1.3 7.3 0.51983 n.a. 2.5 1.0 7.9 0.71984 9.1 2.9 1.2 8.4 1.0 1.31985 n.a. 3.4 1.5 16.3 1.01986 8.0 3.2 1.6 18.6 (21.7)1987 7.1 3.1 1.4 18.7 (22.1)1988 6.5 4.2 1.5 21.2 (25.9)1989 5.7 4.7 1.6 25.3 (31.0) 1.1 1.21990 10.4 4.6 1.5 28.7 (35.2) 1.0 1.4 806.31991 16.0 4.5 1.5 28.6 (36.4) 1360.41992 18.5 4.3 1.6 32.0 (41.3) 53.2 1945.61993 19.2 4.5 1.5 35.4 (45.8) 0.7 57.5 2285.6

*Quebec amount is allowance net of the property tax credit, RIF. For comparability with Manitoba and British Columbia, the allowance grossof the estimated RIF is given in parenthesis. The estimated RIF is the mean RIF for the benefit year times the number of recipients. The RIFis paid annually, the allowance monthly.

Notes:1. Blanks in table generally, but not always, mean data are not readily available. Manitoba’s program for the elderly did not start untilJanuary 1980; the family program started January 1981. The Quebec program started in the fall of 1980; initially only the income of theapplicant was considered but starting in the summer of 1981 total household (ménage) income was considered.2. Rent and Income Conditioned (RIC) allowances such as Manitoba’s SAFER are provided only to households not on social assistance.Actual Rent up to a Maximum (ARM) allowances are shelter allowances provided to those on social assistance; included in the total forManitoba are only those expenditures in categories “board and room” and “private rent.” Total shelter expenditure for all categories ofsocial assistance recipients in Manitoba is $90.6 million for the 1992-93 fiscal year.3. Data are only roughly comparable from province to province because they generally refer to benefit years, which are not the same ascalendar years and differ between provinces. In addition, there is some lack of comparability over time because some data prior to 1986 arecomputed by multiplying benefit in a particular month by 12.4. The Ontario value is 12 times the shelter allowance payments to private renters only (both Family Benefits Assistance and GeneralWelfare Assistance) in March. Excluded are shelter allowance payments to boarders, public and private; renters in public and non-profithousing, and owner-occupiers. Most provinces — not merely Ontario and Manitoba — have ARM allowances.

Sources:British Columbia: 1980, 1982, 1984 data are from Steele 1985a, Table 3; 1986-1993 data are from SAFER Office, BC Ministry of Housing,Recreation and Consumer Services. Data are for benefit year ending in the year shown; e.g. expenditures for 1992-93 are shown here under1993. Net costs to government are less than costs indicated because recipients must deduct housing allowance payments from propertytax credit.Manitoba: RIC data provided by Manitoba Housing. Data are for fiscal year ending in year shown; e.g. data shown for 1993 are for fiscalyear 1992-93. ARM data provided by Manitoba Family Services, Income Security Regional Operations; 1993 data are for fiscal year 1992-93. Manitoba net cost is less than gross costs because recipients must deduct allowance payment from their property tax credit.Quebec: Data on Logirente provided by Société d’Habitation du Québec.New Brunswick: Data for 1980-84 RATE (later called ARC) provided by New Brunswick Housing Corporation. Amount is benefit paid in asingle month (1980 Feb; 1981 July; 1982 Oct.; 1983 June; 1984 June) times 12. Data for fiscal years 1988-89, 1989-90, and 1992-93 arefrom CMHC (1993). ARC was capped in 1992.Nova Scotia: Early data are from George Hough, Ontario Ministry of Housing; 1989 and 1990 data (for 1988-89 and 1989-90 respectively)are from CMHC (1993).Ontario: Data supplied by Peter Cheung, Statistics and Analysis Unit, Social Assistance Programs Branch, Ministry of Community andSocial Services, September 1995.



rewards. Recipients must demonstrate that they aredeserving by sacrificing a higher than affordableproportion of their income for housing.

Rent and Income Conditioned (RIC) allowancesof the Manitoba type have existed since the late1970s and are among the few Canadian housing pro-grams without explosive costs in the 1980s — and one

of the few still accepting applications in the 1990s.In 1993 they cost a puny $70 million 1 (Table 1), incontrast to about three billion dollars for supply pro-grams and billions of dollars for housing taxexpenditures (Steele 1995, Appendix 2). At a timewhen there is much discussion about the effects ofrelaxing restraints on transfers to provinces underthe Canada Health and Social Transfer (CHST), it

TABLE 2 Number of Recipients of RIC Housing Allowances and Selected ARM Allowances

RIC Allowances ARM Allowances

Manitoba British New NovaColumbia Quebec Brunswick Scotia

Year Elderly Families Elderly Elderly Elderly Elderly Canada Manitoba Ontario

(number)

1980 2225 135001981 3004 533 26747 10001982 3316 1171 11300 19325 10001983 3314 1351 19060 1000 642911984 3709 1946 10200 18746 1027 701331985 3952 2292 30084 1515 1900 746411986 4090 2292 9384 31675 51000 773911987 4066 2071 8997 30662 49000 922881988 4339 1969 8436 32990 51000 1203271989 4624 2012 7722 39668 57000 1361751990 4800 1934 9595 42068 61000 1712681991 4671 1780 10808 44708 65000 2632861992 4590 1777 11439 46641 67000 3573651993 4466 1704 11732 51685 72000 4033191994 4323 1559 11828 54908 1700 75000 14518 425000est.

Notes:1. See notes and sources, Table 1.2. The number of RIC recipients for Canada, 1986-1993, is computed assuming New Brunswick recipients number 1200per year 1985 to 1989 and 1000 per year 1990 to 1993, and Nova Scotia recipients number 1900 per year 1986 to 1989and 1700 1990 to 1993.3. Data for Nova Scotia refer to spring 1985, supplied by G. Hough, Ontario Ministry of Housing; and for 1994 refer to1993-94, obtained from Nova Scotia Department of Community Service.4. The number of recipients for Manitoba ARM refers to May and includes social assistance recipients in the categories“board and room” and “private rent”; other categories are unknown, community residence, home owner (1198),institution, hospital, no cost (2539), personal care, residential care, subsidized rent (5738) and trailor; total number ofrecipients is 26,820.5. The number of recipients of the Ontario ARM includes only Family Benefits Assistance and General Welfare Assist-ance recipients (“cases”) who are private renters. Private boarders are excluded. Data are for March for both GWA andFBA, except for 1984 the GWA number is for June and for 1989 the FBA number is for April. Note that the number ofGWA recipients includes those under all 13 “reason” categories. The largest category under “reason” is unemployed.FBA recipients are, for the most part, sole support parents or disabled.

212 Marion Steele


is relevant that both “have” and “have-not” provinceshave introduced housing allowances despite the ab-sence of federal financial assistance. They are astriking example of a purely provincial initiative inresponse to a gap left by federally sponsoredprograms.

In vivid contrast to these allowances are onesprovided for private renters who are welfare recipi-ents. Welfare housing allowances — sometimes con-fused with the programs for those who are not wel-fare recipients — have a dramatically different de-sign. As they exist in Ontario, they simply pay theActual Rent up to a Maximum (ARM), providingno reward for economizing. Indeed their generosity— even after severe cuts in 1995 — to some catego-ries of recipient, in areas outside Toronto, may haveincreased the welfare caseload. They cost over $2billion in Ontario in 1993. They are far more im-portant than RICs, with over 400,000 recipients inOntario, more than five times the number of RICrecipients in all Canada in 1993 (Table 2). They haveexpanded greatly in recent years — the number ofrecipients in 1993 was over three times the numberfive years earlier — initially under the shelter of 50percent federal cost-sharing through the CanadaAssistance Plan (CAP). Since 1990 the Province ofOntario has totally borne its own cost increases.Starting in 1996-97 the implementation of the CHSThas meant that the federal government shares noprovince’s costs at the margin. These allowancesrepresent roughly half of total welfare expenditureso that improving their design is a matter of someurgency.

It is the aim of this paper to demonstrate that thedesign of welfare housing allowances, of the sortcurrently used in Ontario, is badly flawed, that theRICs have a very good design, which justifies ex-panded use, and that a useful guide to improvementsin welfare housing allowances is provided by theRIC allowances. In the next section of this paper,the policy motivation and environment for these twoallowances is discussed to provide some insight intothe reasons RICs incorporate much more favourable

incentives than ARMs. Discussion of the formulasand rules for the two types of housing allowanceprogram reveals in detail the nature of the incen-tives. The superiority, as compared to the currentOntario ARM, of the design of Quebec welfare hous-ing allowances and the pre-1989 design in Ontario,is noted. Evidence on the operation of RICs andARMs is assessed. The evidence on RICs largelycomes from the experience in Manitoba and Que-bec, where plans encompass a broad range ofeligibles, while the evidence on ARM allowanceslargely comes from Ontario, with some reference toManitoba and Quebec. Ontario’s ARM experienceis of special interest because of its explosion of num-bers and expenditures over the last decade. The pa-per concludes with a discussion of policy implica-tions for housing programs, for some federal incomesupport programs, and comments on federal-provincial arrangements.

THE POLICY MOTIVATION FOR HOUSING

ALLOWANCES

The essential aim of provinces introducing RICs hasbeen to making housing more affordable for peoplenot receiving social assistance and not living inRent-Geared-to-Income (RGI) housing.2 Afforda-bility is widely recognized in Canada as one of thethree major housing needs.3 An affordability prob-lem is widely defined to exist when rent is greaterthan 30 percent of gross income. The view that 30percent is the affordable maximum is reflected inthe RGI scales for public housing in British Colum-bia and New Brunswick — although 30 percent isapplied to income net of adjustments, so that theeffective rate on gross income is less than 30 per-cent. The RIC formula directly addresses theaffordability problem.

