Brandon Donnelly

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.

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Tag: mid-rise housing

  • 1151 Queen East

    This morning I toured 1151 Queen East (here in Toronto). It is a new 47-suite apartment building that is being developed by Hullmark and that was designed by Superkül (the same architects as Junction House). It’s not quite finished yet, but it is looking terrific. The interiors feel, to me, like Berlin meets classic Miami Beach (if you can picture whatever this means). So a big congrats to the entire team. I’m sure it will be well-loved once people start moving in this year.

    At the same time, it’s hard not to see small and beautiful infill projects like this and wonder, “why do we make it so difficult to build this kind of new housing? This is a 6-storey rental building that, according to Urban Toronto, was first proposed in 2018. It then had to go through the typical rezoning process, which, in this case, seems to have taken two years. Now we’re in 2024. Uh, why?

    We should be looking at this kind of infill housing and saying, “Yes! You should go ahead and build this right now. Let us help you with that.” Instead, we erect barriers, which only force developers toward ever larger projects. If you’re going to spend two years in rezoning, no matter the scale of the development, why not build 470 homes instead of 47? And this has only been exacerbated with higher interest rates, because now time costs you that much more.

    I say all of this because this is an objectively great infill project. Our city would be a better place with a lot more of these.

  • What might Toronto learn from this infill rental project in Tokyo

    This is a lovely little infill rental project in Tokyo by ETHNOS (architect) for Real Partners (developer):

    The building is 4 storeys plus a rooftop terrace. From the plans, it looks like there are 8 units, all of which are two-storey suites.

    The A and B suites are accessible from the ground floor. For the A suites, you enter at grade, and then go down into the first basement level. And for the B suites, you enter at grade and then go up to your second level. One of the entrances (suite B-3) is via an exterior walkway.

    The middle of the ground floor is the lobby entrance and there’s a single elevator that services the second and third floors (it then drops off for the fourth floor). On the second level is a co-working space, and so the upper C suites (these sound fancy) are all accessible from the third floor.

    The fourth floor and fifth floor terraces are all accessible from within the C suites, which means that the only real common area corridors in this building are on the third level. And it looks like they wanted this particular corridor to have a view to the street, because they could have easily reduced it even further to increase the building’s overall efficiency.

    What is also interesting to look at this building’s dimensions. Based on the above section, the floor-to-floor heights are 2500mm, which is low compared to the 2950/3000mm that is typically used here in Toronto for new reinforced concrete builds.

    In terms of the overall building, it is only about 10m deep and it is less than 10m tall if you exclude the stair popups on the rooftop terraces. For context here, our Junction House lot is about 30m deep and the build is about 30m tall, so actually a similar kind of box proportion.

    But let’s scan more of Toronto.

    If you move away from designated “Avenues” (which is where Junction House sits) and look at some of our other major streets (which is something the City of Toronto is in fact doing), you can sometimes/oftentimes find even deeper lots.

    Below is a random area that I quickly panned too on Dufferin Street — these single-family house lots are around 36m deep:

    Now obviously Toronto is not Tokyo and Tokyo is not Toronto. But my point with all of this was to demonstrate just how much space we actually have within our existing boundaries, should we ever feel the need to increase our overall housing supply.

    As I have argued many times before, I think one of the greatest opportunities to quickly do this sits along our majors streets.

    Architectural drawings: ETHNOS

  • The most unremarkable streets in Toronto

    Within Toronto’s urban structure you have regular streets and you have things known as “Avenues.” (This is among a bunch of other stuff such as Centres and Employment Areas.) What this Avenue designation does is tell you that it may be a suitable location for a new mid-rise building, which is something that I have written a lot about on this blog. Here in Toronto, this means that you would then need to consult the “Mid-Rise Building Performance Standards.” Indeed, if you dust off these standards and turn to the introduction, you’ll find the following: “The Performance Standards are intended to provide simple, straightforward guidance for those seeking to develop midrise projects on the Avenues.”

    But if you want to find some of the most truly unremarkable streets in this city, you need to look at the arterial roads that didn’t quite make the cut to be an Avenue. I don’t want to generalize, but they are generally exceedingly ugly. You can’t help but feel like Toronto has simply outgrown the low-rise building typologies that, in most cases, still remain on these streets. In some cases, they’re also directly adjacent to a subway station, which is kind of like running a great big movie theater with only a handful of seats inside. Maybe one day they’ll grow up to be Avenues. But don’t hold your breath. So what’s another possible solution? Toronto-based PHAEDRUS Studio has an idea. It’s called the Hi-Lo Hybrid.

    Initially designed for a specific client and a specific site, it also happens to be something that could be deployed all across the city. What they have shown here is a 5 storey infill building on your typical long and narrow Toronto lot. As designed, it could house 4-8 units, as well as some non-residential uses, on a lot that previously only had 1-3 units. It would make a lot of sense for some of the ugly streets that I’m talking about. But let’s be honest: it would be almost impossible to get approved. One of the biggest issues would probably be the adjacency/overlook issue that it generates with the neighboring backyards. It’s probably also too tall.

