News   Jul 03, 2020
 1.1K     0 
News   Jul 03, 2020
 442     0 
News   Jul 03, 2020
 1.1K     2 

Baby, we got a bubble!?

WislaHD

Senior Member
Member Bio
Joined
Sep 21, 2013
Messages
8,431
Reaction score
5,911
Location
Midtown Toronto
Answer to what question? We can't continue with the 1970s-90s scouring of farm and forest land to build SFHs.

Whenever I fly to Germany I note from the plane how much green space there is between towns and cities. Somehow Germany fits over 83 million people into a country with half the area of Saskatchewan but keeps its rural and agricultural areas. They do it through density. That's the answer you seek. Alternatively, we have a huge country that is sparsely populated - we don't all need to live in the Golden Horseshoe.
The question is generally about where to house people, I guess.

I applaud the development taking place along arterial road corridors and in the downtown area, but eventually all that low-density single-detached residential areas in the City need to be addressed. They aren't there for market reasons, they are there because of government intervention via zoning.

Yes, density is the answer, but more specifically, we need to change our built-form, because you can't build density with this typical inner-city Toronto built form. We need to allow those neighbourhoods to transform themselves into something more like this typical built form found elsewhere in the world.
 

Admiral Beez

Senior Member
Member Bio
Joined
Apr 28, 2007
Messages
8,509
Reaction score
2,398
We need to allow those neighbourhoods to transform themselves into something more like this typical built form found elsewhere in the world.
I like that. In Nuremberg, Germany last year I walked from my hotel to the Nazi museum and walked through a lot of tight residential streets that looked exactly like this. I suppose it helped expedite development when the area's original housing was flattened in the war.

I like low rise residential flats, but my real estate contacts tell me that it is too expensive to develop low rise. For example, the Rexall site at Wincester and Parliament is zoned for five stories, but the owner says he needs at least ten to make any money. I suppose a lot of that is BS greed, but we shouldn't have fees and construction costs so high that only high rises are feasible.

Mind you, I live in Cabbagetown and I love the protected designation of the neighbourhood. I wouldn't want any 10 storey mid-rises here. So, I suppose that's NIMBY, but I'd support it on Parliament St. nearby .
 

Neutrino

Senior Member
Member Bio
Joined
Dec 4, 2017
Messages
1,207
Reaction score
879
What I think is going to happen: downtown will "sprawl" east toward the DVP. It's already happening. In the longer term, the entire area between Bloor, DVP, Front and Yonge will be redeveloped with towers. What I'd like to see: all SFH within a ten minute walk of all subway, LRT and 2WAD GO redeveloped into walkable high density.
 

Admiral Beez

Senior Member
Member Bio
Joined
Apr 28, 2007
Messages
8,509
Reaction score
2,398
What I think is going to happen: downtown will "sprawl" east toward the DVP. It's already happening. In the longer term, the entire area between Bloor, DVP, Front and Yonge will be redeveloped with towers. What I'd like to see: all SFH within a ten minute walk of all subway, LRT and 2WAD GO redeveloped into walkable high density.
The only way to do that is to expropriate and then establish a plan, and only then resell all the land to developers. If you leave it to developers you’ll get St. Jamestown, wherein developers bought up a few houses, filled them with scum to drive out everyone else.

But with SFH going for over a million in Toronto, can the city really afford to expropriate thousands of houses?
 

junctionist

Senior Member
Member Bio
Joined
May 1, 2007
Messages
8,568
Reaction score
1,797
Location
The Junction, Toronto
I like low rise residential flats, but my real estate contacts tell me that it is too expensive to develop low rise. For example, the Rexall site at Wincester and Parliament is zoned for five stories, but the owner says he needs at least ten to make any money. I suppose a lot of that is BS greed, but we shouldn't have fees and construction costs so high that only high rises are feasible
With so much of the city off-limits to development due to zoning laws protecting entire neighbourhoods of detached houses, the price of land that can be developed into higher-density housing like the Rexall site has been skyrocketing. Less restrictive zoning on the neighbourhoods of detached houses would ease the pressure. I think there's a balance that needs to be struck between heritage preservation and densification. Cabbagetown is so intact as a Victorian neighbourhood that I'd be opposed to redeveloping it.
 

