Category: Housing

• Singapore increases property stamp duty for foreigners to 60%

  Singapore isn’t exactly saying that foreigners can’t buy homes there, but it did just increase the stamp duty on purchases by foreigners to 60%. So it is saying that maybe you shouldn’t do it, unless you want to pay a lot of tax.

  On the other hand, if you’re a foreigner with permanent residency in Singapore, the stamp duty is only 5%. But if you then want to buy a second property, the rate jumps to 30% (up from the previous rate of 25%). Companies or trusts that buy any sort of residential property also now need to pay a stamp duty of 65% (up from 35%).

  The official message is that these are “pre-emptive measures” to cool demand, which I guess is mostly aimed at mainland Chinese buyers. This is the largest group. Last year, they accounted for about 25% of foreign condo purchases in Singapore. However, the total number of homes purchased by foreigners remains pretty low at just 4.7% (2022). Though first quarter data from this year does suggest the number has increased to about 7%.

  Even still, how many homes is this?

  Based on this information, there were 20,909 private home sales in Singapore in 2020. So let’s assume this has since increased and the number is, oh I don’t know, somewhere around 25,000 homes per year. At 7%, that’s 1,750 homes being sold to foreigners each year. Going forward, I don’t know how many people are going to be willing to pay the 60% stamp duty, but presumably some will still do it.

  If we pick a random number and assume that this higher tax wipes out 80% of the foreign demand, then that’s an additional 1,400 homes for locals and only 350 homes going to foreigners each year. Maybe this is something?

  2023.04.27

• Junction House just got its placemaking art

  Today was a fantastic day for the development manic meter. This was finally installed at Junction House:

  

  

  

  If you happen to find yourself in the area, check it out at 2720 Dundas Street West. And if you’d like to know a little bit about how this placemaking art came to be, click here.

  2023.04.26

• It’s decision time on fourplexes in Toronto

  We talk a lot about “missing middle” housing on this blog and, most recently, we’ve been talking about Toronto’s proposed amendments to allow fourplexes across the city and to do away with density maximums (among other things).

  Well, it’s now time to make a decision. These proposed changes are headed to Planning and Housing Committee on Thursday, April 27th. If you’d like to attend in person or virtually, here’s a copy of the public meeting notice.

  The other option is to make a written submission. The good people over at “More Neighbours Toronto” have created this website which will allow you to quickly write the Committee.

  There’s an auto-generated response in support of legalizing multiplex housing — and that’s what I used for my boring email submission — but, of course, you’re free to edit the text as you’d like.

  If you check the agenda, you’ll see that there are already hundreds of email submissions in to the Committee, many of them coming from More Neighbours. Clearly this is a topic that, one way or the other, many people feel very strongly about.

  Click here to make an email submission.

  2023.04.25

• IKEA has just hired photographer Annie Leibovitz to document normal people doing normal things in their homes

  

  Last year, IKEA went around the world interviewing some 37,000 people in 37 countries about what it takes to “make us feel at home.” And one of the things that they discovered was that nearly 50% of people do not feel like their home reality is authentically represented by what they see in the media. In other words, there is a disconnect between how we actually live at home and how the media suggests we are or ought to be living.

  To explore this disconnect a little further, IKEA has just announced that photographer Annie Leibovitz will be the company’s inaugural Artist in Residence. Leibovitz is best known for her celebrity photographs. But for this assignment, she’s going to be travelling to the US, the UK, Japan, Germany, Italy, India, and Sweden, to photograph normal people doing normal things in their homes.

  This is a fascinating idea because we know that there are all kinds of cultural biases around housing. Here in North America, for example, there is a longstanding history of hating apartments. If you wanted to properly raise a family, you needed a morally correct form of housing; meaning, a grade-related house. But this reality isn’t universally possible in most big cities today, and that is probably one of the reasons why we now have this disconnect:

  …why do people feel like they’re not represented in the media, that they’re left out? ‘In the same way that there has been a typical idea in the fashion industry about what size a woman should be, there’s been a typical idea of what a home is,’ wagers Leibovitz. ‘But now we’ve opened up in all sorts of ways, and there’s a difference between a home and feeling at home. And the latter can happen in many different places and maybe that’s more important now than an actual home.’