A second aim of RICs is to reduce the demandfor social housing and the pressure to build moresocial housing.4 Steele (1985b) gives evidence, how-ever, that housing allowances did not affect the de-mand for social housing in Manitoba and British



Columbia, perhaps because low-income householdsfound it much cheaper than private housing, evenwith a housing allowance program. Instead RICsreduced the sacrifice of low-income people whowanted to stay in place — typically in spacious ac-commodation — in the private sector. But this evi-dence is more than a decade old and RGI scales insocial housing have become less generous. It seemslikely that housing allowances at present do affectthe demand for social housing.

RIC housing allowances are seen primarily as aninstrument of housing policy but secondarily as partof social assistance. The ascendancy of the view thata RIC is a housing program is indicated by the factthat the three biggest programs have formulas setand data analyzed in agencies responsible for hous-ing, for example, Manitoba Housing. One reason forlocating RIC allowances in housing ministries is theneed to analyze the housing market to determine theappropriate “maximum allowable rent” or thresh-old rent. Another is to ensure consistency betweenRGI scales and the RIC formula. Another is to makeit administratively easier to ensure applicants forsocial housing know about the program. But thereis also a case for administering housing allowanceswith social assistance, because RIC allowances arecash payments to low-income households, just aswelfare payments are.

In the language of income redistribution analysts,a RIC allowance may be characterized as using amixture of means testing (because of its incomeconditioning) and needs testing (because of its rentcondition). What is the rationale for the needs test?An housing analyst’s response is that rents for agiven quality of accommodation are highly variablefrom place to place, so that conditioning on rentyields a cash payment with roughly the same realvalue in different places, unlike a pure income-conditioned payment. The RIC’s property of ap-proximating a constant real payment also holdswithin any given city, if members of a group, forexample, low-income single-parent families, are per-ceived to be costly to serve — or high-utilization

households in Henderson and Ioannides’(1983) ter-minology — and so pay higher rents than low-cost-to-serve households. A second response is that rentconditioning recognizes the optimality for somehouseholds, especially those with children, of stay-ing put if household income falls temporarily, be-cause of high transactions costs. A family hit by un-employment can easily replace hamburger withbeans, but only with the upheaval of a search and amove can it replace a new three-bedroom townhousewith an old two-bedroom house. A third response isthat to the extent that taxpayers view housing as a meritgood they will be more ready to contribute to a pay-ment that is rent conditioned than to one that is not.

The housing allowance for welfare recipients isActual Rent up to a Maximum in most provinces.Its aim is to provide for the housing need of the re-cipient, consistent with the general philosophy un-derlying welfare under the Canadian AssistancePlan. This aim is met so long as the housing need ofthe recipient is met by a rent no higher than the setmaximum. The ARM may provide assistance wellin excess of housing need, however, when the maxi-mum allows for accommodation at a near-luxurylevel. This possibility arises because the maximumsin Ontario, Manitoba, and in most other provincesdo not vary by location, and a nominal amount thatprovides only a meagre quality of housing in a bigcity like Toronto will provide much more in a vil-lage in the hinterland. A single set of province-widemaximums is clearly inconsistent with the needsphilosophy underlying social assistance. One justi-fication for the single set of maximums is that byproviding higher real assistance in less urbanizedareas the allowance design incorporates an incen-tive for recipients to move to these areas.

Housing allowances play no role in federal hous-ing policy, although on more than one occasionCanada Mortgage and Housing Corporation(CMHC) has toyed with the RIC idea. Its reluctanceto adopt one has arisen for several reasons. First,CMHC has been concerned about the possibility ofrunaway costs of a univeral program in an inflationary

214 Marion Steele


setting. Second, and more fundamental, CMHC,consistent with its traditional role in elevatingbuilding standards, has been unwilling to accept theview that a housing program can be conceived asone involving only a cash transfer. CMHC wouldbe more comfortable with a plan in which, as in thenational US housing allowance under section 8 (ad-ministered by the US Department of Housing and Ur-ban Development [HUD]), recipients have to satisfy aminimum housing standard condition.5 Note also thatin the last few years CMHC has undertaken virtuallyno new subsidized programs of any kind. A furtherstumbling block to a national program may be thepolitically unpalatable fact that total expenditures andexpenditures per recipient in a federal plan would befar higher in “have” than in “have-not” provinces.

DESCRIPTION OF THE PROGRAMS

RIC Formulas and RulesAll four provinces with a RIC housing allowanceuse the same general formula: the benefit is a per-centage of the gap between a recipient’s “rent” and“affordable” rent, where affordable rent is a set pro-portion of income. “Rent” is actual rent unless ac-tual rent is higher than threshold rent, in which caseit is threshold rent. Threshold rent is usually calledmaximum rent or maximum allowable rent. Alongwith the affordability ratio, it determines the incomeat which the allowance becomes zero. Manitoba setsa maximum benefit, also, to prevent large benefitsfor households with no income. Quebec accom-plishes the same purpose by setting a minimum in-come — equal to welfare income — for use in theformula. A Quebecer who is eligible both for wel-fare and for a RIC housing allowance can choosethe housing allowance (with its simpler and moreanonymous application procedure), but the mini-mum income rule would mean that the allowancewould be much less than welfare benefits. In the erabefore the CHST, a rationale for the rule was theneed to discourage shifts from welfare, which iscost-shared with the federal government, to RICs,which are purely provincially funded.

The housing allowance payment, P, is given inQuebec’s formula by the following:

P = 0.75(R - 0.30Y) if R is less than to R*(for R - 0.30Y positive) (1)

P = 0.75(R* -0.30Y) if R is equal to orgreater than R* (for R* - 0.30Y positive) (2)

P = 0 otherwise (3)

where Y is gross income, R is rent (plus a flat al-lowance for heat and electricity, and the charge formunicipal services, if these are not included in rent),and R* is a threshold rent which varies according tothe number in the household. It was $370 for sin-gles and $420 for couples in Quebec in 1993 (Steele,1995 and Table 3). We call the affordability param-eter (30 percent here) the contribution rate. Forhomeowners R equals mortgage interest plus prop-erty and school taxes and a flat amount for heat,maintenance, and electricity. It can be seen that

• the allowance is zero when Y is equal to orgreater than R*/0.30; that is, those with an in-come greater than 3.33 times the threshold rentget no allowance. In 1993, couples with an an-nual income over $16,800 in Quebec, and over$23,000 in British Columbia (computed fromTable 3) received no allowance.

• when R is less than R*, P = 0.75R - 0.225Y, sothat the recipient pays out of his or her ownpocket only 25 percent of any rent increase,which we may call the marginal rent tax rate.The marginal income taxback rate is 22.5percent.

• when R is equal to or greater than R*, P = 0.75R*- 0.225Y, so that the recipient pays 100 percentof any rent increase and the housing allowanceis simply a negative income tax dependent onhousehold size as well as income.



TABLE 3Threshold Rents in RIC Allowance Plans, 1980 to 1993, Couples

British Columbia Manitoba QuebecYear Nominal 1986 Dollars Nominal 1986 Dollars Nominal 1986 Dollars

$ $ $ $ $ $

1980 245a 344 225 3301981 270 371 200 2821982 295b 345 270 340 210 2711983 300c 349 230 2701984 350 385 250 2751985 350 365 295 3101986 350 350 310 3101987 350 338 325 3111988 410d 382 340 3111989 410 367 355 3091990 420 366 375 3151991 575e 467 435 367 390 3181992 575 456 455 374 410 3271993 575 447 455 367 420 329Mean unsubsidizedrent, 2 bedroom 714 511 476unit, 1993 (Vancouver) (Winnipeg) (Montreal)

a Raised to this value March 1980 (Steele 1985b)b Raised to this value July 1981 (Steele 1985b)c Raised to the value in January 1981 (Steele 1985b)d Raised to this value in July 1987e Raised to this value in July 1990Source: Threshold rent data other than indicated in notes were obtained from sources given in Table 1. The rentalcomponent of CPI from Statistics Canada for the largest city in the province (i.e., Vancouver, Winnipeg, Montreal) is thedeflator. Mean unsubsidized rents are computed from Statistics Canada’s Household Income, Facilities and Equipment(HIFE) datafiles; Winnipeg and Vancouver rents are based on less than 100 but more than 60 observations.

The British Columbia formula is the same as thisexcept that the flat 75 percent of the affordabilitygap is replaced with a variable percentage — 90 per-cent for the lowest income recipients, gradually fall-ing to 44 percent for the highest income recipients,implying a marginal income taxback rate of 27 per-cent for the lowest income recipients and 13.2 per-cent for the highest. In Manitoba, the percent of gapis also variable — 90 percent for the lowest incomerecipients, 60 percent for the highest income ones— as is the contribution rate — 25 percent for the

lowest income and 27.5 percent for the highest.These imply marginal income tax rates of 22.5 to16.5 percent. For mid-income recipients in Manitobathe payment parameters are a linear interpolationbetween these extremes.

