Your Biggest Questions About Canada’s Housing Crisis, Answered

A listener Q&A on housing, affordability, immigration, and why young Canadians feel stuck.

In this listener mailbag episode of Classonomics, Sabrina Maddeaux and Cara Stern tackle questions about seniors staying in oversized homes, why young people are leaving cities, whether immigration levels are sustainable, and why building more “missing middle” housing has become so politically difficult.

They explore what younger Canadians can actually do to push for change in a system that often seems stacked against them.

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

Sabrina Maddeaux: One of the wonderful things about working here at The Missing Middle is regularly hearing from our audience. We read everything you send, but because we’re such a small team, we don’t always have the time to respond.

Cara Stern: So today we’re going to do our best to make amends for that.

Mike is off doing his fancy economist stuff, so Sabrina and I will make our way through the viewer mailbag. Predictably, there are a lot of housing policy-related questions, so we’ll start with this question from someone named Eamon who wrote:

“Seniors are lonely, rich and live in houses that are too big, often in desirable neighbourhoods. Young people are desperate for housing, poor, and looking for roommates. Why not create a tax incentive for seniors to free up rooms in their houses for young people? I think a vacancy tax is punitive, but a tax incentive could unlock housing in a win-win rather than a zero-sum way for willing participants. Thoughts?”

Sabrina Maddeaux: First of all, you’re entirely right.

It’s a huge problem that seniors are largely overhoused in good neighbourhoods, near schools, and in homes with too many bedrooms they don’t need. The problem really is, though, that they don’t have anywhere to go, particularly if they want to stay in their own communities.

Not building that missing middle housing hasn’t only impacted young people, but we haven’t built the type of quality housing in neighbourhoods that people want to live in, as well as walkable neighbourhoods that are appropriate for seniors to downsize.

So when it comes to moving, at any point in time in your life, there’s a huge stressor there, and then you add to the fact that there’s not suitable housing stock. It’s no surprise seniors don’t want to and aren’t moving.

I think the biggest thing is increasing the supply so that they have options. I’m not really in favour of giving additional tax incentives to the wealthiest generation in Canada at the moment, who are already sitting on huge lottery housing gains. There’s already the principal residence capital gains tax exemption. However, I would be open to exploring things like reducing, for example, land transfer taxes. And of course, we talk all the time about reducing taxes on bringing new housing supply online, like development charges and the HST - I support bringing supply online. But I’m curious, Cara, about your thoughts here as well.

Cara Stern: Yeah, I don’t think they need a tax incentive because the tax incentive that they’re getting by doing this would be rent. They’d be collecting it every month. So it seems very unnecessary for us to then use our tax dollars to also subsidize it on top of that. I think that if seniors would like to have people living in their home and have younger roommates, they’re totally welcome to rent out rooms. And that might be helpful for them; it might be helpful for some young people.

Every once in a while, there are stories in the news. You hear of a situation, and it can be mutually beneficial. But yeah, they can get enough rent money out of it that I don’t think we should put our public tax dollars towards it.

This next question comes from Kate, and it’s in a similar vein as that one. And this one was posted on X or Twitter:

“In your second time homebuyer article, you mentioned that various government initiatives could lower newly built housing costs by up to 15%, which would free up more family-sized homes, making it easier for seniors to downsize. How would lowering the cost of newly built homes by 15% make it easier for seniors to downsize? In my view, the more significant factor facing senior downsizers is not the cost of new housing, but the scarcity of appealing post-move options for them.”

Sabrina Maddeaux: Yeah, both those things are tied together. The scarcity of options is due to the lack of new supply. So adding in that HST break on newly built homes that will be primary residences, incentivizes seniors to buy those and plan to downsize, which then, if they successfully downsize, has the effect of hopefully freeing up family-sized homes that are desirable for younger Canadians as well, who are looking to either get into the market or to upgrade where they already live. It’s certainly not the only factor at play when it comes to downsizing, but we’re in a situation where anything to get more of that missing middle supply online, the better.

Cara Stern: I think when you have the time-limited discounts, maybe that would incentivize people to act now or lose that opportunity. And so, with the HST cut, which I think is only one year long, that gives an incentive to buy right now. And so maybe if they did that for seniors, that might be like, “Okay, we have to make this call right now, otherwise we’re gonna lose out on this opportunity.”

If they can build something new that actually appeals to them, then that’d be amazing, because then seniors are living in places that they really like, and they can live in a nice new build, and they would open up those homes for families who need to live in family-size homes. Getting more of them on the market is really what needs to happen.

Sabrina Maddeaux: Exactly. We need more houses of the right type for everyone at this point in Canada.

The next question is from Mary, and it’s been edited a little bit for length, but here’s the gist:

“I am a boomer with two millennial children who haven’t yet reached middle class milestones, stable employment or homeownership. I believe factors other than parental status are at play. 1) Are houses more expensive, or are incomes simply failing to keep up with declining purchasing power? And 2) Given the rise in single-person households, why is there so much social isolation? And how does the difficulty of making connections in urban environments impact the ability for young people to save and enter the housing market?”

