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
This is a stretch of College Street (here in Toronto) that I find particularly nice. It's the stretch running west of Bathurst Street to Manning Avenue. What makes it relatively unique is that it's a bit wider than our typical downtown Toronto main street (it's 30m versus the typical 20m) and the buildings are of a scale and height that go beyond the typical 2-3 storey mixed-use structures you'll find all across the city. The extra street width also allows for a nice dedicated cycle track. The result is an urban grandeur that I notice every single time I pass through it.
Now, some of the buildings (and retained facades) are older stock, and some of the buildings are more recent builds. So one could argue, "Hey, this is a built form that Toronto has been building successfully for centuries." But the fact that it stands out to me suggests that it still isn't pervasive enough. Wouldn't it be nice if Toronto had more streets like this? Perhaps there are some lessons if we look to the past.
At the southwest corner of College and Markham sits an old brick-and-beam office building that was (according to this source) designed by Frank R. Cowan and built between 1913 and 1914 to house clothing workshops and space for the Pedlar People Company, a decorative sheet metal manufacturer. For some further history, in 1929 the building was sold for $140,000 (about C$2.5 million in today's dollars) and, at some point in its history, a 6th floor was added on top of the building.
But more important for this discussion is that it is another example of a building built before Toronto had modern zoning. This was a utility building. It was built lot line to lot line, with no setbacks or stepbacks. What Toronto cared about most at that time was whether the building would catch fire and set the block ablaze, not whether it met urban design guidelines. And yet, here we are over a century later and we have urban nerds like me talking about the nice street wall it creates.
The important question for today is how we might best unleash a similar market response along Toronto's major avenues. They may not be for clothing workshops and sheet metal manufacturers, but we have other needs, such as housing, that could be satisfied with similarly unfussy fabric buildings. Ironically, we have policies that now support 6-storey buildings that are roughly of this ilk, but we are not yet seeing a market response at scale.
History tells us that the solution is less complexity and greater simplicity.
Aerial and street view image from Google Maps