Cities Keep Planning for Seniors to Downsize. The Data Shows They're Not Moving.
How flawed assumptions about seniors helped shape today’s housing shortage.
For decades, housing planners have assumed that seniors would eventually downsize, freeing up family homes for the next generation. But that hasn’t happened.
In this episode, Cara Stern and Mike Moffatt explore why most seniors choose to stay in their homes and why that decision is often perfectly rational. High moving costs, limited housing options, strong community ties, and government policies that encourage aging in place all make downsizing far less appealing than planners expected.
This mistaken assumption has shaped housing forecasts, contributed to today’s housing shortage, and fueled tensions between generations. Are seniors really the problem, or did policymakers simply plan the housing system around the wrong idea?
And if seniors aren’t moving, what does that mean for families trying to find space in cities where family-sized homes remain scarce?
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Cara Stern: If you’re a young person looking for a family-sized home to raise your kids in, one thing you’re going to notice really quickly is how many of these homes are being lived in by couples or single people whose kids no longer live at home. And if you start reading about the housing crisis, eventually you’re going to come across articles like these:
Seniors rarely downsize. Here’s why that’s hurting first time homebuyers.
Seniors staying put exacerbates a housing crunch: CEO
One of these has a quote from one Professor Mike Moffatt, saying, “It’s kind of an irony, but one of the best things we can do to help first-time homebuyers is to make it easier for seniors to move into new housing.”
Mike Moffatt: Yeah, it’s absolutely true. And as a policy wonk, I often use my parents as the two-person focus group on a lot of the work that I do.
My folks live in a four-bedroom home that we bought in 1988. For the last 25 years or so, they’ve threatened to downsize, but they never have because they look around and they look at the expense of moving, and they can’t find anything that meets their needs. They’d be moving from one expensive home to another expensive home. So they stay in place in a very large home that doesn’t necessarily meet their needs.
Cara Stern: And they’re not alone, because although urban planners for our cities have spent decades counting on empty nesters to downsize when their families move out, that has not happened. There are so many people just like your parents out there, and I find it really frustrating to look at housing projections, how cities have calculated how many new homes need to be built, because they really do count on seniors downsizing and freeing up those three-bedroom family-size homes at much higher rates than they actually do.
Mike Moffatt: Yeah, it’s been a problem for a long time that cities make these assumptions around generational turnover, which haven’t come to be true. I mean, part of that is just they overestimate the amount that people downsize, but they’ve also underestimated life expectancy. So seniors are actually living longer than they did in the past. And I think a lot of cities haven’t taken that into account.
And all of this we actually talked a little bit about in our Boom, Bust and Echo episode. The 1996 book that the episode is based on predicted that seniors were going to downsize and release a flood of family homes onto the market. The book actually predicted that housing would go back to being places to live rather than investments, which is something that we say in 2026. We say, we should go back to 1996 when homes were a place to live, not an investment.
But if you go back and look at what they were actually saying in ’96, they were like we should go back to some earlier era. But we know how that turned out, that the seniors did not downsize at the rate at which economists and urban planners predicted they would.
Cara Stern: And they’re still counting on it. I don’t know that they’ve really understood how much they need to change that in their projections, right?
Mike Moffatt: Absolutely. It’s necessary for cities to make assumptions around generational turnover and planning that is required. But I still think that they’re overestimating the amount that this is going to happen. And I think actually, particularly in a post-Covid era, where you saw some of the issues in long-term care homes and a lot of the seniors I know say, no, I’m going to stay in here as long as possible. I don’t feel comfortable in that environment. And again, I don’t think cities are fully taking that into account.
Cara Stern: I was looking at the stats in Toronto, and the most recent data I could find came from a 2021 report. So they use the 2016 census data, but I suspect the numbers haven’t changed. And if anything, I suspect they’ve gotten worse for exactly the reason you just said. And they were talking about how many people in Toronto are overhoused.
So, when planners say over-housed, what does that mean?
Mike Moffatt: So I hate this term overhoused. I get what planners are getting at, but in my mind, over-housing means that some government official doesn’t like how you live and thinks you should live differently. Now I jest there, but only partly. Overhoused roughly means that your home has too many bedrooms relative to the size of your family.
