[EnviroTO]

They tend to show that for most of the US's history homes tended to cost essentially what it cost to build them and generally tracked inflation in appreciation. Around the 1970s though, construction costs as a portion of home prices began declining in urban areas like Boston or San Fran and housing costs began to accelerate much more quickly than inflation.

If there wasn't dual income families, interest rates were around 10%, mortgages were shorter in term, and a greater initial payment was required would housing prices be where they are today? The world of credit and spending tomorrows money today didn't exist back then. While zoning plays a part in rising home prices I think when comparing prices to the 70s there are greater factors at work.

 

[Whoaccio]

If there wasn't dual income families, interest rates were around 10%, mortgages were shorter in term, and a greater initial payment was required would housing prices be where they are today? The world of credit and spending tomorrows money today didn't exist back then. While zoning plays a part in rising home prices I think when comparing prices to the 70s there are greater factors at work.

In the long term housing supply has been found to be naturally very elastic. There are no serious technological challenges to adding more housing supply and the costs to do so are low. There are no naturally occurring land constraints in any North American city as density is not particularly expensive. So, while it is tempting to point to greater demand for housing (due to lower interest rates, higher family incomes, population growth, ect...) historically housing supply has expanded to meet this demand.

Since the 1970s, urban areas in Texas and Arizona have grown at a rate far greater than national averages, thereby increasing demand. Developers responded by adding new housing and keeping up with demand. As a result, areas like Houston have seen lower raises in housing costs than many cities with meager or stagnant population growth (i.e. Boston). Looking at Toronto, growing demand for housing has little bearing on actual housing values. The period 1950-70 (avg. annual growth of 4.5%) was by far the biggest growth spurt we have seen (ergo, the biggest jump in demand), but housing costs remained in line with inflation as we added more units. By contrast population was more or less stagnant from the 1970s onwards (avg. annual growth of .5%) but average hosing costs have skyrocketed. Even at the ward level, housing values don't have a clear link to population growth. Wards 19 and 30 had their populations shrink between '01 and '05, but had some of the highest average price increases.

 

[Northern Light]

Another factor

In addition to the various factors outlined in my earlier post as drivers of cost; their is demand (vs supply)

As has been noted by others.

What I thought I might contribute here is the notion that demand growth is not merely a function of full-time resident population growth.

The primary factor in demand growth in the City has been shrinking household size, while maintaining or modestly growing population.

I know when I was young that the majority of households were 3 or greater in size; and if you subtracted the grandparents/retirees, the average was close 4 (2 parents, 2 kids)

That number has fallen throughout my lifetime.

Most notably in the old City of Toronto, but across the board as well.

But population is rising, not declining.

As fewer people have children or have fewer children, we are seeing more cases of a housing unit housing only 1 person.

In my parents time, (leaving High School in the late 1950s) you would typically see young men and women leave home directly to go into a marital home with their new spouse. If they did live on their own briefly, it was usually with a room mate, or as a border.

It was often the case that you lived with your folks (paying rent) till you got married, though back then that was usually by your mid-20s at the latest.

The vast increase in single people, who all want their own housing before the age 25, means more demand.

I think its also worth noting the vast increase in foreign ownership of GTA homes/condos by non-residents either as an investment or as pied-a-terre.

This has increased both due to the rising real estate market (its self-feeding) and as Toronto has become a more international and desirable city.

These factors can be addressed in any number of ways, though whether one wants to address the demand side of the equation as opposed to supply is matter worthy of much consideration.

 

[waterloowarrior]

Another municipality comes up with a "Made in _________" Plan that goes against the Growth Plan (looks like the province will be acquiescing to these plans)

http://www.parisstaronline.com/ArticleDisplay.aspx?e=2205176

County: Density target could fundamentally alter lifestyle in Paris and St. George

Posted By Cate Breaugh

Posted 1 day ago

The county's planning committee is set to recommend that council send the province three recommendations establishing alternate density targets for the municipality.

Under new provincial growth legislation, Ontario set a density target for the county of 50 people and jobs per hectare for new development in Greenfield areas. They also said that 40 per cent of new growth should be through intensification in an effort to use land effectively and efficiently.

Under pressure from municipalities outside of the Greater Toronto Area like the County of Brant, they later agreed to review and permit alternative density targets for outer ring municipalities with no urban growth centres to ensure that targets are an appropriate fit for each municipality and its adjacent communities.

So the county developed a made-in-Brant plan for the density targets.