Cara Stern: So for the first one, are houses more expensive or is income simply failing to keep up? It’s both. If houses are expensive and incomes keep going up to keep up with that, then it’s not really a problem. But the problem happens when the disconnect is there, where the home prices are very high and incomes aren’t catching up at all.

I think that Mike said if incomes keep going up at the same rate and housing prices do not increase, it would be something like 25 years before they would catch up. That’s just not possible, which is why we advocate for things that would actually lower the cost of housing and, at least, lower the cost of units for people to live in.

Given the rise of single-person households, that part of the question about social isolation, I think that is very real. There is a lot of social isolation out there, partly due to social media, partly due to the fact that our cities are not really creating places for people to go and hang out and meet each other in a way that is affordable and accessible.

We did an episode on third places, the lack of them in cities and how that’s changed over generations. I really recommend watching it. I think that it’s very real that people are feeling disconnected from the community. There’s a lot that cities can do to make it better for people to feel connected.

Whenever I sign up for activities that are funded by the city, they always give a big discount to seniors, and I always think, “Why is this the case?” And I understand they think of social isolation for seniors, but we know that there are younger people who are more isolated than seniors are right now, especially the age 20 to 30. And so one thing I would like to see is cities not subsidizing it as much for seniors and spreading it across the board, or maybe giving subsidies for young people to take part in these things, because some of the activities can be quite expensive. I’d like to see it more across the board, and then maybe people would have more access to them and be able to make more friends and feel more connected.

Sabrina Maddeaux: Yeah, the answer is everything is bad all at once. Wage stagnation, unemployment, or precarious employment. And then, of course, housing costs. And the reality is that housing costs have soared by so much that even if wages did start to rise again at a normal rate, they would not catch up within years or decades. So housing prices do have to come down if we’re ever going to reach affordability.

I don’t think that cities result in social isolation in the way a lot of people think. People are out a lot. They make friends, and they create social networks. But what I’m seeing, particularly when people hit their late 20s or throughout their 30s, is that living in the city is so unaffordable, especially if you want to get married or have a place of your own without roommates or start a family, so many people can’t afford to stay in the city. So what happens is that the social group that you did make in the city starts moving an hour to three hours, or even to an entirely different province or country, away.

Cara Stern: They all move to Alberta these days. That’s where they’re all going.

Sabrina Maddeaux: A lot of Alberta, a lot of the far reaches of Ontario. And then you see your social group, once every six months if you’re lucky. And that is really isolating, especially if you start to raise a family. And often on top of that, you’re moving away from your family or potential grandparents. So it is lonely, and there is something to the cycle that you put in the work to make these friendships and these social connections, and then it feels like they’re constantly being torn away from you. So that is another impact of the housing affordability crisis that I think isn’t spoken about as much as it should be.

Cara Stern: That’s a really great point. And you’re right. As people are moving farther away and traffic gets worse and worse because there are so many more people, it becomes very difficult to visit people. It becomes a thing where it’s a whole-day thing if you’re going to go out to Hamilton to visit your friend; you’re not going just for the evening.

I hear a lot of people talk about how hard it is to make friends as an adult, and I think that is a big part of it, although I do think that so many people complain about how difficult it is to make friends that I’m like, “Most people seem to want to make friends; try making friends with them and make an effort.” If you can get over the fear of talking to people and rejection, hopefully you can at least make some new friends, ideally nearby, because proximity is a huge part of maintaining friendships.

Sabrina Maddeaux: That’s very true.

And when you also have a class of renters. They tend to move every few years, especially in this day and age. Not renters who have been in their place 10-30 years. But a lot of the time now, especially with unpredictability about rental evictions or rent increases or having to have a different commute for your job, that proximity is constantly changing.

And the point you made about congestion is such a good one. My friends who did move out of the city- when they initially went to Hamilton or beyond, you could go out for dinner, but the way congestion is now, for everyone to see each other, even for lunch, it requires an entire day’s commitment because it could take up to three hours there and up to three hours back, on a bad day. And even friends who now live on the west end of Toronto- I’m in the East end - even that takes an hour and a half. It used to take an hour and a half to drive to Buffalo. Now it takes an hour and a half to get from one end of the city to the other.

And public transit isn’t any better because literally every route from east to west has some sort of diversion or multiple, so it’s a major issue. I’m thinking we should do an episode on this now, but I’ll get us to the next question for the sake of time, which is from Chris and came from the comment section of our Greenbelt episode.

“Is the Greenbelt even practical for quote unquote ‘affordable housing,’ or does it only provide more land for luxury country estates?”

