Toronto Is The Fastest-Growing City In U.S. And Canada, And That’s Not Good

[suburbanite]

Originally Posted by jtown,man

Why is it always a "giveaway" or a "gimme" to developers to...develop? You guys act like they have like some special genie which allows them to correctly guess lotto numbers or something. Developers take risk, this is why a lot of these projects never get off the ground(like literally, Spire in Chicago comes to mind).

Developers in the city can pre-sell 70% of their units in a modest development in the time it takes to build a sales centre. Giving them concessions from a planning/community standpoint in a market like that is a freebie, especially when the units they're bringing to market aren't going to solve any affordability problems.

[niwell]

Originally Posted by jtown,man

Why is it always a "giveaway" or a "gimme" to developers to...develop? You guys act like they have like some special genie which allows them to correctly guess lotto numbers or something. Developers take risk, this is why a lot of these projects never get off the ground(like literally, Spire in Chicago comes to mind).

Theres nothing wrong with developers building. And the statement that a few more tall buildings will do nothing for affordability is EXACTLY what a NIMBY would say. What you fail to see, is if everyone in the city had the same mindset as you, there would be much worse consequences then you're seeing now.

I’m no NIMBY and have always lived in pretty high density areas. You have no clue about the context, and hence no clue what you are talking about in this particular situation. I even know people in the industry who feel it’s a giveaway.

[mhays]

The push to keep developers from making "too much" money is one of the main reasons everything is expensive in many cities.

[Nite]

Originally Posted by Capsicum

When I was a kid in Toronto, and it was the 90s and the densification trend hadn't really kicked in yet, I still recall my teacher saying (after returning from NYC on a trip) how she was glad Toronto is so different from many cities in having lots of green space (I think she was referring to the Toronto ravine system) where vegetated natural areas like parks and woodlands so close to the inner city seemed natural, unlike many urban parks (like say Central Park).

I'm not convinced that Toronto's unique in that regard or anything, but it goes to show Torontonians, while some are cheering on density, still kind of like their green space.

Then again, it's clearly not the ravines or parks that are going to be built over (Toronto learned from Hurricane Hazel in the 50s to avoid building around easily flooded areas).

Toronto's green spaces are not disappearing and in fact, the city keeps creating new parks every year.

[niwell]

Originally Posted by mhays

The push to keep developers from making "too much" money is one of the main reasons everything is expensive in many cities.

In Toronto, not really, no. Increasing land costs and and the need to sell your investment condo for ever more money is a much larger factor.

Toronto isn’t expensive because we aren’t building. Anyone who tells themselves that is delusional.

[Nite]

Originally Posted by niwell

In Toronto, not really, no. Increasing land costs and and the need to sell your investment condo for ever more money is a much larger factor.

Toronto isn’t expensive because we aren’t building. Anyone who tells themselves that is delusional.

We are building a lot in Toronto but only resent has supply started to outpace demand and prices are stagnant or falling now because we are finally building enough supply

[C.]

Originally Posted by niwell

In Toronto, not really, no. Increasing land costs and and the need to sell your investment condo for ever more money is a much larger factor.

Toronto isn’t expensive because we aren’t building. Anyone who tells themselves that is delusional.

You have it all wrong. Land is a fixed cost when it comes to development. The more units a parcel of land can yield, the less the land cost per unit. The other variable is that there has to be enough parcels of land for development, and that's often where zoning artificially restricts supply driving up the cost of developable land, leading in turn to increasing housing costs in a growing market.

I'm sure real estate investors/flippers want to make as much money as possible when selling a condo, but that doesn't impact market values. (If it did, tell the people who lost their shit during the 2008 financial crisis.) There has to be a willing buyer for every seller, and that transaction determines market value.

I'm also perplexed about the knee-jerk reaction when it comes to investors in condos being a bad thing. Contrary to popular belief, most units are not vacant. They are rented out and add to the rental housing supply. These rentals serves as an alternative to the large apartment complexes managed by a single entity and may offer more flexible lease terms.

