Toronto Needs More Condos

Having read past columns, you’re probably thinking, “What else would you say?” But bear with me — I can back up the assertion.

There is proof on several fronts that more single people are looking for homes and wishing to settle down in downtown cores of cities. And with cities looking to expand their tax bases, the opportunity is ripe for condominium development to really shoot for the sky.

First of all, there’s the desire in Toronto (and many other cities around the world) to densify — grow the population within the city’s current footprint, in accordance with municipal governments’ desires to limit urban sprawl — and the only feasible way to do that is to build skywards.

Doing that is easy and cheap (relatively, I know) to do. You can renovate and expand on existing buildings, or you can put up new buildings on existing sites. In many cases, the desired trend in city core residential development is to make buildings a blend of living spaces over retail spaces, so tenants don’t have far to travel to get the things they need on a daily basis.

Another reason why we need more condos is that more people are opting to live in, or move back, to the downtown cores of cities — millennials are opting to live where the action is and previous generations that had relocated to the suburbs to raise their families are moving back to where they don’t have to travel far to get the amenities they want.

According to Canada Mortgage and Housing Corp. (CMHC), just over half of the 21,000 new homes completed this year are condominiums and they also represent roughly 80 percent of new housing development currently in the GTA. Many of those condos are destined for one-person households. That occupancy rate has more than doubled over the years, from 13 percent 40 years ago to the most current figure of roughly 28 percent.

That is being fuelled by single-occupancy units, which again works in favour of densification because you can get more units stacked upon each other. A recent Globe and Mail story quotes sources that attribute the shift to several groups, but mostly single women (young professionals, divorcees and/or widows) who are able and willing to live on their own.

The CMHC also attributes the shift to Canada’s growing immigration population, an assertion borne out by a CIBC report that says immigrants make up the largest group in Canada’s population growth, and those new residents take up temporary residence but are in the prime homeownership age group and quickly look for residences to purchase. Other new homeowners pushing up the demand are retiring Baby Boomers who are choosing to move back to the cities from which they moved away in the ’80s in order to raise their families in white-picketed lots, and their children who are establishing their careers and wish to live closer to their work than to have the long commutes their parents endured.

That report also quotes experts who estimate that housing starts in comparison to occupancy stands at just over one-to-one, which many don’t consider good enough to take into account the growing number of people looking to purchase new homes as we head into the 2020s. And to add more fuel to the fires of condo development, the experts say that the numbers of immigrants looking for homes are lower than those borne out by actual immigration figures at the border.

So doing the math, more people are looking to purchase homes; more people are looking to move into the downtown cores of cities; and, cities are looking to expand their tax base without increasing their footprints.

See? The city needs more condos.