The Missing Middle Initiative just released its latest Greater Toronto Area and Greater Golden Horseshoe Housing Report Card. If you'd like to download a copy and see the generally abysmal grades, there's a link at the bottom of this page. But here are the high-level findings (based on Q4-2025 data):

• Housing starts are down 34% year-over-year across the 34 municipalities covered in the report.

• Condominium starts, in particular, are down over 50% year-over-year.

• Pre-construction sales, which are a precursor to housing starts, are down 89% for condominiums and 58% for ground-oriented houses.

• The only exception to the above is purpose-built rental starts, which increased 39% year-over-year. But this increase doesn't come close to offsetting the declines seen in both condominiums and low-rise housing.

Once again, we are reminded of the looming housing shortage that, I think, could be felt as soon as next year. New construction is inherently slow to respond to market changes, and, as of right now, the ship is clearly headed toward almost no new supply. For that to change, we will almost certainly need to see pre-construction sales return.

Cover photo by Dmitry Gerasimenko on Unsplash

As a developer, or other market participant, it's easy to be pessimistic about the current housing market in Toronto. It's a challenge to make new projects work. That's suboptimal from a business and city-building standpoint, and for Type A personalities who thrive on accomplishment. But today, let's look at some of the positives and opportunities that are already here or are likely to happen going forward.

• If you're a developer who has been doing the same thing for decades, now is the opportunity to rethink your model and innovate. Why? Because the old model isn't working, and who knows if it ever will again when the fun times return.

• Already, we are seeing a renewed focus on end-user buyers and renters. This is healthy for the market. It signals a return to fundamentals and a deeper focus on our customers. What kind of homes do people actually want to live in?

• At the same time, if you're in need of a home, now is an excellent time to buy or rent. Similarly, for developers, now is an excellent time to buy sites, provided you've found a project that works or you have the balance sheet to be patient.

• Modular construction and mass timber are getting a lot more airtime. They aren't a silver bullet in this market, but these things take time and it's positive that more developers and builders are exploring and testing out their options.

• Crisis forces the hand of government. Already, we have seen a new HST rebate, cuts to development charges, and other helpful measures. I also think cities are more receptive to negotiation. If you have a wild and crazy idea that just might work, go talk to them!

• As incumbents struggle with their legacy assets and deals, the market is creating more space for new entrants and fresh ideas. I have no doubt that we will see a new generation of developers and entrepreneurs emerge during the next cycle.

Never let a good crisis go to waste, as they say.

Would you add anything to this list?

Cover photo by Lennon Kong on Unsplash

I was on a panel this week, put on by BILD, called "Design That Sells." The focus of the panel was on how innovative product design can help sell homes in the current market environment. When I was first asked to be on the panel, I thought to myself, "I'm not sure I'm qualified to talk about this right now. Market conditions, rather than design, are the challenge!"

Of course, focusing on your customers' needs, solving their problems, and innovating with great design is always going to be the way. I think we've consistently tried to do this with our projects, and so that's what I talked about.

But what the discussion also got me thinking about — though I didn't mention this during the panel — is the late Clayton Christensen's theory called "Jobs to Be Done." I've written about this before on the blog, specifically about his milkshake case study.

The key idea behind the theory is that customers "hire" products and services in order to complete specific "jobs" for them. The problem is, businesses sometimes don't actually know the job that people are hiring for! In the case of the milkshake case study, this ended up being the job:

"Most of them, it turned out, bought [the milkshake] to do a similar job," he writes. "They faced a long, boring commute and needed something to keep that extra hand busy and to make the commute more interesting. They weren't yet hungry, but knew that they'd be hungry by 10 a.m.; they wanted to consume something now that would stave off hunger until noon. And they faced constraints: They were in a hurry, they were wearing work clothes, and they had (at most) one free hand."

This is why people were buying milkshakes in the morning, and why their efforts to sell more later in the day were not working. Now, let's talk about a case study that is closer to home. If you visit the Christensen Institute's site, you'll find a case study of his theory from the condominium industry.

The objective was for a Detroit-area developer to sell more homes targeted toward retirees and divorcees. They priced accordingly, had all the luxury finishes, and spent on elaborate marketing, and yet their inventory wasn't moving. Was it a design problem? A pricing issue?

Nope:

So, Moesta took a Jobs to Be Done approach: He set out to learn from the people who had bought units what job they were hiring the condominiums to do, and the conversations revealed an unusual clue: the dining room table. Prospective customers repeatedly told the company they didn’t need a formal dining room. And yet, in Moesta’s conversations with actual buyers, the dining room table came up repeatedly. “People kept saying, ‘As soon as I figured out what to do with my dining room table, then I was free to move,’” says Moesta. The table represented family. 

What was stopping buyers from making the decision to move, he hypothesized, was not a feature that the construction company had failed to offer, but rather, the anxiety that came with giving up something that had profound meaning. “I went in thinking they were in the business of new-home construction,” Moesta recalls. “But I realized they were in the business of moving lives.”

To solve this problem, the company offered moving services, two years of free storage, and a "sorting room" in the condominium where new owners could dump their stuff and then take their time deciding what to keep and what to discard. And it worked. Brilliant.

Once you understand the actual barriers and "jobs to be done," you can solve for them. Sometimes it might be a design problem, but it could be something totally unexpected. Regardless, the solution lies in caring about and understanding your customers. This is true in all market conditions.