As can be seen, as rent rises a recipient contrib-utes more via the marginal rent tax, which, for ex-ample, in Quebec is 25 percent. Also, RIC plans paybenefits only when actual rent is above a set per-centage of income. Thus the admission ticket for

216 Marion Steele


entry into these programs is a substantial contribu-tion toward rent, for example, 30 percent of incomefor recipients in Quebec and British Columbia. Thiscontribution rate out of income is the same as theBritish Columbia RGI rates in social housing. InQuebec the RGI rate is less (25 percent). In Mani-toba it was 26 percent in 1993 (27 percent in 1994),6

which is within the sliding scale of rates in the Mani-toba RIC program, but because the RGI rates applyto income net of certain deductions such as the childbenefit, the RGI rate is effectively less than the al-lowance contribution rate for families in Manitoba.Of course the post allowance rent-to-income ratiowill always be greater in the housing allowance plansthan in RGI housing, when the contribution rate andthe definition of income are the same, because onlypart of the affordability gap is paid in RIC plans.

Elderly or near-elderly households are eligiblefor the allowance in British Columbia, Manitoba,Quebec, Nova Scotia, and New Brunswick.7 In Brit-ish Columbia the minimum age is 60, in Manitobait is 55 and in Quebec it is 57 (1994-95 rules) with aplanned fall to 55. Thus, Manitoba and Quebeceligibles include people well below standard retire-ment age. Extending assistance to them is a sub-stantial step because of work incentives. Further,their income is not boosted by Old Age Security(OAS) payments nor Guaranteed Income Supple-ments (GIS), making them potentially eligible for alarge benefit. In Manitoba families with dependentchildren under 18 are also eligible for a RICallowance.

Quebec is the only province where homeownersas well as renters are eligible for a RIC allowance,but they make up a tiny proportion of total recipi-ents — 2.4 percent in the 1992-93 benefit year. An-nual “rent” for homeowners is taken as the sum ofschool and municipal taxes for the home, mortgageinterest, and a fixed allowance of $1080 (in the 1994-95 plan) to cover utilities and maintenance costs.The small number of recipients among elderly home-owners is not surprising because few have an out-standing mortgage. A typical elderly owner has zero

mortgage interest costs and low total cash costs forhousing.8

Households living in RGI accommodation areineligible in all plans.

A number of countries have RIC housing allow-ances. The current formula for Germany’s allow-ance, Wohngeld, introduced in 1965, is highly simi-lar to Canadian ones. Like Manitoba’s scheme, theGerman parameters — and those for France and theNetherlands — are sensitive to income and house-hold size (Kemp 1990).9 Unlike in Canadian prov-inces, where threshold rents are constant within aprovince, those in Germany and France vary by lo-cation (Ibid.). US allowances under Section 8 in-clude a certificate program which is so differentfrom Canadian and European schemes that it hardlyfits in the same class. Recipients have to live in unitssatisfying a housing standard condition and theycannot pay more than threshold rent, that is, the “fairmarket rent” which varies by location. Furthermore,the housing allowance equals all the difference be-tween actual rent and affordable rent. The US Sec-tion 8 voucher is more like Canadian plans becauseit allows recipients to pay more than threshold rent;but the allowance depends only on threshold rent,not on actual rent,10 so that the marginal rent taxrate is always 100 percent. This allowance is akinto a modest negative income tax subject to mini-mum housing standards. New Zealand’s allowance,called Accommodation Supplement and imple-mented in 1993, is a hybrid of the American voucherand the Canadian RICs. Like the former, the allow-ance uses “fair market rent” adjusted for the suit-able number of bedrooms, instead of actual rent(Morrison 1995); like the latter it pays less than 100percent of the affordability gap. New Zealand’shousing allowance is thus like a modest negativeincome tax that is sensitive to both location andhousehold size.

ARM Formulas and RulesAs indicated earlier, welfare recipients who are pri-vate renters, in most provinces, essentially receive



their actual rent up to a set maximum as the sheltercomponent of their welfare assistance. In Ontario (Oc-tober 1989 to June 1994) the payment is given by

P = B if R is less than B

= R if R is more than B but less than R*

= R* otherwise11

B, set far below market rents, is referred to as “ba-sic shelter.” B, and the maximum, R*, vary accord-ing to number of persons and/or family type. Therelation of R* to mean market rent varies by prov-

ince. For Manitoba R* is typically about 80 percentof Winnipeg mean rent for a suitable apartment(Table 4), with the percentage tending to rise ashousehold size does. The deemed adequacy of R*is highly sensitive to the size of apartment assumedto be suitable. If a bachelor apartment is suitablefor a single person12 — and otherwise it would beodd for municipal regulations to allow bachelors toexist — R* is 83 percent of market rent for a singleperson. The ARM R* is only 70 percent of the RICR* in Manitoba, for singles and 84 percent for cou-ples (see Tables 3 and 4 and Steele 1995, Table 8),but the Manitoba RIC formula ensures that onlybetween 75 percent and 90 percent of rent is counted.

TABLE 4Mean Market Rents, and Maximum (or Threshold) Rents for Social Assistance Recipients, Manitoba and Ontario

Manitoba Ontario

Number of Maximum Rent Mean Rent Maximum Rent Mean RentPersons 1993 1992 Winnipeg 1992 Toronto Hamilton St Catharines-Niagara

$ $ $ $ $ $ $

1 285 282 [340] (83%) 400 [568] (70%) [369] (108%) [326] (123%)418 (67%) 633 (63%) 483 (83%) {482} (83%)

2 387 383 502 (76%) 625 764 (82%) 573 (109%) 524 (119%)3 430 426 502 (85%) 740 764 (97%) 573 (129%) 524 (138%)4 471 466 {558} (84%) 795 869 (91%) {707} (112%) {593} (134%)5 488 483 {558} (87%) 825 869 (95%) {707} (117%) {593} (139%)6 513 508

[ ] mean rent is based on less than 25 observations; {} mean rent is based on 25 to 49 observations.

Notes:1. “Maximum rent” is the maximum subsidized by the welfare program. Recipients may pay more but any amount abovethe maximum is unsubsidized. In 1995 Ontario maximums were cut by 21.6 percent. Applied to 1992 maximums thisyields $314, $490, $580, $623, $647 for 1-5 persons.2. “Mean rent” is the mean unsubsidized rent estimated from the 1993 HIFE survey (estimated using the HIFE weights),deflated to 1992 levels using the annual CPI rent component. For Winnipeg and Toronto the deflators were respectively1.024 and 1.018. The Toronto deflator was also used for Hamilton and St. Catharines-Niagara, because no CPI rentcomponent is available for these two CMAs.

Mean rents given for a one-person household are for a bachelor and a one-bedroom unit, respectively; mean rent fora two-person and a three-person household is for a two-bedroom unit; that for a four- and a five-person household isfor a three-bedroom unit.3. Numbers in parenthesis are percentages of maximum rent.4. Maximum rents for Manitoba were obtained from Manitoba Family Services, Income Security Regional Operations.Ontario maximums are from Ontario, Ministry of Community and Social Services (1992, p. 95).

218 Marion Steele


Thus, the two allowances are consistent in the maxi-mum rent they subsidize.

Quebec’s welfare housing allowance is a hybrid.It pays to families 75 percent of the difference be-tween actual rent (or maximum rent if that is less)and the basic housing component of the welfarebenefit, that is, P = B + 0.75 (R - B) for R<R*. Thepayment of less than 100 percent of marginal rentmakes the Quebec allowance critically differentfrom an ARM; we call it a Percent of Actual Rent atthe Margin up to a Maximum (PARM). It can becharacterized as having a marginal rent tax of 25percent, the same as the marginal rent tax in its RIC.

Prior to 1989, Ontario also had a PARM for wel-fare recipients. Its formula, in effect, was

P = R if R<A

= A if A<R<C

= A + 0.80 (R - C) if C<R<R*

= A + 0.80 (R* - C) otherwise

(Prior to September, 1986, the percent of marginalrent was 75 percent rather than 80 percent). As anexample, the allowance of a single support motherwith one child in January 1988, was (i) $130 forrent $130 to $208, (ii) $130 plus 80 percent of (rentminus $208) for rent over $208 but no more than$500.50, and (c) $130 plus 80 percent of ($500.50minus $208) for rent over $500.50.13

Ontario maximums (Table 4) were very gener-ous in 1992 relative to those in Manitoba, not sur-prising in view of high Toronto rents (see Table 5).The policy of setting a single, province-wide maxi-mum has a much greater impact in Ontario than inManitoba because Toronto market rents are muchhigher than those elsewhere in the province. ForToronto in 1992 maximums were only 70 percentof mean rent for singles, and were also below meanrent for larger households (Table 4). In contrast, con-sider the situation for another Census MetropolitanArea (CMA) in southern Ontario, the relatively smallCMA of St. Catharines. Its ARM allowance maximumsin 1992 were more than a third higher than mean rents,for accommodation suitable for households of three,

TABLE 5Mean Rent in Two-Bedroom Dwellings, by Province and Largest City, 1993

Largest City

Province Mean Estimated Rent Name Mean Rent

Canada 527Newfoundland 402Prince Edward Island (424)Nova Scotia 513 Halifax (571)New Brunswick 387Quebec 429 Montreal 463Ontario 627 Toronto 740Manitoba 457 Winnipeg (479)Saskatchewan 397Alberta 508 Calgary (542)British Columbia 641 Vancouver (702)

Note: numbers in parentheses are based on fewer than 100 observations.Source: weighted estimates computed from Statistics Canada microdata file Household Income (1992), Facilities andEquipment (1993) (HIFE)



four, or five persons.14 On the basis of inferences fromdata in National Council of Welfare (1994), it appearsthat Ontario was alone in having maximums well aboveaverage rents in CMAs.15 Even after cuts of 21.6 per-cent (the percentage across-the-board cut in 1995) areapplied to these numbers, the 1992 maximum is abovethe 1992 mean for three-person families in St.Catharines and Hamilton.

