Devel­op­ment reg­u­la­tions a hin­drance to hous­ing afford­abil­ity and choice

Toronto Star

It’s hard not to notice all the con­do­mini­ums crop­ping up across the GTA these days.

Con­dos accounted for 62% of new-home sales in the GTA last year, accord­ing to Real­Net Canada, a Toronto-based national provider of real estate infor­ma­tion ser­vices. And it seems that every­where you look, there are con­struc­tion cranes and new res­i­den­tial tow­ers dot­ting the urban hori­zon. What isn’t as vis­i­ble, how­ever, is the lack of sub­di­vi­sions being built and the dwin­dling avail­abil­ity of new low-rise houses.

A decade ago, 75% of all new homes sold in the region were single-family houses. Last year, low-rise hous­ing com­prised just 38% of new-home sales, largely the result of provin­cial poli­cies aimed at pro­tect­ing green­belt lands and pro­mot­ing intensification.

The GTA hous­ing mar­ket has been reshaped fun­da­men­tally by provin­cial poli­cies intro­duced in 2006 as part of the Growth Plan for the Greater Golden Horse­shoe, a region in South­ern Ontario whose bound­aries extend south to Lake Erie and north to Geor­gian Bay. With the Green­belt Plan, the province has aimed to pro­tect 1.8 mil­lion acres of green space, and its Places to Grow plan has des­ig­nated areas best suited for intensification.

Com­ment­ing on the dearth of low-rise houses, Paul Golini, chair­man of BILD (Build­ing Indus­try and Land Devel­op­ment Asso­ci­a­tion), says,”People can’t see what doesn’t exist any­more.” BILD rep­re­sents more than 1,375 mem­ber com­pa­nies in the land devel­op­ment, home-building and pro­fes­sional ren­o­va­tion indus­tries in the GTA. “The homes under con­struc­tion today were sold to the home­owner a few years ago. The indus­try is wor­ried about the bal­ance in hous­ing options and the afford­abil­ity of new homes in the future,” says Golini.

The shift from low-density to high-density hous­ing has been directed by provin­cial inten­si­fi­ca­tion poli­cies encour­ag­ing a more sus­tain­able approach to urban devel­op­ment. Home­buy­ers want to choose the type of home that suits their lifestyle through the var­i­ous stages of life — and choice in the low-rise mar­ket is diminishing.

“There just hasn’t been the avail­abil­ity of land when it comes to low-rise prod­uct,” Golini explains. “Not only is the low-rise price index the high­est it’s ever been — $609,369 [this past] August — it’s also dri­ven the mar­ket toward high-rise. And if you’re a first-time buyer, that seems to be your only option.”

There has also been plenty of resis­tance to the inten­si­fi­ca­tion pol­icy in the GTA at the munic­i­pal level, delay­ing approvals of condo projects and pit­ting devel­op­ers against com­mu­nity groups opposed to the intro­duc­tion of denser forms of hous­ing in their neighbourhoods.

“Local inter­ests are not always aligned with the province’s goals when it comes to growth and inten­si­fi­ca­tion,” Golini notes. “Not every­one is ready to accept this new form of living.”

The devel­op­ment indus­try has been oper­at­ing in accor­dance with the provin­cial growth plan, says Golini. But six years in, it has become clear that the poli­cies have had an adverse impact on home­buy­ers, he says, cre­at­ing severe con­straints on land avail­abil­ity and result­ing in lim­ited hous­ing options and ever-increasing prices.

“Places to Grow was designed to put ten­sion in the sys­tem to pro­mote higher-density devel­op­ment, and that ten­sion is there,” says BILD pres­i­dent and CEO Bryan Tuckey. “But you won­der if the bal­ance has been shifted too far.”

With an esti­mated 100,000 peo­ple mov­ing to the GTA each year, Tuckey notes that the indus­try rec­og­nizes that the lack of afford­able hous­ing options for new and first-time home­buy­ers is a seri­ous issue in the GTA, and wants to be part of the solu­tion. “Our indus­try plans and builds about 40,000 homes every year to meet the demand from first-time home­buy­ers, the aging demo­graphic, immi­gra­tion and the chang­ing fam­ily formation.”

The chal­lenge is get­ting polit­i­cal and com­mu­nity sup­port to build them.

