Since 2009, policymakers in Minneapolis having been implementing land use changes to encourage more housing supply. Some of these changes have included eliminating parking minimums, encouraging multi-family buildings up to 6 storeys on commercial corridors, establishing height minimums in high-density zones, and permitting triplexes on all residential lots. It's, from what I can tell, the type of stuff that many cities have now done or are looking to do. But it seems to have worked remarkably well in Minneapolis. According to The Pew, between 2017 and 2022, the city issued permits for nearly 21,000 new homes and nearly 87% of them were for homes in buildings with 20 or more suites.
This is interesting. It tells us that the triplex policies don't seem to be doing all that much, but that the market has certainly taken to larger multi-family projects. This is an accomplishment. Even more importantly, though, is that it seems to be having a measurable impact on average rents. During the same time period as above, Minneapolis increased its housing stock by 12% and average rents increased by only 1%. Whereas the rest of Minnesota only increased its housing stock by 4% and, maybe as a result, average rents went up by 14%. Changes in homelessness also look dramatically different.
It looks to be a similar story to what's playing out in Austin: increased housing supply is tempering rent growth. (Okay, in the case of Austin it seems to be causing rents to fall.) What I would be interested in seeing now is a further breakdown of this 87% share. Because 20 suites is a different kind of build than 300 suites. It's different for developers and it's different for cities. And I'd like to know if the market is favoring one over the other, or if it's building apartments at all scales. If the city is in fact building lots of new apartments at multiple scales, then this is even more of an accomplishment. It means there might be no "missing middle."
Cover photo by Eastman Childs on Unsplash
Our team has been spending a lot of time underwriting sites that would fit within the City of Toronto's new Major Streets Study. The last time I checked these policies were still under appeal, but the expectation is that they will eventually come into force and start encouraging small-scale apartments up to 6-storeys on all "Major Streets" across the city. This is meaningful progress for our city, and we're excited to be working on projects in this space.
At face value, 6 storeys on all major streets sounds like every great European city you've ever been to. But after studying countless sites, what I will say is that these policies are not designed to recreate Paris or Barcelona or Berlin. Instead, they are intended to be deferential to single-family houses. You see this in the required setbacks and in the maximum building depth, among other things. We all know why this is the case, and it was probably needed as a first step, but I think it's important to point out this subtlety.
Because there are at least two effects to this: one, the end future state will not be a uniform urban street wall, like what you'd find in Europe. That is not the goal of the current policies. And two, it unnecessarily makes the smallest sites more challenging to develop. That's a real shame, because more granularity is often a positive thing for cities. So we still have work to do. But I'm optimistic we'll get there, eventually. City planning typically works in increments.
One of the really positive things that is happening in the world of Toronto land use planning is that the minimum scale of development that is permitted as-of-right continues to grow. We've gone from fourplexes to 6-storey apartments, and now we're talking about mid-rise buildings (6-11 storeys) and even some tall buildings (12 storeys or more).
What this ultimately means is being able to build without a rezoning application. That means no site specific negotiation, and no fighting over whether the building should be 32 meters tall or 30.5 meters tall with a 2.4 meter stepback because of shadowing concerns on someone's heritage-designated garden gnome. It means getting under construction sooner.
Here are some of the specific ideas being reviewed:
Expand the number of streets designated as "Avenues" throughout Toronto (Avenues are a defined term and where we have decided that mid-rise buildings should go)
New Official Plan policies that would encourage more mid-rise buildings on Avenues
Eliminate the rear angular plane requirement (currently a mid-rise performance standard); this is expected to produce ~30% more homes in your typical mid-rise development
Increase as-of-right permitted heights to 6-11 storeys (the city estimates that this will unlock ~61,000 additional homes)
Introduce "transition zones" between Avenues and low-rise neighborhoods, which could then accommodate things like low-rise towns and apartments up to 4 storeys (it's worth noting that transition zones were initially part of Toronto's mid-rise performance standards but then got removed for some reason)
This is meaningful progress. Let's enact and keep going.
