Missing Middle & Ron Butler at the National Club
A live conversation on why young families are leaving Toronto, the policies driving the housing crisis, and what the city’s future could look like if affordability keeps getting worse.
Toronto’s housing crisis is pushing young families out of the city and reshaping what life in the GTA looks like. In this live event episode of The Missing Middle Podcast, Sabrina Maddeaux, Mike Moffatt, Cara Stern, and Ron Butler discuss why family-sized homes have become so hard to find, how policy failures and red tape are slowing new housing, and why many young Canadians are increasingly leaving Toronto, or Canada entirely, in search of affordability.
The panel also debates the future of condos, rentals, non-market housing, and the political decisions shaping Toronto’s future, warning that without meaningful reform, the city risks becoming unaffordable for the very people it needs most.
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Sabrina Maddeaux: Well, good evening, everyone, and thank you so much for joining us for the first-ever live taping of the Missing Middle podcast.
We’re so excited to have you here tonight at the National Club. I’m Sabrina Maddeaux, your moderator for the evening. And if you don’t know about The Missing Middle, we talk about the economic pressure shaping life for the middle class and especially young Canadians: housing affordability, fiscal policy, what governments are getting right, and more often, what governments are getting wrong, and we never pull any punches.
Toronto is in an election year, which means the people in this room have a rare chance to shape the future of the city. And the stakes are real. If housing stays unaffordable, if the middle class keeps getting pushed out, we’re not just talking about a tough market. We’re talking about a fundamentally different future for the city and the people who call it home.
And so that’s what we’re here to talk about and figure out tonight. And we’ll be opening up to all of you at the end, so start thinking about your questions. But first I’ll introduce our panel. We have Mike Moffatt next to me, the founding director of The Missing Middle, my podcast co-host, and one of Canada’s leading housing economists.
Cara Stern is also a Missing Middle co-host and has been one of the sharpest voices on what housing policy is doing to families, young families in particular. And Ron Butler, we cannot forget him. You’ll know him very well by the end of the night. He’s a 30-year veteran of the mortgage industry and the host of the Angry Mortgage channel on YouTube. Someone who tells Canadians the very blunt truth about what this market actually looks like from the inside.
And with that, let’s dive right in.
Cara, I’m going to start with you. You’re a young parent in the city, so you have a front-row seat to something that a lot of policymakers or even older Torontonians seem to be missing. There’s this assumption that families will just move to the suburbs or go as far as they need to to find affordability, and that’s fine. They leave; everyone’s happy, no problem. But is it actually fine? And why does it matter if Toronto has kids or young families in it? What do we lose if they all leave?
Cara Stern: Well, I think we lose a lot of the vibrancy of the city if families can’t afford to live anywhere near here; it’ll be a lot of retirees, a lot of professionals, and no families there. It’d be very sad.
But I also think about who the parents are. What age range are they? They are at the prime of their career. We need people in that age range able to work in the city and at least in commuting distance from the city, if not in the city itself. And it’s a really tough thing if you lose families, which we are losing a lot of. You obviously have grandparents who don’t see their grandkids, so that’s pretty sad.
It’s really hard to reverse that trend because people leave the city, and schools close. We’re seeing that happening now. There are fewer kids entering kindergarten this year. So there are fewer classes, and schools will eventually shut down in areas where there aren’t families. You can’t really get that infrastructure back and have it reopen at any point because it becomes much more difficult.
Sabrina Maddeaux: Mike, could you put some perspective on how far gone exactly is Toronto when it comes to losing young families and especially young parents?
Mike Moffatt: Well, I have one of my colleagues at the Globe here, so I don’t want to say too much because I’ve got a piece coming out in about a week on this. But families are leaving the GTA, and not just the city of Toronto. The GTA is large, the latest numbers that we have are about 90,000 more people are leaving the GTA for other parts of Canada than are coming back.
And it’s disproportionately two groups. Some folks sell their place in Cabbagetown and move to Kawartha Lakes or what have you. That does exist, but it is largely people between the ages of 25 and 44 and kids under the age of five.
