The Goldilocks Standard: Right Sizing Housing in Toronto

It may not be as exciting as the song, “525,600 minutes”, but today, we talk about the Growth Plan’s targeted forecast for a Toronto of 3,650,000 people, and how many of them can be accommodated in existing housing stock.

On Friday June 11th, 2021, the City of Toronto’s (“the City”) Planning and Housing Committee, received a report on Right-Sizing Housing and Generational Turnover (“the Report”). The Report will be considered as part of the City’s Municipal Comprehensive Review (“MCR”) of their Official Plan, to bring it into conformity with the 2051 population forecast targets outlined in the 2020 consolidation of the Province’s Growth Plan.

By 2051, the City’s population is projected to grow by over 700,000 people from 2016 levels. However, this number alone does not provide information on how many housing units will be required to accommodate this population, nor the housing sizes or types that are suitable to meet each household’s needs. The City’s MCR will help determine policies that prescribe housing type distribution in any new developments, making the discussion of whether certain housing types are needed more than others even more important. With this context, the Report considers whether current households are over-housed or under-housed, and whether housing turnover may fill some of the City’s housing needs to 2051.

Too Large… Too Small…

Housing suitability is determined based on the National Occupancy Standard (“NOS”) of the Canada Mortgage and Housing Corporation. This standard sets out the number of bedrooms that a household needs based on the number of people living in a household and their demographic factors, including age and relationship status. If a household has at least one less bedroom, then according to the NOS, it is deemed “under-housed”. If a household has at least one more bedroom, it is deemed “over-housed”. If the household has the exact number of bedrooms set out in the NOS, it meets the so-called goldilocks standard and is “right sized”.

The Report reveals that while 135,000 households in the City were under-housed in 2016, more than three times as many households were over-housed. Under-housed households were mainly those with children, particularly in mid- and high-rise units, while over-housing generally increased with the age of a household. Renters tended to be more under-housed than owners (18.6% versus 6.3%).

Importantly, the NOS does not consider the preferences of households in its calculations. For example, a household that has an extra bedroom but is frequently visited by friends and family, would still be counted as over-housed.

Potential to Accommodate Future Growth through Housing Turnover

Housing turnover occurs when a household vacates its dwelling, and a new household moves in. For example, downsizing is a form of turnover and refers to households owned by persons aged 50 years or older who transition from being over-housed to a unit that is right-sized, or has fewer unused bedrooms. When one household downsizes, it creates an opportunity for another household to move in, rather than occupy a new housing unit.

Housing turnover allows Toronto’s existing housing stock to play a role in determining how many new units the City will need to construct over the next 30 years. The Report estimates that approximately 25% of Toronto’s forecasted population growth to 2051 could be accommodated in its existing housing stock, and that by 2051, almost all 2016 housing stock occupied by older generational households will have turned over.

Consequently, not all future population growth needs to be accommodated in new housing.

The Report notes that this research may further support the City’s Expanding Housing Options in Neighbourhoods initiative, which deals with intensification of the City’s neighbourhoods, in which most over-housed households are living. It may also guide climate action initiatives given the carbon emissions associated with new development.