Toronto Families Stuck Between a Small Rock and a Smaller Hard Place
As we work toward our goal of building increased density around transit nodes and seek to capitalize on existing infrastructure by building infill project, on avenues in urban areas there is no denying it—new family housing is either awfully small, or awfully expensive, and among the tiny new offerings, few three-bedroom units can be found.
Elliot Taube is president of International Home Marketing Group. Working with a sizable number of GTA builders during the process of product development, marketing, and sales, Taube has a hand in everything, from downtown high-rise to single family in the suburbs.
His challenge is to design product that attracts both investors and end-users and is saleable. As land prices go up, Taube’s job is becoming harder.
Staying in the suburbs
One option is to suggest families with average incomes (in Toronto it’s about $75,000 a year) stay in the suburbs, but that has a time limit.
“There’s not a lot of inventory,” Taube says of the suburbs. “We’re at an all time low as far as supply goes.”
Suburban land is now irreplaceable, so builders are hanging on to their land while prices continue to rise.
It also seems like an attractive recipe for future suburban poverty as gas prices skyrocket and we’re looking at a decade, at least, before we have reasonable—yet still insufficient—transit.
Attracting families to avenues that will eventually become transit corridors like Eglinton Ave. or Sheppard Ave. is a good idea, but there are a few obstacles, says Taube .
“Mid-rise buildings seem to not work so well from a profitability and design perspective,” he explains . Mid-rise projects usually sit next to low-rise residential neighbourhoods, so they can’t be too tall.
“At eight storeys it doesn’t make money. At nine, ten, eleven we’re happy, but they’ll (the City of Toronto) only give us eight storeys. … We’ve tried and tried, and in the end you end up at the OMB.”
This has caused some of his clients to cancel projects and walk away.
Why not build a giant high-rise on an avenue? First, that approach is unfair to local residents, and second, it doesn’t take investors into account.
Investors arrive first and buy up units at pre-construction prices, and upon closing they either sell or rent out the new unit. They like small units in A+ locations.
Buildings need to be 70 percent sold before builders (read investors) can get the financing to start construction, which will take a couple of years at least. According to Taube, end-users won’t buy “until the building is in the air.”
End-users may want to live in a high-rise near parks and schools a little out of the way, but they can’t wait the five years it takes to close.
Big public projects
Taube sees mega-projects like TCHC revitalization of Regent Park, Alexandra Park, and Lawrence Heights as places that will accommodate families.
Mixed-income communities may not be for everyone, but they are master-planned and close to transit. An influx of homeowners can only make them better.