Yesterday the Globe and Mail published an article titled, “Weakening rental picture latest condo market worry." At first glance, this title seems worrisome. Particularly since Toronto’s condo rental market was supposed to be so robust, with vacancy rates hovering around historic lows.

But as I read the article, I was reminded, once again, about how opaque the real estate marketplace is. To make this prediction, the research group quoted in the article mined craigslist postings. Granted, craigslist is probably the largest source for condo rental listings (even more so than MLS), but I don’t think it necessarily makes it a reliable source.

Craigslist is a messy marketplace. You have expired listings; brokers posting listings in the owner section; brokers posting fake listings for the purpose of lead generation; and so on. It seems to me that there could be a huge margin of error if you tried to rely on this data. So I’m not so sure I would put a lot of weight on a supposed 1.6% rental rate decline.

But what does worry me is how imperfect the real estate marketplace is. It’s incredibly hard to get good data and I think that this is bad for everybody involved in real estate. But network effects are a hard thing to overcome, which is why a messy and ugly marketplace such as craigslist can remain so dominant.

Last night I watched CBC’s the Condo Game documentary. This is what it’s about:

"The Condo Game examines the forces at play behind the fastest moving condo market in North America – Toronto – and discovers that the glittering glass hides a sea of troubles."

If you haven’t seen it, you can watch it here at CBC’s Doc Zone. It’s about 45 minutes long.

Generally, I found the piece to be overly sensationalized. (If you watched it and it left you worried about condos, contact me. I’d love to hear from you.) However, that’s not to say that the documentary doesn’t raise some important points. One that I absolutely think is worth discussing is the Ontario Municipal Board (OMB).

Many developers like “the board” because it provides recourse. If the city fails to take action on a development application within 180 days, developers have the right to appeal to the board.

While I do think it’s critical to have some sort of mechanism to unlock a gridlocked planning process, I also think that it’s fundamentally problematic to give the province ultimate decision making power over municipal planning decisions.

Real estate development is very much a local business and these decisions should be happening at the local level. However, with the OMB looming overhead, it has left municipalities disempowered. “We’ll deal with it at the board” always remains an option. 

But what if there wasn’t a board? What if municipalities and developers had to figure out a solution between the two of them? We’d certainly end up with less wasted money (on expensive lawyers), but I think we’d also end up with better design and planning outcomes.

To do this though, the city needs to get their act together with respect to zoning. Almost nothing is zoned for what developers end up building. But I think this largely has to do with the fact that the city knows any dissenting decision will just get appealed. Again, they’re disempowered.

So I think it’s time we empowered cities. This may seem scary to some developers at first, but there’s a lot to be gained.

One of my favorite development projects going up in Toronto right now is the Pier 27 complex at the base of Yonge Street.

What I love about it is that it’s trying something different. The two sky bridges that sit atop the two phases—currently under construction—are going to create a remarkable new focal point along the waterfront. It’s not just another condo.

And as I watch the buildings go up, I’ve also been impressed by the materials used on the project. In particular the curtain wall (glazing) system used on the eastern most buildings. It’s a clear glass installation with white accent pieces. It’s beautiful. Here are a few photos.

But as much as I love this project, it’s been slow moving. This project, like many others in the city, has been subject to a number of delays. They went to market in 2006-2007 and occupancy isn’t expected until next year—a good 7 years later.

But more than the issue of time, my real concern is the lack of transparency. Why was it delayed? Were sales slow? Were there dewatering issues being on reclaimed land along the waterfront? Was the soil contaminated? As a consumer, it’s frustrating being in the dark.

I do, however, acknowledge that this is a larger issue facing the real estate industry. We’re certainly not known for radical transparency. We’re a closed and insular industry. But over time I do believe that will change. It’s inevitable. And the best thing you can do today—as an organization or as an individual—is to embrace it.

Full disclosure: I have a vested interest in this project and I’m currently having a fight with the developer over a small amendment I would like to make to the agreement of purchase and sale. They have been unwilling to cooperate.