I can think of at least a dozen buildings in Toronto that use some form of a parking stacker system. And I am seeing firsthand how they are becoming more popular and more commonplace as a result of space constraints, rising costs, and a bunch of other factors. Below is an example of a system that allows you to (almost) triple the number of cars that can be accommodated on a given footprint. However, it does require higher floor-to-ceiling heights and a pit. If you can’t see the video below, click here.
Category: Housing
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A 17.6 square meter apartment in Taipei
Dezeen recently announced its 2019 interior award winners and this 17.6 square meter (~190 square foot) flat in Taipei was selected for “small interior of the year.” Designed by the Taiwanese studio A Little Design, the space features a 3.4m ceiling height and a queen-size sleeping loft. The design is very well done.
But as I was looking through the photos, I couldn’t help but think, “This is about the size of a parking spot in Toronto.” Typically, the minimum dimensions for a parking space are 2.6m wide by 5.6m long. If either side is obstructed or the drive aisle is substandard, these dimensions need to be increased.
So we’re not far off.
Some of you will interpret this to mean that the apartment is too small; whereas some of you will interpret this to mean that the spaces we dedicate to cars are too big. It’s a matter of perspective. But what is clear is that there is a market for small urban spaces. Here are some other examples from São Paulo, Beirut, and Moscow.
Photo: Hey! Cheese
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Metrolinx to further optimize the Union Pearson Express train
It was announced this week that Metrolinx will be making changes to the popular UPX train service that connects Union Station to Toronto’s Pearson International Airport. This is an interesting transit story. And as someone who will be moving to the Junction (adjacent to one of the stops along the way), I have a vested interest in this announcement.
The UPX started out as a high-priced boutique train service to the airport. A one-way fare was $27.50 per person (without a PRESTO card). This was too much and I argued that here on the blog. If you looked at the math and compared it to the alternatives, such as taking an UberX, most people were not going to take this train.
The fares were ultimately dropped — by a lot — and the service then took off not only as a link to Pearson but as an inner-city commuter service. I now sometimes call it the Union-Junction Express, because the actual train ride from Union to Bloor St (at Dundas West) is about 7 minutes once you’re on the train.
The announcement this week merely solidifies the train’s evolution from high-priced boutique service (which didn’t work) to airport/commuter service (which is really working). The trains are expected to run more frequently now, some of which will continue to make the same stops as today and some of which will stop in new locations along the line.
As transit-advocate Cameron MacLeod said in the Globe and Mail yesterday, “there’s both good and bad news here.” The good news is more frequent service. Even quicker trips in some instances. And better integration with the broader GO train network. The bad news is the award-winning UPX station at Union will no longer be needed. The service is expected to move to a new platform.
Photo by Sean Thoman on Unsplash
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Airbnb is powering new purpose-built short-term rental buildings
This past weekend I was in a condo building here in Toronto with large signs in the elevator saying, “No Short-Term Rentals Including Airbnb Are Permitted. Trespassers Will be Prosecuted.” It was the first time I had seen anything like this, but it immediately signaled to me that the building must be having a problem with short-term rentals. Why else would you deface the elevators? There are some buildings that allow short-term rentals, but most don’t.
However, over the last few years we have started to see purpose-built short-term rental buildings. In some cases, existing apartments buildings were “converted”, as was the case with Niido’s two properties in Nashville and Orlando. Here tenants in the building can rent both unfurnished and furnished apartments and then rent them out on Airbnb up to a maximum of 180 days per year. To date, I think these are the only two properties to use the “Powered by Airbnb” moniker, but more are on the way.
The developer behind Niido — Newgard Development Group — recently launched a new Powered by Airbnb brand called, Natiivo. This one looks to be focused on for sale product, with two upcoming projects in Austin and Miami. Both projects will have hotel licenses in order to avoid any regulatory risk going forward. But this makes me wonder how materially different this model is from the condo-hotels we’re already familiar with.
For landlords and developers, the goal is obviously to maximize rents and prices. Allowing (or explicitly encouraging) residents to rent out their place and earn some extra cash, should help with that. And given the way I started this post, we also know there’s a desire to do this, particularly in places with strong tourist demand like in Nashville and Miami. But the reviews are mixed. Not everyone wants to live in a hotel. But then again, not everyone wants to co-live. To each their own.
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Conservatives announce four-point housing plan
Earlier today, the Conservative Party of Canada made the following housing policy announcement. If elected this fall, they would (copied verbatim from here):
- Fix the mortgage stress test to ensure that first-time homebuyers aren’t unnecessarily prevented from accessing mortgages and work with OFSI to remove the stress test from mortgage renewals to give homeowners more options.
- Increase amortization periods on insured mortgages to 30 years for first-time homebuyers to lower monthly payments.
- Launch an inquiry into money laundering in the real estate sector and work with our industry partners to root out corrupt practices that inflate housing prices.
- Make surplus federal real estate available for development to increase the supply of housing.
There aren’t a lot of details here, but Andrew Scheer did say that his party would eliminate the financing “stress test” for all mortgage renewals. Currently, you’re only exempt if you renew with your existing lender.
As Rob Carrick points out, this is a pretty sensible move. (Though he doesn’t agree with “fixing” the stress test.) The current situation gives the incumbent lender almost monopolistic power if the borrower can’t meet the stress test and is unable to shop around for a better rate.
At the same time, we know that the price of a highly levered asset tends to correlate with financing ability. So depending on what serves you better, you may be either concerned or delighted that this increased buying power could spur further housing consumption/appreciation.
Housing policy is a complex and curious thing.
