Urbanation’s 2012 Q2 market overview reveals a slowdown in new condo sales. The overview identifies this “softening” as in part due to consumer resistance to increasingly smaller suites.
There is a shocking dearth of anything larger than two bedrooms. Apparently investors don’t like to buy bigger units, so many builders don’t like to build them.
One notable exception is Monarch. Heading toward its 95th year, Monarch began building single-family homes in 1917. They now build everything from planned suburban communities with single-family homes to high-rises downtown.
Monarch’s new president Brad Carr feels builders will need to break away from the unit monoculture and adapt to the changing market.
Carr suggests viewing the GTA housing market with a keener understanding of both regional and consumer diversity.
“As an industry I think we have to get much better at understanding the layering that exists,” he says.
Right now, Carr sees a shift from what he calls “high density that tries to be everything to all people.”
Monarch’s new direction will be to develop “more niche product, neighbourhood-based, not as many units in the building, and focusing more on the end user as opposed to the investor.”
The return of the three-bedroom?
Many people can’t afford a detached home on a lot downtown but are not willing to live in a towering high-rise. Right now, these buyers may be forced to commute.
Monarch’s Picasso building in the entertainment district is one of the few high-rise condos downtown offering a three-bedroom option.
No matter how efficient vertical living is on paper, condos, regardless of the number of bedrooms, will never be for everyone.
As the GTA becomes increasingly diverse, we need to recognize different families have different needs.
New Canadians may be used to living in extended family units. A home requires private spaces for mom, dad, kids and grandparents under one roof.
Carr notes that Monarch has had great success designing homes for extended families.
Upper Danforth Village and Birkdale, both in Toronto’s east end, offer detached and semis on split lots as well as three-story, four-bedroom townhomes.
These homes offer “multiple bedrooms in a much smaller footprint,” say Carr. Ultra tall and ultra thin with small feet, these modern homes are the supermodels of urban family dwelling.
Places to Grow legislation was designed to protect the Greater Golden Horseshoe’s surrounding greenbelt, curb suburban sprawl, and increase urban density.
The shortage of land is on every builder’s lips. It is a major factor in the increasing cost of homes of every sort, and the reason why we’re seeing taller and taller housing filled with smaller and smaller units.
That is not to say there is no land. Both Upper Danforth Village and Berkdale took advantage of the Brownfields Ontario initiative that allows urban industrial sites to be redeveloped for residential use.
In return for demolishing old commercial structures and cleaning up any environmental issues, Brownfields offers developers tax incentives, funding for environmental studies, and may waive the education portion of the property tax.
Best of all, some municipalities even offer a reduction or exemption of development charges—no small thing considering such charges can be between $35,000 and $78,000 per unit depending on the municipality.
Opening up new spaces for development near transit is all part of the government’s stewardship plans.
Markham is a good example of how suburbs are reinventing themselves as cities in their own right. No longer a town, and officially a city, Markham is home to several tech industry giants. Residents live and work there.
Land in Markham is scarce. Monarch is currently selling a project called Garden Court in Markham—a four-story mid-rise building with 186 units and 88 townhomes offering two, three, and four bedrooms right next to Highway 404.
The project has a very urban feel. Residents are close together, but homes are large enough to accommodate bigger families.
Garden Court looks like what new family housing in the GTA needs to be. Not too tall, a small land footprint, shared green space, and enough bedrooms.
That’s not to say high-rises are on the way out. Carr feels high-rises have a valuable role to play.
“Well-located [condos]—I’m talking right on the subway line, right on the waterfront, access to transit—will always have a market.”
High-rises are great places to live for smaller families, young professionals, and students.
Building for a quick sale and viewing homes strictly as investments is what Carr thinks the industry should move away from.
“Housing is a home, it’s not just an investment,” he says. “What I remember [about my parents’ home] is backyard barbeques and my cousins coming over to play.”
“We need to get back to taking a much longer view of housing.”
“A culture of conservatism and a long-term view” are what Carr feels have allowed Monarch to survive for 95 years and remain profitable every year since 1940.
As its youthful new president leads Monarch toward its centenary, Carr hopes to continue with tradition.
“It’s not just about this year or the next year, it’s about the next 95 years.”
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