Category: Development

• Price of a new condominium in Toronto increased 12.5% over the last year

  

  This morning BILD and Altus Group released their January 2019 new home sales figures for the Greater Toronto Area.

  Here are the highlights:

  • 1,362 new homes sold in January 2019 across the GTA. This is up 14% compared to last January.
  • Of these, 942 (~69%) were condominiums (includes low, mid, and high-rise, as well as townhouses). And 420 (~31%) were single-family homes (includes detached, semi-detached, and freehold townhouses).
  • Condominium sales volume is sitting only about 5% below the 10-year average and the benchmark price increased this month to $803,638, which represents a 12.5% year-over-year increase.
  • On the other hand, single-family home sales are down about 53% from the 10-year average and the benchmark price decreased by about 8.1% compared to last year. It is sitting at $1,130,046.

  While there continues to be a bifurcation in the new home market, we are seeing improvements across the board and the data is consistent with Altus’ prediction that 2019 will see an increase in overall sales.

  It is also important to consider how geography might factor into the above numbers. Here are the January sales numbers for the last three years broken down by region within the GTA:

  

  Just under 80% of the new condominiums sold last month took place in Toronto, whereas only about 1.2% of the single-family homes sold last month took place in the city. You can count them on one hand. There were only 5.

  So rather than just look at this in terms of housing type, I think the other way to interpret the data is that it could suggest strong and continued demand for centrally located and transit-oriented communities.

  And that just so happens to translate into a condominium.

  Photo by Eugene Aikimov on Unsplash

  2019.02.26

• Redeveloping the Port Lands — among other things

  On Monday, Christopher Hume of the Toronto Star responded to the recent backlash against Sidewalk Toronto with a piece called, Anger over Google’s vision for Toronto waterfront is misguided.

  The below excerpt is what I was trying to diplomatically allude to with my post on net present value. We need to look at what we are getting and what we are giving up (by way of foregone revenue).

  What had civic (and provincial) nabobs gnashing their teeth was Sidewalk’s suggestion that it should receive a share of city property taxes and development fees. And what would the New York-based outfit do in return? A few things, it turns out. Specifically, it would finance the long-delayed Queens Quay LRT, build the infrastructure necessary to remake much of the Port Lands, launch a new wood-based construction industry and, oh yes, kick-start redevelopment of 140 hectares of long neglected landfill.

  I also don’t understand how the possibility of expanding into the Port Lands has come as a surprise to anyone. That was always integral to the opportunity here in Toronto.

  What your thoughts?

  2019.02.19

• Net present value

  Yesterday’s post was about Amazon pulling out of NYC. Today I thought we’d talk about another contentious city building debate that is happening closer to home.

  This week Sidewalk Toronto announced that it would like to expand its development focus beyond Quayside to the entire Port Lands district along the waterfront.

  To pay for all of this, the Alphabet company is looking for a share of the city’s property taxes and development charges (impact fees), and they want to capture some of the increase in land value.

  Not surprisingly, many reacted poorly to this announcement. Some people are already grouchy about what Sidewalk is up to at Quayside and so this was inevitable.

  But sharing revenue and upside is not necessarily a pioneering idea. It is called a partnership. Perhaps the partners have different skill sets. That is usually a good thing. But regardless, the best partnerships are when all parties win.

  What Sidewalk allegedly wants to do is shoulder more risk upfront in exchange for a kicker on the backend. This, too, also has a name. You can call it real estate development.

  I don’t know the specifics of the deal being proposed, but the question that comes to mind is: What is the net present value to the city — both quantitative and qualitative — with and without Sidewalk?

  (No links in today’s post because I’m writing on mobile while standing at the airport.)

  2019.02.15

• Is this just how the game is played?

  As I am sure you have all heard, there’s a lot of debate in New York right now (city and state) about whether they should reject Amazon’s decision to open up a new headquarters in Queens.

  Urbanist Richard Florida has been arguing that one of the richest companies in the world shouldn’t be receiving taxpayer subsidies and that Amazon should do the right thing here. They should open up in New York but without any inducements.

  As a counter argument, Kenneth Jackson, professor of history at Columbia University, recently opined that this is actually business as usual. American cities have a long history of competing for companies because the benefits outweigh the costs over the longer term.

  Here is an excerpt from his op-ed in the New York Times:

  They are right about one thing. It is absurd that any city would agree to such a deal. But this is how the game is played. Paying companies to relocate has been the American way since 1936, when Mississippi established the nation’s first state-sponsored economic development plan. Under that plan, since followed by many other jurisdictions, cities and states agreed to pay companies to relocate by promising them new factories and low or nonexistent taxes. With those inducements, numerous businesses relocated in the decades after World War II, usually from the union-dominated Northeast and Midwest to the business-friendly South.

  Perhaps this would make a good debate topic for Kialo.

  Update: Amazon just cancelled its plans for a corporate HQ in NYC.

  2019.02.14