Downsizing: How to Optimize your Living Space (Part 2 of 2)

Ontario government funding for homeowners

Last week I wrote Part 1 of Downsizing: How to Optimize your Living Space, which explained trends in increasing living space per person. This trend was inconsistent with a reducing household headcount and flat-line house building costs, creating an excess in living space not seen in other countries. The solution to this issue, unfortunately, is slightly complicated. It could involve building a custom home which is much smaller than the average Canadian home (it’s virtually impossible to find new homes built by developers which measure ~1,000 sq. ft.). This would generally mean purchasing land in the country or in small towns, far from major cities, which is not necessarily an option for many Canadians.

Building a Cost Effective Home

If building a new home is an option for you, it can be very cost-effective.’s build-a-home calculator estimates that a house such as the one that I have designed for myself (a modest 850 sq. ft. total, 2-story home with 3 adequately large bedrooms, 2 bathrooms, and adequate open living space for a family of 4-5) would cost $85,000 to build (if you completed much of the work yourself), or $106,250 to hire a home builder. Note that these prices do not include land prices, and assume extra luxuries, including 2-car garages, hardwood floors, and solid wood cabinets. As such, the price could be significantly cheaper than this rate, based on the building materials used. For many Canadians, this would present an opportunity to be mortgage-free, which is an ideal scenario for long-term savings on housing expenses.

Sure, re-sale value of the house may be greatly impacted due to low demand for small homes, but small houses can be so cost-effective that, in the long-term, you may be able to afford to walk away from a small home and write it off financially in the long run, after experiencing decades of annual housing cost savings related to having a newer, low-maintenance home with no mortgage payments necessary and lower utilities/maintenance costs due to its smaller size.

Control Living Costs with Ontario Government Grants for Energy Savings & Retrofitting

If an off-grid electrical system like the one I envision for my home is not your style, there are many Ontario government grants and incentives to help you reduce home energy costs, decreasing the cost of owning a large Canadian house (as well as the costs of running a business!):

saveONenergy Programs for Homes

Heating & Cooling Incentive: Incentive program for new residential high-efficiency heating & cooling projects. Home owners can receive:

  • $250 when you replace your equipment with a high-efficiency furnace equipped with an Electronically Commutated Motor (ECM)
  • $250 when you install an ENERGY STAR certified CAC system
  • $400 when you install a stand-alone CEE “Tier 2” level central air conditioning system

Peaksaver Plus: This program involves a technician coming to your home to make adjustments to your key appliances, reducing their electricity demands. It allows for appliances such as your central air conditioner of electric water heater to be remotely activated during off-peak hours, allowing you to save on peak-time electricity costs. As a bonus, you will also receive a free in-home energy display!

Coupons: saveONenergy offers a wide range of coupons at participating retailers which help you save on efficient electric appliances and systems

saveONenergy Incentives for Business

Small Business Lighting: Qualifying businesses will receive the first $1,500 in lighting upgrades free. Further upgrades to lighting, HVAC and other utilities systems can qualify for additional funding for up to 50% of project costs

Retrofit: Receive up to 50% of project costs to install energy efficient equipment, including:

  • Lighting
  • Motors
  • Heating
  • Building energy control systems

Audit Funding: Receive up to 50% of the cost of an energy efficiency audit of your building/facility to identify the best and most sustainable energy management plan for your business

Process & Systems: Provides your business with the funding, tools, and resources to help your organization identify, implement, and validate energy efficiency projects from start to finish. This includes:

  • Engineering studies
  • Qualified consultation and leadership from an Energy Manager to help in the upgrade process
  • Capital incentives of up to 70% of project costs to upgrade your facility with energy efficient equipment and systems

If you can’t break away from the city life for one reason or another (I’m in the same boat), then renting is a viable option which will generally provide you with long-term housing savings by sacrificing some unnecessary square footage. I have written about the benefits of renting over home ownership in previous articles, including Personal Finances: Efficiency in the Rental Market.

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