Yesterday afternoon, our team had a productive in-person meeting with senior planning staff at the City of Toronto. The purpose of the meeting was to talk about the challenges associated with delivering infill missing middle housing and to brainstorm the possible solutions.
Some of the key topics that we discussed: Type-G loading / garbage requirements, amenity space requirements, right-sizing the Site Plan Control process, single-stair exiting, the cost of connecting to Toronto Hydro, the challenges with assembling small lots, specifics of the Major Street Study, and a bunch of other things. So many of the things that we regularly talk about on this blog.
We also walked everyone through the site we had under contract but eventually dropped because the margins were just too thin. This included opening up our pro forma, projecting it onto the screen, and going through it line-by-line. We are happy to do this because we think this transparency helps everyone truly understand the obstacles.
What's clear is that we all want to see more family-friendly housing lining our avenues and major streets. And so there's a real feeling of collaboration during meetings like the one we had yesterday. We're all at the stage of "what is it going to take? Let's figure it out!" This can-do attitude makes me feel optimistic that we are going to get there. And once we do, Toronto will be that much better for it.
It was also nice having an in-person meeting back at City Hall. To be honest, I can't remember the last time I did that. But it used to be standard operating procedure. We'd all arrive early, huddle in the cafe at the bottom of the building for a pre-meeting, and then look around to see what other teams/projects were also on deck with the city. It made me feel nostalgic — and older.
Enjoy the weekend, everyone.
The City of Toronto requires amenity spaces to be provided in new housing developments of a certain size. Here, for example, is the relevant excerpt from the recommended zoning by-law amendment that is expected to allow small-scale apartments along all major streets:
The triggers are 20 and 30 dwelling units, which represents a housing scale that Toronto doesn't build a lot of. I mean there's a reason it's called the missing middle. That is, of course,
One of the things I included in my list of "how to improve the feasibility of infill housing" was the adoption of single-stair buildings. So today I'm happy to share that next week the Canadian Urban Institute — in collaboration with LGA Architectural Partners — will be hosting a series of online micro-conferences covering this topic. If you're a regular reader of this blog, you'll know that LGA is one of the leading voices, if not the leading voice, advocating for this important building code change.
Here are the event posters:
Firstly, because it's not feasible at this scale. Think of it this way: two square meters of indoor amenity space x 20 dwelling units = 40 square meters of indoor amenity space or ~430 square feet. Multiply this by an average rent of $5 psf (and then 12 months) and that's nearly $26k of foregone revenue for the project.
This may not seem like a big number for a development project, but consider that at an NOI margin of 77% (i.e. if you deduct operating expenses), this revenue number works out to a net operating income of just over $20k. Capitalize this at 4% and you've just removed $500k of value from the project.
Another way to look at this would be to divide the $26k of foregone rental revenue by the 20 dwelling units. This works out to nearly $1,300 of annual revenue per suite — revenue that will then need to be made up by everyone who lives in the building.
The second reason why I think this requirement needs to go is because it's a suburban way of thinking. In the suburbs, people tend have their own backyards. And so the logic goes that in multi-family buildings, people should also have their own private (albeit shared) amenities.
That's fine if it makes sense for the project. But we shouldn't forget that the reason cities are so wonderful is that they are rich in amenities, culture, and the myriad of other things made possible by collective contribution. World-class museums and galleries, for instance, almost always require big city resources to be viable.
On some level, I think you could argue that there's an irony to this planning requirement. We mandate amenity spaces because amenities are of course good. But it hurts project feasibility, especially at smaller scales, which then limits the amount of new homes, density, and people we have in our existing neighborhoods.
And because we are limiting density, we are indirectly limiting the kind of private and public amenities that might otherwise be feasible if only there were more humans to support them. So I would strongly encourage the city to rethink its position on required amenity areas. At the very least, the triggering unit counts should be raised.
For more on this topic, here's a recent article from the Globe and Mail by John Lorinc.
Photo by Filip Mishevski on Unsplash
And here are the links if you'd like to register for any of the sessions:
Single Stair Sessions Day 1 — "The 3 Ps: Pilot Projects and Prototypes"
Single Stair Sessions Day 2 — "The 2 Ss: Safety and Sustainability"
CityTalk | Live — "Addressing Canada's Housing Supply: Can Regulations Drive Housing Innovation?"
We are actively underwriting new missing middle housing across central Toronto. And I can tell you that project feasibility would benefit enormously from this code change. Single-stair buildings are also allowed in many/most other parts of the world, and so we already know that it can make for better homes and that it doesn't need to compromise life safety. It's great that the city-building community is now increasingly focused on this opportunity.
Cover photo by Mika Wegelius on Unsplash
