The Great Boomer Housing Myth: Why the "Glut" Isn't Coming
Why the answer to affordability probably isn't demographic destiny.
One of the most persistent arguments in Canada’s housing debate goes something like this: baby boomers own millions of family homes, they’re getting older, and eventually those homes will hit the market in large numbers. Why build more housing today if a demographic wave is about to solve the problem for us?
It’s an appealing theory. After all, Canada’s population is aging, deaths are expected to outnumber births within a few years, and millions of bedrooms sit underused in suburban neighbourhoods across the country.
But is a housing glut actually on the way?
In this episode, Cara Stern and Mike Moffatt unpack the assumptions behind the “just wait for the boomers” argument. They explore why similar predictions have failed before, how immigration changes the equation, why Canada isn’t building enough family-sized homes, and whether changing lifestyle preferences will really reduce demand for suburban housing. They also consider the scenarios where the theory could prove right, and what it would take for that to happen.
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Cara Stern: There’s a question I’ve gotten often from people who know that I advocate for building more homes, and it goes something like this. Boomers own a massive share of Canada’s single family homes. Boomers are aging. When they die, all those homes are going to flood the market, and our housing crisis will be solved through sheer demographics. And if we’re not careful, we could end up in a situation where we’ve built too many homes.
So don’t stress. Wait it out. The glut is coming. And it’s a nice idea for people who are doing well with the status quo. But the question we have today is, is it true? Will demographic change save us? So let’s start with what that theory gets right.
Mike Moffatt: Well, I don’t think they’re right. But the folks that think that there will be a glut of suburban family sized homes, they do actually get quite a bit right. Though, since the 1990s, they’ve been overestimating how quickly these things will happen. But here’s what I think they’re right about now. They’re absolutely right that the baby boomers won’t live forever because none of us will.
And they’re right that the Baby Boomers also owned a lot of suburban homes, like millions of them, in fact, across Canada, with roughly about 12 million empty bedrooms. They’re also right that the number of Canadians dying each year is set to rise. So back in the early 1990s, the era of Nirvana and Pearl Jam and Soundgarden, about 200,000 people died in Canada each year.
And that went up over time. And just before the pandemic, we hit about 300,000 people a year. And Statistics Canada projects that by about 2036 or so, we’re going to hit 400,000. And by the late 2050s, we’ll hit about 500,000 a year and then level off at that point. And they’re also right that births aren’t increasing that much, if at all.
And in fact, the same StatsCan predictions say that by 2029, for the first time in Canadian history, there’s going to be more deaths than births, and that’s likely going to continue for the foreseeable future. So, yes, a lot of homes would be freed up, and if that was the end of the story, it would be a safe bet that we would have a glut of suburban homes and prices would, in fact, crater.
But their story misses a lot.
Cara Stern: It makes me think back to when we looked back at the book Boom, Bust & Echo, and we were reading their predictions on housing, and they were basing it on demographics, too. So they were looking at the Baby Boomers, what their ages are, and what’s going to happen to the housing market.
They said it was going to collapse, that homes would no longer be something you can count on for an investment. It was now going to be somewhere to live in, and you’re not going to make money off of it. And that turned out to be very wrong. A lot of the books they got very right, but the housing part of it, it was missing something, which I suspect is some of the parts that we are missing now.
Mike Moffatt: Yeah, absolutely. So let’s start looking at what doesn’t work on this theory. So the first thing that doesn’t work is that they forgot about this thing called immigration. It is ultimately not births versus deaths that matter, but it’s population growth, particularly the growth of people in their 20s and 30s who start to buy and rent homes.
The population of those folks right now in Canada is absolutely massive because of high levels of immigration and non-permanent resident growth we’ve seen over the last decade, and they need housing. And Canada’s population is still set to grow by about 300,000 people a year or more starting in 2028. So although yes, births are going to be lower than deaths, our population is still going to grow by hundreds of thousands of people each year because of immigration.
Canada is not a closed nation.
Cara Stern: That’s what it’s been in the past for a very long time and it was supercharged in the earlier parts of this decade. But the thing I think about is how much of the countries that we bring people in from, they’re also dealing with below replacement rate fertility rates. So yes, we will see lots of population growth still for a while, I think.
But I don’t know. I’m starting to think that in the long run, it might not be easy to count on that people are going to be rushing to come here.
Mike Moffatt: Yeah. But as economists like to say, in the long run, we’re all dead. So by 2100 or so that may be true, but I don’t see that really being much of an effect over the next decade or two. We have got to keep in mind that Canada could probably bring in tens of millions of people each year if it wanted to.
There’s that level of demand out there. The constraints that we have on immigration are our targets, our requirements, things like the level of education you have and so on, and just basically our desire to bring in folks. So, one example, you mentioned different countries. There are still 26 million births a year in India.
