How Long Does It Take For A Neighbourhood To “Change?”

TimeForChange

Perhaps as long as it takes for saplings to grow into mature, leafy trees?

Or is it possible, in today’s judgmental world, with billions of “experts” opining on the Internet, for perceptions about a neighbourhood to ever really change?

I was asked by a newspaper reporter the other day if there are any neighbourhoods in the central core that were “a good bargain,” and while the idea of a bargain in 2015’s real estate market is ludicrous, I do think there are two areas that are under-valued:

Regent Park and St. James Town.

They’re not what they used to be…

TimeForChange

What is the difference between a “hypocrite” and somebody who changes their opinion?

I’ll be the first to admit that when Daniels Corporation announced they would “revitalize” Regent Park almost a decade ago, I was skeptical.

But here we are in 2015, and I look at the prices for Toronto condos, and consider what it costs for a unit in Regent Park, and I honestly wonder why more people aren’t moving there.

“Regent Park.”

It sounds awful, doesn’t it?

When I hear those two words, I get this odd flashback to childhood, when I didn’t know what Regent Park was, or where it was, but I knew it was bad.  I knew that kids used the words “Regent Park” as a dis to other kids.  It was like saying, “You’re so poor you shop at Biway!”

What was wrong with shopping at Biway?

I shop at Dollorama all the time…

Of course back then, I was a middle-class kid growing up in Leaside, which is now upper-middle-class, and is now this majestic neighbourhood that is unaffordable to most, when back in 1980, it was just a place to live.

Then again, in 1913, Leaside wasn’t anything.

While $1,000,000 in Leaside today gets you a 3-bedroom, semi-detached house, back in 1913, it bought you ALL the lots in Leaside!

And while Leaside today is considered “central Toronto,” or part of the “core,” back in 1913, it was “A City Within The City.”

Here’s a newspaper ad from 1913:

OriginalLeaside

Imagine having to convince people to move “up” to Leaside?

I love this ad.

“You can make an appointment by telephone.”

I guess their website wasn’t linked to the calendar in their iPhone…….yet…

This was 102 years ago, but even when most of Leaside was built after the war ended in 1945, this still wasn’t exactly the top choice for Toronto residents.

Today, it’s up there with Moore Park, Lawrence Park, Allenby, et al, always trailing Rosedale & Forest Hill, but still one of the top ten neighbourhoods in the central core.

It took a lot of time for Leaside to reach its current stature, but it was never really looked down upon the way Regent Park and St. James Town were for so long.

We all know the connotations that Regent Park and St. James Town carry.  We all have the same subconscious thoughts when we hear “Regent” and “Park” together.

These areas have both been filled with low-income housing for decades, whether it’s the “towers” of St. James Town, or the “brick projects” of Regent Park.

And we all know what’s happened over the past decade.  The brown brick buildings, with green doors, and dirt yards, that we grew to know as the defacto logo for Regent Park, have almost all disappeared.  Replaced with glass towers – much like the rest of the city, the area is about 90% transformed.

Sure, there is still subsidized housing in the neighbourhood.

And yes, the area attracts a different demographic than, say, King West.

But I’m of the opinion that prices in both Regent Park and St. James Town, which are well below the average in the downtown core, will rise significantly over the coming years.

Why?

Because they have to.

It’s really that simple.

Prices in the downtown core will not rise around Regent Park & St. James Town like these areas are black holes, and it’s inconceivable to think that the market will go up 30% in one area, and 0% in the area right next door.

Not every area appreciates at the same rate, we know this.

But with 2-bed, 2-bath units with parking and lockers, trading at $470 per square foot in 3-year-old buildings with low maintenance fees and superior amenities, for how long can the city ignore what’s going on at Dundas & Parliament?

Condo buyers ignore this area because it used to be ghetto, but it’s not anymore.

In terms of the building construction and design, infrastructure, transit – it’s no different than a dozen other condo neighbourhoods in the downtown core, except for the name.

If all of a sudden, by some form of magic, the words “Regent Park” were wiped from the minds of every person on the planet tomorrow, I think there would be a LOT more condo buyers over at 260 Sackville and 25 Cole.

We talked about “stigma” in Wednesday’s blog, and how you can put a value on something that doesn’t exactly exist; an idea, or a feeling, that has a negative affect on real estate.

There’s a stigma to “Regent Park,” and the question is: how long will it take for that stigma to go away?