  On a more basic level, I think people are also just endlessly curious about how people live and what their homes are like. So regardless, this should be interesting.

  Photo by charlesdeluvio on Unsplash

  2023.04.23

• Examining a circular floor plate in Rio de Janeiro

  

  I came across this apartment on ArchDaily this morning and I immediately thought to myself, “this looks like the Lagoa neighborhood of Rio de Janeiro.” (Rio is one of my favorite cities and we nearly spent a few weeks of winter 2021 in this particular area.) So I opened it up and it turns out I was right. It’s a recent apartment renovation, in this building, by Rio de Janeiro-based architects MZNO.

  I then got onto the floor plan:

  

  Circular building floor plates invariably create fan-shaped suite layouts like this one here. From my experience, these can create some really beautiful spaces up near the face of the building, but they tend to work better when you have a bit more space to play around with. You’re also going to end up with diagonal walls and probably a radial structural system. In this case, the suite is just under 1,000 sf.

  

  I wondered if this might have been two suites that were joined together, with the previous demising being the radial shear wall behind the couch (see above). There seems to be two entrances to the suite on this plan. But then I looked at active listings in the building and this seems to be a typical layout. So I think they just stripped things down to the existing structure in order to open up the plan.

  

  The other item that stood out to me on the plan was the long corridor off the primary bedroom. But again, looking at other plans in the building, I can see that it was initially designed as a walk-in closet. This makes more sense, but it’s also a compromise brought about by this being a relatively deep plan.

  The bedrooms are “tetrised” together to make efficient use of a limited amount of linear glazing. An alternative trade-off (in this second plan) would have been to give it more frontage, and then bury the office (escritório). But I suppose there’s a good argument to be made that it’s better to have more light in your office than in your bedroom.

  MZNO was probably thinking along these same lines when they designed the linear kitchen in the way that they did in the first plan. By aligning it perpendicular to the suite’s exterior glass, you’re able to gain access to a view and some light even when you’re toward the back of the suite.

  

  Finally, the other thing about circular buildings is that they allow you to do cool circulation spaces like the above. In this case, all of the common area corridors are single-loaded, and wrapped around a huge lightwell in the middle of the building. This maybe isn’t so good if you suffer from vertigo, but it’s obvious that these corridors are serving as an extension of people’s living areas.

  And since this is Brazil, they’re naturally filled with greenery.

  Images: MZNO & Loft

  2023.04.16

• Corktown Condos to launch sales this spring

  

  Earlier this week, I shared this image of Corktown Condos on my Instagram. It represents the first phase of Slate’s two-phase project in Hamilton, and I’m excited to announce that we’ll be launching sales this spring (both in Hamilton and in Toronto).

  We love Hamilton. It has walkability, transit, a wonderful stock of old buildings, and a dynamic and growing cultural scene. In other words, it has all of the characteristics that we look for when it comes to new projects. And here, our approach to city building is exactly analogous to what we did in Toronto at Yonge & St. Clair.

  Those of you who are familiar with our work will know that Slate owns 8 office buildings in midtown, including all four corners of the Yonge & St. Clair intersection. And that we have spent the last decade investing in these buildings, investing in the public realm, investing in public art, and working to support businesses in the area. Then in 2021, we launched sales on a landmark condominium tower called One Delisle that is now under construction.

  Here in Hamilton, we are similarly investing in economic development and in housing. Last year, it was announced that we acquired approximately 800 acres of industrial land and buildings on Hamilton’s waterfront. This site alone has the potential to create up to 23,000 new jobs across the region and inject up to $3.8 billion into Ontario’s economy. It will likely also take some time and be measured in decades.

  We prefer to think of ourselves as city builders. And that means taking a long-term view and thinking about the broader city — not just about our individual projects. So for us, Corktown is part of a much larger and longer-term commitment to the City of Hamilton. And we couldn’t be more excited to share it with all of you in the coming weeks.

  Stay tuned. And if you’d like to register for Corktown, you can do that over here.

  2023.04.15

• What would you do if you were Mayor?