Since 2009, policymakers in Minneapolis having been implementing land use changes to encourage more housing supply. Some of these changes have included eliminating parking minimums, encouraging multi-family buildings up to 6 storeys on commercial corridors, establishing height minimums in high-density zones, and permitting triplexes on all residential lots. It's, from what I can tell, the type of stuff that many cities have now done or are looking to do. But it seems to have worked remarkably well in Minneapolis. According to The Pew, between 2017 and 2022, the city issued permits for nearly 21,000 new homes and nearly 87% of them were for homes in buildings with 20 or more suites.
This is interesting. It tells us that the triplex policies don't seem to be doing all that much, but that the market has certainly taken to larger multi-family projects. This is an accomplishment. Even more importantly, though, is that it seems to be having a measurable impact on average rents. During the same time period as above, Minneapolis increased its housing stock by 12% and average rents increased by only 1%. Whereas the rest of Minnesota only increased its housing stock by 4% and, maybe as a result, average rents went up by 14%. Changes in homelessness also look dramatically different.
It looks to be a similar story to what's playing out in Austin: increased housing supply is tempering rent growth. (Okay, in the case of Austin it seems to be causing rents to fall.) What I would be interested in seeing now is a further breakdown of this 87% share. Because 20 suites is a different kind of build than 300 suites. It's different for developers and it's different for cities. And I'd like to know if the market is favoring one over the other, or if it's building apartments at all scales. If the city is in fact building lots of new apartments at multiple scales, then this is even more of an accomplishment. It means there might be no "missing middle."
Cover photo by Eastman Childs on Unsplash
Our team has been spending a lot of time underwriting sites that would fit within the City of Toronto's new Major Streets Study. The last time I checked these policies were still under appeal, but the expectation is that they will eventually come into force and start encouraging small-scale apartments up to 6-storeys on all "Major Streets" across the city. This is meaningful progress for our city, and we're excited to be working on projects in this space.
At face value, 6 storeys on all major streets sounds like every great European city you've ever been to. But after studying countless sites, what I will say is that these policies are not designed to recreate Paris or Barcelona or Berlin. Instead, they are intended to be deferential to single-family houses. You see this in the required setbacks and in the maximum building depth, among other things. We all know why this is the case, and it was probably needed as a first step, but I think it's important to point out this subtlety.
Because there are at least two effects to this: one, the end future state will not be a uniform urban street wall, like what you'd find in Europe. That is not the goal of the current policies. And two, it unnecessarily makes the smallest sites more challenging to develop. That's a real shame, because more granularity is often a positive thing for cities. So we still have work to do. But I'm optimistic we'll get there, eventually. City planning typically works in increments.
One of the really positive things that is happening in the world of Toronto land use planning is that the minimum scale of development that is permitted as-of-right continues to grow. We've gone from fourplexes to 6-storey apartments, and now we're talking about mid-rise buildings (6-11 storeys) and even some tall buildings (12 storeys or more).
What this ultimately means is being able to build without a rezoning application. That means no site specific negotiation, and no fighting over whether the building should be 32 meters tall or 30.5 meters tall with a 2.4 meter stepback because of shadowing concerns on someone's heritage-designated garden gnome. It means getting under construction sooner.
Here are some of the specific ideas being reviewed:
Expand the number of streets designated as "Avenues" throughout Toronto (Avenues are a defined term and where we have decided that mid-rise buildings should go)
New Official Plan policies that would encourage more mid-rise buildings on Avenues
Eliminate the rear angular plane requirement (currently a mid-rise performance standard); this is expected to produce ~30% more homes in your typical mid-rise development
Increase as-of-right permitted heights to 6-11 storeys (the city estimates that this will unlock ~61,000 additional homes)
Introduce "transition zones" between Avenues and low-rise neighborhoods, which could then accommodate things like low-rise towns and apartments up to 4 storeys (it's worth noting that transition zones were initially part of Toronto's mid-rise performance standards but then got removed for some reason)
This is meaningful progress. Let's enact and keep going.
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