I wonder whether it is reluctance of families to living on condos led to the lack of family friendly condo supply, or the lack of supply that led to the inability of most families to live in condos.
If, for example, supply is not an issue and a family can buy a 1200sf three bedroom condo which is 3 km from downtown, instead of a 2400sf four bedroom house with a basement, family room etc 30km from downtown (suppose they work downtown) for the same price, how many families would choose the former over the latter?
According to my personal experience, demand is the issue here, not supply. The developers are not stupid. If there is such a demand, why don't they capitalize it? In many Asian cities, the trend is developers are building increasingly larger condo units, and buyers complain about the shortage of smaller ones. In cities like Hong Kong and Shanghai, most new developments are three bedroom or two bedrooms, and the number of one bedroom and studios are minimum. Why, because developers always do their research on what the demand is really like.
In Canada, people still have totally different preference. Having your first kid almost immediately means condo living is out of the question (which I think is a backward old fashioned way of thinking). cities like Toronto is quite safe. I don't see why small kids can't grow up in highrises. Builders are smart enough to know that, which is why they don't even bother to building large family friendly condo units, because no matter how family friend these condos are, they will always be a lot smaller without the luxury of a guest room, a yard and a basement.
I have watched too many HGTV shows in which a three or four personal family complains about their 2000sf house no longer working, and I could never understand it. If you have two kids of age 2 and 4, one 120sf room is all that is needed for both of them. People tend to look at what other families are doing, instead of thinking about "what exactly and necessarily do we need". So the issue is not developers are not willing to offer larger units, it is most families still don't want to live in condos. For example, a two bedroom condo is perfect and large enough for a family with one to two small kids. Honestly, I don't see the absolute need of anyone under the age of 14 to have his/her "own room". People are too entitled when it comes to space in North America. A guess room which is vacant for 360 days of the year, are you kidding? And I never understood the need to separate the functions of the livingroom and the family room. Why on earth do the family and their guests have to be entertained in different rooms? It is basically sitting on a couch and watching TV, right?
My parents have two kids, and I never had my own room until I was 15, when my older brother left home for college. We lived in a 850sf two bedroom apartment for years. Never heard my mother complain once "there is not enough space/storage!". If there is not enough storage in the kitchen, stopping having 15 pans/skillets/pots of various sizes! I was happy most of the time, and never felt for a second "my home is too crowded". Honestly, kids seldom feel entitled to larger space. It is usually the vanity of the parents which drive such needs.
What can we say, the vast majority of Canadians are suburban creatures and I don't think it is gonna change. Downtown will continue to be dominated by small condos occupied by singles and childless couples, and 95% of families will still move to their 2000 sf tree lined boring suburbs the minute they have their first born.