Tag: places to grow

• The missing middle will come, eventually

  Yesterday Lloyd Alter of Treehugger wrote a great rebuttal to my post about homes for families. His argument was that I missed a whole world of building typologies between single family homes and apartments. (Something that architect and urban planner Daniel Parolek calls “The Missing Middle”.)

  Now he’s absolutely right. I didn’t mention it – other than provide an option in the survey for townhomes. And he’s right that it’s a tremendous opportunity for cities looking to increase housing supply and improve affordability.

  But the reason I didn’t mention it in my survey is because, here in Toronto, we’re not very good at that middle scale.

  I previously wrote a post talking about Toronto’s 3 stages of intensification. It went from high-rise to mid-rise, and then to low-rise intensification. And my argument was that we’re still in and figuring out the mid-rise scale. (There are challenges at this scale, but that deserves a separate post.)

  Eventually though, I think we will get to low-rise intensification. And that will cover off many of the building typologies that Lloyd is talking about: duplexes, triplexes, fourplexes, and, my personal favorite, laneway houses.

  This, of course, isn’t the case in every city. Many cities, such as Montreal, have a strong history of neighborhood-scaled apartments. Lloyd points that out in his article. But that’s not the case here in Toronto.

  In fact, Toronto’s Official Plan explicitly designates these low-rise “Neighborhoods” as areas that are stable and should not see much intensification. And it was a great selling point for the Places to Grow Act: intensification here, but not there.

  But I think this will change. Not because I’m a real estate developer and I think it should change, but because our current arrangement is causing a dramatic erosion of affordability at the low-rise/ground-related housing scale.

  If it were up to me, and it most certainly is not, I would start with laneway housing. It’s a great way to intensify low-rise neighbourhoods without altering the character of the streets.

  If you live in a single family neighborhood, I would especially love to hear your thoughts in the comment section below. It will be interesting to see how this all plays out. 

  2015.06.03

• 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

• Is Toronto’s urban growth boundary really making the city less affordable?

  

  This morning the Globe and Mail published an article by Toronto’s chief planner, Jennifer Keesmaat, called Greenbelts make cities more livable, affordable and transit-friendly.

  The headline immediately caught my attention because conventional economic wisdom would suggest that supply constraints – whether natural or artificially created – generally have a negative effect on housing affordability.

  To be clear though, I support Ontario’s greenbelt. I think an urban growth boundary is the right thing to have if we want to build sustainable, walkable, and transit-oriented communities. But I’m also not blind to some of the potential (negative) externalities.

  However, Keesmaat’s article got me wondering just how prevalent those externalities might be and to what extent our greenbelt is actually impacting housing affordability in Toronto. In her article she cites a recent report by the Pembina Institute that very clearly argues the following:

  “There is no shortage of land throughout the GTA [Greater Toronto Area] to build single-family homes for decades to come, but this land is predominantly located far from the City of Toronto and other established centres of employment in the GTA.”

  More specifically, the report found that of all the land available for development in the region (within our growth boundary), 81% of it is projected to still be unused by 2031. This got me thinking: it’s not that there isn’t land still available in the region; it’s that there isn’t land in the areas where demand is the greatest.

  Put differently, young families aren’t clamoring for single family homes in High Park and Leslieville because the greenbelt has restricted their ability to find new housing. They’re doing so because they want to live in neighborhoods like High Park and Leslieville.

  If you dive into the data, the report shows that in 2004 the average price of a detached home in Toronto was about $117,000 more than the rest of the Greater Toronto Area. As of 2013, that spread had grown to about $200,000. And indeed the data shows that it’s the core of the city where home prices seem to be appreciating the fastest.

  

  So when it comes to housing affordability and supply, the greenbelt may actually be a red herring. Releasing it would not increase the supply of housing in areas where demand is already high, which is probably why this same report also found that – with or without an urban growth boundary – most Canadian cities are seeing similar increases in home prices.

