I wonder then what happens to the old housing stock that is already deteriorating. I've been in many student housing in downtown Toronto and the places are falling apart in near slum conditions. Even in my own neighbourhood in Davisville, the older houses, occupied by the middle-class with the means for repair, are rut with issues.
Historically, the older housing stock became the purview of lower income people, as the previous property owners flee to a newer home further north/west. When the older housing stock are rendered deplorable, they were bulldozed like in The Ward.
Nowadays any detached or semi-detached home in the core is a sacred cow that costs over $1 million, are people's primary asset and cannot be sold either out of sentimentality, fear of losing further house price gains, or inability to buy a house of equivalent size in the core (even with the previous house serving as downpayment). This is going to become an issue in the near future as these homes begin requiring major structural repairs and the house-owners are either reluctant student-housing slumlords, people already living within their margins, or seniors whose pensions cannot cover the costs of the repairs.
Again, I find rezoning to allow denser low-rise developments like townhouses and duplexes as the solution to our deteriorating housing stock, as well as reducing the severity of our housing affordability crisis as we can effectively increase the housing supply. It is the obvious market solution that is hindered by restrictive zoning laws.
