Last week Oliver Moore of the Globe and Mail announced that Toronto mayor John Tory’s SmartTrack transit plan is evolving to feel less like SmartTrack and more like what Metrolinx had been planning all along.
Here’s the map from the Globe and Mail:
The 3 big changes are as follows (and numbered accordingly on the above map):
1.
The western end of the line will be replaced by an extension of the Eglinton-Crosstown LRT (currently under construction) running from Mount Dennis to Pearson Airport. This is what was originally proposed.
2.
The “U” running from Mount Dennis in the west, down through downtown, and up to Kennedy in the east is what remains of the original SmartTrack line and will operate as some sort of “heavy rail” service on existing GO Transit lines. The original election campaign plan was to run trains every 15 minutes, but that was deemed too infrequent to attract riders, so now Metrolinx and everyone is trying to figure out how to get it down to every 5-10 minutes and feel more like subway.
3.
The extension north of Eglinton Avenue to suburban Markham (in the northeast) is being pushed out and will be dealt with sometime in the future. Keeping the first phase of SmartTrack south of Eglinton on both ends is beneficial in avoiding the issue of SmartTrack and the Scarborough subway extension cannibalizing each other. (In my opinion, this issue is a perfect example of what happens when transit planning becomes too political.)
The net result is a plan that is looking less and less like the original SmartTrack. I’m not complaining though because I have never been a big supporter of SmartTrack. I have always thought we should be focusing on the downtown relief subway line and on allowing Metrolinx to just execute on its regional express rail (RER) strategy.
For more on this topic, check out Steve Munro’s post, SmartTrack: Now You See It, Now You Don’t! He’s far more of an expert than I am on these sorts of issues.
Daniel Hertz over at City Observatory just published a post talking about why land costs are so important when it comes to home prices. More specifically though, his post is intended to refute a claim that multifamily housing is always going to be more expensive than single family housing.
The key concept here – which is critical to understanding urban real estate economics – is that home values are essentially made up of two things: the land and the improvements (i.e. the building).
When home prices rapidly appreciate, as has been the case in cities like Vancouver (see below) and Toronto, it’s not the building, but the land that’s really driving the price up.
And as you can see from the chart below (which Daniel shared in his post), it is possible for multifamily housing to be less expensive than single family housing.
For those of you from Ottawa, I’m going to be in town this Thursday evening talking at an event put on by the National Capital Commission called Urbanism Online. It’s all about how blogging, social media, and online discussions can and are contributing to the betterment of cities.
The other bloggers include:
- Marc-André Carignan, Montreal, Kollectif.net
- Jillian Glover, Vancouver, This City Life
- Robert Smythe, Ottawa, UrbSite
The event is now full, but email them or tweet me if you’d really like to come and I’ll certainly ask about space availability. I’m sure it’s going to be a great discussion.
I have a bit of a soft spot for Ottawa. I used to spend a lot of time there when I was working on an office building at 150 Elgin Street. (Key tenants include The Canada Council for the Arts, KPMG, and Shopify.)
I haven’t been back since the building was completed, so I’m excited to see how it turned out.
Update: The event will also be streamed on Periscope, here.
Last week Oliver Moore of the Globe and Mail announced that Toronto mayor John Tory’s SmartTrack transit plan is evolving to feel less like SmartTrack and more like what Metrolinx had been planning all along.
Here’s the map from the Globe and Mail:
The 3 big changes are as follows (and numbered accordingly on the above map):
1.
The western end of the line will be replaced by an extension of the Eglinton-Crosstown LRT (currently under construction) running from Mount Dennis to Pearson Airport. This is what was originally proposed.
2.
The “U” running from Mount Dennis in the west, down through downtown, and up to Kennedy in the east is what remains of the original SmartTrack line and will operate as some sort of “heavy rail” service on existing GO Transit lines. The original election campaign plan was to run trains every 15 minutes, but that was deemed too infrequent to attract riders, so now Metrolinx and everyone is trying to figure out how to get it down to every 5-10 minutes and feel more like subway.
3.
The extension north of Eglinton Avenue to suburban Markham (in the northeast) is being pushed out and will be dealt with sometime in the future. Keeping the first phase of SmartTrack south of Eglinton on both ends is beneficial in avoiding the issue of SmartTrack and the Scarborough subway extension cannibalizing each other. (In my opinion, this issue is a perfect example of what happens when transit planning becomes too political.)
