The City of Toronto is currently studying ways to increase housing options/supply and planning permissions in areas of the city that are designated as Neighbourhoods in the Official Plan.
These are areas that are sometimes referred to as the "Yellowbelt", because they are seeing very little intensification and, in a number of cases, actually losing population. (They're also colored yellow in Toronto's land use map.)
Ultimately, the goal is to encourage more "missing middle" type housing forms; housing that is denser than single-family homes but smaller in scale than say mid-rise housing like Junction House.
Here are a couple of interesting charts from the City. Based on Toronto's Official Plan, "Neighbourhoods" make up 35.4% of the city's land area.
In Toronto's Zoning By-law, the "Residential" category makes up 47.1% of the city's land area.
Digging deeper, 31.3% of Toronto's total area is zoned for only detached houses -- which would mean no missing middle type housing. But 15.8% of the city's total area is already zoned to permit other types of low-rise residential buildings, such as duplexes and triplexes.
So why isn't more of that happening?
As we've talked about before on the blog, the problem is that it is exceedingly difficult to make the math work on projects of this scale, which is why most developers don't want to do them. The web of bureaucracy that you need to navigate in order to build anything in the city is also imposing for non-developers (and developers really).
But to be a developer, I think you need to be an optimist. So I am going to remain hopeful that this study -- and the pilot they want to do in Ward 19 -- will result in a streamlined solution for housing of this scale.
Images: City of Toronto
Dylan Reid recently wrote an interesting article about, what he calls, high low-rise infill buildings along Toronto’s main streets.
He describes the typology in this way: “These are generally 4-storey mixed-use buildings built quickly on one or two lots, replacing smaller previous buildings. They are often inserted beside existing, attached buildings.“
Now, Reid acknowledges that this a challenging scale to develop at. He links to one of my articles in Urban Capital’s Site Magazine where I talk about exactly that: the diseconomies of scale associated with building small. (Though, I was talking about mid-rise, not high low-rise.)
Reid addresses these challenges with a number of potential cost savings, including no parking minimums and no rezoning process. He also suggests that these projects may be better suited to existing landowners (who may own the land free and clear of a mortgage).
Getting rid of parking minimums and streamlining approvals would certainly help, though I remain doubtful about overall feasibility. But what I wanted to comment on today was the last point about these projects being better suited to existing landowners.
One problem with this line of thinking is that if we’re talking about land on a street where greater densities such as mid-rise are also permissible, the land is going to get valued based on mid-rise and not high low-rise.
So when a prudent landowner thinks about developing their land, they may also consider the opportunity cost of simply selling their land based on its highest and best use.
That thought process might go something like this. I own a piece of land. If I were to sell this land today and take on no development risk, I could make $X. If I were to instead develop this land, I could make $Y.
If $Y is less than $X, then I’m obviously not going to develop. But if the spread between $Y and $X isn’t enough to compensate me for the risk of developing (and there’s lots of risk in developing), then I’m also not going to do it. (Developers run a similar test by marking the land cost in their pro forma to market.)
And if $X is based on greater densities than $Y ($X is based on mid-rise densities and $Y is based on high low-rise densities) and if $Y is also being challenged by further diseconomies of scale, then I’m sure you can start to see how the math may not pencil.
I say all of this not to shit on Reid’s article. It’s a good article. You should go read it. And we should all continue to think about ways to increase the supply of housing in this city and in others.
Recently we’ve been talking about California’s Proposition 13 and how it may be creating a disincentive for longtime homeowners to move. They’re enjoying below market property taxes, and so they stay put, even if they may have too much house.
But this concept of “overhousing” isn’t unique to California. The Globe and Mail just ran a piece talking about how Toronto’s designated “Neighborhoods” are losing people as the nests empty out, seniors remain put, and the broader city booms.
The rate of depopulation that created the spare bedrooms in Toronto’s low-rise neighbourhoods is stark: “Since 2001, about 52 per cent of the land mass of Toronto has reduced in density of population by about 201,000 people,” Mr. Smetanin says. “Other parts of Toronto have grown by 492,000.”
The irony of this phenomenon is that the city’s Official Plan considers these Neighborhoods to be “physically stable”, as well as “one of the keys to Toronto’s success.” However, things are clearly changing behind that physical stability.