Memph

Active Member
Member Bio
Joined
Oct 8, 2010
Messages
545
Reaction score
53
With so much of the city off-limits to development due to zoning laws protecting entire neighbourhoods of detached houses, the price of land that can be developed into higher-density housing like the Rexall site has been skyrocketing. Less restrictive zoning on the neighbourhoods of detached houses would ease the pressure. I think there's a balance that needs to be struck between heritage preservation and densification. Cabbagetown is so intact as a Victorian neighbourhood that I'd be opposed to redeveloping it.
Yeah, I'm not sure. If the land was zoned for highrise, then I'd agree it would make sense for it to only be profitable to build highrise given the lack of highrise zoned land in the pre-WWII area of Toronto, but you'd think the midrise zoning would be factored into the land costs. Maybe the market has an expectation that the land can get rezoned to highrise?

If it's viable to demolish a 1 storey bungalow for a 2 storey house, you'd think it would be viable to demolish a 1 storey building for a 5 storey one. Granted, the 2 storey house will likely have a bigger footprint, so it might represent a 3-fold increase in square footage, whereas the 5 storey building would have to have setbacks from the adjacent townhouses while the Rexall building has essentially 100% ground coverage, so building a 5 storey building there might also represent a 3-fold increase in density.

As a general rule, I'd say you need very high housing costs to warrant a 2 fold increase in density, moderate ones to warrant a 3-fold increase, and 4-5 fold increases can be done with relatively affordable housing prices, assuming demolition of the old structure is necessary (so laneway/backyard cottages are different) and the new structure uses wood frame construction.

I think a lot of the potential for making Toronto more affordable is in the more inner ring suburbs because of this. In Old Toronto, you'd have to be pushing up against the 6 storey limit for woodframe construction to achieve a 3 fold increase in density, and you'd have some challenges with building very close to other existing structures and fitting underground parking into small sites. So I think changing the zoning in Old Toronto isn't going to bring housing prices below $500/sf or so, which is maybe still a bit less than it is currently and would allow the city to avoid further increases, so it's still something, and it would create housing in areas where commutes are short and close to subways, and neighbourhoods are very walkable, so it's still a good thing, but building 4-6 storey buildings in the core will probably be barely more affordable than building highrises even if large areas of the core are opened up.

Where it gets more interesting is moving into the 1920s-1960s vintage suburbs. Already in places like Bedford Park, Humewood and Old East York, lots are typically deeper and you have more bungalows rather than 2-3 storey rowhouses, so I think increasing the density 3-4 fold with 4-6 storey buildings is more manageable. Lots get even bigger in Willowdale, Glen Park, Clairlea, Bathurst Manor, Maple Leaf, Sunnylea, Eatonville, Alderwood, Birch Cliff, etc and there's a lot more bungalows remaining in those areas to work with (as opposed to 2 storey mini-mansions).

I'd be curious to see what the redevelopment potential is like in areas like Rexdale too. Right now there's little teardown activity of the bungalows there, but it's not the kind of place where the $200-300k/year income households that buy up those kinds of 3500-5000 sf homes would want to live. Aside from the existing working class demographics that might turn wealthy households away, it's pretty poorly connected to the downtown Toronto jobs, and a lot of the major suburban office clusters are kind of far from there too (DVD/404 corridor, QEW in Halton, Meadowvale). It is fairly well located for jobs at the airport and industrial/warehouse areas however.
 

Neutrino

Senior Member
Member Bio
Joined
Dec 4, 2017
Messages
1,207
Reaction score
879
But with SFH going for over a million in Toronto, can the city really afford to expropriate thousands of houses?
Probably and that's why I mentioned "what I would like to see." But who knows. Things may get so bad that we have no choice. And that may not be so far off.

