Tag: condominiums

• Call with a Paris developer

  I had a call with a developer in Paris earlier this week and it was interesting to hear him talk about the new home market over there. It sounded a lot like Toronto. Higher interest rates cooled demand. Individual investors largely disappeared. And now developers are having to rethink their strategies and floor plans (including suite sizes).

  But in his view, this isn’t necessarily a bad thing. It now means that you actually have to be a reasonably good developer in order to have a chance at succeeding. You have to design thoughtful floor plans and build great housing. It’s a return to fundamentals, and I would argue that the same thing is happening here in Toronto.

  My other noteworthy takeaway was around social housing. All new developments in the Île-de-France region are subject to inclusionary zoning. I believe the requirement is 30% of the suites. These suites are then purchased by social housing operators, and it is one of the ways that new supply is created in the market.

  We talk a lot about IZ on this blog, but what’s interesting about this approach is that it becomes a forward sale for the developer. Meaning, it helps to de-risk projects. Before doing anything, you know you’ve sold 30% of your inventory, and somehow the numbers all work. European social housing math is baffling to me.

  I am now wondering if this creates some kind of incentive to keep development costs in check. Because if social housing operators are expected to buy 30% of all new homes, then they too are going to want them to be as cost effective as possible. I’m speculating though; I don’t know that this is the case.

  If you’re a developer or real estate person in Paris, please get in touch. I’d love to learn more about your market and trade notes.

  2024.11.06

• Florida proposes stricter condo rules

  In response to the tragic collapse of the 12-storey Champlain Towers South building in Surfside last year, the state of Florida is set to pass new stricter condominium rules around inspections and reserve funds. And according to the WSJ, the requirements would be some of the strictest in the US.

  Under the House bill that has already passed, condominium buildings that are three or more stories would need to be fully inspected and recertified once they are 30 years old. For buildings within 3 miles of a coast (salt water is impactful), the requirement would be 25 years old. Following this recertification, the buildings would then need to be inspected every 10 years. Under the proposed Senate bill, the inspection process would start after 20 years and be required every 7 years. In both cases, the reports that come out of these inspections would need to be submitted to all unit owners and to local building officials.

  If approved, these rules would have an immediate impact on the market given that about 900,000 of the approximately 1.5 million condominium units in Florida are older than 30 years old.

  But is all of this enough? I think the devil is in the details.

  Under the House bill, unit owners would no longer be able to waive the collection of certain building reserves. But under the Senate bill, the requirements for waiver would simply be tightened. How tight? In all honesty, I don’t know the specifics. I haven’t read the bills. But the collection of reserve funds is paramount. And after reading the above WSJ article, I can’t help but feel like these new policies might still be less stringent than what we already have here in Ontario.

  Here are two excerpts from Ontario’s Condominium Act:

  

  

  Put more simply, all buildings and structures need to have regular inspections. Materials and systems naturally depreciate over time and so the point of a reserve fund study is to determine (1) what will need to be repaired/replaced, (2) when it will need to be repaired/replaced, and (3) how much it might cost. You then need to ensure that the money is in place to carry out the execution of said study. In all cases, there should be zero compromises around life safety.

  2022.03.06

• How are condos in Canada used?

  Jens von Bergmann (data analyst and mathematician); Nathanael Lauster (sociologist); and Douglas Harris (law professor) have been working since 2018 on a study of how condominiums are used and occupied across Canada. The goal is to use the results to better inform public and academic debate.

  They recently presented some of their early findings at the National Housing Conference in Ottawa and have since made that information public. It is still a work in progress, but already there are some interesting takeaways. To start, here is a chart showing occupied housing units in Canada and in select CMAs:

  

  Not surprisingly, Canada is broadly speaking a nation of single-detached houses. But in our three largest cities — Toronto, Montreal, and Vancouver — apartments/condominiums are doing a lot of the heavy lifting.

  Vancouver has the highest proportion of condominiums. It is a geographically constrained metro area and it is one of the first cities in the country to adopt condominiums as a housing tenure. And in Montreal, there are more apartments under 5 storeys than there are single-detached houses. Not surprising. There’s no “missing middle” in this city.

  But the really interesting question is, how are these condominiums being used and occupied? It’s a challenging question to answer, which is why it’s so often debated, but here’s what the researchers have found so far:

  

  The owner and renter categories are self-explanatory. Temporary, which is the least common type of tenure, is where the owner has declared their principal residence as being somewhere else. In other words, the condominium is a second home.

