One of the things that I’ve been following over the years (and writing about a lot on this blog) is average condo/apartment sizes, specifically in Toronto. I’m interested in this topic because I think it tells you a lot about what’s going on in the market and who is buying/renting.

Developers are often criticized here for building tiny “shoebox condos.” It wouldn’t be unusual to see a building with an average unit size somewhere in the range of 600-700 square feet.

But it’s important to keep in mind that the pull toward smaller units is largely because of one important reason: affordability. All things being equal, I’m sure that most people would gladly take an expansive 2,000 sf apartment. But how many people can actually afford a place that large? And for those who can afford it, many seem to opt for ground-related housing instead. So for the most part, the market has said: not many.

But I’ve suspected for awhile that it was only a matter of time before we saw unit sizes start to creep upward. And indeed today there seems to be a trend toward larger units. I can’t tell you the exact percentage increase for average unit sizes across the city, but you don’t have to look very hard to find a proposed project with average unit sizes in the range of 1,000 to 1,500 sf. I spent this morning looking many of them up and going through their data sheets. If any of you have a larger sample size, please share it in the comment section below.

To me this feels like a maturation of the market. More of us are deciding to move up, instead of out, which is absolutely what we need to do. Affordability, perhaps more than ever, is still a concern. But the confluence of a couple of factors seem to be expanding the multi-family market in this direction.

One, empty nesters are starting to cash out of their large houses and they still want/need space. Two, the price of low-rise housing has increased so dramatically that it’s now out of reach for many and/or it no longer feels cost competitive on a per square foot basis. Three, Toronto’s status as a global city continues to increase and this is making it more of a magnet for foreign capital. And four, central and transit-adjacent housing is incredibly desirable for a large segment of the population. Horrible traffic is probably helping this one.

If there’s any truth to my logic, then I wonder if we won’t see a bit of a bifurcation in the market, if we aren’t already. On the one end, there will still be the pull to shrink unit sizes and maximize affordability. See micro-units. But on the other end, there will be a product segment that now acts as a substitute for low-rise housing.

I’ve said this before, but I’ll say it again: I think more families in condos and apartments would be a positive thing for the city.

The U.S. Census Bureau recently released it’s 2016 city and town population estimates. The press release can be found here.

The headline isn’t a new one. Southern cities continue to grow quickly. This is not a new trend. Humans seem to like warm weather and the housing supply in southern cities tends to be more elastic. This keeps home prices relatively in check and allows the cities to more easily accommodate growth.

From July 2015 to July 2016, 10 of the 15 fastest growing large U.S. cities were in the south (based on % growth). 4 of the top 5 were in Texas. 

From 2010 to 2016, the population in large southern cities grew an average of 9.4%. Cities in the west clocked in at 7.3%. And cities in the northeast and midwest were at 1.8% and 3.0%, respectively.

Two outliers near the top are Seattle and Denver. Since 2010, the population of these two cities grew 15.39% and 14.87%, respectively. I’m going to say it’s because of the skiing and snowboarding. Half-joking. For the top 25 large cities ranked by 2010-2016 growth rate, click here.

In terms of absolute humans, Phoenix had the largest numeric increase between 2015 and 2016: 32,113 or about 88 people per day. After Phoenix it’s Los Angeles (27,173), San Antonio (24,473), New York (21,171), and Seattle (20,847). These are all city proper figures.

It’s also worth noting which large cities aren’t growing. From 2015 to 2016, Chicago fell -0.32% and Detroit fell -0.52%. Philadelphia was only slightly positive at 0.19%. Going back to 2010, Chicago is still flat at 0.27% and Detroit is even more negative at -5.39%. Philadelphia is 2.5%.

Follow the sun and the sprawl.

The below charts are from the United States Census Bureau.

City Observatory recently published a post called, The 0.1 percent solution: Inclusionary zoning’s fatal scale problem. 

I recognize the political attractiveness of this land use policy, but I’ve always been skeptical about its effectiveness. 

Here’s an excerpt from the post:

“While inclusionary zoning gets top mention as a preferred policy by many affordable housing advocates, there’s precious little evidence that its ever had more than a token effect on the size of the housing affordability problem in any city. In addition, because inclusionary zoning requirements essentially shift the cost of housing subsidies onto new development, they raise its cost, and likely reduce the number of units that get built–which tends to aggravate housing shortages and further accelerate prices.”

Sadly, I think that many housing policies tend to be more about optics, than about impact. There’s rarely such thing as a free lunch.