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Northern Light

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The worst part is that current policy will have us blast through that 700,000 figure 20 years earlier than the above estimate.

The current policy driving population growth is immigration.

That's not an anti-immigration comment, merely stating the obvious.

Population here is still growing through natural increase (but won't be when the Baby Boomers start to pass on in larger numbers)...

But regardless, the big drivers are immigration (in the sense of immigrants and refugees)........and also the 'Temporary' residents that permitted in the form
of foreign students and Temporary Foreign Workers.

****

Policies on IZ are about how to cope w/the population growth, not how to slow it down.

Canada, this year, in the midst of a pandemic will hit target of more than 400,000 immigrants.

The GGH typically recieves 35% of the overall Canadian number.

That would be 134,000 this year.

Assuming The City of Toronto takes a similar percentage of GGH growth as in 2019, that will be about 80,000 new residents in the City.

The Feds are planning on further bumping the limit.

Assuming that unfolds as it seems, the City of Toronto will add 700,000 residents in less than 10 years.
 

crs1026

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I'm pretty skeptical about developers opining on development charges. (Which is not to say development charges and section 37 fees are used wisely by the City, but that's a different matter.) It's impossible to know what their asking price would be if development charges were reduced.... would they pass on the full savings to buyers? I suspect not. So their arguments are a bit conflicted.

If the inclusionary zoning provisions ensure a fair allocation of housing mix to affordable housing, I'm all for it. But that alone does not guarantee adequate supply. We will only absorb the 700,000 if we build more housing. That's why we need incentives for infill. We should not rush to become a city of towers alone.

The severed-lot strategy is interesting because it creates incentives for the average homeowner to take action. By severing, the homeowner retains space for their own residence, and extracts equity through the sale of the severed lot. That's helpful to those who view their home as their retirement savings.

Especially close to transit, a single family home that's occupying space that could be triplexed might deserve a higher tax assessment than the current structure is assessed at. If you can build 5,000 square feet, and keep it all to yourself, you pay a tax premium.

- Paul
 

EddyMCD

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I mean, the article literally says this in the second paragraph...
View attachment 358246

Anyway, I think this is the really interesting point...

View attachment 358248

...but developers will definitely say it's not true (and that other jurisdictions provide more incentives) even though you'd think, at least at a macro scale, it does indeed somehow balance out...
(It's worth noting that developers make these same arguments about how they hate to pass on the costs to homeowners with Development Charges or any other external costs, but for a project that is viable, you'd think, again, the cost does balance out and they can't, say, charge $1.2M for a house the market values at $1M just because the DCs went up.
I think that argument is very clearly not true. Sure in any individual development, the price a developer is charging has probably already been maximized, so they cant raise the prices more.

But if IZ is removing 10% of the sellable units from that development, then theoretically 10% of the buyers who couldn't purchase a unit (because 10% of the units went to IZ) now remain in the buyer pool. They will likely seeks other options, such as a different precon unit or a resale condo. That demand will not disappear unless the # of IZ units in a development are added on top of the sellable GFA the developers were previously planning for. And wherever that demand ends up it will put upward pressure on those prices.
 

Undead

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^Yes, IZ should be implemented only if devs are allowed more units to offset the IZ units. Otherwise, it's sort of robbing Peter to pay Paul. And yes, reasonable incentives should be implemented to encourage SFH lot splitting and infill. Moreover, this isn't mutually exclusive to granting devs more density in places where it's merited.
 

allengeorge

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Assuming The City of Toronto takes a similar percentage of GGH growth as in 2019, that will be about 80,000 new residents in the City.
I’m fairly sure the province’s projections for Toronto are off, but I think that 2019 was an outlier. Also, Toronto has a pretty large yearly outflow that has only accelerated given the high price of housing and work changes. My take is that the city’s population 2022 onwards will increase in the 30k/yr range.
 

Northern Light

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I’m fairly sure the province’s projections for Toronto are off, but I think that 2019 was an outlier. Also, Toronto has a pretty large yearly outflow that has only accelerated given the high price of housing and work changes. My take is that the city’s population 2022 onwards will increase in the 30k/yr range.