So let’s say you’re a couple with a three-bedroom home, and you and your partner both work from home, and you’re using each of the bedrooms as a home office. The government would classify you as being overhoused because you’re two people in a three-bedroom home. Or maybe you’re a widowed senior, and you have a two-bedroom apartment, and you use the second bedroom for a hobby like sewing and occasionally have a grandchild stay over. The government would say no, you’re over-housed. That’s inappropriate. You should downsize.
So I get what governments and planners are trying to get at with this idea that there are folks like my parents who are in these larger homes, but I think the term actually does more harm than good.
Cara Stern: Why?
Mike Moffatt: I think the term enables NIMBYism. The core idea of it is that we don’t need to build more family-sized homes. We just got to push old people out of their homes, and everything would be okay. And it puts the onus in the wrong place. It makes it seem like seniors are the ones causing the housing shortage, and seniors are doing the wrong thing, but I disagree.
I think seniors are acting quite rationally. I think it’s the planners that are wrong.
Cara Stern: I see your point, and I can see how it could be used to say, we don’t need more homes, but I do think there’s value to it when we’re comparing it, especially with under-housed, which we’re going to get to in a minute. And I find it really does illustrate the inequality we’ve created quite well, even though it’s difficult because you can’t actually right-size, as the government calls it, since it does involve people who have something that they like being willing to sacrifice for no personal gain.
So there is a problem there. But for illustrative purposes, it’s useful, no?
Mike Moffatt: Well, I think you’ve hit on something that underlines all of this. Now, under-housing is a massive problem in Canada. So don’t get me wrong, and that is one that does require attention. I think we over-focus on over-housed and under-focus on under-housed.
Cara Stern: But it feels so good to have someone to blame!
Mike Moffatt: But I think there are two competing worldviews here. I think the first worldview is an abundance viewpoint, that the way we attack under-housing is by creating more homes, and particularly creating more family-size homes. It’s by building. But there are other viewpoints here that are more of a zero-sum redistributive viewpoint where some people are under-housed, and some people are over-housed, and we’ve got to take the over-housed people and put them in smaller housing, and then that will free up the homes for the under-housed folks.
And if we could just have some central plan or just move people like they were pieces on a chessboard, everything would be fine. So clearly I’m in the first camp. I’m in the camp that says that we need to just build more housing, and we do need to create options for people. So that’s why I’m not a fan of the whole concept of “overhoused.”
However, I will say that there is one related term that I actually do think is quite useful, and that’s the concept of involuntary overhoused. Now this describes where someone would actually like to downsize, but they can’t find a smaller, more suitable home. I think that is a problem and something that the government should address. So I think we should make a distinction between over-housed in general, which is just based on an Excel formula that somebody came up with, and involuntarily over-housed, which is the actual desire of seniors and others to downsize, but they can’t find a way to do so.
Cara Stern: Well, the city only actually collects stats on over-housing, not ones that classify whether seniors want to be living there or not, so those are the numbers we have, and they’re the ones we’re going to go with. The city’s 2021 report found that over-housing rates increase significantly with age. So 66% of households that are age 70 and over are overhoused.
Mike Moffatt: Which makes sense because you’ve got people and large family homes that are still there after children moved out, like my parents. And you also have widowers, and keep in mind that a lot of these formulas say that if you have a widower in a two-bedroom home, they are considered to be over-housed.
Cara Stern: On the other side of that, there were almost 135,000 at the time — it’s probably gone up — Toronto households that were under-housed, meaning they’re living in homes that don’t have enough bedrooms for them. Those are overwhelmingly renters, overwhelmingly households with children in mid and high-rise buildings. And to me, that’s the crux of the problem, where you’ve got families squeezed into condos that don’t work for them.
Meanwhile, we do have a lot of four-bedroom houses nearby with 1 or 2 people in them. And I think that causes a lot of division in society, in some ways, because people are looking at that and going, “I’m so frustrated. I’m raising my kid in this place that’s way too small and they have so many empty bedrooms. Why? Why is this the way that it has to be?”
