22 May 2018 0 Comments Posted By : Josh Dehaas

Why Toronto needs more townhouses

Matthieu St-Pierre met his wife in 2011, while studying at the University of Waterloo. After living in Montreal and Los Angeles, they eventually decided to settle down in Toronto. They found jobs in their chosen fields, St-Pierre as a senior software developer and his wife in communications at a university.

When they had their first child, in 2014, their one-bedroom apartment in midtown suddenly felt too small. They knew they couldn’t afford a house but were disappointed to learn that their budget of $650,000 couldn’t even accommodate a townhome near the downtown core. They bowed out of the market, hoping it would cool.

Four years later, the average price of a freehold townhome/row house in downtown Toronto has reached about $1.1 million. St-Pierre says they can’t keep living in a one-bedroom with nowhere for their four-year-old son to play. They considered moving into a family-sized condo, but the average three-bedroom condo in the GTA was $918,000 last year. They looked into buying in a distant suburb like Aurora or Newcastle, but that would’ve meant spending hours each day in stop-and-go traffic on the 401 or 404. They looked at family-sized apartments near High Park, in Toronto’s west end, but those were going for more than the cost of a mortgage payment in most cities.

Faced with no good options, the family has chosen to leave Toronto altogether. St-Pierre will be transferring to his company’s Quebec City office later this month, and his wife hopes to work remotely from there. They can get a mortgage on a big house near downtown for less than what it costs to rent in Ontario’s capital.

The St-Pierres aren’t the only young professionals who are giving up on living in Toronto altogether. The city’s housing crunch is a crisis that Ryerson University economist Frank Clayton says will only get worse now that the millennial cohort has begun having kids.

Clayton’s research has shown that when people start having children, they tend to want a home with a front door and a patch of grass where they can barbecue — it’s what urban planners call “ground-related housing.” Townhomes eat up half as much space as a typical single-family home (and sometimes less than that), so they are typically the most affordable type.

But despite the dire need for more townhomes, developers in the GTA are building fewer and fewer of them. In the 905 region, construction fell to 4,400 units a year on average between 2006 and 2015, compared to 5,700 between 2001 and 2005. In Toronto, construction fell from an annual average of 1,076 units from 2001 to 2005, to 509 between 2010 to 2015.

Clayton says supply isn’t dwindling simply because there’s no space or because developers wouldn’t jump at the chance to build more, but also because of provincial policies are biased against ground-related housing and the city fails to see the potential in redeveloping underused industrial land. While changing those policies and attitudes wouldn’t solve the affordability crisis for everyone, it could make a difference for families like St-Pierre’s.

According to Clayton, the shortage of ground-related housing is partly due to the Liberals’ 2006 Growth Plan for the Greater Golden Horseshoe (updated in 2017), which did away with a long-standing requirement that municipalities have at least a three-year supply of land to meet the demand for a range of housing types. The plan now states that municipalities must achieve “minimum intensification and density targets” while considering the “range and mix of housing options and densities of the existing housing stock.”

Clayton says the density targets amount to a growth-containment policy — effectively, an attempt to force most people to live in apartment towers in order to preserve farmland and create enough density to justify new low-emission public-transit lines.

But Clayton says that containment policies have been shown to drive up the cost of housing, and that it’s questionable whether they provide substantial environmental benefits. Rather than packing into condos, many families simply opt for longer commutes to wherever they can find ground-related housing — which pumps more carbon into the atmosphere. Clayton says economists are only now beginning to study the impact Ontario’s policies have had on the cost of housing, which he believes may be “severe.” He points to a New Zealand government study that found similar policies might have pushed up the cost of housing in Auckland as much as 56 per cent.

And it’s not just the containment policies that are problematic, Clayton argues: the province’s and the city’s insistence on preserving industrial areas designated as “employment lands” isn’t helping either. The lands may only be converted to residential use once every five years. Clayton says that uncertainty as to whether underused industrial land will ever be rezoned as residential prevents developers from buying it up. The solution, he says, may be for the city to proactively re-zone the least valuable employment lands as residential up to a certain height.

Clayton points to the Warden Woods area — 163 acres of former industrial land in Scarborough — as an example of residential conversion done right. In 2005, when the city rezoned much of the land, developers built 1,449 new homes, including 833 townhouses. About half of the residents take transit to work, which Clayton says makes Warden Woods a relatively environmentally sustainable community. And the homes were affordable: in 2011, the average value was $397,511 (compared to $401,000 citywide), and despite a modest median household income of $66,221, more than 85 per cent of the homes were owner-occupied.

Marcy Burchfield, executive director of the non-profit Neptis Foundation, argues that the Ontario government’s Growth Plan actually gets things right in that it allows rezoning to be done only “in the context of a larger, long-term plan.” She adds: “You can’t just plan in this short-term way of saying, ‘Oh, we need some ground-related housing — let’s convert all the employment lands.’”

Burchfield also sees townhouses as merely one part of the solution. Another is to encourage developers to build more family-friendly condos, which Toronto has long struggled to do.

She also says policies that “lure” empty-nester baby boomers out of their family-sized homes — where many bedrooms sit vacant — could help. “By the time 2031 rolls around, 25 per cent of our population is going to be over the age of 65,” Burchfield says, “so there is turnover to consider.”

Empty-nesters don’t want to leave their favourite neighbourhoods in order to downsize, she explains, but there may not be many condo options close to where they live. For example, if we want baby boomers in East York to sell their single-family homes to young families, the solution could be to pre-zone large sections of the borough’s main road, Danforth Avenue, so that developers can build senior-friendly condos.

Of course, like Clayton’s ideas, Burchfield’s aren’t likely to solve the affordability crisis for everyone who wants to live in Toronto — but they serve as a reminder that there’s more our policymakers could be doing.

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