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Tag Archives: density development

Vertical development: A dense idea

It turns out cram­ming more peo­ple into cities won’t help the envi­ron­ment or our health, and may even hurt the economy

Tam­sin McMa­hon – Macleans

Last month Toronto’s deputy mayor, Doug Holy­day, uttered what has become a cul­tural taboo in Canada’s largest city. Down­town Toronto, he said, is no place to raise a family.

Holy­day, who lives down the street from his grand­chil­dren in the sub­ur­ban Toronto neigh­bour­hood of Eto­bi­coke, was against a city plan to force condo devel­op­ers to reserve 10% of their build­ings for three-bedroom “fam­ily friendly” units.

I could just see now: ‘Where’s lit­tle Ginny?’ ” he said. “She’s down­stairs play­ing in the traf­fic on her way to the park.”

His com­ments were swiftly denounced by Adam Vaughan, the down­town coun­cil­lor who had been push­ing for the family-friendly condo units and once proudly told a reporter he had never vis­ited the sub­urbs around Toronto. (“There’s Toronto and there’s the rest of Canada,” he said.)

Holyday’s view was hardly orig­i­nal, but was so shock­ing because of how it flew in the face of what has become accepted wis­dom in cities across the coun­try: we need to rad­i­cally increase the num­ber of peo­ple liv­ing in the down­town core if we’re going to accom­mo­date pop­u­la­tion growth while end­ing urban sprawl.

The doc­trine of urban inten­si­fi­ca­tion is already hav­ing a dra­matic effect on the condo-lined sky­lines of cities like Toronto and Van­cou­ver, but the debate has been play­ing out across the coun­try with com­mu­ni­ties as dis­parate as Miramichi, N.B., Saska­toon and Cal­gary all wring­ing their hands about how to stop the relent­less march to the suburbs.

In July, Rev­el­stoke, B.C., passed a law requir­ing the city to cut green­house gas emis­sions by 15% by 2030, in part by encour­ag­ing high-density development.

Saska­toon is plan­ning to turn a for­mer dog park in a low-density neigh­bour­hood of Sec­ond World War hous­ing into nine apart­ment build­ings. The city also has plans to rede­velop 97 hectares of indus­trial land in the north down­town into a mixed-use devel­op­ment that could house 6,000 peo­ple and five mil­lion square feet of retail and com­mer­cial space. Some argued the city didn’t go far enough, with coun­cil­lor Myles Heidt telling the Saska­toon Star-Phoenix the devel­op­ment should strive for “extra-high den­sity” capa­ble of hous­ing up to 30,000 peo­ple, or nearly 13% of the city’s cur­rent population.

Miramichi’s new devel­op­ment plan calls for more multi-unit hous­ing. Cal­gary, con­sid­ered the epit­ome of the Cana­dian car-centric city, recently hired an urban plan­ner whose per­sonal motto is: “No place is worth vis­it­ing that doesn’t have a park­ing problem.”

After decades of watch­ing North Amer­i­can cities gut­ted by res­i­dents flee­ing to the leafy sub­urbs, urban enthu­si­asts are now declar­ing an end to low-density development.

In the eyes of many city plan­ners and polit­i­cal lead­ers, the sub­ur­ban ideal of the single-detached house on a quiet cul-de-sac, com­plete with a large yard and the req­ui­site lengthy com­mute, is a relic of a bygone and largely unsus­tain­able era. In its place, they are push­ing for “smart growth” com­mu­ni­ties fea­tur­ing high-density housing-usually in the form of apart­ment and condo complexes-in mixed-use neigh­bour­hoods where every­one walks, bikes or takes the bus. It’s the only way, we’re told, to han­dle our rapid pop­u­la­tion growth with­out destroy­ing the envi­ron­ment and clog­ging streets with traffic.

Urban plan­ners have been hotly debat­ing how to cope with sprawl-or whether we even need to cope with it at all-for decades. But the smart-growth move­ment has picked up steam over the past decade as envi­ron­men­tal­ists con­cerned about global warm­ing pointed the fin­ger squarely at the sub­ur­ban com­muter for con­tribut­ing to cli­mate change.

