This week, the band got together to announce a development charge reduction program here in Toronto. Basically the way it works is that the City is receiving "up to $1.5 billion for eligible housing-enabling infrastructure projects" and this, in turn, will allow the city to reduce its reliance on DCs and lower them by 40-60% (depending on the housing type) between 2026 and 2029.
40% reduction:
Studio and one-bedroom apartments
Multi-unit homes
60% reduction:
Single and semi-detached homes
Apartments and multi-unit homes with two or more bedrooms
Dwelling rooms
The provincial and federal framework requires cities to maintain the lower rates for at least three years. So if everything passes this year, it will expire in 2029. My assumption is that you'll need to have submitted a Site Plan Control application within this time period to lock-in these rates, but as always, you're going to want to consult with your planner and planning lawyer.
While this is certainly positive for housing, it is not a long-term, sustainable solution. The federal and provincial governments had to step in because the infrastructure funding model clearly isn't working for cities, and they're having to overtax new housing as a result. Let's not stop here.
Cover photo by Patrick Tomasso on Unsplash
As we all try to figure out what the future of the condominium market looks like in Toronto, it might be helpful to consider the forms it has taken over the years. When our nascent condominium market started to emerge in the 1990s, it solved a clear problem: it was an affordable solution for first-time buyers. It was a way to buy a place, build equity, and then trade up to a single-family house.
Because of this use case, it was also true that pre-construction condominiums typically sold at a discount relative to resales. This was because buyers wanted to be compensated for the time they had to wait to move in and the risk of buying something off a plan.
As the market grew and evolved (and the cost of constructing new housing rose), this pricing dynamic flipped, and pre-construction condominiums started to be priced at a premium relative to resales. The narrative, then, was that new condos were newer and nicer relative to older stock.
But more importantly, it was also because the buyer profile shifted more toward investors, and therefore, the problem to be solved also changed. Investors, as we spoke about here, started to view the timeline to occupancy as a feature rather than a bug. It meant more time for the unit to appreciate and more time for rents to grow.
This market largely disappeared in 2022, and so now the industry has returned to focusing on end-users. But Toronto is a different, more urban city than it was in the 1990s. Somewhere around 95% of the new housing built in the city is now multi-unit housing. The Baby Boomer generation is also starting to age out of staircases and low-rise houses.
Today, at this very moment, the pre-construction market is trying to address a new problem: large, luxury suites for wealthy buyers. It's the most fertile segment of the market. But how deep is this buyer pool? And what does it tell us about the next condominium cycle? The only thing we know with any certainty right now is that we're seeing a return to end-users.
Paris is experiencing a heatwave at the moment and so my social feeds are naturally filled with people dressed as Spider-Man jumping into the Canal Saint-Martin. First and foremost, it's great to see so many people swimming in an urban body of water. I think this is quickly becoming table stakes for cities, which is why, last year, Globizen became a signatory to the Swimmable Cities Alliance.
Though, to be fair, many or most urban bodies of water, including the Canal Saint-Martin, are clean sometimes, and less clean at other times. It depends on the precipitation levels and whether any combined sewers have backed up. But today, it's clean and Parisians are enjoying themselves.
Now, here's a quick history lesson. The Canal Saint-Martin was initially constructed as a freshwater solution to poor drinking water and overall sanitation concerns in the centre of Paris. Napoleon I ordered the construction of the 4.6 km canal connecting the Canal de l'Ourcq to the River Seine in 1802 and funded it with a new wine tax (of course). Construction lasted until 1825.
By the 1860s, Napoleon III and his urban planner, Baron Haussmann, had started their large-scale overhaul of Paris, and Haussmann viewed the canal as an inconvenient feature getting in the way of his preferred urban design. So he buried nearly half of the canal underneath a massive, vaulted brick tunnel. This continues to exist today, and one of these days I'd love to do a boat tour through it.
By the 1960s, boat traffic had dwindled on the canal and urban planners at the time proposed what urban planners at the time proposed, which was to fill it all in and create a four-lane highway. As I understand it, the French equivalent of Jane Jacobs wasn't there to stop such a project from going ahead; it was instead simply an issue of finances.
Whatever the case, it gave the canal and surrounding area the opportunity to transform from a gritty industrial relic into the trendy Parisian bobo district that it is today. Like many aspects of the modern city, utility and industry are giving way to leisure and lifestyle. This would have been impossible to predict at the start of the 19th century, and it could have very easily turned out differently.
Cover photo via Wikipedia