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What makes midrise development difficult?

A reader recently suggested that I do a post explaining why we aren’t seeing more midrise buildings going up in Toronto. Specifically, why are midrise buildings considered to be “too risky” for developers and what could be done to improve the situation? So today I’d like to focus on that topic.

But first, let me say that I think Toronto is already in the midst of its midrise development era. The push for intensification first brought about towers, but we’ve come to realize that the tower isn’t necessarily going to serve everybody’s needs.

Here’s what John Bentley Mays recently wrote in the Globe and Mail regarding midrise developments:

With Duke, SQ, Nest and similar structures, we may be seeing the start of a promising design trend in Toronto’s multifamily housing market.

And given that our Chief Planner, Jennifer Keesmaat, has been a vocal supporter of midrise, I think there’s no question that we’ll only see more and more of this type of development. Nonetheless, there are challenges. Here are a few that come to mind.

1. Fragmented sites

Because midrise developments typically target established main streets with smaller lot sizes, developers often have to contend with fragmented ownership in order to assemble a site. So instead of talking to one owner (say the owner of a large parking lot downtown), a developer may have to contend with a dozen owners who all need to get on board for the development to happen.

2. Scale is too small

Developers have a lot of fixed costs that don’t materially change whether you’re putting up a 50 storey tower or an 8 storey midrise building. Some costs are certainly variable, but there are overall economies to scale to having more units in which to distribute costs over.

3. Community opposition

The whole point of midrise intensification is to increase the housing supply in established neighborhoods. But along with this comes greater risk for community opposition. You may have a neighbor who’s been living for 30 years adjacent to where you want to build. And when you come along and try and build a 10 storey midrise building, they can get grouchy.

4. Strict guidelines 

To try and counteract community opposition (and promote good urbanism), the city has developed a number of design guidelines for midrise buildings. And while they’re well intentioned, they can be onerous for developers and designers. For example, the requirement to terrace down towards adjacent residential neighborhoods produces a lot of inefficiencies (though it does create spectacular terraces). Oftentimes you’ll end up with more unit types than you would in a large tower.

All this said, I’m a big believer in the midrise building typology. At TAS, I’m involved in two such projects–DUKE and Kingston&Co. Both are exciting projects and both, I think, are at the forefront of a new development era for Toronto. Vancouver pioneered the podium + point tower typology. Toronto is about to do the same with midrise buildings.

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