But a grow­ing body of crit­ics is argu­ing that far from rais­ing our qual­ity of liv­ing, green­ing our envi­ron­ment and mak­ing us all walk more and drive less, the kind of rad­i­cal inten­si­fi­ca­tion plans now in vogue with urban plan­ners are dam­ag­ing our economies, rais­ing our cost of liv­ing and fail­ing to get peo­ple out of their cars and onto pub­lic tran­sit. What we need, they say, is a much more thought­ful debate over how to live beyond the push to cram more peo­ple into ever-smaller spaces.

The whole dia­logue on den­sity is too focused on num­bers rather than being focused on what den­sity can actu­ally offer,” says Pierre Fil­ion, an urban plan­ner at the Uni­ver­sity of Water­loo. “What is impor­tant is, what kind of envi­ron­ment are you going to cre­ate? This is as much, if not even more impor­tant than grow­ing density.”

The con­cept of smart growth, with its belief in densely pop­u­lated mixed-use neigh­bour­hoods, has long been linked to the ideas of Jane Jacobs, the Amer­i­can urban plan­ner whose The Death and Life of Great Amer­i­can Cities called for a return to a live­able urban com­mu­nity. But Jacobs decried neigh­bour­hoods full of high-rise build­ings and wor­ried that den­sity, if left unchecked, could “begin to repress diver­sity instead of stim­u­late it.” Instead, urban plan­ning his­to­ri­ans point out that the modern-day smart-growth move­ment looks much more like the ideas of George Dantzig and Thomas Saaty, two Amer­i­can math­e­mati­cians who in 1973 devel­oped a series of com­puter mod­els for the ideal urban set­ting, which they termed the “com­pact city.”

Effec­tive use of the ver­ti­cal dimen­sion,” they argued, could solve a host of prob­lems fac­ing the growth city, among them: “smog, traf­fic, time lost in com­mut­ing, acci­dents, slums, noise, pol­lu­tion, inac­ces­si­ble nature, unsafe walks and play areas, end­less chauf­feur­ing of chil­dren and ris­ing cost.”

Our claim,” they wrote, “is that it is now cheaper to build land than to go out and rob nature.”

Dantzig and Saaty’s belief that dras­ti­cally increas­ing the pop­u­la­tion den­sity of our cities was the only way to solve a host of envi­ron­men­tal prob­lems has become a cen­tral tenet of the modern-day smart-growth move­ment. Sup­port­ers argue that build­ing up our cities and sub­urbs will cut down on green­house gas emis­sions by short­en­ing our com­mutes and encour­ag­ing more of us to take pub­lic tran­sit to work or walk.

It would be nice to think that sim­ply hav­ing more peo­ple live close together down­town would make peo­ple, par­tic­u­larly chil­dren, health­ier. Less time spent in cars, the think­ing goes, means more time walk­ing to nearby gro­cery stores, play­grounds and schools. But when researchers from the Uni­ver­sity of South­ern Cal­i­for­nia, North­east­ern Uni­ver­sity, and Berke­ley tracked the phys­i­cal activ­ity of chil­dren aged nine to 11 who had moved to smart-growth com­mu­ni­ties and com­pared them with chil­dren in tra­di­tional sub­urbs, they found lit­tle evi­dence of a great shift. Chil­dren in smart-growth com­mu­ni­ties tended to play more out­doors, usu­ally in their neigh­bour­hood, while chil­dren in the sub­urbs played more indoors, the study found. But it con­cluded that “increases in daily moderate-to-vigorous phys­i­cal activ­ity did not sig­nif­i­cantly dif­fer by group.” In other words, chil­dren who moved to smart-growth com­mu­ni­ties changed where they played, but not how much.

Another study out of the Uni­ver­sity of South­ern Cal­i­for­nia exam­ined the core prin­ci­ples of smart growth to see whether any of them actu­ally had any influ­ence on rates of phys­i­cal activ­ity. The only ones that did, they found, were poli­cies pro­mot­ing more open space and those that advo­cated for “dis­tinc­tive com­mu­ni­ties with a strong sense of place,” nei­ther of which are par­tic­u­larly linked to density.

Aside from fail­ing to make us any health­ier, there’s mount­ing evi­dence that smart growth doesn’t live up to the hype when it comes to improv­ing the phys­i­cal state of the envi­ron­ment, either.