Now, this is no longer technically true, but it was a few years ago that the most common age to leave the city of Toronto was zero. It’s kids under age one, and you can understand why. They live in an apartment; they live in a condo, a small unit, and a baby comes along, and they’re like, “This isn’t going to work.” And they drive until they qualify, until they can find a place they can afford. At some level, that’s always happened. But it used to be that they would drive to Etobicoke or whatever. And now they’re driving to Tillsonburg and Woodstock and Belleville and so on.
Cara Stern: They’re flying till they qualify.
Mike Moffatt: Yes, exactly. So it is a real problem for exactly the reasons discussed. And it’s hard to come back. Once a neighbourhood loses that school, it’s even harder to attract those families.
Sabrina Maddeaux: Now, Ron, are you seeing this day-to-day on the ground in your work?
Ron Butler: Oh, we see it every single day.
We did a little informal survey of our mortgage clientele for purchases, mainly first-time homebuyers and pre-approvals. The average family income was $215,000 a year, which is surprisingly a lot of money. But there was effectively nothing under $200. And by the way, you want to know the bad news? The average family income in Ontario is $124, so that’s really bad news if you are in that category and you ever want to own a home or you haven’t done so already. We already know that the average age of first-time homebuyers has gone to 40.
Now, 40 is wildly crazy because if you drop back into the 1980s, it was 27 years old. That is an unbelievably big change. And apropos of families, the fertility rate in Canada has just broken through another level; it’s gone down to 1.2. So that means you’re so far away from the replacement rate it’s not even worth talking about.
We’ve started to do a little work on figuring out a place where there is an exception to this family formation problem. One of the strange outcomes was that Bruce Power saves the world. It’s so wild because the incomes are so high for the Bruce Nuclear Reactor program, which is growing in Ontario. And the prices of the homes have only just gotten up to an average of half a million dollars. Prior to that, if we go back to pre-COVID, they were much less, in the $200,000 range. Because the incomes are so high and the price of homes was very reasonable for a long time, there’s actually family formation within the radiation zone of the nuclear reactor.
Which might be another story for another day. But this is a fascinating thing. If you go back to the late 70s and 80s, family formation was very normal. People got married in their early 20s, had kids, and that was when you could go directly from high school to a factory job that paid you a living wage - an adequate wage.
So one of the things that we have to think about more, other than affordable housing, is that we’ve got to start thinking about how people’s incomes are nowhere near where they need to be to be able to form a family and buy a home and pursue the same thing that I’m guessing most of the people in the room have been able to achieve.
Sabrina Maddeaux: Now I want to jump off of that because, Mike, one of the problems and complaints is that there aren’t suitable homes for families these days. Everything is either too large and unaffordable or too small to have the quality of life most people are expecting or wanting when they have kids. So why is everything either a McMansion or a shoebox right now?
Mike Moffatt: It’s just the economics of how we do taxes and land in this province. We haven’t really allowed other forms of home - missing middle - because of zoning and building code issues. We haven’t allowed for the use of new development land because of urban growth boundaries and Greenbelt-type issues.
So if you’re not allowing a lot of land, that land is going to be very expensive, and nobody’s going to build an $80,000 structure on a million-dollar piece of land. Even if you did that, that home would still cost about $1.1 million. So that only leaves you with high-rise, and high-rise has many uses, but the expense and challenge of building high-rise and building code issues make it very hard to economically build larger units. So it’s this combination of land use policy, taxes and so on - particularly in the GTA and southern Ontario - that has created this dichotomy where you’ve got very small homes and very large homes and not a lot in between.
Sabrina Maddeaux: So, Ron, being on the ground every day, where do you see the future going? You have that ground-level view that the rest of us don’t always have. Five years from now, in the GTA, condos, purpose-built rentals, single-family what’s your honest read on what happens with each?
Ron Butler: Prediction is a crappy business. It’s really bad. But here’s something I feel a lot of conviction about. The dog crate condos will be doomed for a long time.
I’ll give you a great quote. A group from Montreal come to Toronto to buy wholesale numbers of condos. It’s called the Gesta Group. They’ve got half a billion dollars to buy unused, unsold dog crate condos in Toronto.