The one exception to this is the ultra luxury market, where the condo serves as someones 2nd or 3rd home, but in those cases the city is collecting significant property tax dollars without the costs of servicing the unit (city services, public schools, etc). Jersey City right now has been able to increase city services and hold the line of taxes because the property tax ratable base is growing faster than the cost associated with servicing the increases in population, partially because of all the luxury units being built. It's a much better city for it.

[mhays]

Originally Posted by niwell

In Toronto, not really, no. Increasing land costs and and the need to sell your investment condo for ever more money is a much larger factor.

Toronto isn’t expensive because we aren’t building. Anyone who tells themselves that is delusional.

We're probably actually agreeing. If you upzoned large areas to allow multifamily, the average cost for multifamily-zoned land would drop. That would be seen as a "giveaway" to developers (and landowners in the upzoned land) but it would have a big effect on housing prices for both new and existing units.

[C.]

Originally Posted by mhays

We're probably actually agreeing. If you upzoned large areas to allow multifamily, the average cost for multifamily-zoned land would drop. That would be seen as a "giveaway" to developers (and landowners in the upzoned land) but it would have a big effect on housing prices for both new and existing units.

Bingo! I don't know why this is such a hard concept for some to understand.

[Northern Light]

Originally Posted by mhays

We're probably actually agreeing. If you upzoned large areas to allow multifamily, the average cost for multifamily-zoned land would drop. That would be seen as a "giveaway" to developers (and landowners in the upzoned land) but it would have a big effect on housing prices for both new and existing units.

In theory, I agree this might apply; yet I'm not sure it does here in Toronto, right now.

Aside from the fact we're seeing massive levels of new construction, the largest amount being multi-family (condominiums); existing zoning is something that's fairly easy to change in Toronto.

If a development is located along a major road, or in or adjacent to an existing highrise area, for the most part, its a foregone conclusion that an applicant will be able to get approval for tall, multi-residential housing.

Were all of the 'easy' rezone sites unilaterally upzoned, it would surely save some money for the development community, most likely, the majority of it in time, as a typical Toronto rezoning process with Site Plan Approval ranges in the 4-6 year area from beginning to end.

If you could skip part one, you could probably drop that to 2-3 years.

There would be a small secondary savings in what is called 'Section 37' charges as well.

These are essentially 'community benefits' that are payable for exceeding the zoning for the site.

What a each development pays will vary; but for a larger building, something in the 1-3M range might be expected. So something like $6,000-$10,000 per unit.

That said, when developments are often offering entry-level 1brdm suites at more than 600k for the off-prime sites, its a pretty small difference in the overall cost structure.

To lower the cost of land in Toronto you need to actually change how much land is practically developable in key neighbourhoods.

You also need to apply pressure to get some reticent owners to redevelop (I'm thinking B-level shopping centres)

Creating developable plots to affect the market in Toronto would come in two types of change.

The first is to look at an area already deemed desirable but which isn't attracting a lot of development of scale.

Toronto's East York area might be a good example.

What's going on here? I would suggest the problem is that the area is a myriad of 50's era bungalows.

That the only scale you might get would be if you redevelop those that face onto larger roads.

But the way the area is organized, you would have to purchase many lots, and add depth for a development of scale as well.

This is done, here and there, in the most prime of areas.

But in anything that B+ prime, its a lot of hassle to assemble the land.

In the inner-burbs you face 2 larger challenges, one is long stretches without a major road (In Toronto's Scarborough area, major arterials are 2km apart)

But the larger challenge is that much of the area isn't prime for development.

Meaning you won't get top dollar for all your hassle.

******

That said, the idea that investors holding condos is not a negative is strange to me.

Those investors whose units aren't vacant AND who are renting to long-term renters serve some purpose in the market; though they are inflating ownership prices while arguably putting peripheral downward pressure on the rental market (though surging rental prices may suggest differently)

However, I suspect that there are a percentage of these units that are being held vacant; and another larger percentage going on the short-term rental market (ie. Air B'n B)

That may serve to suppress the hotel market a bit, but it does little for the long-term rental market and may arguably drive-up land prices in the process.

There are a multitude of other issues affecting the Toronto and other big-city housing markets, but this is one; and its one for which a bit more upzoning (which i must say i am not opposed to) is probably not a material solution.

