Toronto is transforming from a mostly middle-income city into an island of wealth surrounded by increasingly poor pockets of suburb, 42 years of data reveals.

University of Toronto professor David Hulchanski has recently updated his groundbreaking income-disparity research, showing that polarization proceeds as Toronto’s middle-income communities vanish.

The long-term trend to 2012 shows average incomes rising dramatically in the city core and north up the centre, while plunging in the inner suburbs, particularly northwest Etobicoke and northeast Scarborough.

“We have 28 per cent of the city going significantly up in income and a different part, comprising 40 per cent, where income drops, in a trend that produces what we call the divided city,” says Hulchanski, a professor of housing and community development in the faculty of social work.

“If income inequality grows, this is what happens — our income buys choice of house or apartment or neighbourhood, and you see that reflected in the map ...

“Instead of living together harmoniously, with mutual respect, we are setting up two extreme lifestyles — one where people struggle just to get by and another where every option in the world is open to them. No country is ever perfect in terms of equality, but we’re going in the opposite direction.”

The data, presented here for the first time, updates Hulchanski’s “Three Cities” research showing that mostly middle-income 1980s Toronto has been transformed into three zones: a prosperous core, a shrinking middle-income belt, and swaths of increasingly poor suburbs.

Between 1970 and 1990, average incomes jumped significantly in only about 13 per cent of Toronto’s 500-plus “census tract” neighbourhoods.

Slightly more, 19 per cent, saw incomes drop significantly, while most Torontonians, in 67 per cent of the census tracts, saw earnings change only modestly.

Expanding the time frame to 1970 to 2012 exposes a dramatic shift.

Middle-income communities across the city began to evaporate. Neighbourhoods with relatively stable average income shrank by more than half, to 32 per cent of the census tracts.

The percentage of neighbourhoods where residents’ average incomes skyrocketed more than doubled. At the same time, the percentage of neighbourhoods where people were getting much poorer also doubled.

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Yorkville, which transformed from downtown hippie haven to posh shopping district favoured by the jet set, saw the biggest surge in average incomes. Part of Thorncliffe Park, which became a landing pad for newly arrived immigrants, saw the biggest income drop.

When the city snapshot is narrowed to only 2012, just under half of Toronto is considered low-income — well under the $46,666-per-year average — while 21 per cent is high-income and only 30 per cent is middle.

“What I call City No. 2 — the middle-income city — is simply disappearing,” Hulchanski says.

Gentrification is only one of the root causes, he says, listing provincial and federal policy changes since 1990 that he believes were intended to further enrich society’s top earners.

They include de-industrialization via free trade; low wages in the increasingly deregulated labour market; tax cuts benefiting the rich; cuts in social spending and social program transfers; and the “offshoring” of corporation profits to avoid Canadian taxes.