Should Toronto Be Building More 3-Bedroom Condos For “Families?”

Two important things to note about the title of today’s blog, before we get started:

1) Toronto can’t build condos; it’s a city.  Developers build condos.
2) I put “families” in parenthesis for a reason.

Ryerson University released a report this week lamenting the lack of 3-bedroom condos, and most of the media reports refer to “Toronto” doing the building, as opposed to “developers.”

Since when have developers been tasked with urban planning and civil engineering?

Why would anybody expect the free market to take us in the “right” direction?

Construction cranes are seen in Toronto on Wednesday, July 5, 2017. Canada Revenue Agency is analyzing 2,810 transactions involving cases of pre-construction condominium flipping in Toronto to determine whether audits need to be carried out to find tax evaders. THE CANADIAN PRESS/Frank Gunn

I’ve been barking up this tree for a long time!

Believe it or not, the topic of “building larger condos for families” has been in discussion since 2009.

Check this out:

Final Report – Official Plan Amendment to Encourage the Development of Units for Households with Children

This report dates back to October 13th, 2009.

Eight years.  Wow.

And here we are, in 2017, with the average home price up around 95% since the report was written, and maybe a handful of 3-bedroom condos built in the same time period.

Did the city fail us?

Or did they merely allow nature to take its course?

In that 2009 report, it was suggested that Toronto’s Official Plan be amended to require that developers of condominium units with more than 100 units include at least 10% 3-bedroom units.

I can’t find, with any certainty, a section of the Official Plan that specifies whether or not this amendment was made.

But over the last few years, the 3-bedroom units that have been built are not, in any way, suitable for “families.”

Why do I keep putting the word families in parenthesis?

Because I think it’s a word that gets thrown around a lot in the world of politics, and most of the time, it’s being used by somebody who has an agenda, is trying to prove a point, and/or wants something.

What is a family, anyways?

A married couple and their dog?

A husband and wife with an “only-child?”

One of those clans from Arkansas with 19 children who get their own TV show?

Call me cynical, but I can already see some politician, municipal, provincial, or federal, saying, “We need to build more housing for families,” to a roaring applause.

But perhaps I should back up a little…

This week, Ryerson University’s City Building Institute, in partnership with Urbanation, released a report on the state of condominium development in the city of Toronto, entitled: “Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?”

I did speak to Globe & Mail columnist, Jeff Gray, on Monday about the topic, and you can find his article here:

Toronto Faces Shortage of Family-Friendly Condos: Report

Here’s an excerpt:

A study by Ryerson University’s City Building Institute and Urbanation, a real estate consulting firm, says that only 41 per cent of condominiums under construction or in preconstruction in the GTA have at least two bedrooms. That’s down from 67 per cent in buildings completed in the 1990s.

After a decade spent catering to millennials in the 25-34 age demographic and building small studio or one-bedroom condos, the report says, the city faces a shortage of large units as that cohort ages and starts having children. The GTA will be home to an additional 207,000 residents in the 35-44 age bracket over the next decade, steeper growth in that demographic than it has seen for 20 years.

The report, entitled Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?, warns that many of those millennials will be looking to “upsize” and find larger – and affordable – condos in which to raise families in the city. But if they cannot find those units, the report says, they may be forced to seek more affordable housing on the city’s fringes, or even beyond the province’s Greenbelt.

 


The Toronto Star’s Tess Kalinowinski also picked up the story with her column:

“Not Enough Family-Friendly Condos To Match Demand: Report”

Here’s an excerpt from this article as well:

The report called, “Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?”, shows the price gap between detached houses and condos has tripled since 2007 — from $200,000 to $600,000.

In the City of Toronto, 38 per cent of condos in the pipeline have at least two bedrooms, compared to about 60 per cent in the 1990s. Across the entire region, only 41 per cent of condos being built have at least two bedrooms, down from 67 per cent.

The decline in the number of two-bedrooms may be a result of investor demand for smaller units. Sixty per cent of new construction condos are bought by investors, said Urbanation’s Shaun Hildebrand.

At the same time, buildings are getting taller — averaging 21 storeys compared to 15 in the 1990s. That’s not always appealing to families and seniors, said Burda. Only 7 per cent of coming units are in buildings five to eight storeys and only 3 per cent are low-rise walk-ups — the kind of housing planners call the “missing middle.”

In downtown Toronto, low-rise buildings account for only 9 per cent of development, compared to 29 per cent in the 1990s.

About 70 per cent of condo development is in the City of Toronto with 47 per cent (45,000 units) in the core. Toronto’s old suburbs, which contain about five times the amount of land, have about half the number in development.

 


I’ll be sure to update the blog this week if/when I get a copy of the report, but I think this is one report you don’t really need to read to know what it’s going to say:

1) Toronto real estate is expensive.
2) Developers are primarily building 1-bedroom condos.

What more is there to say before you start to draw conclusions?

It’s expensive to buy a house in Toronto?  No kidding.

Anybody wanting to have children will need more than one bedroom?  That’s true.

Do the math, and we realize that with not everybody being able to afford a freehold home, some people will have to consider raising a family in a condo.  Right.