Cabbagetown is so intact as a Victorian neighbourhood that I'd be opposed to redeveloping it.
Yes. I think priority for redevelopment should go to the most run down of the post-war suburbs.
 

Memph

Active Member
Member Bio
Joined
Oct 8, 2010
Messages
545
Reaction score
53
The only way to do that is to expropriate and then establish a plan, and only then resell all the land to developers. If you leave it to developers you’ll get St. Jamestown, wherein developers bought up a few houses, filled them with scum to drive out everyone else.

But with SFH going for over a million in Toronto, can the city really afford to expropriate thousands of houses?
I think it's possible to assemble small parcels of land without trying to run down the neighbourhood. You can build towers on small plots of land like Theatre Park and Massey Tower, it's not like you need to assemble an entire city block's worth of houses.
 

Admiral Beez

Senior Member
Member Bio
Joined
Apr 28, 2007
Messages
8,509
Reaction score
2,398

WislaHD

Senior Member
Member Bio
Joined
Sep 21, 2013
Messages
8,431
Reaction score
5,911
Location
Midtown Toronto
If Cresford does indeed fail over escalating costs than who is supposed to step in? Every large condo developer has hundreds of millions in debt of their own with multiple projects underway. They are all flying by the seat of their pants as projects have rapidly increased from $50 million to hundreds of millions.
Your post raised red-flags to me concerning the state of the market. If construction and material costs are rising so rapidly, that it is becoming less and less economical for the private sector to build high-rise development, then what happens next? Ostensibly something must break in our housing status quo, between the high demand for housing, the necessity to increase supply, the rapidly increasing population, and the rapidly rising costs of housing.

Does this force the market to seek alternatives through mass adoption of timber or prefab? Do we finally take down the Yellowbelt?
 

innsertnamehere

Superstar
Member Bio
Joined
Mar 8, 2010
Messages
14,317
Reaction score
8,974
Your post raised red-flags to me concerning the state of the market. If construction and material costs are rising so rapidly, that it is becoming less and less economical for the private sector to build high-rise development, then what happens next? Ostensibly something must break in our housing status quo, between the high demand for housing, the necessity to increase supply, the rapidly increasing population, and the rapidly rising costs of housing.

Does this force the market to seek alternatives through mass adoption of timber or prefab? Do we finally take down the Yellowbelt?
Either prices continue to go up further eroding affordability to compensate or new low cost forms of construction are found that can provide housing at a lower cost (yellowbelt?).

The complete exodus of population from Toronto, especially young families, over the last 3 years is directly because of this. Market prices have become out of reach for many, meaning they are pushed further and further out.
 

Davidackerman

Moderator
Staff member
Member Bio
Joined
Oct 18, 2010
Messages
275
Reaction score
231
New report shows that Toronto is not so bad compared to world cities


Can you afford to buy a house? Most say they're priced out of the market
Nearly three in five people say they can’t afford to buy a house where they live.
4 November 2019


Toronto-area insurance broker Nicole Barbosa says she’s been thinking about trying to buy a house for the past year.
Her biggest hurdle: affordability.
The 33-year-old has been renting a basement apartment with her boyfriend for almost two years, but already knows she won’t be able to buy a home in the area where she lives west of the city, which is close to work and family.
“I’m hoping that our situation will improve when it comes to affordability. However, unless we make huge changes to our budget and lifestyle, that will likely not happen,” says Barbosa.
“If something doesn’t give and we are getting to the point where we are fed up, then it’s going to have to be either pick up a second job or really go somewhere where we might not be as happy as if we lived closer to home.”
Barbosa adds that it doesn’t make sense to her that most people that she knows who want to buy a home can’t afford one.
The average price of a home in the Greater Toronto Area has more than doubled ̶ increasing more than 110% over the last nine years ̶ according to the Canadian Real Estate Association. Meanwhile, median household income in the city increased by less than 5% in the 10-year period from 2005 to 2015, according to the latest government census data.
It’s a similar story in many of the world’s thriving urban centers.
A combination of low interest rates, a growing population, restricted housing supply and foreign buyers have pushed house prices beyond the reach of many ̶ especially first-time homebuyers ̶ as incomes have not increased at such a rapid pace.
In a new Global Advisor survey of more than 20,000 people across 29 countries, nearly three in five people (58%) say it is unlikely that they can afford to buy a home in their local market.
The top countries where most said they were priced out of the market were Hungary (84%), Japan (83%), Poland (75%), Argentina (68%) and Russia (67%). Seven of the top 10 countries are in Europe.
Can you buy a home where you live? | Housing | Real estate affordability | Ipsos | Global Advisor