A great quote from the person managing this effort said, “The only thing we won’t buy is condos that are laid out like a bowling alley with a glass wall for the bedroom.” And the great quote he said was, “These things are unlivable.” Think about that for a minute. They’re unlivable. They are so bad they’re unlivable, both for the owner occupant and for the renter. He’s talking about something so awful, finishes so bad, a concept so horrendous that even renters won’t live in them.
If you think about that, there’s so much of this awful product; what are the chances of those prices recalibrating upwards again? Because right now they are 50% off retail in most cases. Will they recalibrate upwards? Developers are already asking for a massive change from the banks to go from 70% sold down to 40% sold. I know of no bank that will agree with this. This is not going to happen. So the chances of bringing back to life new dog-crate-condos built in the GTA are slim to none.
So that’s the only thing I can say for sure, Sabrina, is that I think the situation with tiny condos will be just as bad 3-5 years from now as it is today.
Sabrina Maddeaux: Cara, I want to dive into the policy side of this because what we hear from policymakers is always one thing: they love families, they love affordable housing. But then it’s the dog-crates that get approved and the three-bedroom family homes that get the “no.” What would you like to see from Toronto candidates and policymakers to make it genuinely easier for young people, families, and children to stay in Toronto?
Cara Stern: I think we’ve started seeing some changes. We’ve seen some zoning changes happen, which is really important. All the city can do four-plexes. We have six-plexes in old Toronto, some in East York, and one place in Scarborough. That’s great, except that’s only on paper. But can you actually build them? Can you actually do it in a way where it financially makes sense, so that you can actually fit that on the lot when there are all these other building code rules?
We need to see some changes that make it actually feasible to build these homes, not just the bare minimum of making them legal.
I’m still thrilled because when I started covering this, I could not have imagined six-plexes being allowed anywhere in Toronto as-of-right. I think that there has been progress, but we need to make it easier. You look at Edmonton where they allowed eight-plexes, and most of the ones being built are family-sized because that’s how many you need to make the project make sense financially, and so they’re not seeing a lot of smaller units. We need to see more changes in Toronto to make it actually easy to build these things, not just on paper.
Sabrina Maddeaux: Now, Mike, you’ve written a lot about what you call Potemkin reforms—changes that look meaningful on paper but don’t move the needle in real life. In a Toronto election year, what’s the one thing you wish every candidate understood about why our housing crisis keeps not getting solved?
Mike Moffatt: I think we need as-of-right to actually be as-of-right. Have a list of criteria, and once you do that, then you’re gold. We see this in places like Edmonton where for subdivision permits and several other permits, it’s actually assessed by AI, and something that, if you’re lucky, takes six weeks in the City of Toronto takes six minutes in Edmonton.
There are solutions out there. I think it’s looking at that and looking at one that I’ll have to work with the province a little bit. One of the objections to multiplexes is that in Ontario they’re almost all going to be rentals because to parse them out and sell them as individual units, you get into condo regulations and the economies of scale don’t work. It’s the same amount of paperwork to do a 300-unit condo as an eight-unit condo.
But this is a solvable problem. In British Columbia and other jurisdictions, - in the United States - has several policies to make it easier to subdivide units. There are different methods depending on the type of home, but there’s really not that much difference from doing a semi-detached duplex. So I think it’s looking at that, but it really does come down to as-of-right should mean as-of-right.
Cara Stern: Those delays are huge. Think about how much it adds to the cost of the home for every month that it’s delayed. A lot of these projects take a long time to get approved, even for fairly simple things. So we really need to see some of that red tape go away.
Sabrina Maddeaux: Ron, Mike mentioned land costs. Do you think governments are willing to make those tough decisions necessary to either make it easier to build infill or to make more development land available? Or did the Greenbelt scandal make this a third rail that no one’s going to touch again?
Ron Butler: Well, we live in a province where the premier could do the most preposterous, outrageous, and semi-corrupt things, and all he has to do is apologize two days later and take it back. That is a different kind of political environment than I’ve been used to in my life.