  The vacant category is effectively that city’s condominium rental vacancy rate. These are condominium units which are empty, but that are at the same time listed for rent. There are relatively few of these. In Toronto and Vancouver they’re virtually non-existent in this dataset (2016).

  Finally, we get to unoccupied units. This one is tricky and the researchers aren’t exactly clear on what is driving this number. They chalk it up, at least partially, to the flexible nature of condominiums. For example, it could be empty because the unit is switching from owner-occupied to rental, or vice versa.

  That said, it is very interesting to note that Toronto and Vancouver actually have the lowest percentage of unoccupied condominium units. This may be surprising to some of you given the public discourse around investor units in these two cities.

  Generally, they found that in Canada’s three largest metro areas, the following rule of thumb seems to apply: For every 10 condominium units built, 6 will become owner-occupied, 3 will enter the rental stock, and 1 will go unoccupied. Does that seem right to you?

  If you’d like to dig into the methodology that the researchers used, you can do that over here at Mountain Doodles. All of the charts and data used in this post were taken from there.

  2019.04.13

• Condo or rental apartment — does it matter?

  

  Community by Evgeny Tchebotarev on 500px

  Toronto is the condo capital of North America. For a number of years now, there have been more condos under construction in this city compared to any other in North America, including New York.

  But recently the real estate community has become incredibly interested in building multi-family apartments (also known as purpose-built rental buildings). Which is why about 7 months ago I wrote a post called, Rise of rental.

  It has been decades since Toronto built rental apartment buildings at any sort of scale. That means that our existing stock is generally pretty old and that condominiums – rented out by individual investors – have been almost exclusively fulfilling the need for rental apartments in this city.

  But given that purpose-built rental apartments are on the rise, I’ve been thinking a lot lately about them and about the consumer perspective. 

  And so here’s my question to you:

  If you were looking for a place to rent, would it make a difference whether it was a condominium (rented out by an individual investor) or whether it was a professionally managed apartment building? You can assume that the suite itself is identical.

  There are obviously many differences between both forms of tenure, but I’m curious to what extent that factors into the decision making process for consumers. It hasn’t really been an option in recent years, but that seems destined to change.

  I hope we can have a discussion in the comment section below.

  2015.04.16

• What will the condo market look like in 10-20 years?

  Over the past week I’ve had 2 separate people ask me my thoughts on the future of the condo market in Toronto. One of them was working on a University study and one of them was trying to figure out what (condo) property managers would look like in the future. 

  To be clear, the questions weren’t motivated by the typical “bubble” debate that the media loves to headline, rather these were questions about the long term future of condos in this city.

  I haven’t written about this topic explicitly, so today I thought I would summarize my responses for the Architect This City community. There’s probably a touch of aspiration in the responses I gave, but it’s more or less what I’m thinking and what I believe has a good chance of happening over the next 10-20 years.

  Here are some of my thoughts (not an exhaustive list):

  Intensification is going to continue in Toronto and that is going to mean more condominiums and other types of multi-family dwellings. Rental apartments is the product type du jour right now within the real estate community.

  As intensification continues, I think we’re going to see a tipping point in the near term with more families opting to have and raise children in condos in the city. Part of this will be driven by a desire to stay in the city (walkable communities), but part of it will also be driven by the economics (i.e. high price) of low-rise housing in the city.

  As families begin to fill in condos (not just young single professionals and empty nesters), we’ll see developers and cities respond with more family friendly buildings, amenities, and program choices. This could mean anything from children’s play spaces within buildings to redesigned public spaces and parks.

  In line with this shift, I think we’ll also see more sophisticated executions of “mixed-use.” Rather than just stacked uses (retail at the bottom, a few levels of office, and a residential condo tower above), developers and operators are going to start thinking about the ecosystem they are creating. (Related discussion in the comment section of this post.)

  It’s probably a bit safe to predict that sustainability will become more important going forward. But I think that as more families and long-term end users opt for condos, that consumers will become more interested in building and energy performance. Technological advancement (both hardware and software) will also give this a boost.

  Finally, and this applies somewhat to real estate in general, I believe that we’ll see a lot more openness and transparency all across the industry. There will be much better access to data and information. Similar to above, this will be aided by advances in technology and networks.

  Now it’s your turn. What do you think of the above list? And what will the condo market — either in Toronto or in your city — look like in 10-20 years?

  2015.02.27

• 3 stages of intensification

  

  We all know that the Greater Toronto Area is growing and intensifying at an incredible pace. In fact, last year the region set a record with 25,571 new condominium units completed.