If you’re reading this right now, and you know real estate then tell me what the following “should” cost in the downtown core:

2-bed, 2-bath (both 4-pc)
849 square feet
116 square foot terrace facing west, city view
Open concept living/dining/kitchen
Corner unit
Upgraded features (granite, s/s appliances, etc)
9-foot ceilings
Maintenance fees $0.65/sqft
3-year-old building

How much?

Maybe, on average, $600/sqft?

So $510,000?

And in some stupid, brand-name, hotel-condo, or bling-bling building it could be $900/sqft, or $765,000?

Go to Regent Park, and this is about $400,000.

To each, their own.  I know.

Some of you will say, “Yeah, but then I’d have to live in Regent Park,” but perhaps that’s the problem.

“This isn’t your grandmother’s Regent Park;” isn’t that how the saying goes?

Leaside today isn’t the “northern” sub-division that it was in the 1940’s, so how long will it take for Regent Park to catch up to the rest of the downtown core?

I had a client purchase a gorgeous house on Crossovers Street in August of last year.  That whole complex between Main Street & Victoria Park, north of Gerrard, was built a little less than a decade ago, and at the time it seemed like a silly, hokey, movie-set sub-division.

Today, the houses are highly sought-after, and the prices are higher than what you find in older, more traditional homes on the south side of Gerrard.

That complex is like a miniature Leaside, in a way.

So as I said above, I fully expect that prices in Regent Park and St. James Town will rise, but when?

28 Linden Street – The James Cooper Mansion
500 Sherbourne Street – The Five-Hundred
120 Homewood Avenue – The Verve

Here are three very popular, very successful condominium projects, all built within the last seven years, all in St. James Town.

And if I had to guess, I’d say more buildings are on the way.

The east side of Sherbourne Street, south of Bloor, has been virtually demolished.  Remember where the No Frills used to be?  Yeah, I certainly do.  Their lettuce may have had actual chunks of soil in it, but the same can of soup that’s $2.99 at Loblaw’s is always $1.79 at No Frills!

Well I believe that twenty years from now, the whole Sherbourne corridor will be condos, perhaps like Bay Street has become.  Sherbourne is filled with little 2-storey commercial and residential buildings, and even some vacant lots – all of which are ripe for development.

When I moved down to King & Sherbourne a decade ago, my Dad came to visit me and he said, “You know…….ten years ago, this whole area was full of boarded-up buildings.”

True.  But you can’t stop progress, and considering it’s a ten minute walk to Yonge Street, and around the corner from one of Toronto’s biggest icons – the St. Lawrence Market, there was no way that this area was going to remain derelict when Torontonians began to flock to the downtown core.

Think about how close Dundas & Parliament is to the heart of downtown, the financial core, and the Yonge TTC line, and I don’t think you can argue that condo buyers will ignore Regent Park forever.

There are “deals” to be had in the area, in a city where there are no deals to be had.

I don’t want this to sound like an advertisement for Regent Park, by any means.

And no, I’m not moving to Regent Park tomorrow.

But if a condo buyer puts value and space ahead of location, then Regent Park is the ticket.

It’s great value, and a ton of space, at a lower cost.

You just have to get past the name.

Go to the community centre on a Saturday morning and look around.  Who’s swimming in the pool?  Is it poor people?  Crack-dealers?  Criminals?  No, it’s rich parents with their kids, from Riverdale, Leslieville, and Playter Estates.

Times have changed, and will continue to.

Remember: Leaside was once full of “poor factory workers,” and Cabbagetown got its name because people were so poor they had to grow cabbage on their front lawns.

And as the last brown brick buildings are being torn down at River & Gerrard, it seems like Regent Park is about to complete its makeover, and begin its transition…

17 Comments

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  1. Nate says:

    I am considering buying an investment condo unit on the north edge of St. James Town (pre-construction), but after doing more research I am having second thoughts. This huge apartment complex south of Bloor between Parliament and Sherbourne is not going anywhere. Even today this is the poorest area in Toronto with average income below 30K and the most dense populated place in Canada. I am not a real estate expert, just getting my feet wet. Do you think this would be a bad move to invest in this area?

  2. Mark says:

    none of those 3 buildings are in St Jamestown . They are all west of Sherbourne in the Upper Jarvis neighbourhood

  3. Libertarian says:

    David, since you live at King and Sherbourne, you must love having that No Frills next door. I love that No Frills. I am there every weekend, even though I don’t live in the neighbourhood. My hope is that the store doesn’t get too busy – it’s almost a hidden treasure.

  4. Seeya says:

    . The average detached 416 house is down 4.2% from a year ago. At $859,672, it is $100,000, or 11%, cheaper than it was in April, nine months ago. 

    Where are you “appraiser” ?