  

  Let’s assume that you’re Mayor of your city and that, for whatever reason, you have no need to pander to voters. You’re a benevolent dictator. You can do whatever you think is best overall for the city and it will just happen. What would you do? This is more or less the question I asked on Twitter this morning, and I think it’s only fair that I answer my own question. So here is a non-exhaustive list of items that came to mind while thinking of Toronto:

  • Substantially increase the pay of public sector workers throughout the city and bonus them based on measurable outcomes. Forget things like time limits on development applications; instead align incentives. For example, if we’re trying to get more shovels in the ground on affordable housing, incentivize people based on building permits issued. I’ll never forget what Roger Martin told me while I was at Rotman. When he became Dean of the school, Rotman was a whatever business school that wasn’t faring all that competitively in the rankings. One of the problems he discovered was that the school’s professors were getting paid far less than those at Wharton, Harvard, Stanford, and so on. So if you were a star, why would you ever want to teach at Rotman? He immediately matched the salaries of those top-tier schools and then, not surprisingly, the top-tier talent arrived. You get what you pay for.
  • Immediately price roads and congestion, and direct, to the fullest extent possible, the funds toward transit and cycling infrastructure. At the same time, the planning and building of transit would be depoliticized. There would be a reccurring funding stream and a plan that we’re continually building out. Minimize protracted debates. Never stop building. There’s a lot of talk this mayor election about solving traffic congestion. I have yet to see a plan that will actually work. Accurately pricing congestion likely won’t be popular, but I can guarantee you that it will be highly effective.
  • Ensure that property taxes are sustainably covering the costs of operating the city and then, at a minimum, peg all future increases to CPI.
  • Make any new housing development less than 12 storeys as-of-right. That would mean, no rezoning process and no site plan approval; just straight to building permit.
  • Empower the private sector to build affordable housing through incentives and subsidies. Affordable housing isn’t feasible to build on its own, which is why nobody is doing it. Inclusionary zoning also won’t get us there. Make developers want to build it and they’ll do it.
  • Liberalize licensing and cut red tape to empower small entrepreneurs across the city in various industries. A perfect example in my mind is street food. Toronto is the most diverse city in the world with some of the best restaurants, and yet the only thing you can buy on the street is a stupid hot dog. If we empowered small entrepreneurs to setup shop on our streets, we would easily have the best street food scene in the world. And I am positive that there are countless other latent opportunities in this city that are being held back by dumb and archaic rules.
  • Make dramatic improvements to our public realm with an eye toward becoming the most beautiful and livable city in the world. Finally pedestrianize Kensington Market, remove the elevated Gardiner Expressway, make it so that we can swim in the Lake, build beautiful public washrooms all across the city that are actually open and aren’t gross, and the list goes on. And yes, “beauty” should be requirement so that we don’t end up with shit like this.
  • Focus on art, design, culture, and innovation as central pillars of Toronto’s brand. Miami is a good example of what this approach — along with favourable taxes and nice weather — can do for a city. I’ve said this before, but here’s just one example: Toronto is in many ways the birthplace of the cryptocurrency Ethereum. Why is nobody talking about this? Why are we not celebrating and leveraging this? It’s a missed opportunity. Broadly speaking though, I think just having and doing three things can be effective in promoting new ideas for these pillars: have reasonably affordable housing, be a city that young people want to live in, and remain open and tolerant to immigrants.
  • Stop thinking of the night-time economy as a nuisance and instead think of it as a powerful economic development tool. I recently responded to this “night economy survey” that the City of Toronto released and the obvious bias is that nighttime things are seen as a terrible nuisance. In other words, “tell us how do we make all of this less annoying for grouchy voters.” My response was to extend last call to 4am and to start thinking of it as an opportunity to draw in young people, tourists, and whoever else. This complements my previous point.

  This is, again, a completely non-exhaustive list. But if I had to summarize the overall ambition, it would be to make Toronto a truly exceptional and remarkable city. We should never be happy with mediocrity.

  What else would you do? Leave a comment below.