But a couple of points here: The land prices are astronomical until we completely set aside this whole Greenbelt insanity. It’s really a brown belt or a bush belt or a rock belt - the idea that it’s all farming land is preposterous. Every single organization goes to the barricades every time you talk about the Greenbelt.
When you go back in the lineage of the organizations, it’s just a bunch of NIMBYs who live there and don’t want anything to change in all of those Greenbelt areas, and it’s ridiculous. There’s no sense to it. There’s no reason for it other than an idea that a couple of people in the Harris government dreamt up all those decades ago, and it’s no longer appropriate.
And by the way, if you ever hear anybody refer to the Greenbelt as a critical watershed, you need to point at Lake Ontario. There is never going to be any shortage of fresh water in this region. There’s been so much mythology built around the Greenbelt that’s completely false; it’s so hard to tear it down.
Cara made a great point about the insanity of building multiplexes in the city of Toronto. A friend of mine tried to do it just a few streets off the Danforth. He started three projects, and in the end he said we just gave up.
There was a requirement to increase the water coming into the building, so we had to put in a pipe for the water coming into the six-plex, and that required us to have the provincial arborist come and see how close the pipeline was going to be to a tree. And that took seven weeks. We couldn’t do anything for seven weeks. I’m not even going to talk about the guy who ran three different shade complaints. You can do that. You can just keep going with the shade complaints forever. Or the person on the other side of the project who wanted a significant bribe to allow materials to come in too close to his property.
I’m not making any of this stuff up. This is the way it works. Under those circumstances, how are you going to build this stuff?
Sabrina Maddeaux: Mike, you’re a guy involved in climate initiatives. You care about the climate. Is Ron right or is he just an evil, pro-development…
Mike Moffatt: Well, those things don’t have to be mutually exclusive.
But no, I do think we need to look at these. In particular, the Greenbelt is one issue. But on the urban growth boundary thing, it’s increasingly clear that they actually cause more sprawl than they prevent because what happens is you get the leapfrogging effect.
You see this a lot in my hometown of London, Ontario, where you get a council that puts in a really tight urban growth boundary, and then people just move out to Lucan or Komoka. They move out 10 to 15 minutes north or west of the city, and then they drive back to their jobs at the university or the hospital. So you haven’t stopped sprawl; you’ve just moved it 15 minutes north and west.
And, by the way, when you do that, all of those families pay all their property taxes to Komoka and Lucan. They don’t pay them to London. So now you’ve got all these people who are commuting using London’s infrastructure, but they’re not paying a dime of local municipal taxes. So, I do think we need to look at these things.
And the problem with a lot of these policies - and I say this as somebody at the Institute of the Environment who’s done a lot of environmental work - is whether they actually have the intended outcome? We never ask, “Okay, is this actually making it worse than doing nothing?” And I think in a lot of cases, we would have had less sprawl if we literally had done nothing than by having these tight urban growth boundaries.
Cara Stern: I think people need to realize that good housing policy is good climate policy. They can be done together, and that would really make a huge difference.
Sabrina Maddeaux: Cara, I’m curious because we’ve talked a lot about ownership, but a lot of people are coming to terms with the idea that they might never own. They might be forever renters. Is renting for life a realistic and dignified path in Toronto, or does that only work if we fundamentally change how this city treats rentals and renters?
Cara Stern: I think it’s definitely a dignified path. Some people do want to rent, and if they want to, I think that is a totally great choice. I don’t think that we need to be a place where people have to own, but we do have a lot of financial incentives to own a home. You don’t pay capital gains tax on that increase, and there’s no equivalent for renters at all. When you look at the rental market, there are very few family-sized rental units out there; it’s almost impossible to find one in Toronto.
And so we are ending up with smaller families. I think that will continue to be the case because you can’t make it work in these tiny condos.
I don’t want people to have to rent because that’s their only option. I’m not one of these people who think, “Oh, you know what, if corporations buy homes.” Those are often decent people to rent from because they know the rental laws, unlike a lot of landlords out there, but at the same time, it can’t be that people are forced into this. It has to be that the choice is theirs.