So then we get to the crux of the matter: that developers aren’t building “family-friendly” condominium units, ie. those with 3-bedroom condos.

But the obvious conclusion, to some, is that “developers need to start building more 3-bedroom condos downtown.”

And I’m here to tell you, quite simply, that I disagree.

Now here’s where I risk making things political, and I’ll try to keep the rhetoric to a minimum.

But if we are to assume that the free market will continue to determine the price of real estate (again, without going into politics, I believe a certain political body is crazy enough to start legislating the price of real estate…), then what good is building 3-bedroom condos if “families” can’t afford them?

As I said in the Globe & Mail article, the city’s heart was in the right place.  They realized that there weren’t enough 3-bedroom condos, so they tried to force developers to build more of them.

But as is always the case with government intervention in the real estate markets, every action has unintended consequences.

Requiring developers to build more 3-bedroom condos, presumably for “families,” isn’t a bad policy.

But the problem is: there was no requirement on the size of the required 3-bedroom units.

So what we’ve seen over the past few years is a slew of 800 square foot 3-bed, 2-bath units, which I called, in the Globe & Mail article, “a dorm.”

I’ve seen these units before, where your living/dining/kitchen is one small, combined room, with micro-appliances, and no real room for a couch and a dining table.  The three doors to the three bedrooms are all within arm’s length, and there’s absolutely no way to envision a family comfortably living there.

Who would comfortably live there?

Three foreign students.

Three foreign students, who don’t really need the use of a kitchen, don’t want to interact, and who basically study in their rooms, and unwind by watching Netflix on their laptops, on their beds.

Do foreign students buy condos?

No.

But real estate investors do, and they crank out an incredible yield if they choose to rent out the condo room-by-room.

So let’s say, for argument’s sake, that the government got both of the first two parts of the condos-for-families equation correct: they required developers to build more 3-bedroom condos, and they mandated that the units must be, say, 1,400 square feet or more, so a family could comfortably live there.

What is the third part of the equation?

If it’s not obvious by now, you’re not following along.

Price.

So now you’ve required developers to build 3-bedroom condos for families.  Great.

You’ve required the units to be large enough to avoid the units only being suitable for students.  Perfect.

Now are you going to step in and legislate the price of these units in a free market?

Because if the government is willing to do that, then what the hell is the point of all this?

A 1,400 square foot, 3-bedroom condo in the downtown core would likely average around $1.1 Million.

What kind of “family” can afford that?

The whole notion of “building for families” is, in my opinion, ridiculous.

One might suggest that to stand back and do nothing isn’t the answer, but don’t worry – I have the answer for you.

The answer to “how to house families living in the downtown core” isn’t to force developers to build 3-bedroom condos, perhaps of a certain size, that families can’t afford.

The answer, and I’m not being facetious here, folks, is for families to not attempt to live in the downtown core, because the idea is, as I said, ridiculous.

If you think I’m being a jerk, I’m not.

I’m being reasonable, rational, and logical.

Market dynamics dictate price, price dictates affordability, and affordability dictates who lives where.

I don’t think we need to bring the word “should” into this, either.

Families should be able to live downtown, or they should be able to live wherever they want.

But “should” leads to fantasy.  And our market is a daily reality.

Again, if we want to get political here, then we can.

It seems to me that our increasingly-socialist government is not only allowing the population to believe that every single man, woman, and child should be able to afford their own home, but actually promoting it.

Show me a city on planet earth where the ownership rate is 100.00%, I challenge you.

So why in the world are we talking about families being able to afford 3-bedroom condos in the downtown core?

Don’t worry, yet again, I have the solution.  And it’s such an easy one, even a Premier could understand it.

Ready for this?

Move out of the city, and commute.

There.  Your solution.

The solution is not to force developers to build 3-bedroom condos that families will never be able to afford, but rather to encourage, promote, and advise families that there are other areas in the GTA or Golden Horseshoe in which the could live.

There are 3-bedroom, 3-bathroom houses available in Pickering Village for $550,000.

It’s a 38-minute GO Train ride from Ajax Go to Union Station.

I’m not saying I’d want to do that every day, but if we’re talking about people who can’t afford to live downtown, then why don’t we give them options?

I had lunch with a few Manhattanites on Tuesday, and I asked them where they lived.

One of the guys said he lived in New Jersey, and took the train to the Financial District every day.

An hour, he said it took him, to and from work, every day.

And when I asked why he didn’t live in lower Manhattan, he looked at me as though the answer was obvious and said, “Because I can’t afford it.”

So why is Toronto any different?

Yes, I know; different political climates, and thus different expectations of the population.

But it seems to me that people who live in Toronto have this idea that they “should” be able to afford to live here, and when they can’t afford to live here, they don’t understand that they don’t have to live here, even if they work here.

Something has got to give.

I pull my hair out when I think about the government forcing developers to build crappy 3-bedroom condos that nobody wants to buy, just to say “We’re doing something about the problem.”

How about building infrastructure?

How about building another 150 subway stops across the GTA, more train tracks, more highways, more roads, and more transit?