    One of the main reasons why, I think, laneway suites work and are now permissible as-of-right in Toronto is that they replace existing garages. (ADU’s for the Americans.) They reallocate space that was previously used for cars to humans. And so the incremental height / density is not all that great. They, for the most part, preserve precious neighborhood character. What the Hi-Lo Hybrid proposes is not so incremental. It’s bold. It would be a massive fight. I know that and you know that. But bold is generally what you need when you’re trying to do great things and when you’re trying to shape the future. And so with that, I’ll leave you all with some words from the late American architect, Daniel Burnham.

    “Make no little plans; they have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty.”

  • The case for density transition zones (and why people will probably hate them)

    Toronto is known for its tall buildings and its contrasting low-rise neighborhoods. More recently, we have seen a proliferation of mid-rise buildings along the city’s “Avenues.” This is despite the many challenges and costs associated with this building typology.

    But I think it’s pretty clear that a further evolution is also underway. Laneway housing, which is now permitted “as-of-right,” is in the early stages of being adopted and built out all across the city. And eventually I think we’ll see many of Toronto’s laneways evolve into fully fledged residential streets; perhaps not all that dissimilar from what you might find in compact cities like Tokyo.

    This is very exciting to me and I think of it as the city gaining a third hierarchy of residential streets. We’d have our major arteries and avenues. We’d have our residential side streets. And then we’d have our compact laneways. Dare I say that maybe some of these laneways could even house non-residential uses such as small-scale offices.

    But along with this shift, I think it’s time we look at another infill opportunity — something that planners Blair Scorgie and Sean Hertel are calling “density transition zones.” What these zones hope to be is a new middle transition zone between low-rise neighborhoods (where laneway suites are already permitted) and mid-rise avenues. A place where “missing middle” type housing might be built in close proximity to major streets and existing transit. Let’s call it a 100-200m zone that sits right behind our avenues.

    In my mind this is immediately beneficial for two reasons. The first is obvious. It could be a place for frictionless missing middle housing. Housing that’s more dense than a single family home + laneway suite, but less dense than a typical mid-rise building.

    The second immediate benefit is that this transition zone could be used to help improve the overall feasibility of mid-rise avenue development. The reality is that there are many blocks along Toronto’s avenues where the lot depths are simply too shallow for proper mid-rise buildings. Density transition zones could help with this, which would be not that dissimilar from how “Enhancement Zones” were intended to work (they were never approved).

    If this were to happen, I think there would also be a strong case for softening some of the “requirements” in the mid-rise design guidelines. Requirements like the 45 degree angular plane that new buildings generally need to conform to. All of this would only help the overall feasibility of more European-scaled developments along Toronto’s avenues and, in my opinion, that would be a great thing.

    But for the same reasons that Enhancement Zones were highly contentious, I would expect a lot of grouchy people and a lot of pushback on this idea. There will be concerns about encroaching on our single-family neighborhoods, and there will be the usual objections that come up with any new development (density, traffic, dog poo, etc.) But if we’re serious about building more missing middle housing, we are going to need to find ways to remove the barriers to entry. This scale of housing is simply too small to support a great deal of friction.

    To learn more about how density transition zones might work, I would encourage you to check out the great site that Blair and Sean have put together, over here.

    Image: Density Transition Zones

  • Shrinking lot sizes and unit sizes

    Shane Dingman’s recent piece in the Globe and Mail about shrinking lot sizes raises two interesting points.

    One, new low-rise lot sizes seem to be shrinking and that’s probably a normal market outcome. Similar to the way in which average unit sizes have been generally coming down for mid-rise and high-rise product, it is a way to maintain some semblance of affordability in the face of ever-rising costs.

    The average price of a new condo in the City of Toronto last quarter was nearly $1,300 psf. That means that if you had an average unit size of 1,000 square feet, you’d have an average selling price of $1.3 million (to state the obvious). Not everyone can afford this ticket price, and so there’s downward pressure on unit sizes in order to get the face prices down.

    Two, developer margins aren’t increasing just because home prices have been going up. At best, they’ve remained constant (Shane provides a quantitative example in his article). But there are also many cases where margins are getting squeezed as a result of rising costs.

    All of this to say that I think we can continue to expect downward pressure on lot sizes and unit sizes as the Toronto region continues to grow.

  • Junction House ground breaking

    The Junction House team is excited to announce that construction will start this fall and that our ground breaking ceremony will be held at 11AM on Saturday, October, 19th. Mark your calendars.

    It will take place at our Sales Gallery — 2720 Dundas St W. This will be one of the last opportunities to see the award-winning Junction House Sales Gallery before it is demolished in preparation for construction.

    There will be photo opportunities for everyone in attendance, and so we encourage you to bring your phones/cameras. You’re welcome to extend this invitation to family and friends, but kindly RSVP by sending an email to info@junctionhouse.ca.

    We look forward to seeing you there.

  • The investment case for mid-rise condos

    Shane Dingman’s recent Globe and Mail article about “the investment case for mid-rise condos” is a good summary of why this housing type has become so popular in Toronto.