The Census data, will be an interesting starting point for refined data.

I concur that 700,000 net is unlikely over the next 10 years, though I think probably perfectly sound on a 'gross' basis.

The pandemic year (2020) itself will be anomalous, so we'll need to see things settle a bit.

Nonetheless, I think the City is pacing for far greater than the provincial numbers indicate.
 

TRONto

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I was thinking about this. Considering that there are height limits set by the city (some more stringent than others), I would expect IZ to result in less homes being built as returns are reduced. Using the new height limits in Corktown as the example, if you are limited to 20 stories (I didn't check), and you can only profit from 92% of units, the ROI is reduced and less projects would go ahead. We've seen plenty of projects shut down recently so the margin isn't necessarily huge. Does it make sense that you might expect an increase in prices due to a reduction in supply due to the required ROI to build?
 

TJ O'Pootertoot

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I was thinking about this. Considering that there are height limits set by the city (some more stringent than others), I would expect IZ to result in less homes being built as returns are reduced. Using the new height limits in Corktown as the example, if you are limited to 20 stories (I didn't check), and you can only profit from 92% of units, the ROI is reduced and less projects would go ahead.

Indeed, this is the thing. But one must bear in mind that "limits" don't really exist.
So if the zoning says (to use your example) that there's a 20 storey max, the developer will go and say, "I'll give you your IZ units but give me 3 more storeys to put them in."

And if staff nix it, then they will indeed say their development no longer makes financial sense and, thanks staff, now you get 0 units because the project won't be built etc.
 

Northern Light

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I think we need to put this requirement in the context of the Toronto's market's on-going price increases of 10% ++ per year.
Of course, we're going to reach a breaking point, and it seems odd in some respects that we haven't yet. (arguably we have when it comes to more moderate income households, but I digress)

Based on experience in other 'hot' markets, I don't expect IZ will be be a make or break on most projects here.
If the market does crash at some point, a whole lot of projects will be under water for a lot of reasons other than IZ.
But I don't expect IZ will be the tipping point for very many.
 

crs1026

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Indeed, this is the thing. But one must bear in mind that "limits" don't really exist.
So if the zoning says (to use your example) that there's a 20 storey max, the developer will go and say, "I'll give you your IZ units but give me 3 more storeys to put them in."

And if staff nix it, then they will indeed say their development no longer makes financial sense and, thanks staff, now you get 0 units because the project won't be built etc.

And somebody else will see an opportunity to build something more acceptable somewhere else and the needed units will be built in some other form of housing, particularly if cancelled projects leads Council to come to its senses and grapple with the yellow belt.

I can’t argue against the statement that IZ will shave the profit margin on a tower of fixed height. I just think that the concerns are a bit tower-builder-centric.

If the solution to Toronto’s future is an even greater proliferation of towers, I am definitely moving elsewhere.

- Paul
 

ConformistsWake

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Has anyone taken a detailed look at the assumption that land values will decrease as a result of this policy to ensure that the financials stay viable for developers. I have read the City's peer review study of the original NBLC report, but I am still not sure if this assumption will turn out to be accurate. Developers and some land economists don't seem to think it will. I worry that even if land values do turn out to decrease like the City says that it will take a period of at least a few years of uncertainty with the market pricing of land, which in turn hurt supply at a time when it is definitely needed.

In short, anyone educated on the subject of land economics have a take on how this portion of the policy will play out?
 

allengeorge

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I can’t argue against the statement that IZ will shave the profit margin on a tower of fixed height. I just think that the concerns are a bit tower-builder-centric.

If the solution to Toronto’s future is an even greater proliferation of towers, I am definitely moving elsewhere.
Unfortunately the city is the author of this condition. By restricting density to avenues, listing large swaths of main streets “heritage”, maintaining SFH-only zones, placing planning rules that limit the viability of midrise or missing-middle housing - it’s no surprise that what we see in the GTA is tall-and-sprawl.
 

Towered

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Trashing from what angle? That it's not needed, or that it's not going far enough?

Something to the effect of ruing established neighbourhoods I think...I only started paying attention for the last 15 seconds or so because I couldn't believe what I was hearing.
 

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