A 2009 study from the Geor­gia Insti­tute of Tech­nol­ogy and the Uni­ver­sity of Wisconsin-Madison mod­elled what smart-growth devel­op­ment would do to green­house gas emis­sions by 2050 and found that “aggres­sive” smart growth that included rad­i­cal inten­si­fi­ca­tion could reduce car­bon emis­sions by eight%. On the other hand, forc­ing every­one to drive hybrid vehi­cles, even if on lengthy com­mutes to the burbs, could cut emis­sions by 18%.

Researchers found increas­ing pop­u­la­tion den­sity has not been suc­cess­ful at get­ting peo­ple out of their cars and onto pub­lic tran­sit. That’s because pop­u­la­tion den­sity has lit­tle to do with how peo­ple choose to get to work and almost no asso­ci­a­tion with lev­els of pub­lic tran­sit ridership.

By the sim­ple mea­sure of res­i­dents per hectare, Los Ange­les is North America’s most densely pop­u­lated met­ro­pol­i­tan region, with 27.3 peo­ple per hectare, thanks to its com­pact sub­urbs all con­nected by a net­work of free­ways. Yet more than 90% of its pop­u­la­tion mainly trav­els by car and less than five% by pub­lic tran­sit. That com­pares to Edmon­ton, which houses just 10.1 peo­ple per hectare, but has nearly dou­ble the pro­por­tion of res­i­dents who take tran­sit. Even in Port­land, Ore., a city fre­quently touted by Cana­dian urban plan­ners as the gold stan­dard for smart growth because of its mas­sive invest­ments in light-rail tran­sit and down­town rede­vel­op­ment, 89.4% of res­i­dents still pre­fer to drive to work. In Cal­gary, it’s 76.6%.

I don’t think den­sity has very much to do with the suc­cess of pub­lic tran­sit,” says Paul Mees, a trans­porta­tion plan­ning pro­fes­sor at Royal Mel­bourne Insti­tute of Tech­nol­ogy in Aus­tralia. “I think that’s the urban myth that is really hold­ing back progress.”

That idea, that cities need to be jam-packed with peo­ple in order for tran­sit to be viable, first emerged in the 1950s as a way to advo­cate for more spend­ing on roads and high­ways, says Mees. A Chicago trans­porta­tion study at that time deter­mined the region would need 96.5 res­i­dents per hectare (more than three times the pop­u­la­tion den­sity of present-day Toronto) to sup­port pub­lic tran­sit to its sub­urbs, a cal­cu­la­tion that con­tin­ues to hold sway over city plan­ners today. Instead, Mees argues the actual den­sity needed to pro­vide sus­tain­able pub­lic tran­sit is prob­a­bly closer to one where most peo­ple live on lots of 647 sq. m with a well-defined urban bound­ary to keep houses from sprawl­ing ran­domly into the coun­try­side. In other words, tra­di­tional sub­ur­bia. “That seems to be almost all of Canada,” he says.

While Toronto’s city coun­cil was engulfed in a debate over the need for more family-friendly, three-bedroom con­dos in the city’s down­town, the Toronto Real Estate Board released a report that said just 19 three-bedroom con­dos were sold in the down­town core in the sec­ond quar­ter of the year. The con­dos aver­aged around $800,000, hardly a family-friendly price tag.

Real estate prices inevitably rise in tan­dem with pop­u­la­tion density-one of the main rea­sons, smart-growth crit­ics say, that poli­cies to stop sprawl by increas­ing den­sity in our cities and sub­urbs are des­tined to fail. The more peo­ple you try to cram into a city, the more expen­sive real estate gets, and the more peo­ple are inclined to flee to the sub­urbs for more afford­able hous­ing. In fact, a study released in May from Cam­bridge Uni­ver­sity in the U.K. found that dra­mat­i­cally increas­ing urban den­sity might reduce car use by a mere five%, but the envi­ron­men­tal gains from that reduc­tion would be dwarfed by the eco­nomic con­se­quences of mak­ing cities more expen­sive places to live and do busi­ness. “Any econ­o­mist will know when you restrict the sup­ply of a good that is in demand, you drive up the cost,” says Wen­dell Cox of the U.S. urban pol­icy con­sul­tancy Demographia and a vocal critic of the push for urban inten­si­fi­ca­tion. “If we can fig­ure out a way to do smart growth with­out rationing land, it might be a good idea.”