[mhays]

Those zoning approval durations are HUGE!

There's no question then...the savings would be very significant even if you still need a spot rezone. Two years cut from the land carrying costs, much better ability to time the market, less uncertainty...

[memph]

Originally Posted by Northern Light

In theory, I agree this might apply; yet I'm not sure it does here in Toronto, right now.

Aside from the fact we're seeing massive levels of new construction, the largest amount being multi-family (condominiums); existing zoning is something that's fairly easy to change in Toronto.

If a development is located along a major road, or in or adjacent to an existing highrise area, for the most part, its a foregone conclusion that an applicant will be able to get approval for tall, multi-residential housing.

Were all of the 'easy' rezone sites unilaterally upzoned, it would surely save some money for the development community, most likely, the majority of it in time, as a typical Toronto rezoning process with Site Plan Approval ranges in the 4-6 year area from beginning to end.

If you could skip part one, you could probably drop that to 2-3 years.

There would be a small secondary savings in what is called 'Section 37' charges as well.

These are essentially 'community benefits' that are payable for exceeding the zoning for the site.

What a each development pays will vary; but for a larger building, something in the 1-3M range might be expected. So something like $6,000-$10,000 per unit.

That said, when developments are often offering entry-level 1brdm suites at more than 600k for the off-prime sites, its a pretty small difference in the overall cost structure.

To lower the cost of land in Toronto you need to actually change how much land is practically developable in key neighbourhoods.

You also need to apply pressure to get some reticent owners to redevelop (I'm thinking B-level shopping centres)

Creating developable plots to affect the market in Toronto would come in two types of change.

The first is to look at an area already deemed desirable but which isn't attracting a lot of development of scale.

Toronto's East York area might be a good example.

What's going on here? I would suggest the problem is that the area is a myriad of 50's era bungalows.

That the only scale you might get would be if you redevelop those that face onto larger roads.

But the way the area is organized, you would have to purchase many lots, and add depth for a development of scale as well.

This is done, here and there, in the most prime of areas.

But in anything that B+ prime, its a lot of hassle to assemble the land.

In the inner-burbs you face 2 larger challenges, one is long stretches without a major road (In Toronto's Scarborough area, major arterials are 2km apart)

But the larger challenge is that much of the area isn't prime for development.

Meaning you won't get top dollar for all your hassle.

******

That said, the idea that investors holding condos is not a negative is strange to me.

Those investors whose units aren't vacant AND who are renting to long-term renters serve some purpose in the market; though they are inflating ownership prices while arguably putting peripheral downward pressure on the rental market (though surging rental prices may suggest differently)

However, I suspect that there are a percentage of these units that are being held vacant; and another larger percentage going on the short-term rental market (ie. Air B'n B)

That may serve to suppress the hotel market a bit, but it does little for the long-term rental market and may arguably drive-up land prices in the process.

There are a multitude of other issues affecting the Toronto and other big-city housing markets, but this is one; and its one for which a bit more upzoning (which i must say i am not opposed to) is probably not a material solution.

Part of the problem is that only large projects are viable. The amount of land that allows high rise development, or where developers have a reasonable chance at changing the zoning is quite small. There may be a 20 years supply of housing possible in those zones, but that's not that much.

A 20 years supply might be possible with highrises, but if these zones get built up with woodframe apartments/townhouses, it won't generate enough housing to meet demand, so the economics align so that the prices are high enough to justify 25+ storey highrises with underground parking, which are quite expensive.

And a lot of that highrise zoned land is in Etobicoke and North York. In those areas, I would say the amount of high rise zoned land is adequate.

However, in Old Toronto, it's quite small, by my estimates, it has only about 1/3 of the high density zoned lands that the suburbs (Scarborough, Etobicoke, North York) have despite much higher demand. If someone is looking to sell their property in those high density zoned lands, they're almost guaranteed to find a developer willing to buy, which puts them in a great bargaining position and allows them to bump up the asking price for their land.