That’s not at an all-time high, but it’s pretty close to it. And they’re not going to be in their 20s and 30s until 20 or 30 years from now. There might not be the kind of supply of people wanting to immigrate here at some point, but that point is probably 2070, 2080, 2100.
It’s not going to be the kind of thing that’s going to be an issue, say, 5 to 15 years from now.
Cara Stern: I’m thinking it could happen sooner because we know that we need population growth to sustain our economy. And pretty much all developed countries are dealing with a problem of too few babies being born in their country. And so the solution for most of them is bringing people in from other parts of the world to supplement the population that isn’t being born there.
And so when we have so many problems, like a housing crisis, good luck convincing people to move here when the whole developed world is fighting for them. Like right now you have a lot of people wanting to come here. The political winds have shifted, and there’s a lot of people here who don’t want to see so much immigration right now until housing catches up, until our healthcare capacity catches up.
And that can change. I mean, in 20 years from now, who knows what the sentiment will be. I think it depends a lot on whether we build enough homes for people, but when we have to fight for immigrants to come here—and I think we will one day—I don’t know that it’s a given that they’re going to choose Canada.
Mike Moffatt: Well, I think there may be issues around competing for talent, competing for certain skills and so on. But, keep in mind we take about 1% of the people who want to move here. So yeah, I think if it becomes more competitive, we might only take 3%. We might only have a pool of 10 million people or 8 million people or 6 million people to choose from.
And I also don’t think it’s a given that other countries are going to be fighting for newcomers. The United States sure isn’t.
Cara Stern: Not right now.
Mike Moffatt: That’s for sure. I mean, if we went to President Trump and said, “Hey, we will take 12 million undocumented folks living in America and we’ll bring them up here,” we might be able to get a trade deal signed with the U.S.
I have problems with this theory on both sides of it, that I don’t think that supply of potential newcomers is going to shrink, or at least quickly. But I also don’t see that huge demand from other countries. I think the limitations are just whatever we put on them. I don’t ever foresee a scenario, at least in the next 30 to 50 years where we set an immigration target and we’re actually unable to meet it.
Cara Stern: Let’s assume that’s right and that immigration is going to continue at whatever rate we want it to be. And I expect it’s going to be fairly high still because of our whole economic structure relying on population growth. So if that’s the case, let’s go to the next thing that the theory misses in your mind.
Mike Moffatt: The second thing I think it misses is that the supply of these new homes is low. We are building fewer family sized homes than ever before. Yeah, housing starts are roughly around the average we’ve seen over the past decades. But there’s been this shift from building family-size homes to high-rise units, both condos and purpose-built rentals.
And that’s not to suggest we don’t need condos and purpose-built rentals. We do need them. But there’s been this one-to-one trade-off. And it would be one thing if we were building fewer family size homes because of the lack of demand—if it was just like, nobody wants these things and we’re not going to build them.
But that’s not what’s going on. It’s rather that they have become prohibitively expensive to build due to land regulations, building codes, taxes, and things like that. So we’re not only seeing a big glut of population, but we’re also building fewer family-sized homes just because they’ve gotten prohibitively expensive to create.
Cara Stern: It’s not about the lack of demand. It’s just that, yeah, everything costs too much to build. So family-size homes are just too expensive and so people can’t buy them. And I guess that’s why you end up with all of these condos going up, because there is a market for that. I know right now it seems like there’s not at the moment, but at the same time, at the right price, there’s absolutely a market for those homes. But we do need more family-size homes.
Mike Moffatt: Yeah, absolutely. So yeah, we have in some markets, Lower Mainland B.C., southern Ontario, we have seen prices go down. But still, for a family-sized home, we’re looking at home values that are 6 to 8 times median family income; in the GTA they are closer to 12 to 15x. So it is not the case like 20 or 25 years ago when I bought my first home, when you could get it for two, maybe two and a half times income. So yes, prices have fallen. Yes, we have affordability, but we have a long way to go before the middle class can afford these homes.
And then finally, I think there’s one other thing that people who make this prediction, and planners and others, get wrong is that they assume that suburban homes are going to be passé, that basically nobody’s going to want them in the future, not for demographic reasons, but just that they’re going to go out of style.
There’s a lot of tropes out there that millennials are too lazy to mow the lawn and they don’t know how to drive a car, so all they want to do is live somewhere that they can take a subway or Uber, and they only want housing types where someone else does the maintenance. And I exaggerate, but only a little.
Like it’s absolutely true that there is a cohort of people who want to live in a walkable neighbourhood close to downtown. I’m one of them. But the challenge is there’s not enough of those to go around. It’s why those homes go for $2 to $4 million. And I don’t see that changing. That simply there’s not going to be that level of affordability and those many units to allow people to basically not live in the suburbs.