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Apartment rents in Ottawa vs. Gatineau
Ottawa, Ontario and Gatineau, Quebec are border cities. They exist on either sides of the Ottawa River. And yet, 2017 data from the Canada Mortgage and Housing Corporation revealed that there’s about a $450 per month rent spread on the average two-bedroom apartment in these two cities. The average rent on the Ontario side was $1,232 per month; whereas the average rent on the Quebec side was $782 per month.
Now, Ottawa is bigger. The city has a population of about 934,243 (2016); whereas Gatineau is about 276,245 (2016). Ottawa is also the nation’s capital, and so the center of gravity is firmly toward the former. But the border is also very porous. Google Maps is telling me that you can walk from downtown Ottawa to downtown Hull (Gatineau) in 30 minutes. So why then is there such a rent disparity?
Is there a language barrier? Is it because income taxes are higher in Quebec? Or is it something else? Interesting.
Photo by Marc-Olivier Jodoin on Unsplash
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The 50 coolest neighborhoods in the world
There’s a stretch of restaurants and bars on the south side of King Street, west of John Street, here in Toronto, that I generally try and avoid. I won’t name names, but if you’re from Toronto, you know what I’m talking about. With all due respect to the business owners, I think of this stretch as tourist row. All cities have them. Usually the identifying marker is a human on the street with a menu trying to entice you to come inside and eat. And there’s nothing wrong with that. I can appreciate good street hustle.
But whenever I’m traveling and trying to find a place to eat, I’ll often think to myself, “Oh man, is this the (insert city name here) equivalent of tourist row? I see people on the street with menus in their hands. Could be.” This is one of the reasons why I like Time Out’s recent “definitive list of the planet’s cultural and culinary hotspots.” They surveyed over 27,000 city dwellers in order to figure out where locals actually want to hang out. The result is the 50 coolest neighborhoods in the world.
I am somewhat embarrassed to say that, I think, I’ve only been to 6 of them. I have work to do. But Toronto does make the list — once — and it is none other than the Junction. Their recommendations, here. However, one thing they did miss was the Union Pearson Express. That is the way to get to the Junction from Union Station and it is, clearly, still under the radar for most. The number one spot on their list goes to Arroios in Lisbon, which is actually beside where I stayed when I was there this summer. Damn that city is cool.
For the full list of neighborhoods, click here.
Full disclosure: I am not a neutral observer. We are developing in the Junction. And I am moving to the Junction (and trying to pretend to be cool).
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Suburban household debt in Canada
Rachelle Younglai and Chen Wang’s recent piece in the Globe and Mail on suburban household debt (in Canada) has a number of interesting stats. Here are some of them:
- Looking at debt service ratios across the country, the most financially stressed neighborhoods in Canada are almost exclusively in the suburbs. (Map of the Greater Toronto Area shown at the top of this post. Data from Environics Analytics.)
- 34 of the top 100 most financially strained neighborhoods in Canada are located in Brampton, Ontario.
- Brampton has grown at 2x the rate of Toronto over the last decade.
- 43% of Brampton’s housing was built between 2001 and 2016.
- 80% of homeowners in Brampton have a mortgage compared to 63% across the Toronto region as a whole.
- 80% of Brampton’s property tax revenue comes from residential property (not surprising). In comparison, 47% of Toronto’s property tax revenue comes from commercial properties.
- About 2/3 of Brampton’s work force leaves the city for their job. This makes sense given the above point.
The other thing the article talks about is the increase in the average household size in many suburban communities as a result of people renting out parts of their house.
One Brampton gentleman is quoted as saying that he rents his basement out to 3 or 4 students and his upstairs bedrooms to two truckers. This translates into typically 6 vehicles parked in his driveway.
Assuming this is the trend, I wonder how much of this additional income is being reported to CRA. Because if it’s not, then it could be throwing of these debt ratios and making the financial situation look more dire than it is.
In any event, I think this speaks to, among other things, the role that many suburban communities now serve for new immigrants coming to Canada. They are doing what they can to try and get ahead.
It’s also worth noting that if you look at the above map of the Greater Toronto Area, the lowest “debt spots” are in fact where homes tend to be the most expensive — the core.
Map: The Globe and Mail
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Prime residential pricing in 10 global cities
The below graphs are taken from a recent (June 2019) report by Knight Frank on “prime” residential pricing across the world. They define “prime” as generally being the top 5% of each market by value. What these graphs show are the spread between the average price of a prime property and the top price achieved in that market.
The most expensive market is Hong Kong. The average price of a prime property in 2018 was USD 4,251 per square foot (or USD 45,760 per square meter) and the top price achieved was in 2016 at USD 28,154 per square foot (or USD 303,051 per square meter).
Using the 2018 average, a 350 square foot studio apartment would run nearly USD 1.5 million (or almost CAD 2 million), assuming there are “prime” studios available in the market. Remember, we are talking about the top end of the market.
If you’d like to download a copy of the full report, you can do that over here.
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The Knight Frank Global Affordability Monitor 2019
Here’s a chart from Knight Frank’s 2019 Global Affordability Monitor that I think you’ll find interesting:
It compares real home price growth and real household income growth (after tax) over the last 5 years for 32 world cities. The bolded percentages represent the former and the non-bolded percentages represent the latter.
Consider the variations here.
Amsterdam saw a real home price change of 63.6%, but a household income change of only 4.4% (although the circle looks to be in the wrong spot if this number is correct).
Moscow, on the other hand, saw flat home prices (0.1%) and a 22.7% increase in household income.
Though San Francisco is the star in terms of income growth.
Sao Paulo, unfortunately, saw a dramatic decline in both home prices and incomes. It’s in the bottom left corner.
When I look at this chart, I don’t see a strong correlation between household incomes and home prices. And the proportions of the chart tell you that the y-axis is moving more than the x-axis.
But if the top number exceeds the bottom number, then you could come to the conclusion that housing affordability has gotten worse over the last 5 years.