It’s not only fam­i­lies who have been flee­ing to the sub­urbs as land prices in the city sky­rocket, jobs have also migrated, lead­ing to what’s been dubbed “job sprawl.”

For instance, down­town Toronto is no longer the region’s largest employer, says Cox. More than 350,000 peo­ple work in the sprawl­ing area around Pear­son air­port, com­pared to 325,000 in down­town Toronto. Between 2001 and 2006, 94% of new jobs in the Toronto area were out­side of the cen­tral munic­i­pal­ity, he says, with rates of 70% in Mon­treal and 75% in Van­cou­ver. And as jobs have moved out of cities, down­town res­i­dents have fol­lowed them, lead­ing to the increas­ingly com­mon phe­nom­e­non of the “reverse com­mute,” where res­i­dents leave their homes in the city to drive to work in the sub­urbs. Nearly a third of the com­muter traf­fic in and out of Toronto as of 2006 involved city res­i­dents head­ing to jobs in the sub­urbs. Almost as many Toron­to­ni­ans com­muted to Vaughan, a sub­urb north of the city, as com­muted from Vaughan into the city. In Van­cou­ver in 2006, more than 40% of com­muter traf­fic was doing a reverse com­mute; in Mon­treal it was 23%.

Lisa Anttila is one of those reverse com­muters. She lives in down­town Toronto, where she bikes to the gro­cery store and the doctor’s office. But she gets in the car to go to work at her family’s busi­ness man­u­fac­tur­ing stain­less steel prod­ucts in Markham, a sub­urb north of the city. Most days her work sched­ule is flex­i­ble enough that she can time the com­mute to avoid traf­fic, but that has become more dif­fi­cult in the six years she’s been doing the drive. “It used to be, ‘Don’t get on the road between 7:30 a.m. and 9:30 a.m.’ Now it’s like if you haven’t left by 7:30 then you’re pretty much wait­ing until after 10,” she says. “Iron­i­cally it seems like half the peo­ple who live [in Markham] come to Toronto to work and so they fill the jobs with peo­ple from Toronto.”

At its worst, Anttila’s 18-km reverse com­mute can now take nearly 90 min­utes by car. Pub­lic tran­sit, she says, is not an option. “It takes me longer on pub­lic tran­sit than it does by bicy­cle,” she says.

Smart-growth devel­op­ment is unlikely to reverse that trend. Researchers from East Car­olina Uni­ver­sity stud­ied what hap­pened to jobs in 350 U.S. met­ro­pol­i­tan regions between 2001 and 2006, com­par­ing those that had restric­tions on sprawl with those that didn’t.

Eight of the 11 cities with anti-sprawl laws had “job sprawl” rates that were worse than the aver­age. Bend, Ore., a city that under­went mas­sive mixed-use rede­vel­op­ment before being slammed by the finan­cial melt­down, fared four times worse than the national aver­age. Mean­while, some low-density cities in Texas, Ten­nessee and South Car­olina had actu­ally man­aged to attract more jobs than they lost to the suburbs.

The fact that more den­sity can’t deliver a bet­ter com­mute to work and can even make con­ges­tion worse, is one of the biggest eco­nomic argu­ments against urban inten­si­fi­ca­tion, Cox says. “The only rea­son peo­ple move to cities is to do bet­ter because the oppor­tu­ni­ties in cities are bet­ter,” he says. “If peo­ple don’t begin to real­ize what they’re doing to really nice cities, you could very well in the long run see growth pushed out of them.”

Those munic­i­pal­i­ties that do embrace smart growth have been doing it at the expense of indus­trial devel­op­ment, pre­fer­ring to con­vert fac­tory zones into areas for hous­ing. And that is doing last­ing dam­age to the abil­ity of cities to cre­ate enough jobs for their fast-growing pop­u­la­tions, says Nancey Green Leigh, a brown­field rede­vel­op­ment expert with Geor­gia Tech Uni­ver­sity. She stud­ied the indus­trial devel­op­ment poli­cies of 14 major U.S. cities and 10 smart-growth regions and found smart-growth plan­ning either ignored the needs of indus­try or saw it as a blight on the urban land­scape. Man­u­fac­tur­ing jobs were van­ish­ing from North Amer­i­can cities long before the advent of smart growth. But Green Leigh says the push for urban inten­si­fi­ca­tion has aggra­vated that trend. Once old indus­trial land gets con­verted to con­do­mini­ums, it’s never long before new condo dwellers begin to demand that any remain­ing man­u­fac­tur­ers and fac­to­ries be given the boot.