  If you listen to industry experts, such as George Carras of RealNet, they’ll tell you that this level of intensification — which usually means condominiums — is really a decade in the making. That’s when the government set out to explicitly encourage this type of growth.

  But in the decade since that decision, we’ve seen both government and the market evolve in terms of what that intensification should look like. It started out with a largely high-rise building typology. Tall buildings were to be allowed in the downtown, as well as in specific growth nodes throughout the region. But for everything in between — the officially designated “neighborhoods” — there was to be no development.

  This is what I’ll call the first stage of intensification.

  Then, we started to think about mid-rise intensification along the avenues. Most of these “avenues” (also an official term) cut through those same stable neighborhoods, but the main streets were seen as an appropriate place to allow additional growth. It makes perfect sense and so guidelines were created to help dictate what this new building typology should look like.

  This is what I’ll call the second stage of intensification.

  And it’s one that I’d argue we’re currently living through with new mid-rise projects like DUKE in the Junction (TAS project), Kingston&Co in Kingston Road Village (another TAS project), Abacus Lofts on Dundas West, and The Hive in Etobicoke. These are all mid-rise buildings going up in established neighborhoods.

  With the recent decision to also allow wood frame buildings up to 6 storeys in Ontario (instead of 4), we’ll probably see an even greater surge in mid-rise buildings once the private sector gets its head around this shift.

  So what’s next?

  I think it’s inevitable that we’ll eventually see low-rise intensification within our established neighborhoods. We started by avoiding them altogether, and then deciding that it was desirable to build along their periphery. But as demand for urban housing continues to increase, I believe it’s only a matter of time before we start to loosen the reins on our single family neighborhoods.

  Some of you might be thinking that this is going to be a bad thing, but I actually think the opposite. Projects such as Vancouver’s Union Street EcoHeritage prove that it’s entirely possible to intensify existing neighborhoods through sensitive and beautiful infill interventions. And of course, let’s not forget about laneway housing.

  The fact of the matter is that Toronto has already been intensifying its neighborhoods for a very long time — likely since the beginning — by converting single family homes into duplexes, triplexes, and other multi-family dwellings. We just haven’t been doing it in any sort of structured way.

  I don’t know when this will change, but I think it’s only a matter of time. And that will be the third stage of intensification.

  Image: Flickr

  2015.01.27

• The hard things about retail

  

  Retail is one of the hardest – if not the hardest – real estate category to get right. If you don’t have the right setup, the right location, and the right tenant mix, you can fail pretty easily. It’s a bit of an art. And that obviously applies to both landlords and tenants. I mean, we all know what recently happened with Target Canada.

  This past weekend I had the opportunity to visit the Aura Condos in Toronto, which is supposedly the tallest and largest residential condominium in Canada. There’s about 1.1 million square feet of residential space across 79 floors and somewhere around 150,000 to 180,000 square feet of retail space (the estimates I found online varied). The main anchors include Bed Bath & Beyond, Marshalls, and Hard Candy Fitness (which also serves as the gym for the residences above).

  

  But what’s probably most unique about the retail component of this building is the P1 level (the first underground level). It’s made up of small retail condos, some of which looked to be about 90 square feet. That means that each retail unit is individually owned, just like a residential condominium, and there’s no singular landlord focused on curating the tenant mix and ensuring the entire retail center does well.

  Now, I’m told that this approach works perfectly well in other parts of the world and I know that we’re trying it in other parts of the Greater Toronto Area, but I worry about the long term viability of this (P1) space in particular. When I was there on Saturday there was almost no foot traffic and probably half of the retail units were vacant.

  Maybe it’s because there isn’t enough employment density in the area. Maybe it’s because it’s not well connected to other P1 level retail. Or maybe it’s because the anchors all sit above this space, as opposed to around it (as they do in traditional malls). Whatever it is, I wasn’t feeling product/market fit.

  I hope I’m wrong.

  Images: P1 Retail at Aura Condos

  2015.01.26

• Net-positive buildings — why a green building isn’t what you think it is

  

  “We can’t address climate change without thinking about buildings.” -Bryn Davidson, Lanefab (Vancouver)

  This is a line from a recent TEDx talk by Bryn Davidson, who is one of the founders of Lanefab out of Vancouver. Lanefab is a design and construction firm specializing in sustainable infill / laneway homes. Unlike Toronto, laneway houses are actually allowed in Vancouver.

  If you have any interest in climate change, I would encourage you to watch his talk. It’s less than 20 minutes long and he addresses many of the misconceptions that I think people hold about what it means to build “green”. Click here if you can’t see it below.

