Earlier this week the Globe and Mail reported that the average price of a house in Toronto has risen to $613,933 and that the average price of a detached house has risen to $1,042,405. Those are a big numbers.
Low interest rates are a big part of this story. But there’s also a supply story at play here. The low-rise housing market in this city is heavily supply constrained and so we have an environment where people with more money simply outbid those with less money.
The high-rise side of the market, on the other hand, is creating lots of new supply. And in my opinion that’s why its price growth has been more moderate in recent years and why the pricing spread between low-rise and high-rise housing continues to widen.
Assuming these trends continue, one of the things I’ve thought about and written about in the past is whether we’ll eventually seeing a point where high-rise housing actually becomes a more affordable option for families. Because right now, if you’re in the market for a 3 bedroom home, a low-rise house is likely your most affordable option.
Here’s a quick comparison that I did up this morning between a detached house and a high-rise condo:
For the detached house, I assumed 1,800 square feet at a price of $1,042,405. That’s the average price mentioned above.
For the condo, I assumed a 1,500 square foot 3 bedroom home. I priced it at $650 per square foot (which would be above average for the city) and then added $40,000 for a parking spot. Here you have a slightly smaller condo, but it’s also priced slightly less.
I then compared operating/maintenance costs. For the condo, I assumed a maintenance fee of $0.59 per square foot (which I think is reasonable) and then added $100 per month for electricity. Typically electricity is billed outside of maintenance fees.
For the detached house, I tried to create a similar living situation. I assumed that the owner wouldn’t be cutting their own grass or shovelling their own snow. I assumed that money would be put away each month as a capital reserve for future house expenses (similar to the reserve fund in a condo). And I assumed a gym membership since most condos have a gym. I ignored property taxes and insurance.
The detached house still works out to be a less expensive to operate in this scenario, but not by much. Overall, the two appear quite comparable. Which is why I wouldn’t be surprised if we see a tipping point in the future where all of a sudden families start finally adopting the mythical 3 bedroom condo.
I have published my spreadsheet to the web in case you disagree with my assumptions and want to create your own.
“Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty. Think big.”
-Daniel Burnham, Chicago architect. (1846-1912)
I’m a big fan of Chicago. Having now visited the city, I can say that everyone was right when they told me that I was going to love it. It has great art and architecture, great food (with some of the largest portions I’ve ever seen), great nightlife, and great people.
But I don’t want to talk about any of these things today. Instead, I want to talk about something much more specific that stood out to me last weekend: Chicago’s relationship to both the water and the street.
While Chicago and my hometown of Toronto share many similarities– including being situated on a Great Lake and having rivers flow through the middle of them–the relationship to these bodies of water is remarkably different. Here is a photo of people kayaking in the Chicago River on a Friday afternoon:
What impressed me about Chicago is how intimate and urban the relationship is with the lake and its rivers. If you look at the photo above, you’ll see that many of the buildings are built right up against the river, but that there’s space allocated for riverwalks, patios, and so on. It’s all about engaging and connecting with the water.
Toronto on the other hand, is only recently starting to reacquaint itself with its bodies of water. We spent much of the second half of the 20th century with our back turned to the lake and without a strong urban connection to the Don River. And if I had to guess why it’s because we built highways along them.
We built the Gardiner Expressway adjacent to Lake Ontario and we built the Don Valley Parkway adjacent to the Don River. This fundamentally changed our orientation and largely precluded us, I think, from creating the same kind of waterside urbanity offered in Chicago.
As an example, consider that in the first half of the 20th century, Toronto’s Parkdale neighborhood – which today still has a questionable reputation – was actually an affluent and desirable waterfront community filled with beautiful Victorian mansions. It was well connected to the waterfront, and so the area flourished. Here’s what Sunnyside Pavilion used to look like:
But then in the 1950s we built the Gardiner Expressway, disconnecting Parkdale from the lakefront and destroying many of its amenities, such as the Sunnyside Amusement Park. In turn, the rich people left and their large Victorian mansions got chopped up into rooming houses and other rental housing stock. And in my view, Parkdale still hasn’t fully recovered from this.
Highways are divisive. There’s no question.
So unless you can afford to bury them, it comes down to trade offs: Do you want to make it easier for people to drive in from the suburbs or do you want a truly spectacular water or riverfront? In the 1950s we chose the former. But even still today, the thought of tearing down–even a portion of the Gardiner Expressway–is fraught with opposition. I guess not much has changed.
The second way that Chicago impressed me is through the relationship that many of its buildings hold to the street. They come down to ground level with authority and with great retail presence, and often make no amends about their mass and impressiveness. This frames the street and creates a level of urbanity that isn’t always found in Toronto – particularly outside of the downtown core.
In Toronto, the trend today is towards street level podiums, significant setbacks, and delicate point towers that minimize the impact of their height and allow for natural light to reach street level. It’s well-intentioned and perfectly appropriate in many urban settings. But sometimes you need a little urban assertiveness. Sometimes you want to impress and impose. And Chicago does that.
What I’m getting at is that Chicago architect Daniel Burnham was on to something. He famously advocated for man (that was the era) to think big. Make no little plans, he said. And it’s admirable advice. Toronto is going through a tremendous transformation right now. We’re North America’s boomtown, which is a title that Chicago would have held at one point.
But as we build for the future, let’s remember that, long after we’re gone, we’re going to be judged based on the plans we are making today. So why not make them big ones.
Before visiting Chicago for the first time, everybody told me that I was going to love the city. They would tell me that it’s similar to Toronto, except that it has better architecture and a better waterfront. Having now visited the city, I not surprisingly have a lot to say on this matter. But I need another day or so to formulate my thoughts.
In the interim, I thought it would be fun to host a little competition. Given that both Chicago and Toronto are Great Lake cities of comparable size (and formally sister cities), I’d like to know: Which city, do you think, has the better skyline? Please respond in the comment section below and make sure to include your location (so we all know if you might have a hometown bias).
To help you make your assessment, here are a few photos. Below is one that I took of the Chicago skyline from the architecture boat cruise we went on yesterday afternoon. The building directly in the center is the Trump Chicago.
And here’s a photo of the Toronto skyline that I took from a water taxi earlier this summer.
But since these photos only represent one particular vantage point (me on a boat), here’s a set panoramic photos that I found online (Chicago & Toronto). I want to be as fair as possible.
I think this one could go either way. But I personally like the variety that the lit up CN Tower and Sky Dome (Rogers Centre) bring to Toronto’s skyline. Overall, it feels a lot more modern and exciting to me. So I pick Toronto. What about you?