"We didn't just adopt figures. We took a detailed look," Director of Development Services David Johnston told planning committee members last week. The report examined development trends from the past and development plans in the works. Opportunities and constraints for Paris and St. George were also taken into account.

It found that overall density for developed residential areas in the county is about 12 people per hectare; density for new development in fully serviced areas where intensification should be is just over 29 people per hectare.

Johnston's report, co-authored with Chief Planning Official Mark Pomponi, said that increasing density from just over 29 people per hectare to 50 would fundamentally alter the lifestyle of the residents in Paris and St. George. It proposes that the county could instead increase density to 35 people per hectare by 2012 and go up to 40 people per hectare in the following ten years.

It also recommends that the county not be held to any specific intensification target but instead encourage intensification of the existing built-up area wherever possible. The report explains that there are significant limitations on opportunities for intensification because of lack of available sites and significant heritage areas that exist in the county.

"For us to agree to a percentage of intensification would be very difficult without encroaching on some of our historic areas or established homogeneous areas in Paris and St. George," said Johnston.

Johnston said that the county had great difficulty with employment numbers provided by the province because they were wrong. Ontario said that the numbers must be used anyway but the county doesn't want to include them in calculations for people per hectare. "The industrial/employment numbers don't work and we will ask them not to include those numbers," he said.

The Minister of Energy and Infrastructure must approve the numbers for reduced density in conjunction with the adoption of the county's new official plan.

"It would not be appropriate to agree to numbers that we can't meet. It's better to try and get the numbers that we can," Johnston told councillors. He later told The Paris Star that the density recommendations could be viewed by Ontario as somewhat audacious and said that he had no idea how long it would take the province to review them.

Article ID# 2205176

 

[kettal]

Looking at Toronto... population was more or less stagnant from the 1970s onwards

If you think GTA population has been stagnant since the 1970s you are clearly out of your mind.

 

[adma]

I think he was referring more to the 416 than to the GTA...

 

[kettal]

If that's the case, it's still dumb an argument. Municipal borders are just arbitrary lines on a map.

 

[denfromoakvillemilton]

http://www.thestar.com/news/gta/article/737933--planner-slams-simcoe-sprawl

A damning memo from Ontario's senior planner paints a stark picture of unsustainable sprawl, congestion and skyrocketing infrastructure costs if the province proceeds with a controversial strategy to urbanize large swaths of Simcoe County north of the Greenbelt.

The warning by Victor Doyle, a key architect of the groundbreaking Greenbelt plan, focuses on the combined impact of lightning-speed growth in Barrie and proposals to create two massive employment zones along pastoral Highway 400 in Bradford West Gwillimbury and Innisfil.

 

[T.O.Fanatic]

Has anyone seen the sprawl in Clarington (east of Oshawa) lately? Now that is approaching an exurb rather than a simple suburb....why anyone would want to live in such a lifeless place is beyond me, suburban living is the greatest lie of our generation.

 

[Tdot_one]

^ I despise it as well. Problem is, higher density housing tends to be quite expensive since a very small number of units are produced. Now if they were able to expand the apartment blocks common throughout Scarborough and what not, that would enhance accessibility. I think it's possible to double the number of units in say, the Kennedy-Eglinton area.

 

[SunriseChampion]

Has anyone seen the sprawl in Clarington (east of Oshawa) lately? Now that is approaching an exurb rather than a simple suburb....why anyone would want to live in such a lifeless place is beyond me, suburban living is the greatest lie of our generation.

90% of built-up Durham is a hellhole to live in as far as I'm concerned. Clarington just being the farthest-flung of the lot. If suburban living as seen in Durham is the future, you can shoot me now, please and thank you.

 

[scarberiankhatru]

90% of built-up Durham is a hellhole to live in as far as I'm concerned. Clarington just being the farthest-flung of the lot. If suburban living as seen in Durham is the future, you can shoot me now, please and thank you.

Next subdivision, Port Hope. Sprawl aboard!

Could be worse, though...East Gwillimbury still has plans to septuple in size to 150,000 unfortunate souls.

 

[pilinha]

If a single family home were built in the same place as a high rise or even a mid rise would be built, it would probably be much more expensive than in the suburbs, that's true. But if developers are encouraged to develop because they can sell $300 k closets, it doesn't work as well in the long run.