How about connecting the Golden Horseshoe, so that people can move around freely, and efficiently?

How come in the Provincial Liberal budget this past spring, the City of Toronto was basically shut out?

Right, I forgot, we’re not going to make this political.

If you think the answer to the “where to we house families?” question is to force developers to build 3-bedroom condos, then let me know.

Otherwise, I’d love to hear your solutions…

65 Comments

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  1. Sardonic Lizard says:

    I agree with you on this, Dave. Downtown Toronto is NOT the place to raise a family in the traditional North American style.

    Toronto is not a panacea. There are PLENTY of other places in this country to raise a family with plenty of space for growth and activities.

  2. Frances says:

    Why does a family need a 1400 sq. ft. apartment? 1200 would be fine. And I would expect any condo in downtown Toronto to be expensive so how about building farther out instead. The expensive parts of a condo apartment are the kitchen and bathrooms, why does that third bedroom add so much to the price?

    Almost a year ago now I was taken on a car ride to the farther reaches of Scarborough along Lawrence Ave. and the street is lined with strip malls, low rise offices and some private houses. Why don’t we build family size condos and apartments along streets like this? And, also, why don’t we provide something better than a lumbering bus for transit? We need public transit on a dedicated right of way on all our main streets beyond the downtown core so people can live on them and get around quickly.

  3. Ralph Cramdown says:

    Don’t look now, but you can get a decent NYC house in a decent neighbourhood (w.r.t. schools and crime), often on a 50′ lot, for less than a comparable 416 house. And if you want to consider the inner suburbs, you get even more, especially compared to the inner 905. Their transit is a lot better than ours — you’re probably closer to the train station at both ends of your commute. With that great transit web, you can live a lot further from Manhattan and still not spend your life on the train. I get the feeling that when many people talk about NYC real estate prices, they only know (or think they know) Manhattan. Trulia is only a few keystrokes away, folks. But don’t let the facts get in the way of a good stor(e)y.

    Don’t worry, storytellers, you’ll (probably) always have Paris. Mind you, it has great transit too.

    1. Ralph Cramdown says:

      …and your mortgage rate there is fixed for 15 or 30 years if you like, with a bonus option to refinance should rates go down. And if, having looked on Trulia for yourself, you think I’m exaggerating and prices there are a bit higher than here, well, it’s NYC!

      1. Kramer says:

        Can you please share a link to one? … I would love to see what you’re looking at. I was under the impression it’s WAY more expensive and there’s basically no options.

        1. Chris says:

          http://m.huffingtonpost.ca/2017/01/24/toronto-nyc-affordability-house-prices_n_14344230.html

          I don’t love HuffPo (and I know you will hate the discussion about median income affordability) but scroll down and this article has some examples.

    2. Kramer says:

      Hoping to see a link to a 50 foot lot cheaper than a Toronto comp… seriously… please share. It would be fascinating.

  4. downtown says:

    I enjoy your blog, but really disagree with you on this one. Lots of families live downtown. It’s an amazing place to raise kids. Transportation is excellent, as are shops, restaurants, schools, cultural activities, etc etc. Yes, it’s crazy expensive, but you sell houses to families all the time. Probably most of them have 3 bedrooms. So why does a person (or family) have to live in a house if they want 3 bedrooms and (for the sake of argument) 1700 sq ft of living space? Family sized 3 bedroom condos are exceedingly scarce downtown. Many other cities in the world accommodate families in centrally located low rise buildings. Land is limited. Why not develop policies that steer people towards building up instead of out? It’s already wall-to-wall cement throughout most of southern Ontario. We should not be looking to pave over more, in a myopic view of what families need (i.e. 2 car garage, backyard, etc).

  5. Tommy says:

    The GTA is too big. Government never should have allowed sprawl. It’s unsustainable and gives people unrealistic expectations on what they “should” be able to afford. Instead of the 1000s of cookie cutter car centric housing developments across the GTA, Toronto should have limited sprawl and focused on building vertically decades ago. Today we’d have a city more like NYC, with no shortage of 3 bedroom condos, and better infrastructure and transit for all city dwellers. There shouldn’t be any more “new low rise housing”. The suburbs are a bane on the development of Toronto.

    1. max says:

      i think that would be fine if they actually built them to last, with better materials beyond general aesthetics. There are so many ugly new condos popping up everywhere these days. Maintenance fees will continue to rise as contractors know how to play the game with condo management/boards.

    2. Joel says:

      I think that this would have been better for all residents. Less money spent on roads and endless roadwork and more money spent on mass public transportation. Better for the environment and easier to allocate funds to a smaller geographical area.

  6. Jack says:

    I don’t understand the argument that if 1400 sqft apartments are built, “families” will not be able to afford them. So who will buy them then? Somebody will buy the apartment, to live in or to rent. Either way it will be a home for another family. Or, if enough of them stay unsold because investors lose interest, the price will come down (supply and demand), and some family will be able to buy it.

    1. honeyoak says:

      1400 sqrft * $700/ sqrft = $980K That is not affordable for most “middle class” Canadian families.