  [youtube https://www.youtube.com/watch?v=JEUShQ7r_tE]

  While I think it’s great that the green agenda is much more front and center these days, I agree with Bryn in that we’re not yet on a sustainable path forward. For many people, being green means buying a LEED certified home, having a Tesla in the garage, and having a Nest thermostat on your wall. And certainly those things help.

  But they’re not the whole story. Instead of just focusing on green and LEED buildings, Byrn argues that we need to take it a step further and start focusing on “Net Positive” buildings. In other words, ask yourself this: Will there be fewer green house gas emissions on the planet after your project is built?

  

  More specifically, he outlines 3 criteria:

  1. How good is your building?
  2. Where is it located?
  3. What does it replace?

  The idea behind this framework is that the building itself (i.e. How good is your building?) is only one piece of the story. What also matters is its location and what it happens to be replacing. Is the building in a walkable area? Is it on a greenfield or infill site? Is it replacing an old energy inefficient building? Is it intensifying land use patterns?

  All of these things matter when it comes to assessing our greenhouse gas emissions.

  Let’s now apply this framework to three different building typologies: mid and high rise condominiums, and laneway houses. In the context of a Net Positive building, they all do quite well. In Toronto, we could certainly do a lot to improve the way many of our condo buildings are built, but they are usually in the right kinds of areas and they are the right kind of building typology.

  Similarly, laneway houses as a whole are an incredibly sustainable building typology. In fact, I would argue that an energy efficient laneway house is easily one of the most sustainable homes you could build. They’re compact. They’re located on under-utilized and previously developed land. They often replace parking. And they increase population densities in established residential areas, which then makes transit more feasible.

  But again, here in Toronto we’re not allowed to build them.

  So whether you like it or not, if you’re involved in shaping the built environment, you’re also involved in climate change. This is a job for architects and developers, but also policy makers and communities. Laneway housing is a perfect example of that. Lots of people would build them — if only they could.

  Image: Lanefab

  2014.12.05

• How many households in Canada live in a condominium?

  

  Click here to zoom in / download a copy

  I’ve been meaning to introduce infographics and diagrams into my posts at ATC for quite some time now, so I’m excited to introduce the first one: How many households in Canada live in a condominium? I hope to make this a regular feature.

  While a lot of the new development happening in Canada is condominium – particularly in cities like Toronto and Vancouver – the vast majority of households in Canada still live in non-condominium dwellings. Only 12.1% of households are condominium households, which could be high-rise, low-rise, row-housing, or other, according to Statistics Canada.

  Perhaps not surprisingly, the Vancouver CMA has the highest percentage of condominium households at 31.4%. I would have expected Toronto to come second, but Calgary (20.4%) actually takes that position (probably) due to an abundance of low-rise condominiums (38.8% of all condos in the CMA). However, Toronto has, by far, the highest percentage of high-rise condominium households at 67.4%. This isn’t surprising to me.

  All of the data for this infographic was taken from Statistics Canada and the total number of households in each Census Metropolitan Area (CMA) was assumed to be “occupied by usual residents.” StatsCan defines this as households that are permanent as opposed to ones that could be second homes and so on.

  I hope you like the first ATC infographic.

  2014.08.01

• Kingston&Co at the Beaches Jazz Festival

  

  One of the best things about Toronto in the summer is that it feels like there’s a special event happening almost every day of the week. It would be impossible to go to everything, but one of my favorites is StreetFest at the Beaches Jazz Festival, which is running this week from Thursday (July 24) to Saturday (July 26).

  If you’re from Toronto, then you’ve probably been. But if you haven’t been, StreetFest is basically a 2.5 km stretch of Queen Street East in the Beaches that gets closed to traffic so that hundreds of thousands of pedestrians can walk around and listen to jazz music on the street. It’s a lot of fun and I’m told there will be 40 bands this week.

  This year TAS has sponsored a tent and so the Kingston&Co Condominiums team will be there to talk to people about our project (and also listen to some jazz music!). I’ll be there on Thursday night (tomorrow) and so if you’re around, come by and say hello. If you can’t find us, send me a tweet.

  If you haven’t been to StreetFest before, here are two tips. It gets super busy and traffic is often bad heading in and out of the area. If you have the option of biking there (or riding on someone else’s handlebars), I would highly recommend that.

  Also, given how busy it is, I remember it being difficult to find a beer the last time I went – all the restaurants and patios were full. So you may want to consider investing in a CamelBak Pack. We wouldn’t want you getting dehydrated 🙂

  I hope to see some of you there.

  Image: JR Photography

  2014.07.23