Cara Stern: I wonder, though, like you say that is something that planners get wrong. Which planners are you talking about? Are these city planners? Are they private urban planners? Who’s actually saying that about millennials?
Mike Moffatt: I think a lot of it is municipal planning. If you go through municipal plans, there’s a lot of underlying assumptions. And to be fair, to make a plan, you have to make assumptions. It doesn’t matter if you’re a municipal planner or an economist. You’re building a model, you’re building a plan, there’s going to be underlying assumptions.
And many of those assumptions, I think we’re finding out not to be true. One of those assumptions has been that seniors are going to downsize in great numbers and free up these single family homes. Hasn’t happened. And I think one of the other ones is that the demand to live in high-rise apartments closer to transit is going to be so high that there’s just not going to be that interest in suburban homes.
And we’re not seeing that so far. Now, that may be true someday, but it hasn’t happened yet.
Cara Stern: It seems to be a bit of a mismatch, because I think that there is demand for that kind of living, maybe like in your 20s especially, before you’re raising a family. But the prices are so high that most people cannot afford a condo in a good, transit-oriented, walkable community at that time in their life when they actually might be most likely to consider it.
Mike Moffatt: Yeah, that is true, that we haven’t built enough of them, and I don’t see us building enough of them anytime soon. But I think a lot of this also ignores immigration, that I say that like 90% of all bad planning and housing discourse has the unstated assumption that the only people who need homes are like seventh-generation Canadians with Scottish last names, who are all urbanists.
But when you look at much of housing demand, it’s driven by immigration. And newcomers, like the rest of us, have diverse preferences. They don’t all want the same thing, but a whole lot of them really don’t want to be living in a high-rise apartment. Many of them came from countries where that was the only option, and they’re coming to North America, in part for that North American dream lifestyle of having a ground-oriented home, a little bit of a lawn and so on.
That’s the attraction for many newcomers, and that’s the kind of property that they’re going to want.
Cara Stern: Yeah, I think a lot of people want that. I just keep wondering, like it all comes down to this constrained optimization. There’s so many factors at play here. If you’re going to be working in a city and congestion is brutal because population growth is high and there’s not good transit, people might make the choice to live in one of these more walkable areas, even if it’s smaller — like maybe it’s a unit in a multiplex.
I keep thinking, I don’t know that we have the data to know what people are going to choose, because right now you’re not really giving them the choices that we are advocating for and missing middle homes. It’s often you’re choosing between an apartment and condo or moving to the suburbs because we don’t have the option otherwise.
Mike Moffatt: Absolutely. I think the point here is that we’re not going to be building enough of those because you would have to basically flood the market with them and have them become so popular that these suburban homes become passé. So there’s a layer of assumption on top of assumption on top of assumption that would lead you to the place to say, “Nobody’s going to want these suburban homes.” And I just don’t see that as particularly likely.
We at the Missing Middle absolutely want to get more gentle density. We want to get more missing middle homes. But I’m also realistic about the level of success we’re going to have. I would love it if you and I and the team absolutely nailed it and like everybody did exactly what we said, but I’m just not that optimistic.
Our view is that families should have choice. We want to be able to create as much choice as possible. And I just don’t see us ever getting to a point where we’ve created so much choice that people are going to go, “yeah, I don’t want to buy that four-bedroom home in Mississauga.”
It just strikes me as incredibly unlikely.
Cara Stern: I think it’s unlikely, although I do think it depends on cost, because we know that suburbs are so much more expensive to run because you have a high level of services, and you don’t have the density to support it. So we end up with basically everyone else subsidizing it to make it the cheap option, and that makes it very attractive.
But if people actually have to pay the full cost of living in the suburb, it would be a very luxurious choice. And that is something that a lot of people would like. But I think right now we think of it as that’s the cheap option and maybe it really shouldn’t be. It all depends on policy of whether that will continue to be the case, because I think that you’re right that most people do want to have their own home, ideally. It’s just that we don’t live in an ideal world. So when you have other factors at play here, they might make other choices.
Mike Moffatt: My point is we don’t live in an ideal world, so they are going to choose the suburbs. Because I think that’s ultimately it. And keep in mind the infrastructure for those homes is already built. Because we’re talking about the demand for the homes that the Boomers already live in, so we’re not building a lot of greenfield infrastructure for them.
Yeah, there’s maintenance. And yeah, a lower density neighbourhood costs more to snowplow. Yeah, those things are absolutely true. But I put it this way. It’s like, you can live in Cabbagetown and have a $3 million home or you can live in, I don’t know, Brantford and have a $700,000 home.
$2.3 million pays for a lot of snow plowing. So yes, some of these neighbourhoods are more expensive to service for municipalities. But I’m skeptical of this idea that if we could somehow internalize those costs, that people will go, “Yeah, I’m going to save 500 bucks a year on my property taxes by buying a home that’s $2.3 million more expensive.”