ARM recipients who are non-earners face no con-tribution requirement because their income is de-signed to precisely equal needed expenditure includ-ing rent. Inconsistently with the needs approach,however, recipients also make no contribution whenthey are earning up to the allowed exempt maximum.After their earnings exceed this, they face a veryhigh marginal income tax-back on their total socialassistance, but their marginal rent tax rate remainszero (so long as their rent is below the maximumrent). Welfare recipients face a zero marginal renttax, whatever the level of their income. An exampleillustrates the effect of this: suppose a welfare recipi-ent’s earnings increase by $100 per month and at thesame time he or she moves to accommodation rentingfor an additional $125. Then the total welfare benefitreceived by this person increases. Note that in theManitoba and British Columbia RICs the marginal-rent tax rate increases with income.

ARM allowances are generally available to allhouseholds receiving welfare (that is, in Ontario,recipients of Family Benefits Assistance [FBA] orGeneral Welfare Assistance [GWA]). Young singlepeople are eligible as well as elderly singles andfamilies. Indeed in Ontario, as of November 1993,the majority of ARM recipients are singles (OntarioMinistry of Community and Social Services 1995),while in Manitoba no non-elderly singles are RICrecipients. The modified ARM offered to welfarerecipients in Quebec, however, is available only tofamilies.

Size of the Programs and Average AllowancesRIC housing allowance programs, while tiny com-pared to federal-provincial cost-shared housing pro-grams (Table 1 and Steele 1995, Table A2.1) accountfor a large proportion of total expenditure on solelyprovincially funded housing programs (Steele 1995,Table 2). In Manitoba they are far greater in scalethan any other housing program and in Quebec theyare of the same order of magnitude as the only otherlarge rental program.

The number of RIC recipients was about 72,000in 1993 (Table 2), amounting to only 2 percent ofall tenants in Canada (as estimated from StatisticsCanada’s Household Incomes, Facil i ty and

TABLE 6Recipients of RIC Housing Allowances as a Proportion of All Relevant Tenants, 1993

Manitoba %Elderly (proportion of all unsubsidized tenants 55 years and older) 17.0Families (proportion of all unsubsidized tenants with children younger than 18) 9.4

British ColumbiaElderly (proportion of all unsubsidized tenants 60 years and older) 20.1

QuebecElderly (proportion of all unsubsidized tenants 59 years and older) 21.2

Source: Table 8, and weighted estimates of unsubsidized tenants from Statistics Canada’s Household Income, Facilityand Equipment (HIFE) datafile, survey year 1993

220 Marion Steele


Equipment (HIFE) datafiles). A more enlighteningmeasure is the percentage of the relevant provincialand demographic group. This is 9 percent for theManitoba family plan and is in the 20 percent rangefor the elderly (Table 6).

A plausible guess is that total expenditure onARM allowances is in the range of 5 or 6 billiondollars. A reasonable guess of the number of ARMrecipients in Canada is more than ten times thenumber of RIC recipients; in Ontario alone thenumber was more than 400,000 in 1993 and 1994but the size of Ontario’s welfare caseload was muchlarger relative to population, over 1992-1995, thanin other provinces. On the face of it, this numbersuggests that close to 20 percent of all rental house-holds in Ontario were welfare recipients receivingan ARM allowance. This is almost certainly a ma-jor overstatement, because many single people onwelfare do not have their own household. Manyshare or rent a room so that the number of ARMcases would be much greater than the number ofrental units in which at least one ARM case resides.

Average AllowancesAverage allowances in Manitoba’s RIC and On-tario’s ARM/PARM are shown in Table 7. To putthe two allowances on broadly the same footing, theaverage RIC allowance is adjusted by adding to theactual average allowance the average income-tax-back amount (taken to be 22.5 percent of the aver-age income of recipients). Thus the average adjustedallowance is an estimate of the allowance that wouldhave been received if recipients had had zero in-come (and there were no benefit maximum). Thisadjusted amount is upward biased to the extent thathouseholds would move into cheaper accommoda-tion if their income went to zero, in response to thefact that RIC benefits by design are never as largeas rent.

As can be seen, for 1988 when Ontario’s welfarehousing allowance paid less than 100 percent of rent,the average estimated allowance for a single parentand child on welfare in Ontario is $338 per month,

only slightly more than the average (adjusted) RICallowance, $306, for the same family in Manitoba.For singles, the Manitoba adjusted RIC is greaterthan the Ontario welfare amount, but the Manitobarecipients are elderly, the Ontario recipients are non-elderly, and most social assistance regimes believeelderly singles need/deserve more assistance thanyoung singles.

The numbers for 1993 are in great contrast tothose for 1988. By 1993 Ontario’s change from sub-sidizing 80 percent of rent at the margin, to subsi-dizing 100 percent, had been in place more thanthree years. The average allowance for Ontario sin-gles is $353, now substantially greater than theManitoba average for elderly singles, $327. Theaverage allowance for a welfare single parent andchild in Ontario for 1993 is more than 50 percentgreater than the average (adjusted) RIC allowancefor a Manitoba parent and child. As can be seen thisincrease in the ratio of Ontario to Manitoba is onlyin small part explained by the slightly greater in-crease in rents in Ontario than in Manitoba.

Impact of the RIC AllowancesA useful indicator of the gross impact of RIC pro-grams is the difference between rent-to-income ra-tios of recipients before and after the allowance. Ascan be seen from Table 8, the average rent-to-incomeratio before taking into account the allowance is 43percent for elderly singles and 49 percent for two-person families in Manitoba, far above the standard30 percent ratio. The rent-to-income ratio after theallowance is inevitably much lower than before it.For the Quebec elderly it is 42 percent, notablyhigher than the 32 percent for the Manitoba elderly,reflecting the lesser generosity of the Quebec plan.The average rent-to-income ratio for unsubsidizedrenters is far below this, at 20 percent (Table 8),16

but more than 10 percent of all unsubsidized rentershave a ratio above 52 percent. Of course, to a sub-stantial extent a high ratio simply reflects the choiceof large numbers of people to live alone rather thanshare: if a widow feels well off enough to live notwith her children but by herself, her rent-to-income



TABLE 7Average Monthly Benefits, Selected Household Types, Manitoba RIC Allowance and Ontario ARM Allowance, 1988 and 1993

Two-Person Household One-Person Household

1988 1993 1988 1993

Manitoba(1) RIC family actual 115.37 134.19 n.a. n.a.(2) RIC family adjusted 305.76 345.06 n.a. n.a.(3) RIC elderly actual 81.98 76.08 100.48 103.6(4) RIC elderly adjusted 328.84 369.37 282.06 326.75(5) Rent component of CPI 106.0 123.2

Ontario

(6) ARM 337.9 544.05 236.18 353.08(7) Rent component of CPI 107.8 130.7

Ontario as percentage of Manitoba Average benefit

(6) as percentage of (2) 111 158 (6) as percentage of (4) 103 147 84 108

Rent component of CPI 102 106

Notes:Rows 1 and 3: Taken from “Shelter Allowances for Family Renters Program (SAFFER)” and from “Shelter Allowances forElderly Renters Program (SAFER)” handouts obtained from Manitoba Housing (undated but with latest number from 31December 1994). Averages are monthly averages for the benefit year.Rows 2 and 4: Average benefit adjusted equals average benefit (from rows 1 and 3 respectively) plus 0.225 timesaverage income. Average income is from same source as rows 1 and 3; 0.225 is derived from the values of theparameters for the lowest income category, because average income is only slightly above the lower income break. Theaverage benefit adjusted is an estimate of the average benefit that would have been paid if beneficiaries had had zeroincome.Row 6: Data are for March. Average benefit for 1993 is the average benefit for private renters (weighted average of GWAand FBA recipients) computed from average benefit data obtained from a special computer run from COMSOC. For 1988to this amount is added $119 in the case of singles and $185 in the case of two-person households, because the 1988raw averages contain no “basic shelter” and the 1993 averages do.Rent component of the CPI. The data are for March. Manitoba is Cansim no. P681724. Ontario is Cansim no. P681448.Note that this index only relates changes over time, not space, so that in the last row only the relation of the 1993 valueto the 1988 value is meaningful.

ratio will greatly increase and if two 23-year-oldsdecide to live separately rather than together, theirrent-to-income ratios may double.

One indirect indicator of affordability is the re-sponse of elderly Manitoba recipients who wereasked what they would do if the allowance were

eliminated: only about one quarter said they wouldmove (Minuk and Davidson 1981). Very few wishedto move into social housing. If the housing allow-ance is inadequate, it is not inadequate enough toinduce recipients to move into public housing orother social housing.

222 Marion Steele


INCENTIVES IN THE HOUSING ALLOWANCE

PLANS AND THEIR EFFECTS

Housing Search and Consumption Incentivesin RIC PlansOn the face of it there is not much incentive in RICplans to shop around for cheaper accommodation,since only a small part of any higher rent apparentlycomes out of the pocket of the recipient. But thisignores several aspects. First, recipients are allspending a high percentage of their income on rent,so that even a marginal rent tax rate as low as 25percent is apt to be perceived as important. Second,

a high percentage of recipients are paying more thanR*, the threshold rent.17 For them, 100 percent ofany increased rent comes from their own pocket.Further, those who pay slightly less than the thresh-old will have to pay more than 25 percent of anysubstantial rent increase. Third, threshold rents arenot indexed and so a recipient moving to better andmore expensive accommodation below R* runs therisk that in a year’s time the landlord might raisethe rent above R*.

An important consideration, in view of the lim-ited but nonetheless palpable, monopoly power a

TABLE 8Selected Rent-to-Income Ratios, 1993

Area Group Before Allowance After Allowance

Canada all unsubsidized renters 0.20 n.a.

