According to Royal LePage’s President and CEO, Phil Soper, younger, single people, and even couples, almost always elect to live in condominiums, but by the time a second child is on the way, they bolt for detached houses in the suburb. However, as the world’s advanced economies endeavour to curtail sprawl, living habits need to evolve.
In Toronto, where owning a detached home is reserve for but the lucky few, and where there’s a firm commitment to building vertically, the solution appears to be building family-sized condominium units.
“I think it’s absolutely critical,” said Soper. “It is on the agenda of the City of Toronto, and the City of Vancouver in particular, where we have the greatest need, because people like me have been pressing for this for a number of years, and the federal government has promised us a comprehensive housing strategy. I know one of the things that will be on agenda is ‘How do we continue to develop a vibrant urban core region through larger units?’ There are some people who believe it can’t be done, but I believe we can find a way through a combination of incentives and regulation to build more larger units in the cores of our big cities.”
He added that Canada’s third-largest city might could provide Toronto with a blueprint.
“Vancouver is ahead of us on this one,” added Soper, “with many two- or three-bedroom larger units in condo projects.”
Tax incentives and regulations have been used for years to develop cores. Soper used Pittsburgh as an example of a city whose deadened, stodgy core came to life with residential towers. It was only because inventive programs that Pittsburgh realized its vision.
Condominiums make sense for a lot of reasons, perhaps the chief of which is, of all housing types, it uses a fraction of the square footage living space.
“Urban sprawl is an environment killer,” said Soper. “The cost of infrastructure and the impact on limited resources are dramatically more with single-family homes than with condos.”
Christopher Alexander, regional director at REMAX Integra, echoed Soper, but stopped short of calling it an absolute panacea.
“I’m in big favour of mandating larger condo units,” said Alexander. “I think it’s probably the fatest way to fix the supply issue. It’s not going to totally fix it but it’s a step in the right direction and I’m in big favour of that.”
Alexander added that in Chicago, one of Toronto’s sister cities and its closest comparable in many ways, large family-sized condo units are the rule, not the exception.
“Condos there are huge,” he said. “Seeing something that is 1,600 to 2,500 square feet with three bedrooms is common, but in Toronto it’s not. Most condos are one- or two-bedroom.
Builders usually squeeze as many smaller units into buildings as they can so to increase profits, and the city – happy to collect on the land transfer tax – enables the behaviour. Alexander concedes there’s nary an inventive for either party to change a tried, tested and true formula.
However, condo sales are driven by a confluence of things. Affordability has eroded in large urban centres, like Toronto; most advanced economies are becoming condominium nations; and a third of all housing stock in Canada built in the last five years has been condominiums.
“In 1980, when boomers were the same age as millennials are now, that number 6%,” said Soper. “Six percent versus 33% today.”
Given that condominiums are quickly coming to dominate the market, and that Toronto’s population is rising quickly, it doesn’t appear like family-sized units will even be an option in a few years.
High inventory effecting condo prices
Toronto market projected to moderate further in 2018
It’s no secret that Toronto’s condos are getting smaller and that family-sized homes of all types are in high demand and low supply, but two Toronto real estate veterans believe a commitment from the city to build larger units will remedy a lot of problems.