The loss of indus­trial land to con­dos, offices and retail com­plexes has become a prob­lem in B.C.’s Lower Main­land, where the port author­ity has run up against stiff oppo­si­tion to its plans to buy prop­er­ties for future indus­trial uses. Port Metro Van­cou­ver has recently pur­chased 142 hectares of land in the Lower Main­land to safe­guard for indus­trial use. But, CEO Robin Sil­vester says, provin­cial esti­mates point to the need for as many as 809 hectares of indus­trial land if the region is to stay eco­nom­i­cally com­pet­i­tive and avoid becom­ing a res­i­den­tial oasis for the wealthy and retired. And that has put the port on a col­li­sion course with those who believe the areas should be reserved for more urban liv­ing. “We need to have a bet­ter qual­ity of dis­cus­sion around the prob­lem that’s emerg­ing,” Sil­vester says. “Oth­er­wise we run the risk of becom­ing like com­mu­ni­ties in parts of Florida where a lot of peo­ple go to live, but where there’s no eco­nomic activ­ity tak­ing place.”

Van­cou­ver is per­haps Canada’s stark­est exam­ple of what hap­pens to real estate when a city becomes a place where every­one wants to live. But urban plan­ners across the coun­try are sin­gu­larly focused on end­ing sprawl. The irony is that the cur­rent obses­sion with smart growth may just become one more thing that pushes us, our fam­i­lies and our jobs, even far­ther into the burbs.

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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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  • Toronto Real Estate Forecast 2010

    Toronto Real Estate Market at a Glance

    * MLS® sales in the GTA will hit a record high 101,000 this year. Average prices for 2010 will increase to $444,000. Both sales and price growth will begin to show significant moderation in the second half of this year and early next year.

    * New home sales will jump to 42,000 in 2010 thanks to a 50% increase in high rise sales. Housing starts will rise by 34% this year to reach 36,400 units on strong single-detached construction.

    * The unemployment rate in Toronto will fall slightly to an average of 9% this year. Employment gains will push the unemployment rate down further next year, providing support for homeownership demand.

    Toronto Resale Market – Nearing a Turning Point

    The resale market in the Greater Toronto Area (GTA) will put an exclamation point on 2010 with a record level of activity this year. Sales will reach six digits for the first time and price growth will be well above the historical average. This momentum, however, is expected to wane in the second half of the year. In fact, the market will look quite different by 2011 as sales levels converge back to their longer-term average and prices show little movement. The era of rockbottom mortgage rates is coming to an end and the red hot GTA housing market will begin to lose its steam.

    A full year of record-low borrowing costs has made first-time buyers out of tens of thousands of renters and parents’ basement dwellers in the GTA. However, the primary source of stimulus fuelling this increase in homeownership is already beginning to fade. Five-year mortgage rates are on the move and will be a full percentage point higher by the end of the year. Combining higher rates with the new reality of average prices well above $400,000 will make the transition to homeownership more expensive. The erosion of affordability will cause delay for many first time buyers, who have proactively accelerated their purchasing decisions and propped up sales temporarily.

    Home sales in the GTA, however, are not expected to decline dramatically and will converge to the 10-year average in 2011. More jobs, stronger income growth and higher net migration will provide support for the market. Furthermore, demand from current homeowners is expected to pick up some of the slack left by fi rst-time buyers. Owners feel the timing is right to make a move as prices for their current home climb to new highs and fi nancing costs for their next purchase still remain low. Also, price appreciation for detached homes in some desirable areas in the GTA hasn’t been as strong as the rest of the market. A higher presence of move-up buyers will further increase the appeal of established neighbourhoods, which should see above-average price growth in the coming years due to their fixed level of supply and relatively low level of turnover. With move-up buyers looking to enter the high end and down-sizing baby boomers looking for less maintenance and to liquidate assets for retirement, a high level of new listings will be a theme over the next couple years.