Manitoba recipients in housing allowance programselderly singles 0.43 0.32

couples 0.37 0.31sharers 0.33 0.27

families, 2 persons 0.49 0.343 persons 0.45 0.334 persons 0.42 0.31

Quebec recipients in housing allowance programselderly singles 0.51 0.42

couples 0.46 0.40roomers 0.58 0.54

Notes:All rent-to-income ratios are computed by dividing mean rent (before or after the allowance) by mean income. Ingeneral this is not the same as the mean of the rent-to-income ratios computed for individual households; it will be verysimilar to the median, however.The Canada ratio is computed using weighted means from Statistics Canada’s Household Income, Facilities andEquipment (HIFE) 1993 survey year. Data for housing allowance recipients is for the 1992/93 benefit year.For Quebec, the allowance is gross of the RIF (remboursement d’impôts fonciers). This makes the data for Quebeccomparable with that for Manitoba. The RIF is a property tax credit; Manitoba also has this kind of credit. In bothprovinces recipients in effect have the property tax credit deducted from their housing allowance. (This is accomplishedin Manitoba by deducting the housing allowance received in any year from the property tax credit on the income taxreturn.) Note that rent for roomers in Quebec may include board (i.e. meals) and may also include care.



landlord wields (Arnott 1989) is that these housingallowance programs do not require contact with thelandlord. A lease or a cancelled rent cheque is al-lowed as evidence of the amount of rent paid. Atone time Quebec required contact with the landlordbut the requirement was dropped after Quebec offi-cials concluded that it led to extra increases in rent.More than half of family recipients surveyed inManitoba reported that their landlord did not knowthey received the allowance (Steele 1985a, p. 18).No landlords would know the amount, unless theyknew both their tenants’ income as defined for al-lowance purposes, and the complex Manitoba ben-efit formula.

To some extent, reference to “shopping around”for accommodation gives a misleading impressionof the situation of RIC allowance recipients. A sub-stantial proportion — especially in the case of fami-lies — are recipients only for a short time18 and typi-cally they merely use the housing allowance to helpthem pay the rent where they lived before they be-came recipients and/or where they will stay afterthey are no longer covered.

Housing Search and Consumption Incentivesin ARM PlansIncentives for shopping around are essentially non-existent for ARM housing-allowance recipientswhose rent is well below the maximum rent. Theyget no reward in the form of a larger allowance forfood and clothing if they economize on housing, nordo they pay any penalty for increases in rent up tothe maximum (once they are past the very low basicrent allowance). Once at the maximum, however,they pay 100 percent of any additional rent. One ofthe problems with the ARM is this abrupt change inthe marginal rent tax rate. Recipients have no expe-rience paying any part of a rent increase until theyhave to pay all of it. In contrast, in RIC plans themarginal rent tax rate (using the Quebec parameters)is 100 percent until rent is 30 percent of income,then drops to 25 percent until threshold rent isreached and then rises again to 100 percent. In Brit-ish Columbia and Manitoba the marginal rental tax

rate is linked to income. The modified ARM (whichwe call a PARM) in Quebec and the pre-1990 PARMin Ontario have incentives quite like those in its RIC.

Critical for the strength of incentives in any par-ticular ARM is the level of the rent maximum. Ifmaximums are high relative to mean rents — as theywere up to 1995 in Hamilton and St. Catharines-Niagara (Table 4) — the incentive is virtually absent.

An additional problem for the ARMs is that land-lords are likely to know those tenants who are re-cipients.19 This has two negative consequences.First, it tends to push rents charged to the welfaremaximum. The likelihood of this is heightened bythe simplicity of the ARM formula. Unlike the casewith the RIC allowance, it is easy for the landlordto know the amount of any tenant’s maximum al-lowance. And the landlord knows that any increaseup to the maximum will not cost his tenant a nickel.Second, it identifies welfare tenants, making it easyfor landlords to refuse to rent to them.20

Evidence on the Impact of RIC Allowanceson Housing ConsumptionThe evidence suggests that the RIC allowances havehad little impact on housing consumption. First,consider mobility. Usually a change in housing con-sumption requires a move, so that the mobility rateis an indicator of changes in consumption. In aManitoba survey of housing allowance recipients,nearly 25 percent of families but only 3.5 percentof the elderly reported they had moved in anticipa-tion of receiving their first payment (Steele 1985b,p. 106). This suggests a possibly substantial impacton families’ housing consumption. But the mobilityrate of continuing recipients was essentially thesame as that of low income non-recipients: about11 percent for the elderly and somewhat over 25percent for families (Steele 1985b, pp. 82-83).

Second, consider the change in rent of those whomoved. The mean rent change of Manitoba recipi-ents who moved in the first year and a half of theirprogram was 4.7 percent for elderly recipients and

224 Marion Steele


8.4 percent for family recipients, in both cases lessthan the increase in the rental component of the CPIover the same period. The rent change for moverswas less than that for non-movers.21 This suggeststhat recipients either reduced their housing con-sumption when they moved or obtained a better rentbargain. The latter possibility seems likely given thehigh vacancy rate in Winnipeg at the time.

Evidence on the Impact of ARM Allowanceson Housing ConsumptionNo direct quantitative evidence is obtainable on theeffect of ARM allowances on housing consumption,but indirect evidence suggests it is substantial and/or “welfare landlords” are exerting monopoly powerto increase rents above market levels. First, despitethe generosity of Ontario maximums, 41 percent ofprivate renters receiving social assistance (FBA orGWA) paid a rent above the ceiling in January 1994.Furthermore, the proportion of recipients payingabove the province-wide ceiling has a quite weakrelation to the mean city rents. For the relativelyhigh-rent set of municipalities in the vicinity of To-ronto and Ottawa, the proportion of recipients pay-ing above the ceiling is 43 percent, but this propor-tion is still a high 38 percent in the set of smallermunicipalities, where rents are relatively low; yet,as Table 4 indicates, it is likely that in such munici-palities — but not in Toronto — ceiling rent waswell above mean rent. Apparently rents paid havemuch to do with the ceiling and rather little to dowith mean market rents. Further, while mean rentsfor all market rental units vary greatly between thesetwo sets of cities — $771 in the first set and $556 inthe second set — mean rents paid by recipients varyrather little — $555 in the first set and $471 in thesecond.22

Why do some recipients pay above the maximumrent, given that they pay 100 percent of any rentabove the maximum? One answer is that rents andquality levels are discontinuous so that a recipientcannot always fine-tune his or her consumption toattain the maximum subsidy without any unsub-sidized housing expenditure. For example, he or she

may have only two alternatives: a low quality apart-ment $75 below the maximum and a high qualityone $10 above the maximum. Choosing the lattermeans in effect paying only 13 percent of the mar-ginal rent (that is, $10 of the $75) for higher qual-ity, although this is of course paying above the maxi-mum. Other recipients may pay a relatively high rentin the expectation of finding a sharer, an attractiveoption in view of the economies of scale in hous-ing. Some of these may forget to report — or theirlandlord may not notice — their success in findinga sharer so that their reported rent is greater thantheir actual rent (share). They have a strong incen-tive to forget. Still other recipients, especially thosewhose EI benefits are exhausted, may expect to beemployed again shortly. For them transactions costsmake a temporary move to cheaper housinguneconomical.

The discussion so far deals with the effect of theARM formula on increasing the housing consump-tion of a given group of recipients. The number ofrecipients will also tend to increase, as welfare re-cipients are attracted from public housing into theprivate market and as the total number on welfarerises. This will increase aggregate housing consump-tion if welfare status increases housing consump-tion. For example, if the availability of welfare in-duces a young person to leave the parental home andrent an apartment, housing consumption increases.

The effects of the ARM housing allowance onthe total number of recipients cannot be disentan-gled from the effects of the total basic assistancepackage. But the allowance accounts for the lion’sshare of total welfare benefits in many cases; for1992, the maximum shelter allowance was 62 per-cent of maximum total benefits for singleemployables and 53 percent for a sole-support par-ent and one child.23 Between 1985 and 1992, whenbasic assistance including the housing allowanceceiling rose much more in Ontario than elsewhere,24

the number of GWA recipients rose by 144 percentin Ontario, but by only 29 percent in Manitoba —and the numbers in Quebec actually fell by 5 per-



cent (Barrett and Cragg 1995, Table 1.2).25 The dev-astating effect of the 1990s recession on employ-ment in Ontario (Courchene 1994, p. 26) clearlyplayed a major role in the welfare explosion, butthe experience for single parents, a category pre-sumably less affected by employment swings thansingles, is strikingly suggestive of the role of gen-erous benefits, especially the housing allowance.Between 1985 and 1992, Ontario’s non-housingwelfare payment for single parents with one childrose by 54 percent, its housing allowance maximumrose by 115 percent,26 and Ontario’s single-parentcases per capita rose sharply while those in BritishColumbia rose only slightly and those in Quebecactually fell (Brown 1995, Fig. 5).

The Participation Rate in RIC HousingAllowance Programs and Welfare StigmaThe participation rate in Canadian RIC housing al-lowance programs is well below 100 percent. Inparticular, when eligibles are defined as all thosewhose income, rent, and age qualify them, the par-ticipation rate is estimated at 64 percent for BC in1978 (Steele 1985b, Table 12), and between 50 and60 percent for BC and Quebec in 1981-82 (Steele1985a, pp. 8, 10, 13).

