How Home Prices Shape Families

A new University of Toronto study proves that housing affordability has directly contributed to declining fertility rates in a massive way

Cara Stern

Mike Moffatt

, and

Djeima Ramos

Dec 03, 2025

This episode of the Missing Middle podcast explores a new University of Toronto study that highlights housing affordability as a key factor in declining fertility rates in the United States.

Hosts Mike Moffatt and Cara Stern analyze the findings, including the study’s estimate that over half of the fertility decline since 1990 is linked to the shortage of affordable, family-sized homes—resulting in 13 million fewer births. They discuss how delayed household formation, smaller living spaces, and rising costs for family-appropriate housing all contribute, and why similar trends are probably occurring in Canada, especially in high-cost provinces like Ontario and B.C. The conversation also addresses misconceptions about fertility, critiques the “all supply is good supply” argument, and examines the structural barriers preventing cities from building enough three- and four-bedroom homes. Mike and Cara explore how unsuitable housing impacts families, newcomers, and children, how municipal regulations add to the shortage, and why resolving this issue requires major zoning, planning, and building-code reforms—rather than simply telling young people to “lower their standards.”

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Below is an AI-generated transcript of the Missing Middle podcast, which has been lightly edited.

Mike Moffatt: So, Cara, one of the more frustrating aspects about being a traditional research academic, and one of the reasons why I try to avoid doing academic research, is that most research is trying to show or prove something pretty obvious to most of the rest of humanity. I have to know, when I told you about a new study out of the University of Toronto that found that housing affordability has directly contributed to the declining fertility rate in America, what was your reaction?

Cara Stern: It feels really obvious that that would be the result. I’ve seen studies that show that women are having fewer kids than they otherwise would if their circumstances allowed them to, and I find that really sad.

Housing is clearly not the only factor, and the study didn’t say it was, but there’s no way you can convince me that having no path to a family-sized home doesn’t play a role in having a family.

So from this study, we learned that people in America are having fewer kids because of housing affordability issues. What were the details?

Mike Moffatt: So this study looked at 30 years between 1990 and 2020, and it was for the United States.

They found that 51% of the decline in the fertility rate can be explained by housing affordability and availability. That means that 49% is a variety of other factors, but clearly, it is the primary reason why America’s fertility rate is dropping. They found that if this hadn’t happened, 11% more children would have been born in the United States during this period. That’s 13 million more kids. So we can say that the decline in housing availability and affordability has reduced childbirth by 13 million.

What it also finds is not just about the number of homes, but it turns out that family-sized homes explain twice as much of the decline in fertility. All types of homes are important, and the supply of any type of home will increase fertility, but larger family-sized homes are twice as important — or twice as valuable — when it comes to this.

They find that there are basically two things going on: First, the lack of housing affordability delays things like people moving out of their parents’ house. It delays marriages and that sort of thing. The second factor is that it also reduces the number of children that families have. If they’re in smaller homes or are having trouble paying the bills, they’re a lot less likely to have that second, third or fourth child.

Overall, this is a massive result and really does prove what I’ve always thought was kind of obvious — that housing affordability absolutely causes families to have fewer children than they otherwise would.

Cara Stern: Those numbers are huge. I hear those, and I’m thinking, that’s a lot of children. I guess some of it might be coming from the sizes of homes, but you also mentioned that some people are delaying marriage and delaying getting into relationships. The older you get, the harder it is to have kids, so I imagine that’s also playing a role.

As you said in a previous episode, Canada is the worst in the OECD for housing affordability. Given that this study is looking at American numbers, do you suspect that Canadian numbers are higher in terms of the number of kids that are missing because of housing affordability?

Mike Moffatt: Yeah, I do think if we studied this for Canada, we would find similar results, and we’d see that across provinces — that we’ve had bigger declines in fertility rates in Ontario and British Columbia than in other provinces.