  Photo by Aditya Chinchure on Unsplash

  2023.04.09

• No more floor space index maximums

  I am positive that it had absolutely nothing to do with this post about fourplex feasibility, but I was happy to receive this notice in the mail yesterday:

  

  It is a public meeting notice for the City of Toronto’s proposed multiplex policies (defined as duplexes, triplexes, and fourplexes). And as you can see from the highlighted section, they’re looking, among other things, to make this form of housing exempt from floor space index maximums.

  Good.

  I don’t like this “where applicable” business, but I’m going to conveniently ignore that for now and just say that this is positive. Removing density maximums is a mandatory ingredient for helping to make this type of housing feasible.

  No FSI maximums. No DCs. And let’s modernize how HST is charged on new rental housing.

  2023.04.06

• New rental apartments in Toronto by year of construction

  

  “Your local self-inflicted housing criss ouroboros” tweeted this chart out over the weekend, showing the number of new rental suites completed in Toronto since 1900. The data is from Open Data Toronto and it does not include any condominiums. It also only includes apartment buildings with 10 or more suites (which would be most of the supply anyway).

  This chart is a good example of what we spoke about yesterday: “If you want to negatively impact new supply, cap rental growth.” And that’s exactly what was done in the 1970s. But in reality, the changes were more broad than this. The 1970s saw a philosophical shift in the way Canada thought about new housing.

  Housing became rightly viewed as a basic human right. But because of this, the policy landscape shifted away from facilitating the private sector, to intervening and regulating the private sector. This included tax changes which negatively impacted new housing development and, yes, rent controls.

  Ironically, but not unexpectedly, this dramatically lowered the overall supply of new rental housing. To the point where we had effectively shut off the taps by the late 1990s. Thankfully, the condominium sector stepped in and started meaningfully delivering new housing — both for sale and for rent (via individual private investors).

  The supply of new condominiums in Toronto is not shown above, but there is no question that this (shadow rentals) has formed the vast majority of our new rental stock over the last two decades. But in my view, this shift was largely the result of policy decisions. We decided that we didn’t want the private sector building so many new purpose-built rentals, and so we told them to stop.

  It then listened remarkably well.

  2023.04.02

• Two ideas for increasing the supply of new rental housing

  

  There are lots of ideas out there for how to improve the supply of new rental housing. But it is important to remember, at least here in our market, that the playing field is not level between new condominiums and new rental homes. We have spoken about this before, over here, where I compared the (per square foot) revenue generated from your average new condo against that generated by your average new rental home. Of course, since I wrote that post in 2020, we have seen upward pressure on cap rates (meaning downward pressure on values). So feasibility has gotten even more challenging.

  Land is not the factor preventing rental these days
  1. Upfront equity requirements
  2. Cost escalation: construction, interest rates, DCs, HST
  3. Revenue uncertainty (build first lease later) & lease-up risk
  4. Take-out financing availability
  5. Better investment alternatives

  — Benjamin 🐂✒️ (@benmyers29) April 1, 2023

  The important thing to remember is that developers do not have some philosophical aversion to building more rental housing; it is that the math is challenging. You generally need economies of scale (really big projects), patient long-term capital, and a belief that rents will continue to exhibit meaningful positive growth. If you want to negatively impact new supply, cap rental growth. But if you want to encourage new supply, somebody needs to pull out a development pro forma and make the call to improve the cost structure for new rental housing.

  In my opinion, two obvious line items to focus on are development charges (as well as the other government levies) and HST (our harmonized sales tax). The point of development charges, as we always talk about, is for growth to pay for growth. They are intended to pay for municipal services like roads, transit, water and sewer, and so on. In the other words, they’re supposed to capture of the cost impacts of new housing. But what about the impact of not building enough new rental housing? Are we thinking about this the right way? Especially if you consider the possibility of more new rental housing in our existing transit nodes.

  The HST charged on new rental housing is also significant. There is a new residential rental property rebate available to builders (not tax advice!), but the thresholds have not been indexed and so it’s grossly out of date compared to where values sit today. In any event, if the goal is more homes, why not make new rental homes exempt? Developers are simple. If the math works, they will build. If the math doesn’t work, they will not build. And these two line items, alone, would go a long way to helping the former.

  Photo by Pierre Châtel-Innocenti on Unsplash

  2023.04.01