What accounts for less than full participation? AManitoba survey found that “welfare stigma” hadonly a tiny impact on the participation of those whorequested an application form but did not apply: only5 percent of this group gave as the reason for notapplying “pride/not needed.” There is some indica-tion that the relative absence of welfare stigma isan attraction for families. Manitoba authorities havefound that some families apply for the housing al-lowance despite the fact they are eligible for muchmore assistance from the welfare system, presum-ably partly because of the greater stigma and moredegrading and time-consuming application processassociated with welfare (Steele 1985b). Perhaps cru-cially families know that landlords need not knowthey are receiving a RIC.

There is no evidence indicating landlords areunwilling to rent to people receiving RIC allow-ances. The situation is quite different for people onwelfare. There is a belief that some landlords targetthis group for overpriced accommodation, whilemany others are unwilling to rent to them (Murray1990). One possible explanation is that some land-lords wish to minimize involvement with the gov-ernment, and landlords of welfare tenants often haveto sign a statement for welfare officials. Or land-lords regard welfare status as a mark of incompe-tence, unreliability, and being a poor credit risk.

Identifying tenants to landlords as recipients, theinevitable result of the intrusion of welfare officialsinto the landlord-tenant relationship, clearly dam-ages the prospects of recipients in the rental market.The Section 8 housing allowance program in theUnited States also identifies recipients and one land-lord reports, “As you can see, inspections by thehousing authority and other ‘red tape’ issues havevery little to do with the higher rents we require forSection 8 rentals; the tenants themselves cause usto require a premium. And although the premium issubstantial, we have decided it’s not worth the head-aches: we no longer rent through the Section 8 pro-gram.” (“Name withheld...” 1996) Tenants who donot have to identify themselves as a Section 8 ten-ant, have some chance of renting from this landlord;as a Section 8 tenant they have no chance.

CONCLUSIONS, RECOMMENDATIONS AND

WIDER IMPLICATIONS

Just as the 1980s were the era of booming privateand public spending, the 1990s are the era of gov-ernment spending cuts. Welfare spending has beencut and is threatened with further cuts. A major com-ponent of welfare spending — amounting to morethan half of benefits for some recipients — is theARM housing allowance. This allowance has beenparticularly expensive in Ontario for several reasons:the relatively high market rents in Toronto, and to alesser extent in Ottawa; high maximum ARM rents,

226 Marion Steele


set at the same level outside Toronto as inside; thegenerally poor design of the allowance as a resultof foolhardy changes made in 1989; and the increasein the number of welfare recipients for other rea-sons. In 1995 the Ontario ARM allowance was cutby 21.6 percent, as part of across-the-board cuts ofthe same magnitude in total welfare benefits. Un-fortunately, the fundamental design was notchanged. The consequence of this is that Torontorecipients, especially singles, face a cruelly inad-equate allowance while recipients living in mostother places except perhaps Ottawa, still receive anallowance more generous, for example, than the oneavailable to those in Manitoba’s biggest city,Winnipeg.27

To a large extent ARM problems in Ontario are aToronto problem. Ignoring the differences betweenhousing expenses in Toronto and elsewhere in theprovince is a root cause of the excessive generosityof the benefits in the late 1980s and early 1990s forthose outside Toronto and the excessive meannessof the benefits for Toronto recipients in the mid-1990s.

At the same time RIC housing allowances are asuccess story — albeit a modest one. These pro-grams have endured with little change because theyare relatively cheap compared to both housing-supply programs and housing allowances withinwelfare programs. They are easy to deliver effi-ciently and they help needy people. They allow someelderly people and families to stay put rather thanmove to social housing or into the welfare system.For low-income people they subsidize more spacioushousing than would be obtainable in social-housingprojects,28 at low government cost. They help fami-lies cope with fluctuating incomes caused by un-employment or other adversity.

It is quite easy to control the costs of RIC hous-ing allowances, especially in an environment of in-flation. Because the levels of threshold rents are notformally indexed, leaving them unchanged whenrents and incomes rise cuts expenditure. Perhaps for

this reason British Columbia, Manitoba, and Que-bec felt able to expand eligibility over the 1980-93period to cover people under 60 years of age. Que-bec and British Columbia have yet to extend theirprograms to families, however, despite the encour-aging experience in Manitoba. No doubt the absenceof federal-provincial cost-sharing is an importantimpediment.

Policy Implications for Housing AllowancesARMs badly need change. The most important re-form in Ontario would be to vary the maximum rentsby location, in recognition of the huge differencebetween the rental market in Toronto — and to someextent in Ottawa — and elsewhere. A second im-portant reform would be a simple redesign of theformula to reward people who share accommoda-tion as well as those who search thoroughly for eco-nomical housing. For example, for families the hous-ing allowance within the welfare system might beset equal to a lump sum plus a percentage, say 75percent of the difference between actual rent orthreshold rent, whichever is lower, and the lumpsum. Indeed this is precisely the housing allowanceplan for welfare families in Quebec and it is similarto the welfare housing allowance in Ontario before1989. No evidence of actual rent should be requiredexcept a receipt or copy of a lease agreement.29

Sharers and other economizers on housing wouldthen be able to spend most of their housing savingson food and other goods.

Unfortunately in the case of young singles, whoconstitute a large proportion of the welfare load inOntario, the potential for confusion or fraud is greatbecause many of them share accommodation withother singles and write only one cheque to the land-lord. This problematic group is not eligible for aRIC allowance in any province and its exclusion hascontributed to the good performance of RICs. Eventhe modified ARM in existence in Quebec is riskyfor this target goup; and indeed in Quebec singlesare ineligible. Young people there simply receive aflat amount for housing which does not vary accord-ing to actual rent. An attractive change to the cur-



rent (post 21.6 percent cut) Ontario ARM for youngsingles outside Toronto (and perhaps Ottawa) wouldbe to give these singles a flat amount, less than thecurrent maximum shelter allowance, and increasethe food and clothing allocation but perhaps not byan amount that would fully offset the reduction inthe shelter allowance;30 for Toronto the increase inthe food and clothing allocation should more thanoffset any accompanying cut in the shelter allow-ance. Singles who do not share would need to usesome of the increased food and clothing allocationfor shelter, but those who do share would reap thereward: money for other needs. This is importantbecause in Ontario, as in most jurisdictions, singlesare given too little for non-housing needs.31

RIC housing allowances should be extended tofamilies and elderly in all provinces, with the costspaid for partly by raising some rents in public andother social housing. The RGI scale is somewhatgenerous to small households (although not to largeones) at present.

There is a case for the view that because RICsand ARMs are more expensive in places where housevalues and rents are relatively high, the extra costshould partly be borne by the beneficiaries of thesehigher values. Taxation at the point when a capitalgain is realized, either through the sale of propertyor through a mortgage secured by the capital gain,is an attractive option. The taxation could be in theform of a transactions tax, a kind of Tobin tax forreal estate. This tax would discourage transactions,which might be counted by some as a disadvantage.At the same time, unlike an increment to the prop-erty tax it would not impose a cash burden on low-income homeowners.

A cautionary note is needed because some advo-cate totally eliminating social housing and replac-ing it with RIC housing allowances. These allow-ances can never totally replace social housing be-cause of the difficulty some households have in find-ing accommodation in the private market, becauseof the need of some households for greater security

of tenure than provided by the private rental mar-ket, and because there is no reason why those whowould like to live in government-run housing ratherthan that provided by private landlords, should notdo so, as long as the subsidy they receive is not morethan that received by private market renters.32

Some Implications for Federal ProgramsAt the level of federal-provincial transfers, it is clearthat the huge differences in housing costs amongprovinces imply that, for a wide array of programs,nominal benefits per recipient have to be muchhigher in some provinces than in others to achieve aroughly equal standard of living across the country.For example, rents for two-bedroom dwellings byprovince (Table 5) indicate that housing expensesare roughly 50 percent greater in Ontario and Brit-ish Columbia than in Newfoundland. If account istaken of the very high rate of home ownership inNewfoundland (Steele 1995, Table A1.1), the dif-ference is even greater, because average cashexpenses for homeowners are lower than those forrenters. As noted above, in Ontario for importantclasses of welfare recipients the housing benefitaccounts for more than half of total benefits. Thisimplies that to provide Ontario welfare recipientswith the same standard of living as those in New-foundland, benefits need to be in the order of 25percent greater. It is fair to conclude that the arrange-ment prior to the CHST — the standard 50 percentcost-sharing formula for the Canada Assistance Pro-gram — was unfair to Ontario and British Colum-bia, and the cap on CAP for these provinces andAlberta, extraordinarily unfair, on the basis ofexpenditure need. On a broader level, the housing-costs issue strongly supports the position ofCourchene (1994, 1995) and others (e.g. Shah 1996)that federal equalization payments to provincesshould take into account expenditure needs as wellas revenue needs.

Mention needs to be made of federal housing as-sistance. If Ontario and British Columbia receivedmuch larger subsidies per capita from CMHC thanNewfoundland, as one might expect given their

228 Marion Steele


higher housing costs, federal housing subsidieswould provide an offset to underfunding of fiscaltransfers to these provinces. But they do not. Itshould be noted that since federal-provincial shar-ing of public-housing deficits continues while shar-ing of welfare costs does not, there will be a strongfiscal incentive for provinces to maximize the pub-lic-housing deficit by shifting welfare recipients intopublic housing and looking after higher earning ten-ants in other ways.

The great differences in housing costs amongprovinces also raise questions about the structuringof purely federal programs such as the GuaranteedIncome Supplement (GIS) for the elderly and Em-ployment Insurance. Have benefits for these pro-grams been set too high because of a refusal to facethe fact of the enormous variations in housing costsfrom place to place? If these benefits have been setat a level that is just adequate in Newfoundland, doesthe insensitivity to cost variations mean that grind-ing poverty, queues at food banks, and desperatepeople driven to crime is the unhappy consequencein Toronto and Vancouver? If so, this is a strong ar-gument for restructured programs made up of a ba-sic amount, in the case of EI, related to earnings,plus a housing allowance.