Cara Stern: I think it provides land for whatever we want it to provide land for. I think it depends on what the zoning is. I think for a lot of developers, it’s easiest and the least risky thing would be to just build a bunch of single-family homes that are nice country estates, as this person said, because they will sell and they don’t take that long to build. You don’t have to build a giant tower and take all the risk and get a certain number of investors to start building it. So people will build these single-family luxury country estates, if that is what we make it easiest to build.

But I think we can zone in different ways. They can provide incentives, and there are some ghost stations in the Greenbelt. If you look at transit-oriented communities, that’s where people are putting these high-rises where they can have more affordable homes. If we started looking at those ones in the Greenbelt and tried to incentivize building tall, I think that would actually happen. It all depends on policy.

Sabrina Maddeaux: I also want to say, I don’t think we necessarily need towers in the Greenbelt. I’m not against them. But there’s a difference between luxury country estates and single-family detached homes. And we have a shortage of single-family detached homes. They don’t have to be huge, but with a yard, three bedrooms, the ability to raise a child- maybe two children in them. It’s the lack of supply of those that is contributing to the housing crisis and affordability issues. So yeah, we do need more of those and probably in the Greenbelt.

Cara Stern: But of course, we know that it’s been politically very risky for Doug Ford. I don’t think given the controversy that happened there, I don’t think we’re actually going to see anything open up in the Greenbelt while he’s in power. So it might be a bit of a moot point.

And of course, immigration always generates a lot of conversation online @canucklhead asked a couple of questions in the comment section of one of our episodes, Out of Nowhere: How Canada Fell Behind Alabama.

“Isn’t the obvious solution here to keep immigration low for the next few years, to keep pressuring rents lower? Wouldn’t this be the easiest solution to help affordability for everyone?”

Sabrina Maddeaux: I agree. It’s a big part of the solution, and we had such an unsustainable surge of immigration that we now need to course correct. And it can’t just be for a year or two. We really need to tie this to our ability to house people and other infrastructure stressors as well. So I entirely agree that housing is a demand-supply equation, and we need to keep demand low from the immigration front as we work to build more housing.

Cara Stern: The only problem with it is that a lot of people in Canada aren’t having kids, and we need population growth to sustain our economy and pay for all the benefits that people get- that a lot of seniors get, for example; old age security is the single largest line item in the federal budget.

When it comes to immigration numbers, I really don’t think the number itself matters so much as how it balances out with housing, because we can have high immigration if we have a lot of new homes being built.

If we are going to cut immigration and we are going to have slower population growth, we just need to understand that the sacrifices that need to come out of that are going to come from across-the-board, it can’t just be from young people. And I hope politicians have the courage to maybe upset some of the wealthiest people in this country and some of the very reliable voters and say that “sacrifices have to happen, and it cannot all be from young people.”

Sabrina Maddeaux: And the last question is for Cara. Emily writes”

“I see what’s happening to those under 25, and it is awful. How can I get involved? What steps can I take that will make the most difference? Do you know of a group in Edmonton that is making a real difference, especially in the missing middle space?”

Cara Stern: When it comes to Edmonton, Grow Together Edmonton is the organization I know of, the EMB group that has been very active in getting multiplexes built. I think you need to do all of those things. You need to get involved with your local politician, potentially write to your MPP, your MLA, or your MP. Write to your city councillor as well to let them know that you care about this.

I always let my politicians know that I’m a one-issue voter and that issue is housing. And it’s really important that they understand that being pro-housing is going to get them votes, because I think a lot of politicians think that we’re going to get votes from older people and we need to focus on what they care about. And that is true when you look at who’s actually coming out to vote. I think if they start to see a change there, they see a lot of young people coming out and caring about it, that would make a difference. People have to get involved for there to be change. No one’s going to come and solve it for you because the incentives just aren’t there. The people in power don’t have the incentives to make it better for you, so you need to step up.

Sabrina Maddeaux: Definitely. Young people, please vote. Politicians do pay attention to that. There’s this perception that even when young people care about an issue, they don’t actually show up to the polls. So get there, prove them wrong. Make sure that they’re listening to you and get involved in your community as well, because it is a major issue that it’s often very well-housed, wealthy retirees who are heard the most by politicians.

And part of that is they have the time on their hands. And our consultation processes are not effective. They’re set up a lot of the time to always listen to the loudest dissenters, whether they have legitimate concerns or not. So we do need to fix those processes.

But in the meantime, get out there, be heard, vote, and also encourage your politicians to fix those processes so that everyone is heard, not just the loudest voices with the most money and the most time on their hands.

Thank you so much for watching and listening and sending us your questions. And to our producer, Meredith Martin and our editor, Sean Foreman.

Cara Stern: If you have any thoughts or questions about how no one’s coming to save you and you’ve got to save yourself in this economy, please send us an email to [email protected].

Sabrina Maddeaux: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

The Disappearing “Third Place”: Why Making Friends Is Getting Harder

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative