Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Search results for: “laneway”

  • Finally — garden suites are now permitted in Toronto

    Some of you might remember that Toronto City Council approved new garden suite policies earlier this year. Garden suites (also known as accessory dwelling units) are kind of like laneway suites but without the adjacent lane.

    Unfortunately, these new policies were subsequently appealed by a group of Resident’s Associations, and so they haven’t been in force. Thankfully, the Ontario Land Tribunal has just dismissed this appeal:

    What this means is that, as of today, you’re now free to build a garden suite in the City of Toronto. So hire an architect and file for a building permit — it’s go time. If you need any referrals, please feel free to reach out.

    The Ontario Land Tribunal is often criticized for its ability to overrule local communities on land use matters such as these. But this is a good example of why it is needed and why it is important to have some kind of neutral arbitral.

    Because these sorts of decisions should not be based on what any one individual or group thinks; these decisions should be based on what makes for good planning and what makes the most sense for the broader city and region.

    Invariably, this is going to piss some people off. But in my mind, it’s kind of like that asshole teacher you used to have. Sure, you hated him/her at the time, but in retrospect you end up appreciating what they were trying to do to help.

    This could be a bad analogy.

  • Mass timber construction next?

    We poured the last section of our level 4 slab at Junction House yesterday. As I was leaving the site, I tweeted this photo out from Watkinson Avenue. What you are seeing is the northwest corner of the building where we have seven two-storey towns that front onto our rear laneway. In response to this tweet, Andrew Williamson asked a most excellent question: “timber next?”

    My response was that we would love to do a mass timber building. We have certainly looked at it in the past, and we will continue to look for opportunities to use more sustainable building materials wherever possible. But there are challenges to overcome and a project like Junction House would have been far more difficult to do in mass timber. I’m not an expert when it comes to wood construction, but I will offer up three items that have come up for us in the past.

    The first is trade familiarity. We are in a highly inflationary hard cost environment right now. Everyone is hyper focused on costs and the market is competitive. So switching to a construction method that is less common comes with some additional risks. But this will almost certainly change over time as the market evolves and more people adopt mass timber.

    The second is water. The Junction area, or at least parts of it, have a relatively high water table. That is certainly the case with our site. One of the things you need to do during construction is dewater, or draw down the water level within your site so that you can actually build. In our case, we built a watertight below-grade parking structure, though that isn’t always the case.

    Dewatering comes at a cost and so generally you want to stop dewatering as soon as it is feasible to do so. But you need to make sure that you have enough weight to counteract the buoyancy forces associated with groundwater returning to the site. Generally this means you need to wait until you’ve finished constructing a certain level in the building so that there’s enough mass. The engineers will say things, “we can shut off the dewatering once we complete our level 4 slab.”

    The thing to consider with all of this is that concrete is heavier than wood, which means that you may need to run your dewatering program for longer (increasing your costs). Or, if your building isn’t all that big, maybe you’ll never have enough weight to offset the below-grade water forces and so you have to look at other methods for keeping your building from floating away. Again, this will increase your costs.

    The last thing I’ll mention is that mass timber buildings generally have higher floor-to-floor heights compared to cast-in-place concrete. What this means is that a 9 storey building in timber is going to be taller, in meters, compared to a 9 storey building in concrete — even if the clear heights within the suites are the same. This is a massive deal when you’re operating in an environment that is highly sensitive to building height.

    In the case of Junction House, we were negotiating our final height in centimeter increments — literally arguing whether it could be 50cm to 1.3m taller than some perceived maximum height. This is, in my mind, absurd, but it became a hill that people were willing to die on. The result is that our laneway towns (pictured above) went from having an entrance that was a few steps up off the lane to having an entrance that is now a few steps down off the lane. That is how we ultimately solved our centimeter problem.

    This wounded me to my core because, at the end of the day, what are people going to remark: The additional meter at the top of the building or the relationship that these towns will now have to the street? It will, of course, be the latter. So please know that our hearts were in the right place. But what this also means is that had we been trying to build in wood, we likely would have lost a floor during this negotiation and that would have killed the entire project.

  • 6-unit missing middle site for sale in Toronto

    Marty over at Laneway Housing Advisors published this listing in his newsletter today. It’s for an entitled lot at 78 Gladstone Avenue in Toronto that has been approved (by way of a minor variance) for 6 units. Five units in the front where a house currently sits and one unit at the back in a standalone laneway suite. Though it also happens to be a corner lot and so the laneway suite isn’t really “in the back”.

    It’s listed for $2.5M. And according to the description, you can build about 5,500 square feet (4,200 sf in the front with a 1,300 sf laneway suite). This ask translates into a land cost that is just over $450 per buildable square foot, which is far more than what high-density land typically trades for in the city right now. This is usually the case for smaller low-rise sites.

    To help put this figure into some kind of context, Bullpen Consulting published in their latest insights report that the average high-density land price in Q4-2021 was $135 per buildable square foot in Toronto (416 area code only). Of course, averages only tell you so much. To truly evaluate the feasibility of a site like this, you’d need to create your own pro forma and do your own residual land value calculation. The value of development land depends on what you can build on it.

    If you were to do that, I suspect that you would discover at least two things: 1) you would find it challenging to make the numbers work, particularly for rental housing, and 2) you would quickly realize that this sort of “missing middle” housing isn’t, in its current form, some undiscovered bastion of housing affordability.

    Part of the problem is that these 6 units are not being delivered on an as-of-right basis. Somebody had to go out and entitle the land in order to secure these permissions. That means that time and money were spent and that the current owner is now rightly seeking a margin for their efforts. But if we collectively believe that this is an appropriate and sensible form of housing, then this should not be a necessary step in the whole process. Especially for only 6 units.

    All of this being said, we know that Toronto and many other cities around the world are taking a hard look at this issue. And that there is a groundswell of interest in allowing more housing in our low-rise communities. It’s going to be a battle — just look at how Toronto’s new garden suite policies have now been appealed by various resident’s groups. But I’m certain that we’ll get there, just like we are getting there with laneway housing and other types of ADUs.

  • Garden suite policies approved at council

    Earlier today, Toronto City Council voted 19-5 in favor of the new garden suite policies. This is great news, and something that I have been writing about since our laneway suite policies were first introduced and later expanded across the city in 2018-2019.

    The simplest way of thinking about this new housing type is that they’re like laneway suites, except now the permissions have been expanded to include all of the properties that don’t have access to a lane. In other words, they are backyard cottages (also known as accessory dwelling units).

    Not every property is going to be suitable for a garden suite, but these new policies do apply to all low-rise “Neighbourhoods” of Toronto. So this is yet another important milestone for what is ultimately a broader look at housing supply in our low-rise communities. Next on deck is likely to be more multi-unit dwellings.

    If you’re interested in building a garden suite and would like to connect with an accomplished architect, I am most certainly not your best resource. I would recommend Gabriel Fain (the architect behind Mackay Laneway House) or Craig Race (an important pioneer/entrepreneur in this space).

  • Brampton is building a ton of secondary suites

    Here is an interesting housing chart from Ryerson University’s Centre for Urban Research (CUR) using data from CMHC:

    What it shows is (1) the number of new housing using created through the addition of secondary suites, such as basement apartments and laneway suites; (2) the number of housing units lost to demolition or “deconversions”, such as when a duplex or triplex gets converted (back) to a single-family home; and then (3) the net new units added over the last three years.

    In looking at the chart, you’ll see that the City of Toronto actually lost about 2,000 units from its existing housing stock between 2019 and 2021. Again, these numbers only consider what’s happening in the city’s existing low-rise residential housing stock. They don’t factor any of the housing supply being delivered through new condominiums and multi-family apartments.

    Still, it’s evidence for something that is perhaps already well known: many of Toronto’s low-rise neighborhoods are losing people. They are losing people because the existing structures are housing fewer residents and they are losing people because we make it difficult to build new housing. We want them to be “stable.” But stable built form doesn’t necessarily mean that things aren’t changing on the inside.

    Now compare this to what’s happening in Brampton (a suburb of Toronto). CUR is calling Brampton the land of secondary suites. Over the last three years, it added nearly 11,000 housing units and was on pace (at the time the data was published) to create nearly 6,000 last year alone (most of which are basement apartments). This is all within its existing housing stock.

    With all of this, I think there’s an interesting question about about how much of this is being driven by market demand and how much of this is being driven by land use policies. There’s obviously demand for expensive single-family homes in Toronto, which is why “deconversions” are happening. But to what extent does this change if/when we become more permissive around multi-unit dwellings?

    I think it depends on how we craft the policies.

  • Toronto is on the verge of finding the missing middle

    Toronto’s chief planner Gregg Lintern (who you can follow over here on Twitter) was recently in the Toronto Star talking about the city’s plans to allow more multi-unit dwellings in our low-rise single-family neighborhoods.

    I was careful to say “more” because they are already permissible in some areas. The challenge is that they’re not happening at any sort of meaningful scale, which is an obvious signal that some key ingredients are still missing.

    Or perhaps there are too many required ingredients. For example, right now the zoning by-law requires one car parking space for every dwelling in a multi-unit building. This is, of course, dumb and the requirement should be completely eliminated.

    Changes like this, as well as many others, are long overdue. Not just in Toronto, but in many other cities. And it is partially what I was getting at when I wrote about laneway housing this past weekend and hinted at the need for other solutions to increase housing supply.

    So when you have a few minutes, I would encourage you to complete the city’s survey on expanding permissions for multiplexes across the city. I just did it and voted to bring on the multiplexes.

    Photo by Tiago Rodrigues on Unsplash

  • Longer-term benefits of Airbnb for housing supply

    There is a commonly held view that short-term rentals (such as the ones you might find on platforms like Airbnb) are bad for housing affordability because they take long-term rentals out of the market and they help to drive up property values. And there’s evidence for this. A study published in Harvard Business Review found that home-sharing alone might be responsible for about 20% of the average annual rent increases across the US.

    Findings like these have encouraged municipalities around the world to put restrictions in place for STRs. But like most policy issues, there are nuances. And the thoughtful answers are rarely as obvious as they may initially seem. This has been part of my complaint around inclusionary zoning. It sounds good when politicians say it: let’s just get developers to build us free affordable housing. But again, there are nuances to consider.

    Short-term rentals are similar. A recent follow-up study that was again published in Harvard Business Review has actually uncovered some interesting longer-term benefits to STRs.

    Using residential permit data, Airbnb listings, and STR policies across the US, the team found that when you look over a longer time horizon, Airbnb listings actually tend to increase the supply of residential housing. On average, a 1% increase in Airbnb listings led to a 0.769% increase in permit applications. Supply is of course good for a whole host of reasons, one of which is boosting the local tax base.

    Conversely, they found that restricting STRs tended to reduce the supply of new housing and renovations. After new regulations were put in place affecting STRs, Airbnb listings fell on average by about 21% and residential permits fell by 10%.

    Restrictions also seem to have a direct impact on the construction of things like accessory dwelling units (laneway and garden suites for us here in Toronto). When analyzing data in and around the borders between jurisdictions in Los Angeles County, the researchers found that areas without STR regulations saw 17% more ADU permit applications compared to the areas that had restrictions.

    For the 15 US cities that the team studied, they conservatively estimated that STR restrictions reduced property values by about $2.8 billion and impacted tax revenues by about $40 million per year. Some cities, like Chicago, have also found success using STRs as an economic development strategy in distressed neighborhoods, which would further bolster the tax base.

    All of these findings suggest that a more nuanced approach to STR policies is probably merited.

    Photo by Andrea Davis on Unsplash

  • 79 container ships are waiting to berth in Los Angeles

    Most of us have felt the effects of supply chain disruption during this pandemic. When we were building Mackay Laneway House this past winter, it was right when lumber prices were peaking. We had no choice but to just absorb the cost premiums and move forward with the job. On bigger projects with longer construction schedules, I know that a lot of us are trying to time what they can with the expectation that things will eventually sort themselves out.

    When things are working as they should, this is the sort of thing that you can take for granted. But now you really need to consider lead times and cost premiums. I was reading this morning that the average number of wait days from anchorage to berth in a port in Los Angeles is now 13 days. What that means is that vessels are sitting out in the water, on average, for almost 2 weeks waiting a spot. This costs money.

    As of last week, this translated into 79 container ships sitting in front of Los Angeles and Long Beach waiting to berth (see above chart). If you do the math, which Freight Waves tried to do over here, you get to a value of somewhere around $26 billion worth of stuff sitting out in the water. As I understand it, a big part of the problem is a lack of trucks and drivers to pick up the cargo once these ships have berthed. So you can run the ports 24/7, but you still have a bottleneck.

    Logistics clearly matter.

    Chart: American Shipper with data from Marine Exchange of Southern California, via Freight Waves

  • Does new housing supply need better economic incentives?

    I watched a bit of the English leadership debate the other night. Eventually I got frustrated and went to bed, but I understand that housing affordability and overall affordability were important topics.

    What is clear, to anyone who cares to look, is that in most big cities we are not building enough new housing. According to the above Economist article (linked in the above tweet), the “rich world” has seen new housing production drop by about 50% (relative to population) since the 1960s.

    There are many reasons for this. But part of the problem is bureaucracy. Things move exceedingly slow. And another part of the problem is community opposition. Urban sprawl can be easier to swallow because there’s an out-of-sight-out-of-mind phenomenon at work. Stuff may be happening, but it’s not happening in my backyard.

    But now that so much of what we do is centered around intensifying existing neighborhoods, we are faced with a battle between the incumbents (existing residents) and the future residents of a community that don’t have nearly as much say — if any at all.

    What I like about the Economist article is their line of thinking for how to address this dynamic, which, at the end of the day, is rooted in what I will call expected selfishness.

    The approach is around aligning incentives. How could we better structure the delivery of new housing so that more stakeholders stand to directly benefit? Because as we have seen with laneway housing here in Toronto, homeowners will gladly build in their backyard when they stand to benefit directly.

  • Districts versus spines

    I was recently having a discussion on Twitter about midrise buildings and architect Dermot Sweeny raised the important distinction between creating “spines” and creating “districts.”

    What he was referring to with “spines” was the way in which Toronto is intensifying its “Avenues” with midrise buildings. It is a kind of linear form of intensification which almost always means that each building must transition in some way to the low-rise housing that typically abuts our Avenues. This is far less relevant in districts.

    We have started to increase housing supply in our “Neighborhoods” through things like laneway houses and garden suites, but in most cases, we are arguably not creating urban districts.

    This is of course a touchy subject. But I think it’s an important discussion to be having for a number reasons:

    • Increasing housing supply is a good thing
    • Angular planes and other transition measures make housing more expensive
    • Urban places are, I would argue, better defined through districts rather than spines
    • Mixed-use (employment) becomes more viable with districts
    • Transit infrastructure is better utilized with radial density around its stations

    Can you think of any others?

    Photo: Old Montrêal (Shot on iPhone)