NOTES

This paper has greatly benefited from the comments ofthree referees, including one particularly thorough one.An earlier version was much improved by the commentsof Larry Bourne, Judith Bell, and John Miron of the Cen-tre for Urban and Community Studies. For research as-sistance I am indebted to Jenny Arnott, especially, and toChris West. This paper could not have been written with-out the help of many government officials. I am indebtedto Jacques Beaupré and Ed Nera of CMHC, DebbieRitchie, and Cherry Rebalkin of the BC Ministry of Hous-ing, Recreation and Consumer Services, Jim Cooper ofManitoba Family Services, David Mercer of the OntarioMinistry of Community and Social Service (COMSOC),and Joan Miller of Manitoba Housing. I am especiallyindebted to Ken Cassin of Manitoba Housing, Richard

Vaillancourt, and Peter Cheung of COMSOC and FrançoisRenaud and Marie Lise Coté of Société d’Habitation duQuébec for providing detailed, useful data and answer-ing many questions. Most fundamentally I am indebtedto Peter Kemp now of the University of Glasgow whoprovided funding and questions for the project on whichthis is based. I alone am responsible for any errors.

1The amount is gross of provincial property tax cred-its. Net of these, the total would probably be less than$50 million. The total would be increased if Alberta’ssenior citizens’ renter assistance grant were included, butthis grant is essentially the same as other provinces’ prop-erty tax credit.

2This aim is articulated by Dallard Runge, the initia-tor of the first Canadian RIC in British Columbia, as “toease the burden of shelter cost for those in need of assist-ance” (1991, p. 1).

3The other two are adequacy, which refers to physicalfacilities, and suitability, which refers to the relation ofthe number of bedrooms to the size and composition of ahousehold.

4This aim is the last in a list in a memorandum from aminister in Quebec, although it might have been the mostimportant argument for getting approval of the program.The memorandum states “Le programme vise essentielle-ment à alléger le fardeau financier que représente le loyerpour certains ménages de pensionnés, à favoriser lemaintien dans les lieux de ces ménages ou encore à leurpermettre d’améliorer leur condition de logement endéménageant dans un logement de meilleure qualité etenfin à diminuer la pression sur les autres programmesde la Société.” (Québec, Gouvernement du Québec 1984,italics added)

5Provisions of section 8 are given in Colwell andDehring (1995, 1996), Weicher (1996) and in Kennedyand Finkel (1987). In Canada, only New Brunswick hasever had any kind of housing standards requirement, andit was a soft one.

These reasons were expressed informally to the au-thor some years ago. John Engeland and Brian Davidsonof CMHC have confirmed that they still hold. Engelandnotes that the objection to housing allowances without aminimum housing standards condition is in harmony withthe CMHC core need approach. A household is definedto be in core (housing) need if it is paying an unaffordable



proportion of its income in rent, living in an unsuitable,that is, crowded, dwelling and/or living in a physicallyinadequate one, unless alternative accommodation isavailable that is affordable, suitable, and adequate (seefor example, CMHC 1991). Brian Davidson has pointedout that CMHC has traditionally preferred the Rent Sup-plement approach to the private market. Rent Supplementis tied to a dwelling unit not a household and minimumstandards must be met.

6For other provinces the rates are: Newfoundland, 25percent; Prince Edward Island, 26.5 percent in 1993,which rose to 30 percent in 1995, for seniors; Nova Scotia,27 percent in 1994, which rose to 30 percent in 1996 ex-cept for those with dependents or incomes under $848per month; New Brunswick, 30 percent; Ontario, 26 per-cent in 1993 which rose to 30 percent in 1997; Saskatch-ewan, 25 percent; Alberta, 28 percent in July, 1994, 30percent in April, 1995.

7New Brunswick capped its program in 1992, so thathousing allowance payments now go only to people whowere recipients as of that date.

8The extension to family home owners of a RIC hous-ing allowance, however, might have a substantial effectbecause home ownership is surprisingly prevalent amonglow-income families outside big cities, and many of thesehave mortgages.

9Reference is to the Allocation de Logement in France,and to Individuele Huursubsidie in The Netherlands.

10Except that no allowance is paid if actual rent is lessthan 10 percent of income (Colwell and Dehring 1995).

11In July 1994, the formula changed to be simply R ifR<R* and otherwise R*.

12Sarlo (1992) who adopts The Montreal Diet Dispen-sary’s guidelines with minor modifications sets suitablesizes as: bachelor (bathroom plus a room incorporatingkitchen, living, and sleeping facilities) apartment for oneperson, one bedroom for two persons, two bedroom forthree persons, and three bedrooms for four or more per-sons. This is less generous than CMHC’s suitabilityguideline.

13A was called the demarcation and C the threshold.The formula in the text gives the design in effect. Liter-ally, however, shelter needs up to a rent of A were as-

sumed to be covered by the “basic needs allowance.”Welfare recipients with a rent less than A had the differ-ence between A and rent deducted from their basic needsallowance. Between a rent of A and a rent of C they werenot subject to a deduction but they received no sheltersubsidy. For a rent between C and the maximum rent theyreceived a “shelter subsidy.” This was 80 percent (in 1988)of the difference between their rent and C.

One complication (not of empirical importance) is thatfrom July 1977 until November 1981, for FBA recipientsnot on GAINS-D there was a minimum implicit shelteramount ($37 in July 1977 for a single parent and onechild); i.e. the maximum reduction in the basic needs al-lowance was (A - $37). It appears that this minimum con-tinued after 1981. A second complication was the treat-ment of heating fuel. Recipients, 1981 to 1986, in un-heated accommodation could receive 100 percent of thecost of their fuel or the shelter subsidy based on contractrent, but not both; also, their demarcation amount waslower (except for singles). As of September 1986, thedifferential demarcation for unheated accommodation wasabolished, and fuel costs were added to contract rent forpurposes of the calculation of the shelter subsidy.

As part of the 1989 changes, the term “basic shelter”was introduced. This is the B in the previous page of text.Its value was essentially the same as the value of C for sin-gles, but was less than C for a single mother with one child.(Ontario Ministry of Community and Social Services In-come Maintenance Branch 1988).

14These rents are, for Toronto and Hamilton, slightlylower (1 percent, 4 percent respectively) than rents givenby CMHC’s rental survey (Canadian Housing Statistics1993, Table 34) of privately initiated apartment structureswith six or more units in October 1993. For Winnipegand St. Catharines they are substantially lower (11 per-cent, 13 percent respectively). All rents refer to two-bedroom units. In general the CMHC survey’s rents aremore upward biased (as an estimate of the universal rentalmean) the larger the rental unit.

15This inference is based on maxima estimated as fol-lows: (basic social assistance for a couple with two chil-dren in province i minus basic social assistance for a cou-ple with two children in Manitoba) plus maximum rentincluding heat and utilities in the Manitoba ARM for fourpersons; this is compared to the mean rents shown in Ta-ble 5. The difference in amounts between provinces re-flects differences in the estimates of other needs as well

230 Marion Steele


as differences in shelter allowances, but the latter wouldbe the most important.

16Note that this is computed by dividing mean rent bymean income. When rent is divided by income for eachhousehold, and then the mean is taken, the value is muchhigher, because of extreme values; the median rent to in-come ratio, which is not affected by extreme values, is21 percent for unsubsidized renters and 23 percent forsubsidized ones. These values are all computed from the1993 HIFE using the “final universal weight.”

17In 1984, 57 percent of Quebec recipients, 40 per-cent of BC recipients, 25 percent of Manitoba elderly re-cipients, and 30 percent of Manitoba single parents withone child were paying above the threshold rent (Steele,1985a, Table 6). In 1993, the ratio above the threshold inBritish Columbia was 45 percent for singles, 60 percentfor couples, and 24 percent for sharers (data supplied byShelter Allowances for Elderly Renters [SAFER] Pro-gram, BC).

18Evidence for this is available from Manitoba. In1980, 21 percent of elderly recipients who had receivedan allowance at some time earlier in the year did not re-ceive an allowance in December; for families the similarrate for 1981 was 64 percent (Steele 1985b, p. 99).

19The likelihood that a landlord will know depends onthe jurisdiction. It is clear that administrative proceduresin Metropolitan Toronto make it virtually certain that thelandlord will know. In Toronto, on initial application aclient is asked to provide a lease or cancelled rent chequeas evidence of rent paid and the landlord is telephonedfor verification of the number of people in the dwellingunit and other information. If a tenant does not have alease or cancelled cheque she/he provides a statementfrom the landlord stating willingness to provide accom-modation (a “promise of address” statement). This is alsoverified. Every three or four months thereafter, informa-tion is reviewed and verified. The client must give per-mission before the landlord is contacted, but without per-mission verification cannot take place and the client willreceive no shelter allowance. (Information from DawnHaley, Metropolitan Toronto Community Services). It ispossible, however, that some officials in some jurisdictionswill accept a cancelled cheque without further verification.

20Concerns about possible human rights violation maykeep the discrimination less than explicit. An example ofwhat happens when there are no such concerns is illus-

trated by many advertisements in the London, UK news-paper, Loot, that include the words “no DSS,” whichmeans no recipients of housing benefit. DSS refers to theDepartment of Social Services.

21The program for the elderly started in 1980, a yearbefore the program for families; the change in the rentcomponent of the CPI is taken for the relevant year and ahalf. For details of computation see Steele 1985b, p. 88.