  7. steve says:

    What about all that underdeveloped land in the inner suburbs?

  8. Madmax says:

    The government is never going to spend money on infrastructure when they are too busy paying for the 1 million, likely unskilled immigrants that will be brought into the country over the next three years. It is going to cost a small fortune to provide these people with housing, and medical. Your tax dollars are not going to be spent on YOU!

    1. No Name says:

      I’m glad somebody brought this up. I was starting to wonder if people were too afraid or not aware.

      This is a hot button topic but an important point nonetheless.

      Trudeau has made it known that he wants to be the opposite of Trump, and as a result he’s going to increase immigration to the highest levels ever. The problem is he’s not going to help Toronto where a majority of these people will end up.

      He has no plan whatsoever, other than to spend billions in tax dollars on refugees and unskilled immigrants who have never paid a dollar in tax in their lives.

      For those of you asking where the tax revenue to build infrastructure in Toronto could come from, I’d recommend you start there.

      1. Daniel says:

        nice racist comments on here. you think you’re just the ones brave enough to say what others are too PC to mention, when in reality it’s that other people understand that every economic study has shown that even low skilled immigrants are not a drag on the economy or government resources.

        So, unless you’ve got actual facts to back it up let me summarize it. You don’t like Trudeau, fine. But don’t drag the immigrants to Canada, who work harder and build lives for their families here, into it. Your comments are racist because they’re divorced from actual fact.

        The reality is that the current canadian population has a huge demographic problem – not enough working age people to pay taxes to support all the baby boomers when they start retiring. It’s pretty basic economics of how to support the social safety net.

        I suggest you go back to the national post comment boards where you can call people libtards and spout uninformed drivel.

        1. Kyle says:

          Bingo!

          Not sure if Madmax or No Name has made the mental connection yet, but it’s kind of obvious when you look at the various cities across Canada. It isn’t a coincidence that the cities that attract the most immigrants are also the economic engines of our Country.

          1. Appraiser says:

            @ Daniel & @ no name:

            You two must be lost. Here’s some directions, take a hard right over to Breitbart News and then another right over to Alex Jones where mindless racist drivel is tolerated. Just take your alt-right bullshit somewhere else.

        2. Appraiser says:

          Sorry Daniel, that was meant for mad max and his buddy.

    2. Jack says:

      If you limit immigration, who is going to build new homes? Have you ever been to a construction site?

      1. Appraiser says:

        Have you, asshole.

  9. Alexander says:

    I totally agree with the point that government should be building infrastructure instead of mandating the size of condos for families – just the other day I was commenting on total lack of pedestrian underpasses in our “world-class” city ( me being sarcastic ), not start talking about subway development in the last 20 years. I can understand that anything government touches become inflated in price at least twice, but it has to start sooner rather than later. It is almost impossible to get from A to B during peak hours by car and 401 and DVP are moving at reasonable speeds only on weekend mornings. We have a transportation crisis in GTA and it will get worse, way more worse soon enough. I want to get rid of my car, but with the current public transportation system is simply not feasible.

  10. Joel says:

    I think that the solution to this (and I have mentioned it before) is to allow and encourage development along the TTC routes. Queen and the Danforth should be covered in 5-7 story units. People could live further from down town, but still in the city. This would increase the amount of housing available.

    Toronto has a problem with NIMBYism and poor infrastructure that prevent this. Address the TTC and other options and we can increase density in the inner burbs, with the need for only high rise condos.

    1. Ralph Cramdown says:

      It seems like a good idea but it will be opposed by a pincer movement. On the left, single family residential on the side streets nearby and directly behind, who’d rather live next to a 2-3 storey building than the construction, bigger shadow, increased traffic and tighter street parking that a 5-7 storey building would bring. They’ll be vocal at any rezoning or variance proposal, and their local councillor with them. On the right, the owners of these buildings, who don’t want to sell out for cheap to a developer who’ll only build 7 storeys. They’re waiting to sell for much more to someone who will build 15-25 storeys. And they’ll wait as long as that takes. And they’ll lobby for tax breaks in the meantime.

      Think about that when you read stories like this:
      https://beta.theglobeandmail.com/report-on-business/small-business/sb-managing/toronto-eyes-new-tax-class-that-could-spell-relief-for-small-businesses/article36777477/

  11. Professional Shanker says:

    I find it funny that many people get up in arms about the government meddling in the market. Specifically why do we believe the government should not regulate the price of real estate for what they believe is a desired outcome? To a large disagree they already have – advent of CHMC, extension of mortgage amort terms, the BOC (an extension of government) establishing interest rates, setting immigration targets which directly impacts population density, no capital gains tax on principal residences – I have just named a few but in reality they have directly influenced the market for my entire lifetime – so when affordability erodes due to their policies which have directly and/or indirectly encouraged domestic and foreign participants to speculate more heavily is it really surprising that they would continue to intervene?

    If the policies previously put in place have made living in a city unaffordable does that same government NOT have an obligation to regulate prices downward through additional policies?

    We are a free market, but that free market is set by rules put in place by government.

    1. Agnese says:

      Well said Professional Shanker!