Many munic­i­pal­i­ties have out­dated zon­ing bylaws that don’t con­form to Places to Grow and don’t include inten­si­fi­ca­tion tar­gets, says Tuckey, result­ing in fur­ther delays, as rezon­ing is required before con­struc­tion can begin on higher-density projects.

“I inter­act with many of the best devel­op­ers in the city and they all feel that the approval process gets bogged down at the city level,”says Bar­bara Lawlor, pres­i­dent of Baker Real Estate, a lead­ing bro­ker­age firm in the GTA.

“We need to see more stream­lin­ing when it comes to the red tape and the lay­ers of reg­u­la­tion,” Golini agrees, not­ing too that exces­sive devel­op­ment charges and park­land require­ments cre­ate hin­drances that con­tribute to higher home prices.

BILD is deter­mined to ensure the 68,000 hectares of white­belt lands — the area between the GTA and the green­belt — are pre­served for growth past 2031.

Though the white­belt was intended to func­tion as an urban reserve that would accom­mo­date future growth in the region — whose pop­u­la­tion is pro­jected to spike from 6.3 mil­lion to 8 mil­lion by 2031 — many munic­i­pal­i­ties have been restrict­ing devel­op­ment of these lands.

“If the province was able to give a clear state­ment regard­ing the white­belt and its long-term future,” says Tuckey, “it would go a long way to help­ing the imple­men­ta­tion of Places to Grow in the GTA.”

Sub­ur­ban Option – What did you buy and why?

Elaine Viterbo — 40, man­ager, North 44° restaurant

Where did you buy? Upper Unionville, a 1,700-home com­mu­nity at Kennedy Rd. and 16^th Ave.

Tell us about your place. It’s a 2,300-sq.-ft. detached home on a 34-foot lot.

What appealed to you? For six years my hus­band and I have been liv­ing in a town­house in Rich­mond Hill, but the pric­ing there for a detached home is ridicu­lous. We paid $720,000 for the home at Upper Unionville, so the price was appeal­ing. So is the loca­tion — it’s eas­ier to com­mute to work. Plus, it’s near my aunt’s house and she can take care of my two-year-old. And Unionville is a nice com­mu­nity that’s still growing.

Why a low-rise home, not a condo? My hus­band really likes hav­ing a back­yard, even though you have to mow it, and there’s the main­te­nance of the home itself. But it’s also just the free­dom; you don’t have to use an ele­va­tor. And we look at con­dos as a whole bunch of peo­ple liv­ing in one space.

Why did you buy new, not resale? I like the thought of being the first per­son using the bed­room and bath­room; being able to cre­ate some­thing we want, not hav­ing to say, “We like the house except for this, but maybe we can ren­o­vate it to be that way”; being able to pick our own fin­ishes — the builder had its own décor cen­tre, so we chose the decor our­selves, and it suited our tastes; also, the smell of a new home (it’s like buy­ing a new car).

When do you move in? August 2013. We visit the site weekly to see what stage it’s at. But it’s still just dirt at the moment.

City Cen­tre Option – What did you buy and why?

David Porter — 39, condo-garden designer, Toronto Condo Gar­den

Where did you buy? River City, Phase One, King St. E. and River St. (the first res­i­den­tial project in the new West Don Lands precinct)

Tell us about your place. It’s a one-bedroom, 762-sq.-ft. cor­ner unit on the 12^th floor, with north– and west-facing views.

What appealed to you? The amaz­ing and unob­structed view of down­town. The sec­ond rea­son was value — it was $437,000, includ­ing one park­ing spot and a locker. This worked out to $525 per square foot, com­pared to the down­town core, which is five min­utes away by street­car, where con­dos are going for about $700 per square foot. I thought it was a cool lit­tle pocket of the city.

Why a condo, not a low-rise home? I travel quite a bit and I like walk­ing out the door and not wor­ry­ing about it, so it fits my lifestyle. Although a back­yard gar­den can be nice, I do love gar­den­ing on a bal­cony or a ter­race. So easy to main­tain and change up.

Why did you buy new, not resale? I’m not big into resale. That’s part of the fun of buy­ing new con­struc­tion — actu­ally watch­ing it, being able to pick all your fin­ishes and then see­ing it go from noth­ing into something.

When do you move in? Next sum­mer. They’ve just topped off my build­ing and I can see there are win­dows being installed, so they seem on schedule.

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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