Why Housing Differential Subsidies Save More Than Just Money
When companies relocate employees between cities, especially in Canada, there’s a dirty little secret: most organizations wing it when it comes to cost-of-living adjustments.
Sure, there are pay band discussions. Maybe there’s a quick look at salary surveys. But when you move an employee from Calgary to Vancouver—or Halifax to Toronto—the real pain point isn’t grocery bills or gas prices. It’s housing. And housing isn’t just a cost of living issue—it’s a cost of staying issue.
The Housing Differential Problem
Here’s the scenario:
- You need to move a high performer from Calgary to Vancouver.
- Calgary’s average home price: ~$600,000
- Vancouver’s average home price: ~$1.2 million
That’s not a lifestyle adjustment—that’s a financial cliff.
Most companies respond the way they always have: they negotiate a salary increase.
But here’s the catch:
- How much? Is it the right number? Did you overpay because the transferee had a great poker face? Or underpay and risk turnover?
- Permanent salary increases compound. Give someone an extra $20K to cover housing, and you’ve just committed to that $20K (plus its impact on bonuses, pensions, and every future raise) for the rest of their tenure—including if they’re moved again to a lower-cost city.
If that person ends up in Halifax next, are you really prepared to keep paying Vancouver rates?
The Smarter Alternative: Housing Differential Subsidies
There’s a better way—and it’s hiding in plain sight in the relocation industry.
It’s called a Comparable Value Estimate (CVE). CVEs compare real housing markets, not just theoretical cost-of-living indices. If you know that a comparable house in Vancouver costs X% more than in Calgary, you’ve just created a scientific method for setting compensation—not a backroom negotiation.
Enter the Housing Differential Subsidy:
- It covers the difference between housing costs in the origin and destination location. To calculate the monthly subsidy, multiply the housing delta by the current mortgage interest rate—this estimates the real cost of carrying the difference, without rewarding principal repayment.”It usually scales back 20% per year—because people get acclimated, build equity, or move into lower-cost neighborhoods as locals do.
- And crucially, it’s temporary. If that same employee later moves to Halifax or back to Calgary, the differential doesn’t follow them. You’re not stuck paying a Vancouver-level salary in a non-Vancouver market.
Why This Matters Now
Companies like to use Hay Group data or other compensation benchmarks to set salaries—but housing costs often shift faster and more dramatically than salary data can capture. Look at the last three years of real estate in Vancouver or Toronto and you’ll see what we mean.
By using CVEs and housing differentials, you:
- Protect your compensation structure from long-term distortion
- Provide scientifically justifiable, fair support to transferees
- Avoid compounding costs over time
- Maintain mobility flexibility without permanent salary inflation
Bottom Line
Housing is the single largest cost hurdle in most relocations. If you solve for it the smart way—not the “negotiated salary bump” way—you avoid the hidden costs that sink budgets quietly over time.
In an economy where employees expect fairness but companies need fiscal discipline, the housing differential subsidy might be the most underused win-win in mobility today.
A Final Word on Getting CVEs Right
At All Points, we still conduct Comparable Value Estimates in-house. We’re one of the last companies to do so.
Why does that matter? Because we’ve seen what happens when third-party contractors handle CVEs without care. The science gets thrown out the window—but HR is left holding the results, without the tools to challenge them.
If your CVE is wrong, the whole game is shot. You’ll either overcompensate (and distort your pay structure) or undercompensate (and lose the employee).
That’s why accuracy isn’t optional here—you need someone who knows the markets, understands the math, and has skin in the game.
In our case, you need Audrey’s final approval on that study.