Lack of affordability a sign of success?
Toronto-based Doug Porter, Chief Economist at BMO Financial Group, says this list reflects nations that are either characterized by tough economic backdrops and resulting low incomes as in the case of Russia and Argentina, or are densely populated like Japan and Germany with traditionally high home prices versus incomes.
“I think the broad-based nature of this list just shows how widespread this issue is; even as interest rates have come down over the years, home prices have simply vaulted higher in response,” says Porter.
“Almost everyone wants the best living conditions possible, and prices will almost always be driven right up to the edge of what people can afford and sometimes even above the edge.”
How affordable you think property is in your market in 1 minute:

Porter adds that this is especially true when confidence is high, consumer sentiment is generally strong and jobless rates are down – meaning the lack of affordability in housing can be a sign of the price of economic success.
“Classic example is Silicon Valley; a booming economy, but some of the worst affordability issues in the world,” says Porter. “Of course, supply constraints can also be an issue, especially in densely populated and relatively wealthy nations like Germany and Japan and yes, San Francisco or even Vancouver.”
The median price of a single family home in the San Francisco Bay Area has more than doubled in the last 10 years – up 105% from September 2009 to 2019, according to data from the California Association of Realtors.
Out of the top 10 countries where the most people said they can afford to buy a home, seven were emerging markets.
  • China (74%)
  • India (73%)
  • Saudi Arabia (61%)
  • U.S. and Peru (55%)
London-based Chris Hale, Director at Ipsos MORI’s Social Research Institute, says this could suggest that house price to income ratios are more favourable in emerging markets.
“Economic growth rates are more rapid in emerging markets than in developed markets, so that might be part of the story,” says Hale.
Avi Friedman, Professor of Architecture at Montreal’s McGill University, agreed adding the affordability gap – the gap between the cost of housing and income – maybe be less, making buying a home more attainable in emerging markets.
Of those respondents who said it’s unlikely they can afford to buy a home, more people in emerging markets said this was a temporary situation that could improve in the future ̶ with Peru (80%), Brazil (79%), Argentina (78%), Mexico (75%), Saudi Arabia (73%) and India (72%) at the top of the list.
Buying less of a house
Still Gary Painter, Professor in Sol Price School of Public Policy at University of Southern California, says what’s changed is the increase in housing cost burdens as defined by the percentage of household income that is dedicated to rents or other housing costs. This means it’s costing us more to pay for how we live.
In Canada, the cost of owning a home in the country’s two largest cities – Toronto is 79% of median household income, and 88% of median household income in Vancouver ̶ according to a report from RBC Economic Research.
Prof. Friedman says people are still buying homes, but it may be “less home” than in previous generations.
“In most of the world’s capitals there is the phenomenon of microunits in order to cope with the affordability gap. What you see across the board is that developers have now shrunk the typical unit sizes,” says Prof. Friedman.
“You can still buy a home but you can buy less of it. This will be the equivalent of less than 50 m² where people start their life, work hard, and then they hope to switch into a larger place.”
Barbosa, however, says she rather rent until she can find something in her area that she thinks is worth the value.
“I don’t want to be house rich and then gas poor, because I’ve got to drive an hour to see our parents,” she says. “From what I’ve seen house-hunting, the value of what you get doesn’t seem worth it for me at this point.”
 

Top