Funny you should mention that. This year I demolished a room in my basement and then re-made it smaller... because it was overbuilt for its purpose... It was a laundry room that was over 200 square feet. The room is now is closer to 1/3rd the prior size, but the space is being added to the rest of the basement's livable space.
Cost me a lot of money, because I had to get architectural drawings, engineering specs, HVAC assessments, knock down support walls, put a new large steel support beam in (since that support wall actually held up the centre of my two-storey house and the roof), shore up the foundation, revamp the HVAC ductwork, re-direct the gas lines, re-route the electrical wiring and cable, re-route the plumbing and drains and get all sorts of inspections. But hell yeah, it was worth it. It was a painful process to make that room smaller, but the overall project will be MUCH better because of it.
If Transit City were up to me though, I'd just add BRT for now on Sheppard East, and spend the money on Eglinton and Bloor Danforth.