[Tuscani01]

These days, condos have replaced the small bungalows of the 1950's, as starter homes. The trouble is that those small bungalows have the land available to add on additions or second floors for an expanding family. Condos don't have that possibility, unless they are able to buy the unit next door (or above or below) and cut through the concrete separating them.

Which is a possibility in many buildings, but the cost of purchasing that neighbouring unit, and possibility of doing so after pre-construction makes it pretty tough.

 

[CJan]

I've been looking ahead to when I retire because based on what my retirement income will be, I won't be able to afford the place I'm living in now.

Downtown rentals are slim pickings especially if you want something half-decent. My only choice will be to go for a small brownstone. They've got a few in the Forest Hill village which are
surprisingly reasonable. $850-$950 a month. Which is a lot better than the $1290 I'm now paying for a 445 sq ft studio that has "condo-like" amenities. Why can't they build some
more of these brownstone-type buildings as rental units? Because not everyone wants the use of a party room/games room/conference room/ exercise room/theatre; certainly not if a
one bedroom is going to cost $1500 a month to rent.

 

[DarnDirtyApe]

I've been looking ahead to when I retire because based on what my retirement income will be, I won't be able to afford the place I'm living in now.

Downtown rentals are slim pickings especially if you want something half-decent. My only choice will be to go for a small brownstone. They've got a few in the Forest Hill village which are
surprisingly reasonable. $850-$950 a month. Which is a lot better than the $1290 I'm now paying for a 445 sq ft studio that has "condo-like" amenities. Why can't they build some
more of these brownstone-type buildings as rental units? Because not everyone wants the use of a party room/games room/conference room/ exercise room/theatre; certainly not if a
one bedroom is going to cost $1500 a month to rent.

You just answered your own question - as a developer or landlord, would you rather get $1290 for 445 square feet or $850-90 for something twice as big? Most renters are willing to pay more for those amenities even if you're not, so those buildings are more desirable and therefore more profitable.

It's unfortunate, but a lot of the talk around zoning comes down to social engineering - planners (and other citizens) want to force people to build and live in housing types that fit their view of the world rather than actually listening to what end-users want. People build McMansions in place of post-war bungalows because that's what they want to do!

 

[CJan]

You just answered your own question - as a developer or landlord, would you rather get $1290 for 445 square feet or $850-90 for something twice as big? Most renters are willing to pay more for those amenities even if you're not, so those buildings are more desirable and therefore more profitable.

That's true but I think it also depends on how much you're willing to put up with as a landlord. You get more money doing a $1290 for 445 sq ft, but you
also get the hassles. The building I live in is mostly university students, so the turnover is big. Which means more money spent on cleaning and repairs.
Younger tenants want the amnenities, but they also abuse them. If I was a landlord I don't know if I'd want the expense and the trouble of dealing
with those kinds of tenants.

Older building renting to older tenants, you get less money as a landlord but you wind up with a far more stable group of tenants.

 

[pman]

Wouldn't the older buildings have been subject to long-standing rent control? Does that have anything to do with the disparity between rents on relatively new condos and older buildings?

 

[DarnDirtyApe]

Wouldn't the older buildings have been subject to long-standing rent control? Does that have anything to do with the disparity between rents on relatively new condos and older buildings?

Not for new tenants. Presumably buildings with higher operating & maintainence costs have that baked into the rent.

The rental market in Toronto actually works pretty well in the sense that there are few restrictions on new supply coming on to the market, so higher demand does result in more apartments built and available to rent. Some people just don't want to pay a fair price to allow landlords to cover their costs...

 

[ksun]

Not for new tenants. Presumably buildings with higher operating & maintainence costs have that baked into the rent.

The rental market in Toronto actually works pretty well in the sense that there are few restrictions on new supply coming on to the market, so higher demand does result in more apartments built and available to rent. Some people just don't want to pay a fair price to allow landlords to cover their costs...

Yes, rental market is Toronto is actually surprisingly affordable, thanks to ample supply. Renting the same place in Toronto is a lot cheaper, maybe 30% or more, than a similar neighbourhood in Chicago, Boston, San Francisco or Los Angeles. Heck, even Vancouver a city 1/3 the size charges the same rent. There is really nothing to complain about affordability in Toronto's rental market. It is Canada's financial center so renting anything decent near the core won't be cheap and shouldn't be, but it is not prohibitively expensive at all.