Basically, it caters to a specific group of people. Families and people with a lower income won't buy into it (or god forbid low-income families,) because the price for the high density home they want to live in is enormous when taking into account their needs and available money. Even if you want to fit a family of four into a one or two bedroom condo, that same family could instead buy a place twice the size in the suburbs for the same price. But if you give them a choice between high priced condos and a dwindling supply of houses, they're not going to choose the condos; they're just going to leave. They're either going to go to places where condo living is easier and less expensive, or to places where there are more available suburban houses.

That's why the government needs to find ways to make condos and high density living more affordable to the average person, and there's a number of ways they can do that. They could offer tax breaks to developers, so they can start lowering prices on condos. They could have funds to give to developers wishing to build high density, again giving them extra money to lower their prices.

Once they get enough people in condos, there's going to be a tipping point that'll be reached. There's going to be more demand for them, and they'll start being more than just the places where rich or single people live. Demand will rise, and developers will be able to build more and sell them at a lower price due to this increased demand. Due to this lower price, families will be able to live in high density more easily, and when that starts happening, the masses will be rolling in. You'll have places that (self-sustainably) are competitive in price with 'burb living, as well as having more convenient connections than living in the suburbs. Some people will chose the conventional suburban life, while others will chose the high-density life. This is what I love about all the City Centres, because they will not only be a place for areas to focus on, but they will keep a suburban feel while keeping the good characteristics of cities.

If you want to know why so many high-rises are being built downtown, it's because that's where there's a concentration of unmarried young people, or at least people without children and demanding little space. They have a niche downtown, where they can buy condos suiting their needs, and developers develop based on their needs. But what I see wrong is that developers are trying to carry that into the suburbs. For the most part, they advertise a grand bachelor lifestyle, with really little attempt to coerce families into living there. And that's all because it's currently how they make money. Don't get me wrong, I can live with downtown condos being relatively expensive (though the price could go down a bit.) What I'm worried about is the relatively suburban condos (especially those in NYCC, STC, MTC, RHC, VCC, ETC,) being expensive and only accommodating growth in this current niche that condos fill.

So... I think that made sense.

Excellent post, Second_in_pie.

I have a kid on the way soon and currently live in a 700 square foot condo. I would be happy to raise my child in a condo but there isn't anything available. I did find some apartment conversions in the outskirts of Toronto for a decent price, but they are in terrible shape and the buildings need a lot of work. Plus, they too are going up in price.

What is the city going to do to correct the current imbalance of tiny units being built? If they want density they have to squeeze the builders to build larger units. Currently the builders are making a killing off these tiny units.

 

[pilinha]

Has anyone seen the sprawl in Clarington (east of Oshawa) lately? Now that is approaching an exurb rather than a simple suburb....why anyone would want to live in such a lifeless place is beyond me, suburban living is the greatest lie of our generation.

My niece lives in Newcastle, I know it well. It's far, very far.

I can't do the surburban living thing. I'm trying to buy into it, I almost did once but backed out. The closest I got was buying a house in Scarborough in the late 90s. I wanted to end my life. Sorry, but what an awful place to take the transit. I don't want to talk about it, bad memories of crowded buses and long cold waits.

 

[Mike in TO]

What is the city going to do to correct the current imbalance of tiny units being built? If they want density they have to squeeze the builders to build larger units. Currently the builders are making a killing off these tiny units.

Builders would be happy to construct more larger units if there was a market for them. They build what they can sell. The problem with the larger family sized units is that they aren't affordable for most families - a 700 new square foot condo in the city core at $550psf is $385k... a three bedroom 1,200 square foot unit would be $660,000 - most families would take a ground oriented unit in Markham, Milton etc for a fraction of that price. It's an affordability and choice issue and there currently isn't the demand for a lot of larger condo units. Should that demand materialize you can be assured that the development industry will be happy to sell lots of 3 bedroom units.

As for profits, the size of the unit has nothing to do with the profit margin. Any given building has a certain amount of revenue producing square footage on a floor that is generally sold at nearly the same $psf. So it doesn't really matter if that is split between 4 units per floor or 8 units per floor - the revenue will be the same... actually fewer units per floor would result in lower costs for the developer as there are fewer kitchens, bathrooms and expensive fixtures to install, less HVAC and hallway circulation space required (which in turn increases the amount of revenue producing square footage that can be sold to consumers) fewer costs related to sales, development charges, after-sales service costs and administrative costs etc.

The reason for smaller units isn't profit margins, that's where the market is and builders provide supply to fill demand.