Sabrina Maddeaux: So if a young person is in a position where they could put down a down payment and afford a home in Toronto, right now, Ron, can you give us the honest answer? Would you recommend it?
Ron Butler: Would I recommend buying a house in Toronto?
Sabrina Maddeaux: Right now. If you’re a young person and you have a down payment, you can technically afford the mortgage payments. Is it a good idea?
Ron Butler: If you can wait six months, you’ll have lower prices in almost every region. The thing that we misunderstand about housing is that it’s not like the stock market. There’s no such thing as a whole market that moves with momentum. There are some dog companies that get pulled up by the success of other companies in the stock market. That’s not true in real estate.
If you have a sought-after neighbourhood, a great street, and a great home, you will get a great price out of it. And we hear the story, “Oh, the market’s turned and everything’s getting a lot better; you better jump in and buy right now, or you’re doomed.” I can show you a lot of homes in Scarborough that have been sitting there for seven months. Not every single place is that unique, sought-after property. Those sell; others don’t. And if it’s the wrong price, it doesn’t sell at all.
So will the price come down a bit more in the city of Toronto? I think yes, if we talk about the whole city and not just those ultra-specific neighbourhoods close to the core. I think yes, prices will come down. And here’s one thing for sure: if you wait six months and save $50,000, you’d like to have that $50,000, right?
Sabrina Maddeaux: I’d take it.
So, Mike, Mayor Olivia Chow has made non-market housing a signature of her time as mayor, and anyone running against her in this election is going to have to take a position on that. Is she right to say that non-market has to be a bigger part of the answer, or is that approach getting in the way of solving the affordability crisis?
Mike Moffatt: No, I definitely think we need more non-market housing. We can debate where the money comes from, which order of government, and so on. I think where it becomes problematic is when it’s tied to a market building or proposal where you go, “Okay, if you want to build this missing middle or mid-rise apartment building, x percent has to be deeply affordable.” Then the math breaks.
Ultimately, if we are building deeply affordable housing, we should pay for it as a society. We shouldn’t just be giving the bill to a bunch of new young renters and owners. I don’t think it makes sense to have people who are already getting screwed by the market and two decades’ worth of bad policy say, “Okay, now you’ve got to pay for this subsidy for other groups.”
Cara Stern: Is that when they’re paying for it through development charges, through inclusionary zoning? Those are the things where we’re able to put the cost onto other buyers.
Mike Moffatt: Don’t put it on development charges.
Ron Butler: You know, I think there’s a huge need for social housing. Homelessness is the greatest curse of our society as we sit in these large cities today. But it’s important that the mayor and all the council realize that their long-term social housing is making them famous as slumlords. They have neglected to maintain these properties for years.
So there’s a lesson there that if you’re going to build these things and take federal incentives to build social housing, you better have a realistic commitment to how you’re going to look after it for multiple decades and not end up being even more famous as the biggest slumlord in Toronto, as is the City of Toronto.
Sabrina Maddeaux: I’m going to do a couple of rapid-fire rounds before we go to audience questions. Let’s start with Ron. If you could tell the next mayor of Toronto, whoever that might be, one thing about housing, what would it be?
Ron Butler: First, wear fewer costumes. After that, understand that development fees only do harm. They give the government a completely wrong idea of where and how money should be spent. Because ultimately, if there was no taxation on the new construction of housing, a lot of people say, “Oh, no, if you do that, the developers will just run wild and take all the money and profits and be terrible.” But there’s a reason why the prices got so high on these condos- why they went from $375 a foot to $500 to $700 to $1,400 a foot. It’s a combination of land costs, which are speculation unto themselves, and huge taxes and development charges.
So say to yourself, “Why is there tax on new construction?” Then, if you decide there shouldn’t be, there will be a lot more useful new construction.
Sabrina Maddeaux: Cara, same to you. What do you tell the next mayor?
Cara Stern: I would tell the next mayor to really focus on housing. I was really disappointed when the six-plex debate came up that Olivia Chow did not use her strong mayor powers and didn’t advocate for six-plexes all over the city. She recused herself from the discussion, and I thought that was such an abdication of responsibility.
