Population and Housing

[taylortbb]

Now, a plot of land that might previously have held four houses to the half acre can hold a tower with 100 housing units. When the individual owners of those 100 units want to move (say to a house), there are now 100 home buyers who are looking for 100 units of housing.  Unless another 100-unit tower is built, those existing owners are going to wash into a low rise development and increase demand.  In theoretical terms, a tower can be built infinitely high and where previously there had only been 4 houses, there could be 100, 200 or more homes that serve as capital to climb the housing ladder.  Many of those owners moving from towers do not want to move into another tower.  They would like a single-family home or a row house.  This then puts an incredible pressure on everyone involved in the housing industry to build more single-family homes or other low-rise buildings.

I think the issue with your analysis is that it ignores all the reasons people downsize from houses. Empty nesters looking for a smaller place may choose to move into a tower, especially as they get older and the maintenance of a house becomes more of a problem.

I believe the expectation of boomers downsizing was a key part of our provincial housing plan, but it's turned out they're doing it slower than expected. That said, at some point they will have to, and the effect on the housing market will likely be significant.