    Investors are also expected to be active in listings their condominiums — approximately 17,000 high rise units will be completed this year with an additional 16,000 coming on stream in 2011. Those who purchased at pre-construction sales centres a couple years back will realize their completed units have gone up in value by about 20 percent. Research undertaken by CMHC reveals that approximately 20% of the condominium units registered in 2009 were listed for sale. It is likely that this share will grow as investors look to capitalize on the recent run-up in prices. Expect up to 10,000 newly completed condominiums to be put on the market over the next couple years. The added supply will lead to softer price growth for high rise units relative to low rise homes.

    Existing owners on the move and listings from some condo investors will provide buyers with more selection at a time when overall demand is moderating. With fewer buyers competing for more homes, bidding wars will become less common and prices will face little upward pressure. There is a risk that prices could come down some in late 2010/early 2011. However, any declines would be minimal and short-lived. In fact it is quite difficult to call a decline in house prices that lasts longer than six months in Toronto as prices have recorded annual increases in each of the past 14 years. That streak is expected to increase to 16 years in 2011 with a balanced market producing price growth of less than two percent. Prices can be expected to remain fairly fl at over the next few years to allow income levels to catch up.

    Toronto New Home Market – The Future is ‘Up’

    A calmer buying environment in the resale market will lead fewer purchasers into new home sales centres. Total new home sales will trend lower in the second half of the year, particularly for singles as the HST sets in, but will nonetheless register a banner year for 2010. High rise units will take back the majority share of new home purchases this year with a record-breaking 23,500 sales. The 18,500 low rise sales will provide a boost for housing starts in 2010, but single-detached homes will soon become a drag for overall housing starts in the GTA. The construction industry will rely more on high rise development next year thanks to recent condo sales centre activity.

    Although sales have heated up, high rise starts have yet to materialize. The diffi cult sales and construction financing environment lasting through most of last year will weigh on the number of projects started this year — total high rise starts will remain at the decade average of 14,000 units. All signs point to a pick up in starts in the second half of 2010 and into 2011. Lenders are making credit more available and projects that opened sales offi ces back in late 2007 and early 2008 have hit their preconstruction sales targets. Groundbreaking ceremonies are beginning at sites across the city and a ready-for-construction backlog of at least 10,000 units should be cleared by year end. The upward trend will continue in 2011 thanks to sales levels hitting new highs in late 2009 and the fi rst half of 2010 (typical sale-to-start time lag for high rise projects is approximately 18 months). Also, as the large volume of units currently under construction finish up over the next couple years, more labour, fi nancing and construction cranes will be available to start new projects. High rise starts will rise by close to 30% next year with the potential for further gains in the years ahead. Healthy unsold inventory levels will support more project launches and demand will remain stable as affordability in the GTA declines and land constraints continue to favour high density development. Expect high rise cranes to appear in 905 areas such as North Oakville, downtown Mississauga, Vaughan Metropolitan Centre and Markham Centre.

    Unlike the high rise market, better times for low rise construction appear to be in the past. The upward trend for singles beginning in the second half of 2009 will be shortlived and the longer-term decline that started back in 2003 will resume. A 60% increase in detached starts in 2010 will be matched by an equivalent reduction in 2011. The “pull-forward” effect from buyers and builders looking to close on homes before the HST is introduced will result in some let down in the latter part of the year. Furthermore, interest rate increases will no doubt impact affordability and demand for the most expensive houses, and new singles in the GTA defi nitely fit the bill — prices will average $600,000 this year. But perhaps the bigger story weighing on the outlook for single detached construction relates to the scarcity of available land. Over the past seven years the number of available units at construction sites has been cut in half, resulting in the same trend for sales and starts.

    Greenbelt boundaries and Provincial housing density targets are making low rise development less feasible in the GTA. As well, single detached sites are typically located outside of the built-up boundary, which can require extensive infrastructure development. Single detached project sites will continue to come online, however at this time, less than 5,000 units are ready to build according to RealNet Canada Inc. Since a developer cannot sell what they do not have, single detached starts will remain limited and the supply squeeze will continue to push prices up. Row homes, which are conducive to infill development and more affordable than singles, will take on their greatest share of low rise housing starts next year with 30%.