As the Mayor, you have a responsibility to make sure that these things get passed. Those strong mayor powers were put in place so that people could actually get housing passed when the council isn’t agreeing to it. I see the way they cut it back to only being part of the city as such a failure. I would like the next mayor to actually use the powers available to them to make housing available in the city.
Sabrina Maddeaux: Mike?
Mike Moffatt: I’ll tie it back to an earlier question. Lose the market versus non-market mindset. There are no non-market electricians, no non-market sewers, no non-market building code, no non-market zoning. If you fix the issues with housing, you’re going to help both the market and non-market sides at the same time.
And I think we get into this market versus non-market, deeply affordable versus market, whereas 90% of the policy solutions help both at the same time. So focus on that 90% and don’t create artificial conflict that you don’t need to create.
Sabrina Maddeaux: Last rapid-fire round. I know Ron hates predictions, but too bad, it’s my show.
I want all of you to tell me one prediction that you think will happen. It can be a policy or something in the political landscape to do with housing the middle class in the Toronto area over the next five years. What do you think we’ll see? Cara, let’s start with you.
Cara Stern: I think we’re going to see a problem as housing is not being built right now. We’re seeing condos not getting built.
I think in a couple of years we’re going to see housing prices go up because the things that would come on the market aren’t going to come on the market. I’m very concerned about that. I don’t see any other way around it when building was frozen for a little while.
With the elections coming up, I hope people are going to talk about housing, but I’m pretty concerned. My prediction is that we’re going to spend more time talking about the jets on the island than we will about housing in the city.
Why are we spending so much time on this compared to affordable housing and housing for middle-class families? That is a huge crisis in the city.
Sabrina Maddeaux: Mike?
Mike Moffatt: I think we’re going to have more young people and young kids leave Toronto. Furthermore, I think we’re going to have more people leaving Ontario and more people leaving Canada.
We’re already seeing record numbers of young Canadians move to the US. I think if their political situation ever stabilizes, we’re going to see a far larger out-migration. I hope I’m wrong about that. I hope our policymakers at all three orders of government can do something about it. But I’m really worried about the exodus of youth and talent, particularly from the GTA.
Sabrina Maddeaux: I’m going to add in my own quick prediction before we get to Ron.
I think the economic consequences of allowing affordability to go unsolved and not being urgently addressed are just going to compound. It was a young people’s problem. It was a renters’ or first-time buyers’ problem. Now it’s a second-time buyers’ problem. Now it’s a problem for seniors and retirees who want to downsize. The longer we let this go unsolved, the more damage it’s going to do to every demographic and to the Toronto, Ontario and Canadian economy, ultimately.
Cara Stern: That’s the thing with the second-time buyers’ problem. I hadn’t heard that the first-time home buyer is now 40 years old. And I didn’t think about how everyone always said to me growing up, “You want to buy your starter home, and you work your way up.” At that point, you’re probably in need of the biggest home you’ll ever need in your life. That’s when you’re probably having kids. So it becomes even worse when you need to be able to buy something that should be considered something you work up to.
Ron Butler: Yeah, that’s a serious number. It’s national, which is even worse.
Cara Stern: It’s got to be worse in Toronto.
Ron Butler: Oh, I’m sure it is.
The nice part about being really old and really fat is that I can make a five-year prediction and I’m probably not going to be around to be proven wrong. My cardiologist would agree with that.
Here’s a political prediction because I have a lot of fun with it. I think that we will have a new Prime Minister at the end of five years and a new Premier. I think the Premier will just wear out his welcome. But I think the Prime Minister might just think five years is enough and go on and become the General Secretary of the United Nations.
Sabrina Maddeaux: And that’s why we close with Ron.
Editor’s note: The panel discussion was followed by a lively Q&A, during which participants explored topics including a Land Value Tax and the tension between housing as an investment vehicle and housing as a place to live. To watch the full exchange, check out the video on YouTube.
Additional Reading/Listening that Helped Inform the Episode:
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