Mike Moffatt: I think that shows why the housing shortage creates this zero-sum mentality of people that I don’t think is particularly healthy. Ultimately, I think it’s the job of governments and planners to create the conditions that everyone can have a home that meets their needs and not say, “Seniors, you’re not acting the way some municipal planner predicted you would in 1998. Therefore, you’re the problem.”
Cara Stern: Sure. And if we allowed lots of family-size homes, I would agree. But we don’t really. And until recently, you couldn’t even build a duplex in most neighbourhoods. They were frozen as single-family homes. And now it’s still not easy to build densely, even though it is getting better, and we’re not there yet. So that’s where it becomes a zero-sum game, if we have to allow housing.
Mike Moffatt: Absolutely. But the reason why cities don’t allow for building lots of family-sized homes is because of the flawed assumption that seniors will leave their homes. So it all goes back to this generational turnover assumption. It’s fair to point out that many of the seniors who would benefit from being able to build in existing neighbourhoods are often the ones preventing that construction. So, I do think when you see folks out protesting pro-housing reforms, I think it’s fair to criticize that, and go no, this is necessary in order to create enough housing for everyone. So, if you’re out there protesting new housing, I think that’s fair game for criticism.
Cara Stern: Part of the case for more density is so that we don’t have that resentment. I feel like that’d be so much better for society if you don’t have that, you don’t have people who are protesting things that people who don’t have need. And that involves more infill. So someone could downsize into one of them but not have to move to a high-rise condo, which often aren’t even built in residential neighbourhoods. That would open it up for seniors who do want to downsize, to have the ability to do those things that you talked about, your parents wanting to be in their own neighbourhood where they’ve been living for a long time, and someone who can move from a house to maybe a ground-floor unit in a house.
There’s such a good case for density, if you are looking at what seniors need and what would make their lives better as they age.
Mike Moffatt: Yeah, absolutely. I think that would be beneficial for everyone. Not just seniors. So 100%.
Cara Stern: I remember pointing out the mismatch on Twitter and getting piled on with people suggesting that I was saying seniors need to give up their homes, and that’s not it. That’s not what I’m saying. It’s just the math of where the mismatch is. The city has created this narrative that the turnover would solve the family housing shortage.
And younger people heard that and thought, when’s that happening? And then nothing happened. And the frustration gets directed at seniors, which is completely unfair because seniors are responding rationally to the situation that they’re in.
Mike Moffatt: Yeah. So there’s a lesson there for all you kids. Governments are often wrong.
Anyhow, there’s a study from the National Institute on Aging that spoke to Canadians aged 50 and older in 2025, and 81% report that they want to remain in their home as they age, either their current home — and that’s 70% of them — or a smaller, more manageable home — 11%.
In other words, the vast majority of them want to stay exactly where they are. And I have to wonder if municipalities conduct these types of polls in their planning because it sure doesn’t seem like they do.
Cara Stern: Yeah, I hope that they at least listen when other people do these polls. That would be nice, even if they don’t do their own. I’m in a starter home. I’m planning on staying here instead of moving up because the cost to move is just too high. And I realize, I can renovate my house and get something much better than I could get if I moved, especially when you calculate how much money I’d be paying just in taxes, real estate fees, and the cost of moving. So I’m assuming that seniors are looking at all those costs and doing the exact same calculation that I am doing right now, right?
Mike Moffatt: Absolutely. So let’s say you’re moving into a newly built home in the City of Toronto. You’re going to pay a 5% GST, an 8% PST, a 2% provincial land transfer tax, and a 2% municipal land transfer tax. Then there are realtor fees, the expense and hassle of moving. That’s not even including all the taxes that get embedded into new homes, like development charges.
So seniors would end up losing hundreds of thousands of dollars. And for what? To move into something that’s also substantially overpriced, likely doesn’t meet their needs and causes them to have to leave their neighbourhood and say goodbye to all their friends. For most seniors, that’s a horrible trade, so they don’t do it.
Cara Stern: I understand how it makes no financial sense, unless maybe you’re moving to a much cheaper market, which some people do. But then of course, you’re moving away from family and friends and doctors and other services, which is all the same reasons I would bristle when people would tell me to just move to another city if I wanted to afford a home, and if the senior can’t afford to stay, there’s nothing, forcing them to move. In the same way, a lot of young people are making that decision because they see that they don’t have any other options. But seniors do. They have the option to stay where they are. So I understand, why would they move?
Mike Moffatt: And that point about being able to afford to stay, I think is a really important one, because we have to keep in mind that governments have spent the last 50 to 60 years trying to eradicate senior poverty, so we don’t go back to the old days where it was far too common for seniors, particularly widowed seniors, to be so broke that they were eating cat food and they would get priced out of their homes.
Seniors being able to age in place is the end result of all of that good work to eradicate seniors’ poverty. Which leads me to ask, what did policymakers think would happen when they eradicated or got close to eradicating senior poverty in the first place?
Cara Stern: Yeah, I guess it’s government agencies not talking to one another and having different goals or different assumptions at least. And the rebates and relief programs we do have, they’re all targeted pretty much at first-time homebuyers, which makes sense since they’re the ones on the losing side of this. And obviously being under-housed is a much bigger problem than being overhoused.
But the thing that really gets me when I look at this from a policy design standpoint is that we’re not just failing to make it easy to move, we’re actively paying seniors to stay put. And that makes me really mad. There are property tax deferrals attached to primary residences that get paid when you sell, and the Ontario senior homeowners’ property tax grant.
I get why these are introduced. It’s genuinely a good goal to help seniors stay housed, but the cumulative effect of all of them together, along with the high taxes to move, is a policy environment that says in every possible way, do not move.
Mike Moffatt: Absolutely. There’s a certain irony that municipal planners keep assuming that seniors will downsize, while at the same time, municipal governments keep introducing new programs to ensure they don’t. This reminds me of Principal Skinner in The Simpsons when he says, am I so out of touch? No, it’s the children who are wrong. Municipalities keep seeming to think that no, it’s the seniors who are wrong.
Cara Stern: Obviously, one solution is just build more family-sized homes. That would be great if they could just do that. Then it doesn’t matter how many people are living in an overhoused situation, because there are fewer underhoused people. We don’t have to right-size. We can just have everyone living in homes that make sense for them. But as we said, there’s just so much stopping developers from building, and it makes me wonder, if they’re not going to make family-sized homes available for everyone who needs it, is it possible to make policies that make downsizing a rational decision for seniors?
Mike Moffatt: Well, governments have to eliminate the two big barriers, which are, ironically, both created by governments.
First, they have to reduce the taxes that make moving such a financial loser. And secondly, they have to legalize the building of homes suitable for seniors in the neighbourhoods they want to live in. All of that would certainly help.
There are other countries that do other things. Australia, for example, has a program where if you are a senior that you sell a home that you’ve lived in for at least ten years, you can take some of the money from that sale and top up a pension, like an RRSP. So there are additional things that countries do, but I think it’s really important to get the basics right first.
But I also think we need to temper our expectations about how many seniors will move, because we have that polling data that shows it’s clear that most of them don’t want to. So we have to accept that they’re happy where they are and they have the right to stay there.
Cara Stern: So we really just need a lot of our politicians to stop listening to the voices saying we don’t need more homes, especially if those people already have homes that are at least as big as they need them to be, if not bigger than they need them to be, by whatever definition we’re using for this.
Thank you so much for watching and listening. Our producer is Meredith Martin, and our editor is Sean Foreman.
Mike Moffatt: If you have any thoughts or questions about buying a home in 1988 London, Ontario, please send us an email to [email protected]
Cara Stern: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
Right-Sizing Housing and Generational Turnover
Perspectives on Growing Older in Canada: The 2025 NIA Ageing in Canada Survey – National Institute on Ageing, Toronto Metropolitan University
Canada’s Demographic Time Bomb: What Boom, Bust & Echo Got Right -
City of Toronto – Garden Suites and Laneway Suites
As Seniors who would be criticized as “over-housed” this was a very good summary. Living in a community with few downsizing options, we would emphasize the problem of obtaining a family doctor if we left that community. Wider availability of options might help. I did enjoy the humorous depiction of planners who have no idea what aging Boomers are considering for their future. As you point out, nobody asks. It’s not a secret. We are not irrational yet, I hope.
Oh hey, you opened up the comments 👍