Like, I just don’t see the math working there. But I think it’s also like a moot academic point, because I don’t see the nature of property taxes changing anytime soon.
Cara Stern: Okay, let’s go back to the argument that there’s going to be a glut of single family homes out there. We don’t need to build more, we just need to wait. So let’s look at that argument and figure out: Is there any way that they’re right?
Mike Moffatt: So when I taught a course at Ivey—I taught this course for over ten years on global investment and the strategies that firms use when making foreign direct investments. And we used a lot of tools to analyze these things. And one of the tools we used was called a pre-mortem analysis.
And the idea behind a pre-mortem analysis is that an organization—this is often done in the military—you come up with a plan and then you analyze that plan as if you did it, but the plan failed, and you work backwards and go, “Okay, what could have caused that plan to fail?” It’s a red team exercise. And if I was to red team this or do a pre-mortem analysis and go, “Okay, actually, you know what, my prediction is wrong. Why might they be wrong?”
The obvious answer is immigration, but a little bit different than what you suggest. I don’t think the immigration issue would be a supply issue. I think it would just be a demand issue. That Canada just decides, for whatever reason, to go, “Okay, we’re going to further lower immigration targets. We’re going to further reduce the number of nonpermanent residents and so on,” for whatever reason.
And we could debate the economics of it, but that could happen. We could get to a point where our population continuously starts to fall. At that point, you probably would get a glut of family size homes and suburban homes in the next 10 to 20 years. And in particular, I think it could be right in specific geographies.
So the other thing that we could see happen is, let’s say Western Canada grows more economically and say southern Ontario stagnates. Well, you might start to see, and we’ve already seen this, lots of families move from southern Ontario to Alberta or other parts of western Canada. So you could have that, the same way that we’ve seen Rust Belt cities in the U.S. hollow out and their suburban homes in places like Gary, Indiana, basically go to zero.
That could happen in specific pockets. So those are the things that I would be looking at. The glut of family home people could be right, either because immigration goes way, way down or they could be right at a specific geographic level, because economies go into decline and people move from one community to another.
Cara Stern: I guess if you’re thinking about where to settle down right now and worrying about your property value, you have to think about where that would be, where they wouldn’t go down. Because I guess we did see a little bit of this during the pandemic, where prices went up in places and down very quickly in those same places that don’t necessarily have the demand constantly.
So I guess those are the communities you’re thinking of. I’m thinking of Oshawa and I’m thinking of Tillsonburg and all these places that really, really, really shot up during the pandemic. And I believe they’ve all, maybe aren’t affordable, but come back down quite a lot.
Mike Moffatt: Yeah, though they’re still way higher than they used to be. So that could be part of it. But I was just thinking more about the economics of it. So, let’s suppose we have a 20 to 30 year run where oil and gas does really well, but manufacturing doesn’t. Then you’re going to see people move out of those manufacturing centres, like in Oshawa, but also like a Windsor, a London, and so on, and move out to the patch or vice versa.
We could have a 20 or 30-year period where oil and gas prices crater, there’s not a lot of demand out there, and you see folks move in the other direction. And we’ve seen this before in Canadian history. My dad’s family is from a community called Southey, Saskatchewan. And during the depression, Saskatchewan basically depopulated because of droughts. And you had this diaspora who moved out of Saskatchewan and moved to places like London, Ontario.
That could happen again. It doesn’t necessarily have to be a drought, but if you have some part of geography that doesn’t do well or some industry that goes into severe decline, you could absolutely see a level of outmigration that causes suburban homes to become quite available and cheap.
Cara Stern: I keep thinking about what you said about if we did close the taps on immigration. Like that definitely requires major structural changes to our economy, and I just don’t even know how Canada would deal with that. I guess that should be an episode, we should come back to that. But how do you restructure your economy if you can’t rely on population growth?
Mike Moffatt: I think that’s exactly it, that the glut of family homes assumption requires some level of large structural change to Canada’s economy, whether that’s a big reduction in immigration or a lot of reforms to infill housing and so on, and you get a massive boom of family-sized infill homes. It requires a big economic and structural change that I just don’t see as likely. It’s not impossible, I don’t want to suggest there’s zero chance, I just don’t see it as particularly likely.
Cara Stern: Yeah. What I’m getting from this is we are not going to slow down on our advocacy to build more homes because, I guess worst-case scenario, if there are too many homes, I would probably choose a problem where homes are too affordable for people over one where homes are completely out of reach for the middle class.
Mike Moffatt: Absolutely. Put me on Team Abundance and Team Affordability.
Cara Stern: Thanks 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 Southey, Saskatchewan, 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:
No, aging baby boomers will not trigger a glut of suburban homes for young families