Ontario has 4.4m empty rooms in homes occupied by seniors who haven't downsized
Canada’s housing supply shortage is not only a matter of new construction but also of residential mobility, according to a report by the Missing Middle Initiative, which points to taxes and market constraints that prevent seniors from relocating and freeing up homes for younger families.
The Ottawa-based research group—operating out of the University of Ottawa—released its findings this week, identifying federal goods and services tax (GST) and land transfer taxes as deterrents for older homeowners considering a move into smaller, age-appropriate housing.
The report recommends expanding the GST rebate on new homes to include seniors looking to downsize.
According to the report, many seniors continue to live in homes that exceed their needs, often because of the limited availability of smaller residences with access to essential services. This dynamic keeps larger, family-sized homes off the market, contributing to ongoing supply constraints.
“Not only would this help increase the supply of seniors’ friendly housing (but) would also free up larger, child-friendly homes for the next generation of families,” the report states.
Paul Smetanin, president of the Canadian Centre for Economic Analysis, said he supports the report’s conclusions. He said Ontario has an estimated 4.4 million empty rooms, largely within homes owned by older adults who have not moved due to high costs or market limitations. That volume, he noted, is roughly equal to more than two decades’ worth of housing construction.
“It really burns my chops,” Smetanin said, referring to the unused space across the province.
In March, the federal government announced it would eliminate the GST on new homes purchased by first-time buyers for $1 million or less. The long-term effect of that policy on housing affordability and availability has yet to be determined.
The report also draws attention to declining homeownership rates among Canadians under 40. Many younger households face a “second-time homebuyers” challenge—unable to move from small starter units to homes that meet their growing needs due to market pressures.
The Missing Middle Initiative, established in late 2023, was created to examine the economic and policy factors affecting Canada’s urban middle class, including obstacles that limit mobility within the housing market for both aging homeowners and young families.