  So what should we be doing?

  I think we should do two things: (1) focus on accommodating more growth in the areas that people already want to live in, and (2) figure out ways to transform the less desirable areas into more desirable ones. This second one will be the hardest, because it’s likely going to mean changing car dependent areas into transit-oriented ones, which is no easy task.

  The good news though is that we are already doing these things. There’s more that I would like to see happen, but we’re headed in the right direction.

  If your city has a greenbelt or you have experience with greenfield development in the Toronto region, I’d love to hear your thoughts in the comments. This is an area of development that I’ve never really been involved with.

  Image: Flickr

  2015.01.13

• Toronto already has a laneway community on the islands

  

  It feels really good to have shared the details about my laneway project yesterday. It’s a project I’ve been working on for a few years now, and – though I’ve spoken to architects, engineers, and city staff about the project – I hadn’t really gone public with it. And I’m happy I did.

  I got a lot of great feedback from the twittersphere. In fact, I didn’t receive one negative comment about the idea of a laneway house in Toronto. Everyone seemed to think it was a great idea and many expressed their dismay with the city’s reticence to formally support them.

  I also received a number of encouraging emails, one of which was from a resident of the Toronto Islands. And he raised a really great point: Toronto already has a very successful community of laneway-like houses and it’s called the Toronto Islands.

  The streets are no wider than the laneways we have here on the mainland (and even smaller in some cases) and yet there are about 250 houses serving a population of roughly 750. He went on to mention that they even have “downsized garbage trucks”, which are used to navigate the small, car-free streets of the Toronto Islands.

  What this reinforces is that our aversion to laneway housing is not because we can’t figure out the logistics of how to service them. We can and are already doing that. If we can figure out how to do that on the islands, I’m pretty sure that we could also figure out how to do it on the mainland. 

  So what this really comes down is that there isn’t the political will to make this happen. And there isn’t that will, I’m guessing, because there’s a fear of upsetting the established neighborhoods. That’s why Ontario’s Places to Grow Act (2005) was deliberate in concentrating growth in specific areas of the city – it meant that we could say that the rest of the city would receive little to no growth.

  We’ve since revised that position with the push to intensify our Avenues with mid-rise buildings. But just as we went from high-rise to mid-rise intensification, I think it’s only a matter of time before low-rise intensification starts to also happen.

  I firmly believe that the demand is already there for laneway housing (the Lanehouse on Bartlett pretty much sold out in one evening). It’s simply a matter of now figuring out the supply side of this equation.

  Image: Ward’s Island (Toronto Islands)

  2014.11.18

• On medium density development

  Over the past decade, Toronto has seen a proliferation of condos across the city. And while I do think this intensification is a great thing, we’ve been much better at building towers than anything else. We’ve neglected medium density development and it has bifurcated our housing market: you’re either in the market for a condo or for a house.

  And since we’re not really building anymore of the latter, Toronto has become accustomed to bidding wars and multiple offers. Every young couple I know is in the market for an “hip fixer-upper in the city.” Problem is, that’ll cost you $700,000 or more and you may still need to gut it.

  At this point, it’s not realistic to expect that we’ll be building anymore single family homes in the city—at least not at any sort of significant scale. We’re tapped out. But what we can reasonably expect is more medium density development. I’m talking about midrise developments along our avenues, laneway houses in people’s backyards and other creative infill solutions that sit somewhere between a house and a highrise.

  If we’re concerned about creating equitable housing opportunities, then we’re going to need relieve some of the pressures on low rise housing. We’re going to need more diversity in our product offerings.

  2014.02.16

• Q&A on Toronto’s condo rental market

  Earlier this week I connected with a Ryerson student doing a piece on Toronto’s condo rental market. She emailed me and asked if I would mind answering a few questions. Here are my responses.

  Generally speaking, why is Toronto continuing to see such a rapid increase in the number of condos in development? 