And while developers can get their property re-zoned, hiring lawyers and urban planners to make their case, doing community consultations, etc is quite expensive and time and uncertainty has a cost too. One major impact of those is that it makes smaller developments non-viable, for a 500 unit condo it's do-able, but for a 10 unit development it's generally not. That means development of the "avenues" becomes much more difficult, since the narrow lots means assembling enough land for a large enough development is quite difficult, especially when heights are limited so the best you can hope for is upzoning from 6 storeys to 10 storeys or something, rather than 60 storeys, and I think planners and the community wouldn't like block-busting developments that made up for lack of height by expanding the building footprint.

It also makes it more difficult to wood-frame construction developments, which are generally on the small side by nature of being short/lowrise. Wood-frame construction being of course cheaper and more affordable to build.

I think you're underestimating the potential for new housing in the "bungalow belt", including the interwar housing and the 40s-50s housing in SW Scarborough, Alderwood, The Queensway, Topham Park, Bedford Park, Glen Park, Willowdale, etc.

First of all, the E-W arterials are 2km apart but the N-S ones are only 800-1000m apart (in Scarborough and Etobicoke). That means about 15% of the lots are on land that fronts an arterial, which nearly doubles if you add the houses that back onto those arterial facing lots and are on the same block.

Personally, I think even the far away suburbs like Rexdale and Agincourt should allow small scale intensification in the form of semi-detached homes, accessory dwellings or triplexes across the board. Then allow higher density stacked townhouses and 3-4 storey apartments on collector streets (ex Brimorton, Maple Leaf, Norseman), 6 storey midrises on the 4 lane arterials, and high rises on the 6 lane arterials that typically have deeper lots with rental towers and retail, high frequency bus routes and the highest likelihood of getting BRT/LRT.

Doing that would probably increase the zoned population capacity of Toronto by 2-3 million people. Opening up land for development in all these more close-in bungalow areas would be a more effective alternative to living in an expensive downtown highrise compare to Scarborough Town Centre which is quite a bit further and too far for a lot of people who want to commute to or spend a lot of time downtown.

It would also significantly boost the capacity of Old Toronto, where the arterials and through roads are much closer together. If minor arterials like Christie, Cosburn, Pape, Jones, Dovercourt, Landsdowne, etc are upzoned to allow 4-6 storey buildings, that would be a huge increase compared to what's allowed under the "avenues" zoning, which is limited to only the most bustling 25% of the arterial roads.

I think more density should also be allowed near the subway stations, especially the Bloor-Danforth Line but also the Allen Rd segment of the YUS line and the Sheppard subway.

[memph]

Originally Posted by mhays

Those zoning approval durations are HUGE!

There's no question then...the savings would be very significant even if you still need a spot rezone. Two years cut from the land carrying costs, much better ability to time the market, less uncertainty...

Yeah, to me minor time/easy change would be like the process for getting a minor variance for a custom home in the Toronto suburb I grew up in. You're already allowed to redevelop the bungalows and build a big custom home as-of-right in that neighbourhood (say about 5000 sf) but developers sometimes ask for slightly high site coverage, or smaller setbacks or a taller roof that might add an extra 500-1500 sf. That process takes about 30 days, and because it's a low density area with only a dozen homes close enough to (potentially) care, it's common that not a single local will show up to the hearing to protest and it gets approved after that 30 day process.

I think the ideal would be that the zoning should just allow the development as of right, and just increase development charges - a standard, predictable, flat fee - to pay for the extra infrastructure required. Maybe have different tiers of development charges for different locations depending on what the local infrastructure is like.

[Northern Light]

Originally Posted by memph

.....

And while developers can get their property re-zoned, hiring lawyers and urban planners to make their case, doing community consultations, etc is quite expensive and time and uncertainty has a cost too. One major impact of those is that it makes smaller developments non-viable, for a 500 unit condo it's do-able, but for a 10 unit development it's generally not. That means development of the "avenues" becomes much more difficult, since the narrow lots means assembling enough land for a large enough development is quite difficult, especially when heights are limited so the best you can hope for is upzoning from 6 storeys to 10 storeys or something, rather than 60 storeys, and I think planners and the community wouldn't like block-busting developments that made up for lack of height by expanding the building footprint.