    2. Libertarian says:

      As Agnese wrote, well said.

      Most of the commenters on this blog only think back to 1997 and the start of this bull run in real estate. Now that everybody and their grandmothers are hooked on real estate, people think all of this is normal and will continue forever, so there’s no point in the gov’t trying to stop it.

  12. Ralph Cramdown says:

    I think the sad thing here is that so many seem to think that nothing can be done. Toronto can’t build, only developers can, and they can build whatever they want? Humbug! Every time talk of another Olympic bid rolls around, these same free market fundamentalists seem to think that government could directly hire construction contractors and get the necessary infrastructure built.

    We have gone from a society where works considered necessary or desirable were accomplished with skill, speed and economy to one content to argue interminably on whether they can be accomplished at all. Over a decade of studies and arguments over a one stop subway costing $3 billion? And council is still arguing about it today? America put man on the moon in less time. World class? Not hardly.

    https://www.nfb.ca/film/wartime_housing/

    1. BJA says:

      America put a man on the moon nearly fifty years ago (and hasn’t done so since 1972) mainly in an effort to beat the Soviet Union there (who incidentally abandoned their man-on-the-moon plans the moment the U.S. accomplished it). Sure, they did it “fast” but part of the reason is that funds that could’ve/might’ve/should’ve been put to better use were poured into this “beat the commies” effort.

      1. Ralph Cramdown says:

        If you don’t like the space race example, there’s Eisenhower’s interstate highway system, Canada’s transcontinental railroad, the St. Lawrence Seaway, the Panama Canal, Robert Moses in the NYC area, Baron Haussmann’s redesign of Paris, heck, even this:
        https://en.wikipedia.org/wiki/Caesar%27s_Rhine_bridges
        How long have we been planning another Windsor-Detroit crossing now? Arguing over what’s to be done with the crumbling Gardiner?

        1. O says:

          Forget putting a man on the moon. World War 2 took less time than it took us to extend the 404 by 13km.

          “twenty years after first being tabled, 14 transportation ministers from all three political parties later, five years after a provincial commitment and almost two years after its original completion date, the long-awaited extension opened after an official ribbon cutting ceremony with Transportation Minister Steven Del Duca today at 1:30 p.m.”

          https://www.yorkregion.com/news-story/4865300-you-can-finally-drive-on-hwy-404-extension/

  13. BJA says:

    It’s easy to chastise governments for not building suitable/sufficient infrastructure (as David put it, “another 150 subway stops, more train tracks, more highways, more roads, more transit”) but please tell me how “the government” could even begin to address these issues without raising taxes far beyond what anyone (including virtually every reader/commenter of this blog) would stand for. And if anyone’s solution is to “cut spending” (always unspecified) they’re also living in dreamland.

    1. A Grant says:

      The problem is that our roads have been subsidized to such an extent, for such a long time, that it will be nary impossible to find the political will to claw these subsidies back (via gas taxes and toll roads) in order to pay for much need non-car based infrastructure.

    2. Ralph Cramdown says:

      That’s exactly the kind of can’t-do spirit I’m talking about. Toronto/GTA can either be world class in fifty years, which will require continual investment in infrastructure and other productive capital, or it can stand idly by while fifty cities surpass it.

      Our federal government debt/GDP is reasonably low and falling. The provinces vary, but are facing significant headwinds with health costs. GTA municipalities are a joke, promising world class on a budget of property taxes that only rise at the rate of inflation, fighting with each other over commercial tax rates and patchwork transit, and facing boom/bust revenue with the LTT in Toronto. Household balance sheets are crappy, especially for the young with large student debt and large mortgages.

      If we can’t afford significant infrastructure spending, and can’t solve somewhat affordable housing for 60th-80th percentile income families, we don’t end up world class. It’s one or the other.

    3. Not Harold says:

      The government at all levels takes in more than enough money to build the infrastructure that we need.

      Instead it wastes it on excessive numbers of excessively paid civil servants, on supposed social programs whose only actual accomplishment is to employ unproductive people like David’s wife at excessive salaries, and on ridiculous contracting rules that increase costs but don’t reduce corruption (and likely actually increase it – see municipal paving contracts and ontario highway spending).

      Here’s an easy way to make money available for building subways (and highways and other necessary infrastructure): cap all public sector salaries at $40k except for doctors and emergency services, end all programs introduced since 1950, get rid of all investment attraction, regional development agencies, etc etc. Government should run police, fire, sewers, a public health board that prevents epidemics like cholera and TB, and rigourous k-12 education. They currently (try to) do far too much and spend far too much not doing so.

      Meanwhile the TDSB is actively trying to not educate students and ensure that they are vulnerable to murder by gangs inside the classroom, while the city is actively encouraging heroin addiction and homelessness.

      1. Libertarian says:

        Amen!

        We haven’t had a good political rant like that on this blog in a long time!

        Although, I would include the cops and firefighters in that $40K salary cap.

