After the last of their three children moved out, Joe and Rosalee Mihevc wanted to downsize from their 3,000-square-foot house on the west side of Toronto. The couple considered leaving the city — too much of a lifestyle change, they decided — or buying a condo in another neighborhood, but they couldn’t possibly afford it amid the city’s housing crunch. So they’re moving to their backyard.
Last year, the Mihevcs erected a two-bedroom, 1,300-square-foot cottage in the grassy patch behind their house. The cost, which the family covered using a home equity line of credit, was about 500,000 Canadian dollars (or $350,000), roughly half what they would have paid for a condo in the area.“I did 70 percent of the work myself,” said Mr. Mihevc, 70, who served on Toronto’s City Council for nearly three decades before retiring in 2021 to become an adjunct professor of human geography and urban studies at York University. The question now is which of their children will get to live in the main house. “My kids are having kids, and there’s no way they can afford a big enough place to live,” he said.
It’s a common conundrum in Canada’s largest city, where a drastic inventory shortage and a ballooning population have set home prices skyrocketing. In an effort to ease the congestion, Toronto began allowing residents to build “garden suites” — defined as “self-contained living accommodations in rear yards” — on their properties in 2022. Olivia Chow, Toronto’s mayor, called the city’s housing market “a dire situation, a disaster,” in an interview. “For several decades, all three levels of government stopped building housing,” Ms. Chow said. “We have to fix that by building more and building faster.”
The benchmark price for a home in Greater Toronto peaked at 1.32 million Canadian dollars (about $920,000) in mid-2022, before settling back to about 1.1 million Canadian dollars ($765,000) last summer — a 100 percent increase over the past decade. The city is scrambling to add more inventory, including 65,000 new affordable-housing units, some of which will be built atop municipal parking lots. But it won’t be enough to house everyone. According to Statistics Canada, more than 1.3 million immigrants settled in the country between July 2023 and July 2024. Nearly 14 percent of them landed in Toronto, according to a municipal government report. While the city welcomed many newcomers (not all, however), it didn’t build adequate housing for them.