  A lot of what we’re seeing is policy driven. It stems from the Places to Grow Act and the continued push towards intensification. It actually mirrors a similar boom we saw in the 70s. In both cases, it was policy driven and the market responded.

  The other factor is a growing consumer preference for more walkable and urban neighborhoods. People are sick of long commutes and so we’re seeing a return to city centers and downtowns. This is happening across all demographic segments, though Millennials and Baby Boomers seem like particularly strong ones.

  Is that boom, and the consequent rush by developers to create new units for rapid sale, affecting the quality of design and accessibility in new condo developments in Toronto?

  When you have a hot market, you’re going to get lots of people rushing in and trying to make money. Whether it’s real estate, tech or some other industry, it’s to be expected. And I’m sure it impacted some projects negatively. But that market is gone in Toronto.

  And regardless of the pace of development, there will always be varying degrees of quality across builders. The unfortunate thing for consumers is that it’s not always easy to tell which is which.

  One of the things we’re trying to do (at TAS) is integrate consumer education more into our sales and marketing programs. Mechanical equipment, as one example, isn’t the most exciting thing to to talk about, but we want consumers to know what they’re buying into.

  Prices are rising (you could buy a house outside the city for the price of some of Toronto’s tiny bachelor units, if I’m not mistaken…) – So what is making condo ownership so desirable in spite of the high cost relative to space? 

  Again, it’s being driven a lot by lifestyle. People want walkable communities, they want to be close to amenities and they want to drive less. And they’re willing to give up space for that. 

  When considering and comparing the cost of a home, I think it’s important to consider some of the indirect costs, such as transportation costs, travel times, quality life and so on.

  Sure a home in the suburbs may be a lot cheaper, but what’s my total, all-in, cost? If you need to own 2 cars and you spend 2 hours commuting everyday, there’s a real cost to that. If you place a big value on your time (as I do), the cost equation isn’t so skewed all of a sudden.

  Are more people choosing to live in rental condos instead of buying, because of the inaccessible cost? If so – why are we still seeing so many new ‘rental condo units’ being built, rather than purpose-built apartment units?

  Condos are being built because, in most cases, it’s the highest-and-best use for the land. It’s the most profitable. And investors have been more than willing to step up and fill the rental needs of the market. But with the condo market now coming down from record levels, I wouldn’t be surprised if we start seeing more purpose-built apartments.

  Would you say that the majority of condo rentals on the market are owned by foreign investors who depend on building management to liaise with renters? If so, why are they choosing to buy units in Toronto?

  I have no idea. It’s even hard to tell how many units are just investor owned, let alone local versus foreign. Because there are tax implications if you don’t owner occupy a unit, buyers have an incentive not to disclose. Overall, I find it problematic that the marketplace is so opaque. I wish there was a way to bring perfect information.

  With respect to why they choose to buy in Toronto, there are a bunch of reasons. Real estate has been a phenomenal investment in Toronto over the past decade and that’s attracted a lot of investor attention. There are also segments that just want capital preservation in a safe and stable country. Even without great returns, that’s a valuable proposition for some foreigners. And of course, Toronto is a great city. Talent wants to live here and that’s important.

  Generally speaking, is there a certain LOCAL demographic (ie, boomers, post-boomers) that are investing in condos for the purposes of renting them out? What makes that investment so desirable?

  Again, there isn’t great data on this. 

  What I will add to the investor topic is that, despite the fact that investors often get a lot of flack, they do serve two important needs in the marketplace for both developers and consumers. The first one we’ve already talked about. Investors provide rental housing in Toronto at a time when few, new, purpose-built rental apartments are being constructed.

  The second one is that investors help to get projects under construction and built. I’ve heard one developer refer to them as providing a kind of short-term financing. Because consumers don’t always want to commit to a unit that might be built 4-5 years out, developers rely on investors to buy pre-sale units so that the project can get underway. Once construction is complete, these units then often get sold to end users who are now ready to commit and move in.

  2013.12.05