  14. BJA says:

    Here’s the link to the Ryerson/Urbanation “Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?” report:

    http://www.citybuildinginstitute.ca/wp-content/uploads/2017/11/FINAL-BedroomsInTheSky.pdf

  15. blowing Sunshine says:

    I bought a pre-construction condo townhouse in 2007, under 300K for 1300 sf, 3+1 bedrooms and 2 baths, roof terrace on an unloved (now super trendy) stretch of Bloor West. I was single at the time and planning to live there by myself, but I bought the biggest unit I could because I figured that this place would appeal to families and would be different than the typical 1 bed condo when it came time to sell. 10 years later I am still there, my partner has moved in and now we are planning to start a family. Places like mine might be the middle ground between a large highrise condo and a suburban house…

    1. Geoff says:

      yes. If people have time machines. 🙂

      1. blowing Sunshine says:

        Of course I recognize how lucky I was to buy at a good time. What I am suggesting is that places like mine (which have also appreciated considerably) are the middle ground between super expensive large highrise condos and lower priced suburban homes. The maintenance fee are much lower than a high rise and they are located within the city on transit lines…

        1. downtown says:

          Totally agree with you, “Blowing Sunshine”.

  16. Ralph Cramdown says:

    Suggested viewing. 1) Adam Curtis investigates government driven highrise development gone wrong:
    https://www.youtube.com/watch?v=Ch5VorymiL4
    2) Same story, fictionalized, with Christopher Eccleston, Daniel Craig, Gina McKee, Malcolm McDowell
    http://www.imdb.com/title/tt0115305/

  17. McBloggert says:

    I totally agree with your assessment – that missing from all of these discussions about building more family sized units has to do with the cost.

    If you can’t afford ~$800-$1M for a small starter house – there is no way you are going to afford a 1400sq/ft condo. They will not be cheaper. They may be more convenient and low maintenance but they won’t be cheap. Developers are all about ROI at the end of the day – if there is money to be made they will fill that gap.

    I don’t know what the solution is. The pragmatic side of me says – the city is just dam expensive and that is a reality we may have to accept. If the city doesn’t offer you what you want/need you move somewhere else or learn to adapt to that situation (aka live small).

    However, my hope is that we see more people consider living and working outside of Toronto. If people start more or move their companies and create more opportunities in other regions of Ontario – a lot of these problems go away.

    1. John Smith says:

      The city is expensive. The United States median house price is about 250k USD, with a median price to median income ratio of about 4. But are we really to expect to find similar ratio and prices in NYC or SF? Why should Toronto be any different? Just because you can find a 2000 sqft 180k CAD detached house up North in Chalk River, it doesn’t mean you should be able to find something similar in the GTA. Just because somebody making 45k CAD in Moncton, NB can afford a townhouse (which is less than 180k), it doesn’t mean that 45k CAD should go as far in Missisauga or Brampton when it comes real estate. Different cities, different lifestyle, different opportunities.

      1. Kramer says:

        I agree. And unfortunately this view just takes the whole debate full circle right back to the beginning.

        One thing I like about this phase in the debate however is pointing out how many neighbourhoods closer than Ajax and Pickering are still affordable.

        Absolutely these are not the prime areas. But this would not be the first, second, or third time that a first-time buyer group has trailblazed into new ‘less desirable’ areas or in general made sacrifices in order to get ahead of the market. Maybe it just stings that much more because prices have accelerated so quickly in the last 5 years and the potential for a correction and being able to spend $X and not “sacrifice” is too possible.

        Who would have thought 10 years ago that the Junction would be the “Xanadu” that it is today? Answer: The people who bought there looking at the long term and who were willing to sacrifice some.

        I read somewhere that Rockcliffe-Smythe is one of the next up and coming neighbourhoods. I don’t know the area well, but I’ve driven through it 50+ times. Right now some people are looking to buy there with a long term view. Right now some people are saying they would rather wait to see if the market changes significantly so they can buy in the Junction or Riverdale for $150K less than today. The thing is, all the people I know who bought in Riverdale in the last 5 years (and it is a lot of people), have no intention of moving for the next 30 years.

        And the beat will roll on, and on, and on, and on.

        1. Kramer says:

          And by Riverdale I’m not talking the $3MM big ones near Broadview… but rather the semis/rows that were selling for $500K 5 years ago and have basically doubled since.

        2. John Smith says:

          I think both the bears and the bulls here agree that if your intention is to live long term (10+ years), then you wouldn’t have to worry about any short or medium term potential correction. Not even the bears are calling for 2008 US style meltdown in Canada. In fact, the condo market is still going strong, even in 905, and some 416 areas (such as Mimico and Woodbine Corridor) have experienced only a very mild correction compared to the peak in spring.

          1. max says:

            the old adage “location, location, location” will always prove to be true in time. If you look at major cities in Asia that have experienced crashes, good locations always retain their value a lot better. That’s why I think Toronto, being arguably the creme de la creme of canada, will never go back to the affordable-for-all days.

          2. John Smith says:

            @max True. Toronto ain’t the level of NYC, but it is the NYC of Canada. It is unreasonable to expect Toronto to be as affordable as say, Podunk, PEI, or Peggy’s Cove, Nova Scotia.