Quebec used to have, by far, the lowest fertility rates, but Ontario and B.C. have declined quite a bit to catch up with Quebec, and a lot of that is, I believe, due to those differences in housing affordability. It’s not a surprise that the two most expensive provinces have seen the two biggest declines in fertility rates.

Cara Stern: Overall, I was kind of surprised that this is a new idea and that anyone would look at this as a surprising result. Although anytime I’ve posted online saying something about housing affordability and the number of children people have, people always respond, “Well, really, it’s about education. It’s about choices. It has nothing really to do with housing affordability.” We actually received a comment on a recent video that we posted where someone pretty much said that, so I wanted to read a shortened version of it. And this comes from a username @pghirin1124:

“The argument that people are not starting families because of affordability is a common misconception. In Canada, fertility has been sub-replacement since the 1970s. You can easily look up that data. Houses were affordable in the 1990s, yet people only had one to two children on average, not enough to sustain the population level. That’s why we took in so many immigrants in recent years, most of whom were born in the 1990s, to compensate for the children that the boomers never had. Plus, let’s face it, you don’t need to own a big home to raise a family. The issue with low birth rates is not income or house prices. It’s way more complicated than that, and if anything, it’s more likely to be about modern Westerners being too used to comforts and not willing to make sacrifices.”

What did you think of that response?

Mike Moffatt: So there is some truth to these comments. It is absolutely true that Canada’s fertility rate fell below replacement levels around 1971 or 1972. That is a thing that happened.

It is also true, as the previous study reports, that there are many factors that have contributed to the fall in fertility rate, not just in Canada, but around the world. Those parts of it are true, but that also doesn’t mean that this can’t be a portion of it. And I think in recent years, this is a large portion. I often hear this argument, that back in the 1950s and 1940s, families lived in a 900-square-foot home.

Where are young people going to find that home today? My dad grew up in one of those strawberry-box post-war homes. Nowadays — and this is in London, Ontario — that home’s about $550,000. If you are a personal support worker married to a restaurant server, you’re not going to qualify for that mortgage.

So this idea that people can just buy the homes that people bought in the 1950s and everything would be fine, but these decadent westerners are refusing to — I defy anybody to afford one of those 1950s-style homes.

If you try to buy one in Etobicoke or North York, they’re over $2 million. I don’t understand what these people are talking about. This idea that “Oh, well, we should just do the things that they did in the ’50s.” Those options are off the table in large parts of the country.

That’s my Gen X rant. I’d love to hear your thoughts.

Cara Stern: Yeah, I think a lot of those homes don’t exist anymore in that they’ve been made bigger over the years. You can walk through my neighbourhood around East York. There are a lot of those old, small homes. I live in one of those old, small homes that’s under a thousand square feet. I think that there are some of them around, but a lot of them have been torn down and made bigger. That’s just what happens over time.

Historically, people were able to give their children a similar or better lifestyle than what they had. This is the first generation that isn’t able to do that. That’s not lost on anyone. So, yes, we can look back a few generations and say people lived with more people per bedroom, but that isn’t going to make people feel better about not being able to give their kids anything near the quality of life that they had growing up.

We know that millennials are buying homes later, and I have to think that plays a role in this as well, because people say to me, “Millennials, you guys just want to buy your forever home first, and that’s not how it works. Start small and work your way up.”

I think that what they’re missing is that people are buying their homes later, which means that they’re buying their first home at the time when they’re going to need the biggest house they’re ever going to need, which is when they have kids.

I’m pretty tired of hearing people say that. We need a solution for that because it’s not going to get better for Gen Z.

People don’t have to have kids, but society does need a younger generation. If we want to solve that problem, we’ve got to find a solution that isn’t just, “Well, lower your standards. Live as they did 100 years ago,” even though society has progressed.

A lot of what I hear in discussions about whether to have kids has to do with housing size. I hear many people saying, “Ideally, it’d be nice to have another kid, but we’d have to move, and I just can’t afford a bigger house.”

You had a piece on Substack recently on how big homes need to be in order to adequately house a family. Can you give us a shortened version of that argument?