    Mortgage Rate Outlook

    The Bank of Canada cut the Target for the Overnight Rate in the earl months of 2009. The rate was 1.50% at the start of 2009 and has since fallen to 0.25%. Looking ahead, we expect that short-term interest rates will begin to rise in the second half of 2010.

    With the overnight rate expected to increase in the coming months, mortgage rates have begun to rise. According to CMHC’s base case scenario, posted mortgage rates will gradually increase throughout the course of 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate is assumed to be in the 3.6-4.8% range, while three and five-year posted mortgage rates are forecast to be in the 4.2-6.7% range. For 2011, the one year posted mortgage rate is assumed be in the 5.0-6.0% range, while three and fi ve-year posted mortgage rates are forecast to be in the 5.6-7.2% range.

    Rates could, however, increase at a faster pace if the economy recovers more quickly than presently anticipated. Conversely, rate increases could be more muted if the economic recovery is more modest in nature.

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    Contact the Jeffrey Team for more information  -  416-388-1960

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    Mid-rise living has its advantages

    Michael Collins-Williams – Special to QMI Agency

    No doubt, many of today’s home buyers think of just two options when it comes to purchasing a new home —it’s either a high-rise condo in Toronto or the more traditional low density suburban home. But as our communities evolve — more and more consumers are recognizing the benefits in buying a home in a mid-rise building. This third option for home buyers is anticipated to flourish in the years ahead.

    Across the Greater Toronto Area, decades of low density development has not always made the most efficient use of existing infrastructure. Most of us are all too familiar with ever increasing traffic congestion, longer commutes and rising housing costs. Despite these issues, our relative prosperity ensures that the GTA will remain the destination of choice in Canada for tens of thousands of new immigrants for the foreseeable future. If we are going to preserve the high quality of life we’ve all become accustomed to, new patterns of growth planning and transportation planning are inevitably going to evolve.

    One of the key factors supporting mid-rise condo development is the increasing environmental awareness of governments, businesses and citizens which is directing us to utilize our resources more efficiently. In the coming years, this will translate to an increased focus on the renewal of community infrastructure, as well as the protection and enhancement of our assets. Recent changes in the policies of the provincial government, such as the Growth Plan for the Greater Golden Horseshoe and the Greenbelt Plan are some of the driving forces behind intensification of new development today. Mid-rise buildings will become much more common as the building type of choice both for developers constructing them and new home buyers looking for affordable options that aren’t located in the concrete jungle of downtown Toronto.

    As well, Canadians can reduce their impact on the environment through mid-rise condo living. Individual suites are typically smaller than single family homes which is an effective way to reduce both the carbon footprint and the monthly operating costs for homeowners. Glenn Miller, vice-president of the Canadian Urban Institute, suggests “the mid-rise building form has the potential to be the most energy efficient of all building forms.” This type of housing is a perfect opportunity to help the environment and your pocketbook. The buildings themselves are typically located on main streets close to shops and services, which reduces auto-dependency and promotes a healthy active pedestrian lifestyle. Miller notes that “mid-rises are built to a human scale that contributes to street life”. This provides a perfect smart growth alternative to larger scale apartment blocks without compromising the character of traditional neighbourhoods.

    The graying of society with many baby boomers approaching retirement age is a second major driving force behind mid-rise condo development. This growing segment of society will increasingly be looking to downsize and live in an easy, maintenance-free lifestyle that doesn’t involve a lot of stairs. Unlike towering skyscrapers, mid-rise buildings in the four to eight floor range have the ability to integrate themselves within the existing urban fabric. These boutique style condo buildings are perfectly suited to provide a new supply of housing to a growing portion of the housing market in an aging society.

    Mid-rise condos provide opportunities to enhance our communities while reducing our impact on the environment. Mid-rises blend into and improve neighbourhoods as Miller further suggests that “it’s a building form that adds to the quality of life in cities through quality urban form.

    Mid-rise buildings can be viewed as an ideal scenario to provide an affordable supply of new housing for potential home buyers and slightly increase densities without disrupting established communities. There is almost an overwhelming amount of choice in today’s rapidly evolving real estate market. However, considering all the environmental, economic and lifestyle benefits that mid-rise living has to offer, a home in a mid-rise project is a choice worthy of consideration for anyone in the market for a new home.

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    Contact the Jeffrey Team for more information  -  416-388-1960

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