            The bears seem to worship the one metric of affordability, the ratio between median house price and median income, but even when considering this metric ALONE, places such as SF, NYC, Boston, Seattle, LA and San Jose are less affordable.

            Should we also expect these places to have a real-estate crash to bring up their affordability to match the rest of the country? I think that would be absurd.

          3. Kramer says:

            Exactly John Smith… I was thinking the same thing… If anyone believes Median Income is the most important driver, then there are dozens of other cities that are going to crash including NYC…

            Hopefully by now everyone has changed their viewpoint on that and acknowledges there are likely 100+ other factors (many of them more important than Median Income) that explain why certain cities have these higher “Median Multiples” and generally speaking higher real estate prices.

          4. Kyle says:

            If there was even a shred of truth to average income being the prime factor behind real estate prices and the magic number is 3x, then prices would never be able to get that “overvalued” in the first place. It’s not like these so-called fundamentals are a closely guarded secret to a few insiders. So if there was any validity to them everyone would consider the market “overvalued” and would have stopped buying ages ago.

            Such a massive logic fail.

  18. Condodweller says:

    Necessity is the mother of all inventions as the saying goes. People’s expectations will be adjusted by reality which will then become the norm for them. Average house sizes have gone up significantly over the last 50 years because which have become the norm. Now that these large homes are becoming unaffordable for the average person families will have no choice but to adjust their expectations. Many European/Asian populations would give their firstborn to live in an “unrealistic” 800sqft 3 bd condo. Where I come from it was the norm for a family of four to live in a two room apartment/condo of about 800sqft. Notice I said two rooms and not two bedrooms and that’s because frequently one room doubled as the master bedroom/living/dining room (ok make that tripled) and 1-3 kids lived, or should I say, slept in the second room. When I was a kid, I went home after school to grab a bite and immediately went out to meet up with friends to hang out in local parks and went home for dinner and sleep shortly after.

    I have visited places in the middle where a family of 6-8 was living in a one room apartment. I was invited for a meal in one of these places and guess what, people still get by in lead “normal” lives. We ate in the one room where half the room was a row of beds and a coffee table served as the dining room table. Some of us sat on the end of the beds, some sat on the two chairs and others sat on the floor. Now consider for a moment that these people were considered lucky because they had an apartment to sleep in.

    Some of my friends lived in what we called half rooms. These were literally one room chopped into two that each fit a bed to allow kids to have privacy. These places were basically what you find in an 800sqft 3bd condo. Is it ideal? No, but is it functional? Yes, if you consider the basic necessities. Ultimately you need a place to sleep/eat/clean which can be done in a surprisingly small space. If that is not for you then you have the option to commute.

    The market will drive developers to build what people want. My old building’s second phase reduced two bedroom units in favor of one bedroom units with 0 three beds. People who wanted three bedrooms bought two units and made them into larger 3/4 beds. If the demand for 3 beds is there, builders will build them even if they are not mandated to do so. If future needs change where couples want to have kids and stay in a condo downtown, two units can be converted into larger units as well.

    People will always take the path of least resistance based on their personal preferences. Some prefer to live near work and are willing to pay more for smaller spaces where others will be happy commuting 3 hrs/day to live in a large family home. Neither one is right or wrong it’s just their preference.

    The crowd will drive prices though which again will change the dynamics. It’s a fluid situation.

    1. Condodweller says:

      “I have visited places in the middle” was meant to say middle east. Autocorrect is a pain.

    2. CarlW says:

      In the mid-1960s, our family of seven lived in a three-bedroom bungalow in suburban Montreal, roughly 25 km from downtown. In the 1970s, when the youngest two children reached six and two years of age, we moved to a modestly larger four-bedroom house about 10 km further outside the core. Public transit in these burbs was nonexistent, your only choices were a CP commuter train (which my father took to his downtown office, leaving our family’s lone car to my mother and the five kids) or a Metropolitan Provincial bus (basically a “Greyhound-type” bus line). These were the realities. There are new realities today, and people’s expectations should (and I think do, for the most part) adjust to modern realities to some extent.

  19. Kyle says:

    There are still many neighbourhoods of freehold homes that haven’t risen to the stratosphere yet. And many of them are close to or on transit lines: Scarborough, Earlscourt, Carleton Village, Corso Italia, Silverthorn, Fairbanks, Weston, Mount Denis, Topham Park, Danforth Village, etc.

    As for increasing future supply, i agree that it is only big Developers adding supply, not “Toronto”. If anything the City is a huge impediment to adding supply. It wasn’t that long ago that infill projects by small developers, Architects and private land owners added tonnes of town houses and semis throughout the City. People like George Popper come to mind. Those smaller players, no longer have an economic hope in hell of getting approvals today.

  20. A Grant says:

    The elephant in the room here is perceived “entitlement”.

    David, from your perspective, you feel “entitlement” is the belief that you should be able to afford to live close to your place of work. I would say that such a lifestyle isn’t so much entitlement as the most sustainable way to live. It puts less pressure on local resources (saving the municipality money) and contributes far less to city smog and global warming.