    Mid-rise buildings tend to attract more end-users because of their boutique scale. That is, they attract people who plan to move into the building once it is built, as opposed to buyers who plan to rent out their unit. We are certainly seeing this with purchasers at Junction House.

    Because of their generally smaller scale and because they are often built in mature neighborhoods with few opportunities for new construction, supply of new mid-rise housing also tends to be limited. That bodes well for future price appreciation.

    Here’s a quote from Shaun Hildebrand (President of Urbanation), taken from the above Globe article. (Sorry, it’s behind a paywall.)

    “Price growth between the two building types [mid-rise and high-rise] began to converge in 2018, and in Q1-2019, buildings under 12 storeys saw average resale prices per square foot grow 10 per cent year-over-year, compared to 6.5 per cent for buildings of 12 or more storeys,” Mr. Hildebrand said. “We may be now entering back into a period of outperformance of mid-rise buildings as the market is shifting.”

  • Toward more family condos

    The Ryerson City Building Institute and Urbanation recently published a terrific report called: Bedrooms in the Sky. Is Toronto Building the Right Condo Supply? 

    Here is a quick synopsis: The 35-44 year old age bracket in this city will see significant growth over the next decade; single family homes are really expensive; and we’re not building enough family-friendly condo units.

    When Urbanation looked at the data for all condo units currently under construction they found that the unit mixes still skewed toward 1-bedroom units, but that the number of 3-bedroom units is starting to trend upward. That feels right.

    The report also talks about the affordability gap between condos and houses. The average condo in the Greater Toronto Area costs about $511,000, while the average detached house costs $1,134,000.

    However, this isn’t exactly an accurate comparison because the average condo is smaller in size than the average house. I think a better metric is to look at price per square foot.

    Also, houses give you the flexibility of a secondary suite. Right now that usually means a basement apartment, but pretty soon it’ll likely include a laneway suite. That creates an additional income stream and helps with overall affordability.

    In any event, up until maybe recently, houses generally looked cheaper on a per square foot basis. And my view – which I have written about extensively on this blog – was that as soon as houses become “more expensive”, we’ll see an uptick in larger family-oriented condos.

    A few weeks ago I went to an open house in a desirable area of Toronto. It was for a 1,300 sf semi-detached house with good bones, but in need of a full gut. Basement was low, only suitable for humans around 5′ tall. It sold for $1 million.

    Let’s say that house needs $300,000 to bring it up to the level of a new condo. If that doesn’t include some sort of extension, now you’re in for $1.3 million or about $1,000 per square foot. You can still find a condo for less than that.

    Which is one of the reasons why I think we’re now starting to see an uptick in larger/family units. (We are trying to do it at Junction House.) 

    But like all things in real estate, these things move slowly. The condos under construction today were designed years ago. Changes take time to work themselves through the system.

  • Toward larger condo units

    One of the things that I’ve been following over the years (and writing about a lot on this blog) is average condo/apartment sizes, specifically in Toronto. I’m interested in this topic because I think it tells you a lot about what’s going on in the market and who is buying/renting.

    Developers are often criticized here for building tiny “shoebox condos.” It wouldn’t be unusual to see a building with an average unit size somewhere in the range of 600-700 square feet.

    But it’s important to keep in mind that the pull toward smaller units is largely because of one important reason: affordability. All things being equal, I’m sure that most people would gladly take an expansive 2,000 sf apartment. But how many people can actually afford a place that large? And for those who can afford it, many seem to opt for ground-related housing instead. So for the most part, the market has said: not many.

    But I’ve suspected for awhile that it was only a matter of time before we saw unit sizes start to creep upward. And indeed today there seems to be a trend toward larger units. I can’t tell you the exact percentage increase for average unit sizes across the city, but you don’t have to look very hard to find a proposed project with average unit sizes in the range of 1,000 to 1,500 sf. I spent this morning looking many of them up and going through their data sheets. If any of you have a larger sample size, please share it in the comment section below.

    To me this feels like a maturation of the market. More of us are deciding to move up, instead of out, which is absolutely what we need to do. Affordability, perhaps more than ever, is still a concern. But the confluence of a couple of factors seem to be expanding the multi-family market in this direction.

    One, empty nesters are starting to cash out of their large houses and they still want/need space. Two, the price of low-rise housing has increased so dramatically that it’s now out of reach for many and/or it no longer feels cost competitive on a per square foot basis. Three, Toronto’s status as a global city continues to increase and this is making it more of a magnet for foreign capital. And four, central and transit-adjacent housing is incredibly desirable for a large segment of the population. Horrible traffic is probably helping this one.

    If there’s any truth to my logic, then I wonder if we won’t see a bit of a bifurcation in the market, if we aren’t already. On the one end, there will still be the pull to shrink unit sizes and maximize affordability. See micro-units. But on the other end, there will be a product segment that now acts as a substitute for low-rise housing.

    I’ve said this before, but I’ll say it again: I think more families in condos and apartments would be a positive thing for the city.