    1. Steve says:

      Uh oh …. sounds like trouble

      1. Kyle says:

        I’m not Appraiser, but it doesn’t take someone who works in real estate to see how ridiculous your comments are.

        Actually what it sounds like is wishful thinking on the part of the gullible. First why would anyone in their right mind compare April housing data to Dec data for detached houses? That’s as stupid as comparing April temperatures to December temperatures and concluding that we’re heading for large scale global cooling. There’s a reason they call it the “Spring market”, hint: it’s because housing is seasonal. Second the actual YOY change on detached houses in 416 is +8%, not -4.2%: Dec 2014 avg was $934,039 and Dec 2013 avg price was $864,351, below are the links. Would be great if Seeya could post his/her data sources, but i realize he/she can’t since he/she doesn’t have any actual data and instead copied and pasted Garth Turner’s January 18th post verbatim:
        http://www.torontorealestateboard.com/market_news/market_watch/2014/mw1412.pdf
        http://www.torontorealestateboard.com/market_news/market_watch/2013/mw1312.pdf

        Seriously don’t you guys ever get tired of being fed BS and being told what to think and believe by Garth? So, so gullible. It’s like you guys are impervious to facts.

  5. Wendy says:

    Leaside took 50+ years to become a close to million dollar neighborhood. Regent park will change… but by the time it changes, you’ll prob grown out of your condo already.

    and at that time it’ll prob still be hard to afford a bigger house in the established area.

    1. Tyler says:

      The St Lawrence Market / Esplanade area transformation is probably a better comparison to Regent Park’s revitalization than Leaside, I think.

  6. Annie says:

    lol david,
    i actually own a unit on 225 sacvilles st, 2bed, 2bath penthouse. Bought couple years ago. I am certainly happy to see the neighborhood going up! there are lots students living dundas/parilment cause it is very close to university.

  7. Kyle says:

    I agree that Regent Park has lots of potential, especially now with through streets that allow people in and out of the neighbourhood, as opposed to the old maze that discouraged anyone from outside from ever entering. Also the new developments to the South should bring in an influx of people with mixed income levels and hopefully more retail and commercial will start to pop up along the main streets.

    St James Town on the other hand has quite a few more challenges. Even though it is surrounded by affluence, it is hemmed in on three sides by physical barriers (Bloor St E and the Rosedale Valley to the North, The Don Valley to the East and the Necropolis to the South), which turns it into an almost impenetrable island of low income.

  8. dee says:

    Id live in Regent if I didn’t have kids who use the schools ….. the community center…. I don’t want them to be exposed to all the bad things at Regent. It’s convenient for commuting to downtown and to out of town as close to DVP, a short cab ride when intoxicated. But alas would never consider it a family place to have my kids grow up. Too many drugs, too many gangs, weapons, etc from the poverty and poor parenting that goes on.
    As an adult if take precautions and aren’t stupid ( don’t live your Coach purse on your car seat) I am not that worried about personal safety. there are many many many hard working families in the that community who bestow values and morals on their children, its the few bad apples that taint the rest.

    1. Jason says:

      I would have to agree with this. You can’t trade on your kid’s well being. A young family would be better off just leaving T.O. if this was their only option.

      1. JDF says:

        So leaving Toronto is the better option here ?

        Seriously.

        Sign up for a lengthly commute in lieu of the 20 minute wak it takes you to get home from the core ? Sounds like definitly more quality time with the kids, no ?

        And of course, the suburbs are perfect. Nothing bad ever happens there….no drugs, weapons, and definitely no poor parenting !!

        Instead of setting progress back years by your mindset, why don’t you actually step foot (if you dare,that is) in a Regent Park school, community center or park before you post anymore “insights”.

        1. Jason says:

          The lady doth protest too much.

          1. A Grant says:

            Not really – let’s not forget the true dangers to children’s well being are not urban “drugs, gangs and weapons”, but suburban commuting. Car accidents are leading cause of death amongst young people.

            So if your only concern is your family’s safety, I would suggest that living in the core of a city, where you are not reliant on the automobile as your sole source of transportation.

    2. Lauren says:

      I don’t know why the focus is on “kids and families.”

      This blog post read to me like it was directed at condo buyers/dwellers, not families.

      I might agree about the family concerns (although most of these comments are playing on the exact stereotypes that David was saying have gone away), but for a 20-something looking at a 2-bed, 2-bath at $600K in King West versus $400K in Regent Park, I totally buy into this argument.

  9. A Grant says:

    Leaside: “it’s future is as certain as that next year will be 1914.” Oh the irony, given the global apocalypse that was to come.

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