May 30, 2017

2016 Census Reveals Suburban Home Downsizing Challenges

Toronto’s suburbs are going grey far more quickly than the city’s core, according to recently released data from the 2016 census. While the number of Toronto residents aged 65 and older grew by roughly 13 per cent between 2011 and 2016, Whitby’s share of seniors jumped by nearly 31 per cent. The biggest jump among the surrounding suburbs: Brampton, where the increase was almost 40 per cent.

Isn’t everybody in this cohort supposed to be downsizing by now? In past generations, once the kids moved out, empty nesters soon followed them, either purchasing smaller houses or renting apartments. But today’s seniors don’t seem to be in a rush to do either, particularly in and around the GTA.

Related Read: Are Boomerang Kids to Blame for Fewer House Listings?

Older Homeowners Slow to Downsize

In truth, many older suburban homeowners are simply stuck – house rich, but retirement poor. It’s not uncommon for higher-end condos in desirable locations around the GTA to cost almost as much as the established homes they might be selling. In hot markets, competition pushes up prices for everybody, including those who might like to downsize but can’t find a replacement home that’s both affordable and suitable. So they wait, further disrupting the food chain.

Of course, while some seniors may opt to stay in their single-detached homes for the rest of their lives, others will eventually move into smaller, lower-maintenance homes – but not necessarily closer to downtown Toronto. Some will up and move to towns like Collingwood or Brockville, both attractive lakeside communities still fairly close enough to major centres. But they’re not cheap either.

Asset Rich, But Cash Poor

A great many, of course, will happily succumb to the turn-key lure of downtown Toronto condo life. That’s what Toronto retirees Bob and Roz Holden chose to do. For them, downsizing to a two-bedroom metro condo was the perfect solution: no maintenance, easy access to transit, affable, like-minded neighbours – and few financial pressures. After all, with a cottage and heavy travel schedule, they’re only there for four months of the year anyway.

But, for many suburban homeowners, downsizing is much more about balancing the books in retirement. But that’s not always easy to do. While living on a smaller scale elsewhere may mean lower mortgage payments or rent, reduced maintenance costs, and less onerous utility bills, a move to a smaller home doesn’t necessarily guarantee significant savings. And that’s a problem for someone who has lived in the same place for 35 years.

After all, if downsizing doesn’t reduce your household expenses by at least 30 per cent, then what’s the point of moving? And, if seeing your grandchildren and long-time friends suddenly means a six-hour trek, it’s easy to see why so many people stay put.

Car Dependency a Major Problem

The fact is, when children move away or elderly spouses die, suburban homes can become increasingly less comfortable nests for older people. For one thing, accessing services and amenities like grocery stores or health care in lower-density subdivisions usually requires hopping into a car.

Unfortunately, with Canadians living longer – and for the most part, healthier than in the past – most people will outlive their ability to drive, predicts Canadian Urban Institute researcher Glenn Miller in a recent report. By 2036, more than 40 per cent of people living in car-dependent suburbs surrounding Toronto will no longer have a driver’s licence, he estimates.

Suburbs No Place to Grow Old

The challenge for planners and policymakers is to find ways to move services closer to where the people are, rather than to encourage all of them to relocate, he maintains. The problem, of course, is that most municipalities have been slow to make their land-use plans more “age-friendly.”

Rather than simply extending the time residents have to cross a crosswalk, municipalities and developers need to collaborate in seeking out compact, walkable redevelopment sites such as suburban strip plazas, failed malls and other brownfields to create mixed use projects that offer easy access to age-appropriate housing and amenities, he maintains.

Easing Into the Big Move

But that’s not going to happen tomorrow though. For many long-time owners, today’s booming market is a chance to take some money off of the table and either accelerate their retirement or at least top up their retirement nest egg.

If you’re contemplating such a change, think about selling first and renting something for a while to make sure it’s really what you need. As a renter, even for awhile, you’ll have no money tied up and could add the extra capital from the house sale to your investments. Even if prices keep rising, you may be better off paying a bit more a couple of years from now than getting stuck in the wrong place.