22Data are from Ontario Ministry of Community andSocial Services (1995). Note that mean market rents arefrom the 1991 Census and do not adjust for type of unit.If the mean market size is two bedrooms but the meanwelfare size is one bedroom, the two means are not com-parable. A low mean size for welfare private renters seemslikely because 51 percent are single, for the data in thisreport, and therefore would require only a bachelor unit(or a room). Note also that the percentage of welfare pri-vate renters who are single is 57 percent in high-cost cit-ies and only 43 percent in the lowest cost set of munici-palities. This implies that the difference between meanwelfare rents in high-cost versus low-cost cities, correct-ing for demographic differences, is somewhat bigger thanthe difference noted in the text.

At the same time, given that only 43 percent of wel-fare renters in low-cost municipalities are single, it isespecially remarkable that 38 percent of welfare renterspay above the ceiling since Table 4 suggests that for twoor more persons, mean rents for a suitable size of dwell-ing in relatively low-cost cities were apt to be well belowthe welfare ceiling.

23Computed from the table entitled “Ontario’s SocialAssistance Rates for Selected Case Types: 1967-1992,”in Ontario Ministry of Community and Social Services[1995], by adding “basic shelter” ($120 for singles and$185 for a single parent with one child) to the “sheltersubsidy” amount.

24Between 1986 and 1992 the constant dollar maxi-mum benefit for a single parent with a two-year-old childrose 26 percent in Ontario, 3 percent in Quebec, 5 per-cent in Manitoba, and 15 percent in British Columbia. Itfell in four provinces and in the Yukon. In general thepicture for other categories was similar (National Coun-cil of Welfare 1997, Table 5)

25Barrett and Cragg (1995), Table 1.2. Numbers fromwhich growth was computed include recipients and theirdependents.



26Computed for a sole-support parent with one childaged 0-12 years, from data in Ontario Ministry of Com-munity and Social Services (1996). Data are for the be-ginning of the year. Included in the housing amount inboth years is $185 “basic shelter”; the percentage increasein the “shelter subsidy” alone is 300 percent. The CPIrent component for Ontario increased by 36 percent,March 1985 to March 1992.

27This can be seen by computing mean rents in To-ronto, Hamilton, and St. Catharines as a ratio of (100 -21.6) percent of the maximum rents shown for Ontario inTable 4. An underlying assumption is that, in 1995 be-fore the cuts, mean rents bore the same relationship tomaximum rents as they did in 1992.

28The square footage occupied by elderly housing al-lowance recipients in Manitoba was about 50 percentgreater than they would be allocated in Manitoba socialhousing (Minuk and Davidson 1981).

29Possibly an affidavit stating the number of adultsoccupying the unit should be required from the recipientwhen rent is above the rent maximum minus some speci-fied amount. The 25 percent “marginal rent tax” wouldsubstantially reduce the incentive for fraud compared withthe current situation.

30There is a good case for increasing the benefit tosingles with age, in view of the increase in expenditurewith age observed for the non-welfare population. Hu-man rights legislation may not allow this, however.

31Sarlo (1992) who finds welfare rates generally abovethe poverty level finds that for singles they are generallybelow it.

32Smith (1995), like many economists, has called forhousing allowances to replace social housing, except thathe makes an exception in the case of households withspecial needs. Prima facie, New Zealand, as part of itssweeping economic reforms, did replace social housingwith housing allowances in 1993 (Morrison 1995), butthe “business enterprise” Housing New Zealand Ltd. hasas its shareholders the Ministers of Housing and Finance(Ibid.) and this agency’s objectives include serving theneedy, so that the New Zealand reform retains somethingbetween social housing and private housing.

REFERENCES

Arnott, R. (1989), “Housing Vacancies, Thin Markets, andIdiosyncratic Tastes,” Journal of Real Estate Financeand Economics 2:5-30.

Barrett, G.F. and M.I. Cragg (1995), “Dynamics of Ca-nadian Welfare Participation” (Vancouver: Departmentof Economics, University of British Columbia).

Brown, D.M. (1995), “Welfare Caseloads in Canada,” inHelping the Poor, ed. J. Richards and W.G. Watson(Toronto: C.D. Howe Institute).

Canada Department of Finance (1993), Government ofCanada Personal and Corporate Income Tax Expen-ditures (Ottawa: Department of Finance) p. 99.

Canada Mortgage and Housing Corporation (CMHC)(1991), Core Housing Need in Canada (Ottawa: CMHC).

____ (1993), Directory of Housing Programs in Canada(Ottawa: CMHC) pp. I,24; II,30; III,158,

Colwell, P.F. and C.A. Dehring (1995), “Problems withSection 8 Rental Assistance,” Illinois Real Estate Let-ter Fall: pp. 1-5.

____ (1996), “Problems with Section 8: A Response,” Il-linois Real Estate Letter Winter: pp. 12-13.

Courchene, T.J. (1994), Social Canada in the Millennium(Toronto: C.D. Howe Institute).

____ (1995), Redistributing Money and Power: A Guideto the Canada Health and Social Transfer (Toronto:C.D. Howe Institute).

Fallis, G., A.J. Hosios and G.V. Jump (1995), “HousingAllowances, Nonprofit Housing, and CostEffectiveProgram Choice,” Journal of Housing Economics4(2):136-52 .

Henderson, J.V. and Y.M. Ioannides (1983), “A Model ofHousing Tenure Choice,” American Economic Review73(1):98-113.

Hum, Derek (1981), Canada’s Administrative Experiencewith Negative Income Taxation (Winnipeg: Departmentof Economics, St. John’s College, University of Mani-toba).

Kemp, P. (1990), “Income-Related Assistance with Hous-ing Costs: A Cross-National Comparison,” UrbanStudies 27 (6):795-808.

Kennedy, S.D. and M. Finkel (1987), Report of the FirstYear Findings for the Freestanding Housing VoucherDemonstartion (Cambridge, AM: ABT Associates).

Krashinsky, M. (1995), “Putting the Poor to Work: Why‘’Workfare’ Is an Idea Whose Time Has Come,” inHelping the Poor, ed. J. Richards and W.G. Watson(Toronto: C.D. Howe Institute).

232 Marion Steele


Minuk, M. and K. Davidson (1981), “A Report on theResearch Findings of the MHRC 1981 Shelter Allow-ance Programs Review,” (Draft). Manitoba Housingand Renewal Corporation, Winnipeg, Manitoba.

Morrison, P.S. (1995), “The Geography of Rental Hous-ing and the Restructuring of Housing Assistance inNew Zealand,” Housing Studies 10(1):39-56.

Murray, A. (1990), “Homelessness: The People,” in Hous-ing the Homeless and Poor: New Partnerships Amongthe Private, Public, and Third Sectors, ed. G. Fallisand A. Murray (Toronto: University of Toronto Press).

“Name withheld by request” (1996), “My Life as a Sec-tion 8 Landlord,” Illinois Real Estate Letter Winter:14.

National Council of Welfare (1994), Welfare Incomes,1993 (Ottawa: National Council of Welfare, Ministryof Supply and Services).

____ (1997), Welfare Incomes, 1995 (Ottawa: NationalCouncil of Welfare, Ministry of Supply and Services).

Ontario Ministry of Community and Social Services(1992), Time for Action: Principal Report of the Advi-sory Group on New Social Assistance Legislation (To-ronto: 1992).

____ [1995], “Background Information on Shelter Costs,”(Toronto: Ontario Ministry of Community and SocialServices, photocopied).

____ Income Maintenance Branch (1988), “Analysis ofShelter Subsidy Expenditures from 1981 to 1988,”Draft July 21, 1988. Toronto: Ontario Ministry of Com-munity and Social Services Income MaintenanceBranch. 24 pp.

____ Statistics and Analysis Unit (1996), “Ontario’s So-cial Assistance Rates for Selected Case Types: 1967-1996,” Toronto: Ontario Ministry of Community andSocial Services, photocopied) 2 pp.

Québec Gouvernement du Québec (1984), Memoir auConseil des Ministres de Monsieur Guy Tardif,Ministre de l’Habitation et de la Protection duconsommateur.

Runge, D. (1991), Memorandum on housing allowanceslabelled Dallard Runge-FRPO-91/11/18 (Toronto:Canada Mortgage and Housing Corporation, OntarioRegional Office).

Sarlo, C.A. (1992), Poverty in Canada (Vancouver: TheFraser Institute).

Shah, A. (1996), “A Fiscal Need Approach to Equaliza-tion,” Canadian Public Policy - Analyse de Politiques22(2): 99-115

Smith, L.B. (1995), “Ontario Housing Policy: The Un-learned Lessons,” in Home Remedies: Rethinking Ca-nadian Housing Policy, ed. G. Fallis et al. (Toronto:University of Toronto Press).

Statistics Canada (various years), Household Incomes, Fa-cilities and Equipment (HIFE). Microdata file.

Steele, M. (1985a), Housing Allowances: An Assessmentof the Proposal for a National Program for Canada(Ottawa: Canadian Home Builders’ Association).

____ (1985b), Canadian Housing Allowances: An Eco-nomic Analysis, Ontario Economic Council ResearchStudy (Toronto: University of Toronto Press for On-tario Economic Council).

____ (1995), Two Kinds of Canadian Housing Allowance,1980 to 1993: An Evaluation, Research Paper 191 (To-ronto: Centre for Urban and Community Studies, Uni-versity of Toronto).

Weicher, J.C. (1996), “Problems with Section 8: A Com-ment,” Illinois Real Estate Letter Winter:811.

canadian housing allowances inside 209 and outside the

Documents