The net result is a plan that is looking less and less like the original SmartTrack. I’m not complaining though because I have never been a big supporter of SmartTrack. I have always thought we should be focusing on the downtown relief subway line and on allowing Metrolinx to just execute on its regional express rail (RER) strategy.
For more on this topic, check out Steve Munro’s post, SmartTrack: Now You See It, Now You Don’t! He’s far more of an expert than I am on these sorts of issues.
Daniel Hertz over at City Observatory just published a post talking about why land costs are so important when it comes to home prices. More specifically though, his post is intended to refute a claim that multifamily housing is always going to be more expensive than single family housing.
The key concept here – which is critical to understanding urban real estate economics – is that home values are essentially made up of two things: the land and the improvements (i.e. the building).
When home prices rapidly appreciate, as has been the case in cities like Vancouver (see below) and Toronto, it’s not the building, but the land that’s really driving the price up.
And as you can see from the chart below (which Daniel shared in his post), it is possible for multifamily housing to be less expensive than single family housing.
For those of you from Ottawa, I’m going to be in town this Thursday evening talking at an event put on by the National Capital Commission called Urbanism Online. It’s all about how blogging, social media, and online discussions can and are contributing to the betterment of cities.
The other bloggers include:
- Marc-André Carignan, Montreal, Kollectif.net
- Jillian Glover, Vancouver, This City Life
- Robert Smythe, Ottawa, UrbSite
The event is now full, but email them or tweet me if you’d really like to come and I’ll certainly ask about space availability. I’m sure it’s going to be a great discussion.
I have a bit of a soft spot for Ottawa. I used to spend a lot of time there when I was working on an office building at 150 Elgin Street. (Key tenants include The Canada Council for the Arts, KPMG, and Shopify.)
I haven’t been back since the building was completed, so I’m excited to see how it turned out.
Update: The event will also be streamed on Periscope, here.
So why was someone arguing that multifamily housing is more expensive?
Well if you look at just construction costs, then this is generally true. Single family housing is typically wood frame construction, whereas multifamily housing is usually reinforced concrete or some other material that allows you to build up. In these latter cases, the price per square foot to build is going to be higher.
But Daniel’s argument is that when you build multifamily housing, you also begin to amortize the cost of the land over more housing units. So you begin to use land more efficiently and that offsets the higher construction costs.
However, two thoughts come to mind.
First, the value of a piece of land is entirely dependent on what you can build on it. And the more you can build on it, the more the land is worth. So as densities increase, so do land prices.
Second, a big part of why condominiums are so much more affordable is that they’re smaller. In 2014, the average condo size in Metro Vancouver was estimated to be 840 square feet. I couldn’t find the average size of a detached house in the city, but let’s assume for a second that it’s 2,500 sf.
If that were the case, then a detached house, despite being more expensive overall, would still be cheaper on a per square foot basis. You would be paying less for every square foot of livable space. True that doesn’t make the house more affordable, but I think it’s a bit unfair to compare apples (small condo) to oranges (large house).
So what I would really like to see is a graph of all-in low-rise and high-rise per square foot prices over time and for various cities. Because I would be curious to see at what point – if ever – they intersect.
So why was someone arguing that multifamily housing is more expensive?
Well if you look at just construction costs, then this is generally true. Single family housing is typically wood frame construction, whereas multifamily housing is usually reinforced concrete or some other material that allows you to build up. In these latter cases, the price per square foot to build is going to be higher.
But Daniel’s argument is that when you build multifamily housing, you also begin to amortize the cost of the land over more housing units. So you begin to use land more efficiently and that offsets the higher construction costs.
However, two thoughts come to mind.
First, the value of a piece of land is entirely dependent on what you can build on it. And the more you can build on it, the more the land is worth. So as densities increase, so do land prices.
Second, a big part of why condominiums are so much more affordable is that they’re smaller. In 2014, the average condo size in Metro Vancouver was estimated to be 840 square feet. I couldn’t find the average size of a detached house in the city, but let’s assume for a second that it’s 2,500 sf.
If that were the case, then a detached house, despite being more expensive overall, would still be cheaper on a per square foot basis. You would be paying less for every square foot of livable space. True that doesn’t make the house more affordable, but I think it’s a bit unfair to compare apples (small condo) to oranges (large house).
So what I would really like to see is a graph of all-in low-rise and high-rise per square foot prices over time and for various cities. Because I would be curious to see at what point – if ever – they intersect.
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