On Tuesday night I attended a great industry event that Quadrangle Architects organized about mid-rise buildings.
Mid-rise buildings (somewhere around 4-12 storeys) are all the rage in Toronto these days. But there are many challenges associated with this building typology and this was an event to talk about them and hopefully push things forward.
One of the speakers at the event was Jeanhy Shim of Housing Lab Toronto. And I’d like to share one of her slides here:
It reads:
Value = (rational benefit x emotional benefit) / price
I believe she admitted to taking it from someone at Bruce Mau Design. But that’s okay. That’s how ideas build. What I really like about it is that it attaches a value to the things that are difficult and sometimes impossible to measure: the emotional stuff.
As I mentioned in this post over the weekend, we are all obsessed with the quantitative side of our businesses. In the case of development, we look at prices, per square foot prices, apartment sizes, and the list goes on. And we often reduce our “products” to these sorts of key metrics.
But if you’re competing just on numbers, then you’re missing a big and important part of the equation. People consume things – and housing is no different – for a number of different reasons. We buy things because of how it makes us feel, how it reinforces our sense of self, how it improves or promises to improve our lives, and so on. These are all harder to measure than square footage.
But we are living in a data driven world and more and more of this type of information will become available for city building. If you and your business can get your head around it first, you’ll have a huge advantage.
I was looking through real estate listings this morning (which I do quite often out of sheer interest), and I started noticing a number of 3 bedroom condos (here in Toronto) that were priced under $1 million.
Now, this is a lot of money now matter how you slice it. But given that the average price of a detached home in the city is now well over $1 million, I can’t help but wonder if condos will become more accepted as the family home.
I’ve written about this topic a lot, because it’s something I’m interested in and I like living in a condo. But I’m seeing far more of my network looking for a low-rise house upon marriage/kids than for a bigger apartment/condo.
So today I thought I would run a very quick survey. There are only 3-4 questions depending on how you answer and it basically revolves around housing type and whether or not you have or plan to have a family. I also ask what city you live in because I think this will have an impact on preferences.
If you have 30 seconds, I would love to get your input and I’m sure the ATC community would be interested as well. The responses are anonymous, but I’ve made them public. Click here if you can’t see the survey below.
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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:
On Tuesday night I attended a great industry event that Quadrangle Architects organized about mid-rise buildings.
Mid-rise buildings (somewhere around 4-12 storeys) are all the rage in Toronto these days. But there are many challenges associated with this building typology and this was an event to talk about them and hopefully push things forward.
One of the speakers at the event was Jeanhy Shim of Housing Lab Toronto. And I’d like to share one of her slides here:
It reads:
Value = (rational benefit x emotional benefit) / price
I believe she admitted to taking it from someone at Bruce Mau Design. But that’s okay. That’s how ideas build. What I really like about it is that it attaches a value to the things that are difficult and sometimes impossible to measure: the emotional stuff.
As I mentioned in this post over the weekend, we are all obsessed with the quantitative side of our businesses. In the case of development, we look at prices, per square foot prices, apartment sizes, and the list goes on. And we often reduce our “products” to these sorts of key metrics.
But if you’re competing just on numbers, then you’re missing a big and important part of the equation. People consume things – and housing is no different – for a number of different reasons. We buy things because of how it makes us feel, how it reinforces our sense of self, how it improves or promises to improve our lives, and so on. These are all harder to measure than square footage.
But we are living in a data driven world and more and more of this type of information will become available for city building. If you and your business can get your head around it first, you’ll have a huge advantage.
I was looking through real estate listings this morning (which I do quite often out of sheer interest), and I started noticing a number of 3 bedroom condos (here in Toronto) that were priced under $1 million.
Now, this is a lot of money now matter how you slice it. But given that the average price of a detached home in the city is now well over $1 million, I can’t help but wonder if condos will become more accepted as the family home.
I’ve written about this topic a lot, because it’s something I’m interested in and I like living in a condo. But I’m seeing far more of my network looking for a low-rise house upon marriage/kids than for a bigger apartment/condo.
So today I thought I would run a very quick survey. There are only 3-4 questions depending on how you answer and it basically revolves around housing type and whether or not you have or plan to have a family. I also ask what city you live in because I think this will have an impact on preferences.
If you have 30 seconds, I would love to get your input and I’m sure the ATC community would be interested as well. The responses are anonymous, but I’ve made them public. Click here if you can’t see the survey below.
[googleapps domain="docs" dir="a/brandondonnelly.com/forms/d/1wyMguhSlNv6pe6DS3duyJUqpzjImHI_KiYer1CKTVxo/viewform" query="embedded=true" width="640" height="600" /]
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.
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.
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