Mike Moffatt: Yeah, absolutely. So in both international and national law, we have this concept called the human right to housing — that everyone in the country should have access to safe and comfortable housing that suits their needs. You need to have a way to measure whether or not that human right is being met.

In Canada, we have a metric called “core housing need”, and we can identify who in the population is having their core housing needs met and who isn’t. There are three big components to core housing needs: One is, can you afford to live there? And after you pay your rent or your mortgage or whatever, you still have enough money to be able to get your groceries and do those things, so an affordability metric. The second is, is the home in good condition? Is the roof caving in? That kind of thing. The third is around the size of the home, which is referred to as suitability.

So whether or not a home is suitable for a household is defined by something called the National Occupancy Standard, or NOS. What the NOS looks at is how many people are in their family versus how many bedrooms. Suitability is defined by the bedrooms in the home, not square footage or anything like that.

It’s a complex relationship because it’s not one-to-one, people-to-bedrooms. For instance, it says that there can only be two people in a bedroom, but there are some instances where that wouldn’t be allowed. So if you have two teenage kids of different genders, they should each be in their own bedroom and so on.

What the federal government has found in Census 2021, if you look at the National Occupancy Standard, is that the biggest shortage of homes is larger homes, and it’s three-bedroom, four-bedroom, five-bedroom, and so on. In many cases, seven bedrooms and up.

You take an example of 25 international students all living in one home in Brampton. Well, they would need a lot of bedrooms to suitably house that household. It’s a complex relationship, but it’s basically the government’s way of measuring whether or not a home is suitable and ultimately measuring whether or not we’re meeting our national and international housing-as-a-human-right obligation.

Cara Stern: I think it makes a lot of sense. I think a lot of people could hear that and understand that maybe the parents are sharing a bedroom, but teenage kids of the opposite sex — they probably aren’t happy to be sharing a bedroom. It’s probably not appropriate at a certain age to be sharing a bedroom. So I think that’s one of those things where you hear it, and you’re like, “Oh, yeah, that’s just common sense.”

Mike Moffatt: Yeah, absolutely. This is often misinterpreted as saying that the number of bedrooms should equal the number of people in households, but the National Occupancy Standard does not say that at all. It’s far more pragmatic. That pragmatism makes it a little bit complex. Overall, it’s the best measure we have of whether or not homes are suitable and whether or not Canada is meeting our human rights obligations when it comes to housing.

As of Census 2021, 3.5 million Canadians were living in unsuitable housing - housing that’s too small to meet their needs. Some groups are more likely than others to live in unsuitable housing.

So, Cara, let’s play a little game here. Can you guess which groups are more likely to be living in unsuitable housing in Canada?

Cara Stern: I’m sure families are in there. I’m thinking that there’s probably a bunch of families who are living in maybe two-bedroom apartments, but they actually need three bedrooms. Maybe they were rolling the dice and saying if they had two kids of the same sex, they could share a bedroom, but they didn’t, and so now they need a bigger space. There’s also the situation of: they can’t afford a big enough home. There aren’t enough homes out there that are within their budget.

I suspect there’s a generational divide in that people who bought a long time ago, especially a lot of seniors, who are living in the homes where they raised families, and are living in situations where they are adequately housed, if not overhoused by these standards. Do these standards include overhoused as well?

Mike Moffatt: No, it does not include overhoused because it’s basically looking at human rights. I don’t think anybody would consider it a human rights violation to live in a McMansion by themselves.

Cara Stern: That’s fair. What about international students? I wonder whether newcomers are adequately housed in general.

Mike Moffatt: Yeah, you absolutely nailed it. The people who are most likely to be under-housed are non-permanent residents, recent immigrants to Canada, persons of colour and so on. Other groups appear there, so children, particularly young children, are far more likely to live in unsuitable housing than older populations.

Cara Stern: Young children being what age?

Mike Moffatt: So there are two groups. They look at kids under the age of six and then six to 17. Both of those have very high rates of living in unsuitable housing, but slightly more for younger kids.

