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On Friday, Craig Race Architecture hosted its annual holiday dinner at Barberian's Steak House. It was a great evening and I really appreciate the invite, especially considering that we're not yet clients. Thank you, Craig. I'm also not sure I had ever been to Barberian's before. That probably makes me a bad Torontonian.
Because of their work and because of the current market, the dinner has also become a kind of gathering for missing middle developers. I felt like the odd one out not having a sixplex + laneway suite built or under construction.
What's interesting about the current environment is that it's pushing developers — both big and small — towards missing middle housing. Smaller developers are doing it because the barriers to entry are lower, and meaningful progress has been made on improving the development economics (the no HST and development charges are crucial). And bigger developers are doing it because larger projects simply don't work right now, or the absorption risk is perceived as too great.
But here's the thing: as soon as the market turns, there's once again going to be a natural inclination to scale up. On Friday, I heard many developers say, "I'm dealing with the same amount of bullshit that I used to deal with on my larger projects."
For example, I was told of an instance where a client wanted to keep the facade of their house and build a sixplex behind it. The facade had heritage and sentimental value. But because the removal of HST on rental housing only applies to new construction, keeping the facade would have made it a renovation. And so they had no choice but to demolish everything. (Of course, developers will also play the opposite game and keep one wall so as to not be deemed new construction in other instances.)
What all of this stuff means is that as soon as the conditions allow for it, developers are going to want to increase their return on bullshit. In the meantime, though, this city has an industry chomping at the bit to build more missing middle housing. We should do everything we can to harness that.
As you know, sixplexes are now permitted in certain parts of Toronto. We've spoken before about how it should be all of Toronto; but nevertheless, they are allowed in areas where they were not allowed before. That constitutes progress.
But it gets much better: This week, Mayor Chow announced that she will be bringing forward a motion to Council to eliminate development charges and parkland dedication cash-in-lieu requirements for new developments of up to six residential homes. This is a big deal and something that is necessary if we want to spur more rental housing.
To quote my friend Craig Race (of Craig Race Architecture), "this is the first thing [Olivia Chow has] done I'm happy about, and I hope to see more." Mayor Chow was criticized for standing around while sixplexes were being debated, and so this is perhaps her now trying to step up. Whatever it is, home builders will take it.
Globizen wasn't looking at this scale before, but I'm now going to adapt one of our screening models to see if the math works. If it does, then expect the industry to mobilize around it.
This week, Toronto once again demonstrated that there are two cities within our city: There's Old Toronto and then there's the rest of Toronto. The former generally corresponds to the boundaries of Toronto prior to amalgamation in 1998. It represents a city that was built around streetcars and subways and is therefore embedded with certain urban sensibilities. Then there's the rest of Toronto. This part of the city ranges from being reluctantly urban to overly hostile toward it. And it shows up in many areas, from its modal split to its voting patterns.
This week it showed up in a debate to permit multiplexes with up to six homes (sixplexes) in all residential neighborhoods city-wide. It is also important to note that adopting this zoning change is a prerequisite to the city accessing $471.1 million in funding from the federal government. But this is not how City Council voted this week. Instead, a "compromise motion" had to be put forward that isolated sixplexes to Toronto and East York District, and Ward 23 in Scarborough. In other words, we are not that far off from splitting Toronto between Old and the rest.
I'm glad that something, instead of nothing, got done. But it's disappointing that Mayor Olivia Chow did not stand up and show any leadership on this recommendation from planning staff.
On Friday, Craig Race Architecture hosted its annual holiday dinner at Barberian's Steak House. It was a great evening and I really appreciate the invite, especially considering that we're not yet clients. Thank you, Craig. I'm also not sure I had ever been to Barberian's before. That probably makes me a bad Torontonian.
Because of their work and because of the current market, the dinner has also become a kind of gathering for missing middle developers. I felt like the odd one out not having a sixplex + laneway suite built or under construction.
What's interesting about the current environment is that it's pushing developers — both big and small — towards missing middle housing. Smaller developers are doing it because the barriers to entry are lower, and meaningful progress has been made on improving the development economics (the no HST and development charges are crucial). And bigger developers are doing it because larger projects simply don't work right now, or the absorption risk is perceived as too great.
But here's the thing: as soon as the market turns, there's once again going to be a natural inclination to scale up. On Friday, I heard many developers say, "I'm dealing with the same amount of bullshit that I used to deal with on my larger projects."
For example, I was told of an instance where a client wanted to keep the facade of their house and build a sixplex behind it. The facade had heritage and sentimental value. But because the removal of HST on rental housing only applies to new construction, keeping the facade would have made it a renovation. And so they had no choice but to demolish everything. (Of course, developers will also play the opposite game and keep one wall so as to not be deemed new construction in other instances.)
What all of this stuff means is that as soon as the conditions allow for it, developers are going to want to increase their return on bullshit. In the meantime, though, this city has an industry chomping at the bit to build more missing middle housing. We should do everything we can to harness that.
As you know, sixplexes are now permitted in certain parts of Toronto. We've spoken before about how it should be all of Toronto; but nevertheless, they are allowed in areas where they were not allowed before. That constitutes progress.
But it gets much better: This week, Mayor Chow announced that she will be bringing forward a motion to Council to eliminate development charges and parkland dedication cash-in-lieu requirements for new developments of up to six residential homes. This is a big deal and something that is necessary if we want to spur more rental housing.
To quote my friend Craig Race (of Craig Race Architecture), "this is the first thing [Olivia Chow has] done I'm happy about, and I hope to see more." Mayor Chow was criticized for standing around while sixplexes were being debated, and so this is perhaps her now trying to step up. Whatever it is, home builders will take it.
Globizen wasn't looking at this scale before, but I'm now going to adapt one of our screening models to see if the math works. If it does, then expect the industry to mobilize around it.
This week, Toronto once again demonstrated that there are two cities within our city: There's Old Toronto and then there's the rest of Toronto. The former generally corresponds to the boundaries of Toronto prior to amalgamation in 1998. It represents a city that was built around streetcars and subways and is therefore embedded with certain urban sensibilities. Then there's the rest of Toronto. This part of the city ranges from being reluctantly urban to overly hostile toward it. And it shows up in many areas, from its modal split to its voting patterns.
This week it showed up in a debate to permit multiplexes with up to six homes (sixplexes) in all residential neighborhoods city-wide. It is also important to note that adopting this zoning change is a prerequisite to the city accessing $471.1 million in funding from the federal government. But this is not how City Council voted this week. Instead, a "compromise motion" had to be put forward that isolated sixplexes to Toronto and East York District, and Ward 23 in Scarborough. In other words, we are not that far off from splitting Toronto between Old and the rest.
I'm glad that something, instead of nothing, got done. But it's disappointing that Mayor Olivia Chow did not stand up and show any leadership on this recommendation from planning staff.
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