It also makes it more difficult to wood-frame construction developments, which are generally on the small side by nature of being short/lowrise. Wood-frame construction being of course cheaper and more affordable to build.

I think you're underestimating the potential for new housing in the "bungalow belt", including the interwar housing and the 40s-50s housing in SW Scarborough, Alderwood, The Queensway, Topham Park, Bedford Park, Glen Park, Willowdale, etc.

First of all, the E-W arterials are 2km apart but the N-S ones are only 800-1000m apart (in Scarborough and Etobicoke). That means about 15% of the lots are on land that fronts an arterial, which nearly doubles if you add the houses that back onto those arterial facing lots and are on the same block.

Personally, I think even the far away suburbs like Rexdale and Agincourt should allow small scale intensification in the form of semi-detached homes, accessory dwellings or triplexes across the board. Then allow higher density stacked townhouses and 3-4 storey apartments on collector streets (ex Brimorton, Maple Leaf, Norseman), 6 storey midrises on the 4 lane arterials, and high rises on the 6 lane arterials that typically have deeper lots with rental towers and retail, high frequency bus routes and the highest likelihood of getting BRT/LRT.

Doing that would probably increase the zoned population capacity of Toronto by 2-3 million people. Opening up land for development in all these more close-in bungalow areas would be a more effective alternative to living in an expensive downtown highrise compare to Scarborough Town Centre which is quite a bit further and too far for a lot of people who want to commute to or spend a lot of time downtown.

It would also significantly boost the capacity of Old Toronto, where the arterials and through roads are much closer together. If minor arterials like Christie, Cosburn, Pape, Jones, Dovercourt, Landsdowne, etc are upzoned to allow 4-6 storey buildings, that would be a huge increase compared to what's allowed under the "avenues" zoning, which is limited to only the most bustling 25% of the arterial roads.

I think more density should also be allowed near the subway stations, especially the Bloor-Danforth Line but also the Allen Rd segment of the YUS line and the Sheppard subway.

I don't disagree w/the thrust of what your saying.

My point is made by this example.

I looked at Cosburn Avenue, east of Donlands.

I would support the kind of intensification you're talking about here.

This same road is low to midrise apartments on the west side of Donlands and is served by a frequent bus route.

Makes sense.

BUT

I measured the lot depths, and you only have between 75-90ft to play with.

I don't see any midrise fitting in that depth.

So assuming a developer could aquire 4 or more lots in sequence you still don't have the room desired, upzoning or not.

Here, you need to acquire additional lots on the abutting side streets.

A minimum of 1, but probably 2-3 to get a good depth, ideally allowing some 'green buffer' and maybe a rear lane.

To make that work you'd have to upzone the side street for a few lots or the developer runs into the same process problem they did w/Cosburn itself.

That's where I see trouble.

How far in would you upzone?

Really the upzoning of the interior properties isn't meant to bring a tower right next to a bungalow, its meant to permit the full-lot facing Cosburn to be built to its lot line and then provide a buffer to the adjacent community.

But once you upzone that interior property, when its not yet part of an assembly you invite all manor of issues.

I'm just not sure I see a solution that lowers costs of construction for smaller developments without some sort of City intervention.

ie. should the City do the assembling and then unilaterally upzone you may manage to lower costs; but that is then predicated on a developer taking the property off the City's hands at cost; on a presumably for-profit proposal.

Another conundrum.

I'm not suggesting there not be some upzoning.

I see room for this on the wide suburban arterials.

But I think some of the other spaces would require more intensive intervention.

[Northern Light]

Originally Posted by mhays

Those zoning approval durations are HUGE!

There's no question then...the savings would be very significant even if you still need a spot rezone. Two years cut from the land carrying costs, much better ability to time the market, less uncertainty...

Have a look-see at what the Toronto process looks like:

This is a report to Council on a particular very dense condo development just east of the downtown core.

https://www.toronto.ca/legdocs/mmis/...file-84354.pdf

This is the supplementary report list that had to be supplied:

http://app.toronto.ca/DevelopmentApp...abSearch=false

I should add that some application/reports are a great deal longer.