    I, on the other hand, see more “entitlement” from those who live outside the city. A perceived entitlement to cheap gas, single-occupancy vehicles and quick commutes.

    I agree that the solution is building another 150 subway stops across the GTA, more train tracks, and more transit (although not more roads/highways. In such cases, money ought to be dedicated towards fixing existing infrastructure). The problem is that, in my view, the only way the fund such massive projects – outside raising property taxes to unsustainable levels – would be to raise taxes on gas and implement a system of toll roads.

    Of course, this would be viewed as part of the mythical “war on cars” and would be political suicide.

  21. Jackie says:

    “It’s a 38-minute GO Train ride from Ajax Go to Union Station. I’m not saying I’d want to do that every day, ”
    Liberty village to Union Station is 25 minutes on the street car during rush hour. Not much of a time savings for living downtownish. Price of 2 bedroom condo in Liberty Village can get you a 3 bedroom town home in Pickering or Ajax if you are looking for space for a family. And there are much more recreational activities/facilities for families (children and adults) in Durham.

    1. J says:

      If anyone thinks they’re commuting from Ajax to downtown in 38 minutes, keep dreaming. While it’s true the train takes 38 minutes, factoring in driving from your house to the GO station, leaving early to make sure you catch the train since you’re chained to a fixed schedule, parking, delays, TTC from Union Station and walking to the office, you’re probably looking at a 90 minute marathon, or 3 hours of commuting each and every day.

  22. Ralph Cramdown says:

    Yeah, you’re not a Manhattanite if you don’t live in the same state. You’re what Manhattanites call the bridge and tunnel crowd.

    Did you know that 80% of Singapore citizens live in government built housing, much of it sold at subsidized prices, and owned by the occupants? In Hong Kong, 30% rent in public housing, with another 20% in government subsidized owner occupied condos. The Japanese long ago mastered the art of family living in small spaces, with multiuse, quickly convertible space… but then they stopped having children. China didn’t need any three bedroom apartments, because having a second child was made illegal.

    Raising a child in this city has been wonderful, but we are fortunate enough to overlook a forest, near a great school and the subway, and I still wish we had more living space. Most families and prospective families have fewer and poorer options. Long commutes are soul deadening, and the quoted time never includes driving to the station or circling the lot for 8 minutes to find parking.

    If Toronto wants to build a city for families, the “free market” will have to be directed by government (i.e. citizens). Frankly, I don’t even see the free market delivering product that I’d want to live in if I were single — most condo product is badly designed crap that smart people don’t buy to live in themselves long term, only to rent to others with less money and lower standards, or to “build equity” to parlay into something more liveable. As went St. James Town, so will go Cityplace.

    If we DON’T want to build a family friendly city (“free market says no”), I don’t know what we get a few decades out. More and more public schools close down leaving only private schools for the rich who can afford family life here, and a lot of trouble attracting talent just below that bracket who have or want children? Vancouver? A continuing decline in our already low birthrate, leaving us more and more reliant on immigration, with the possible attendant increased social tensions?

    Back in the day, central planning did things like picking a hub for development far enough outside downtown that it was affordable, but with good(ish) transit. We got Scarborough Town Centre, the lower mainland got Metrotown. I don’t see the political will. If we don’t build it, they won’t come.

  23. Francesca says:

    David I agree with you that we need to build more infrastructure and transit to make it more convenient and faster for people to live somewhere where they can afford a family friendly house and commute to the core or elsewhere if necessary. What a lot of people fail to accept or realize is that not everyone wants to live in the core or works in the core. There are lots of jobs in the 905 area that people could look for if they wanted to avoid a longer commute to the core. You may not to have to buy a second vehicle if one person works from home or if you live close enough to a Go train station or a Main Street with access to stores, services, etc. I totally agree that the 3 bedroom condos they are currently building are not large enough or practical for families. You would need to look at older buildings to really get a large enough family friendly condo and often these condos come with very high maintenance fees and I’m sure the prices aren’t cheap either. You are right in saying that people have this notion that they should be able to afford to live downtown but your example of Manhattan is very good. I lived in Milan for 8 years and while we lived right downtown thanks to my dad’s job subsidizing the rent of our apartment, half my high school class used to commute via train from the outers suburbs to attend our private all girls HS. In most global cities the economics of living central are often not there. From my experience in living in various cities around the world, half of which were in apartments I would say that 1400 sq feet is the absolute min for a family of four to not feel like they are constantly on top of each other especially as kids grow into teenagers and want more privacy to have friends over. Forcing developers to build 3 bedroom condos is not the solution seeing the size and layout of these condos and the prices attached to them.

    1. Michael says:

      But really how many Go stations are there to live close to, and how many “main” streets do you find in suburbia. The reality is, the majority of suburbia promotes an unsustainable, car centric lifestyle, which goes against most millennials preferences, and frankly most of the accepted principles of contemporary urban planning. So yes you are correct in saying we need more transportation infrastructure, but as of today, living in suburbia is a horrible alternative. I don’t know the solution, but it certainly shouldn’t be living beyond the greenbelt or the status quo of suburbia.

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