GTA housing supply: Bedroom banking

NRU
Nov. 30, 2016
Leah Wong

Policy experts suggest that empty nesters staying in their family homes well after the kids have left is affecting resale volume in the Greater Toronto Area and changing the population density in existing neighbourhoods.

Speaking as part of a panel on housing supply and housing prices in the GTA Monday, Ryerson University real estate management associate professor Murtaza Haider said resale listings have been stagnant since 2006 despite an increase in house prices. He speculated that this is partially because young people are living with their parents longer rather than forming new households with a significant other.

“This gig economy has created a stage where millennials are still living in [their parent’s] home,” Haider told participants. “When you have a bigger home and the kids leave and you are an empty nester, you scale down ... and list your home.”

Canadian Centre for Economic Analysis CEO Paul Smetanin said Sydney, Australia, where he previously lived, is facing a similar problem with empty nesters not downsizing to smaller houses.

“[Researchers] found that there is 20 years worth of housing supply in bedrooms in Sydney,” Smetanin told participants. This housing isn’t accessible because much of it is owned by empty nesters who have not downsized. “We hear about land-banking, well this is bedroom banking.”

Neptis Foundation executive director Marcie Burchfield told participants that zoning that only allows for limited types of housing is preventing growth in existing urbanized areas. In Chicago she said it is common to see duplexes and triplexes serving as options for people not wanting to down-size to a high-rise unit.

“People who don’t want to live in highrises may still want to invest in rental properties—live in one and rent out the other,” said Burchfield.

With limited resale options in older urban areas, Burchfi eld said Neptis’ research has shown that growth is being directed to the edges of the region. She added that there is limited access to transit, and new hard and soft services are needed to support the growth.

“Essentially we’re adding 100,000 people per year in this region,” said Burchfi eld. “And the biggest challenge to adding that many people per year, and trying to change the pattern of growth, is aligning growth with transportation.”

The discussion on housing supply in the GTA was hosted by Toronto Association for Business and Economics, Urban Land Institute and the Ryerson City Building Institute.