Cara Stern: Interesting.

Mike Moffatt: I think a lot of it is, you have a couple who are living in a small condo, and they have a kid, and they need at least two, sometimes maybe three bedrooms. The most common form of underhousing is people who live in a two-bedroom home that really should have a three-bedroom home.

Cara Stern: I guess that makes sense that people who have kids who are a little bit older probably bought before prices started skyrocketing, and maybe were able to get that suitable house.

Mike Moffatt: Yeah, absolutely. Maybe they were driven nuts by their kids, and the family broke up, and now they’re two families. And I say that glibly, but you actually see that in the data.

The lack of housing causes all kinds of societal problems and issues. This is a real, real problem. One of the things that we see is that the most common areas to see unsuitably housed people are large metro areas. So Toronto, Vancouver, and so on. In rural areas, it’s not as much of a problem. It does still exist, but nowhere to the same extent. This really is an issue for large, dense municipalities, as they just don’t have enough family-friendly housing.

Cara Stern: There’s a part of this study that I found interesting because it critiqued the yes in my backyard movement, the YIMBY movement. What it was specifically critiquing is the way that a lot of YIMBYs will say, “all supply is good supply.” They suggest that, instead, you should encourage family-sized housing specifically.

I know that I’m definitely guilty of saying all supply is good supply, and despite what the study says, I still believe that. Even small homes are so expensive, which tells me they’re still needed. I know they’re not needed for families, but they are needed in our society.

Those 25 international students in one home, I bet a lot of them would be very happy with a small, even what we call “shoebox condos,” if they were at the right price point, which they are not. So that tells me we still need more.

I also get the concern that maybe the asks should be more specific. I wouldn’t want to see any city councils looking at this and saying, “Well, this building can only be approved if it has this number of three-bedroom versus four-bedrooms,” because I worry that when you add restrictions onto a development, the less likely it’ll actually be built, and in reality, it just means fewer homes for everyone.

Mike Moffatt: Yeah, absolutely. That is a very legitimate concern.

To be clear, we need more of all types of housing. I don’t want to put this in a situation where we’re trying to pit one form against the other. We need more of everything. I think we do disproportionately need more family-size units, but that shouldn’t come at the expense of smaller units.

I think you’ve identified a problem we see with policymaking, particularly at the municipal level, where we get into this mindset of “We need more X, therefore we will put on these restrictions that say you have to do X.” Sometimes that’s a good idea, but most of the time it’s basically ignoring the root causes.

It’s trying to do an end run around the problems and say, “OK, we’re not actually going to fix anything. We’re just going to paper over the issue and then try to legislate some outcome.” If you don’t deal with the root causes, it’s not going to be successful. We have to understand why we don’t have enough of these three and four-bedroom homes. That’s everything from building code, to zoning, to land use issues and so on. That has to be the answer.

We have to go back and look at root causes and not just paper over problems and try and legislate the outcomes that we want. That’s not going to work, and it’s going to lead to all kinds of unintended consequences, including people not building anything.

Cara Stern: I wanted to go back to what you said before about this being largely a city problem. What are the consequences of people not being able to afford to have kids in a city? What’s the problem if they move out of the city to somewhere — maybe somewhere more rural — where the houses are more family-sized?

Mike Moffatt: Well, I think there are a couple of things that happen. The first it’s sprawl on steroids. One of the things I can’t understand about municipalities and planners is that they absolutely obsess over expanding urban growth boundaries and go, “OK, we can’t let our city grow or expand out.” There are worthwhile reasons why they’re concerned about that. That is a legitimate concern.

If you don’t allow for enough building within the city, what ends up happening is that people move to the next town over and then drive back to work each time. To eliminate 500 metres of sprawl, you’ve extended sprawl 50 kilometres, and all of the infrastructure that goes in place.

If you could keep those individuals in the city, they’d at least pay property tax to that city, but if they’re moving to the next town over, they’re paying their property tax to that town. So what happens is it hollows out the budget of the larger city because you have all these people working in the city, but none of them pay municipal property taxes.

You see this a lot in the United States, where their towns in a lot of places didn’t amalgamate. So you have these little tiny downtowns where nobody lives, but everybody works, and they have absolutely no revenue. Then you have these suburban towns that are quite well off. You get this real problem with municipal finance.

The other thing that happens is sometimes those families move out of commuting distance. Or let’s say you’ve got a nurse who moves from Hamilton to Brantford. For a while, he or she might make that commute back into Hamilton until they realize, well, “Hey, Brantford needs nurses too.” So what happens is you lose all of these great middle-class workers in your large towns because they end up leaving and they end up getting local jobs.

You have schools that have trouble finding EAs, hospitals that have trouble finding nurses, personal support workers, and so on.

So your city ends up losing its middle class in both a family sense but also an employment sense. You end up getting these very large skill gaps because you can’t find people who can afford to live there.

Cara Stern: I’m guessing that the return to office movement has made that worse because people are now having to commute back in, although we don’t need to get into that because we have a whole episode about that.

Knowing that this is a problem, that we’re not having enough three to four-bedroom homes, how do we actually go about solving it?

Mike Moffatt: Well, the number one thing we have to do is get out of this “a unit is a unit is a unit” mindset that plagues governments. The federal government might say, “We need 500,000 homes a year,” but they never specify what those are or how many of each kind. They just have a number.

Ontario, in some sense, is even worse because they have their 1.5 million over 10 years, and they have this tracker, and then they started counting student residences and long-term-care beds and baby turtles as homes. They throw everything — anything with a roof becomes a home. It’s absolutely ridiculous, but we need to understand that not all homes are the same. We need a diversity of homes, and our planning system has to allow for that. So that’s the number one thing.

Then, once you do that, you need to create the conditions for those homes to be built. So once we’ve decided that we need more family-sized homes, we’ve got to figure out how to build them. There are really two ways to do that - we can build them out, or we can expand urban growth boundaries.

We could have some very uncomfortable conversations about the Greenbelt and so on, or we can build our cities up. We can make the regulatory changes necessary to build larger homes within the city.

There are a lot of building code issues, like single staircase, which we’ve talked about before. There are issues around elevators in small apartments. Everything from setbacks, angular planes, to your name it. The City of Toronto, for instance, puts a limit on how many bedrooms can be in a multiplex unit.

Cara Stern: That’s so weird.

Mike Moffatt: It’s weird, yeah.

A lot of times, they’re regulated like, “No, these things have to be a certain size, and you can’t have too many people in it.” We’ve got to create the changes to zoning rules and development charges and building code, and a lot of things like that. There’s no one single fix here, but we have to change the project economics to make these projects viable.

At the end of the day, builders and developers are going to build what’s easiest and most profitable. If building family-sized units is prohibitively expensive and a pain in the butt, they’re not going to do it. Governments are never going to build enough social housing to make up for that. They’re trying, but they’ve never gotten anywhere near the numbers we need.

Ultimately, we have to change the taxes and change the regulations to change the market conditions and make these units “pencil”, in the term that developers use.

Cara Stern: I’m never going to get over that maximum bedroom rule that the city put in because, although I understand what they were doing with it — they didn’t want to have legal rooming houses everywhere — they don’t want it to be too loud, but I’m like, just enforce the existing bylaws! Stop forcing people to build smaller homes when that’s not what we need. It’s very frustrating.

Mike Moffatt: Yeah, it truly is. Those 25 students end up being in a smaller home anyway. You don’t get rid of the concentration of people. You’re just asking them to live in an ultra-concentrated area, which, again, both international and national law says is a violation of human rights. But it seems to be one that politicians and planners seem OK with.

Cara Stern: Thanks so much for watching and listening. And thanks, as always, to our producer, Meredith Martin.

Mike Moffatt: And if you have any thoughts or questions about being a nurse in Brantford, Ontario, please send us an email to [email protected].

Cara Stern: And we’ll see you next time!