Second_in_pie
Senior Member
See my post that it was originally replying to.
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- Thread starter waterloowarrior
- Start date
pilinha
New Member
The builders are making incredible money at what they're charging per square foot and could charge less. If they did, people would consider purchasing a 3 bedroom unit for example. For pete's sake, they're buying pie-in-the-sky!! I can't believe that it costs that much more to build in the air than it does to build a house! Why is it that a 1200 square foot 3 bedroom house in the air costs $650,000 and a beautiful 3 bedroom Victorian house on actual land in Queen West can be purchased for $650,000? Example: Queen West.
I reckon part of the problem is that too many investors have purchased smaller units and are hanging on to them.
Bottom line: investors and builders are making out like bandits. In the end, someone will pay for this error and it will be us.
pilinha
New Member
We all live under rules and restrictions. The builders have way too much power in the cities. In my opinion an easy way around this is for the city to put restrictions on the type of units they're building.
Just like the city restricted builders from where they build, they should now dictate how they build. In other words: if you want to build that unit in ABC area, it has to be 50% 2-bdrm units, 25% 3-bdrm units and the rest 1 bdrm or bachelor.
Watch how quickly the price of a 3 bedroom unit comes down when builders have no choice but to sell these. Thing is, they'll still make a sick profit!
waterloowarrior
Senior Member
construction costs
http://www.markham.ca/markham/ccbs/...90623/Hemson Housing Stock Analysis App A.pdf
btw those per square foot numbers are gross/buildable area (above ground), not saleable area (just the units), which is important when looking at condo buildings... IIRC the guideline is that net saleable area = about 85% of gross floor area.
http://www.markham.ca/markham/ccbs/...90623/Hemson Housing Stock Analysis App A.pdf
btw those per square foot numbers are gross/buildable area (above ground), not saleable area (just the units), which is important when looking at condo buildings... IIRC the guideline is that net saleable area = about 85% of gross floor area.
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Mike in TO
Senior Member
Pilinha, you obviously have little knowledge of the economics behind development or what the actual expenses vs revenues are. There isn't a lot of wiggle room for prices to come down (if there was we would have seen more price declines in Q1-09 & Q2-09 as builders tried to deal with significant unsold inventory issues when sales dried up) and if the city had the power to mandate specifically what supply would have to come onto the market ignoring demand patterns that would more likely result in higher prices as carrying costs and risks increased, furthermore fewer projects would be brought forward due economic viability issues (therefore reducing overall supply & competition).
Municipalities have pushed the province for planning tools to mandate unit mix and mandate that a certain percentage of units be sold at below market rates (inclusionary zoning). However both these policies would result in the balance of market units increasing in prices as those home buyers would in effect be subsidizing the below market units or larger units that don’t typically sell well. Overall this would increase the average costs of condos for the vast majority of Torontonians. While it's no secret that some developers are making half decent profits (others are making half decent loses - it's a risky business), the margins aren't high enough to absorb these additional costs and they just get passed onto the end user.
Also as far as economic viability goes, financial institutions have specific policies with respect to 'net proceeds' that are required as conditions for financing. These requirements have been enhanced through the credit crunch over the past year and as many of you know there are a number of condos that have pre-sold 75%+ of their inventory that haven't gained financing (or were delayed due to financing issues). There are a variety of issues contributing to this - but one key issue is that for many financial institutions the loan is perceived as being too risky.... if your assumptions that all these projects were as you put it "making sick profits" - the banks would be falling over themselves to provide financing... well they aren't.
Sorry - I hadn't read all the posts leading up to Pilinha's post and I felt compelled to correct the false assumptions he/she had posted.
Municipalities have pushed the province for planning tools to mandate unit mix and mandate that a certain percentage of units be sold at below market rates (inclusionary zoning). However both these policies would result in the balance of market units increasing in prices as those home buyers would in effect be subsidizing the below market units or larger units that don’t typically sell well. Overall this would increase the average costs of condos for the vast majority of Torontonians. While it's no secret that some developers are making half decent profits (others are making half decent loses - it's a risky business), the margins aren't high enough to absorb these additional costs and they just get passed onto the end user.
Also as far as economic viability goes, financial institutions have specific policies with respect to 'net proceeds' that are required as conditions for financing. These requirements have been enhanced through the credit crunch over the past year and as many of you know there are a number of condos that have pre-sold 75%+ of their inventory that haven't gained financing (or were delayed due to financing issues). There are a variety of issues contributing to this - but one key issue is that for many financial institutions the loan is perceived as being too risky.... if your assumptions that all these projects were as you put it "making sick profits" - the banks would be falling over themselves to provide financing... well they aren't.
Sorry - I hadn't read all the posts leading up to Pilinha's post and I felt compelled to correct the false assumptions he/she had posted.
MuchoGrande
New Member
Well said Mike in TO. There seems to be an impression out there that developers just rake in profit without considering the large risks that are taken on and the fact that many projects never see dime one (just take a look at the massive losses to the US builders).
matix
New Member
with all due respect, i don't think Pilinha has a real understanding of the industry.
class is in session. Student (Pilinha) meet teacher (Mike in TO)
class is in session. Student (Pilinha) meet teacher (Mike in TO)
pilinha
New Member
I find many of your architects, developers, property investors and real estate agents on this website to be very clique and you guys like to insult people. The word you like to call people is 'troll'. Often times you just laugh off people's opinions and gang up on them.
Back to my argument:
First, I don't believe that developers are paying huge land prices that they claim. Compared to what? They're buliding 500 units on something the size of a parking lot. If condo building isn't profitable, why is there a huge line up of applications at City Hall to build condos/lofts?
I would love to see G&M do an article on what are the real costs of building in GTA. The current prices in most of GTA is $450-$500/sq.ft so you do the math. Who's lying?
Back to my argument:
First, I don't believe that developers are paying huge land prices that they claim. Compared to what? They're buliding 500 units on something the size of a parking lot. If condo building isn't profitable, why is there a huge line up of applications at City Hall to build condos/lofts?
I would love to see G&M do an article on what are the real costs of building in GTA. The current prices in most of GTA is $450-$500/sq.ft so you do the math. Who's lying?
pilinha
New Member
The concept of inclusionary zoning rings a bell. Is the Daniels project in Regent Park an example of this?
As for profits, my builder did some pretty sneaky things to ensure they made good on our building. I won't get into details, but the developer is Diamante. Don't trust these guys.
As for profits, my builder did some pretty sneaky things to ensure they made good on our building. I won't get into details, but the developer is Diamante. Don't trust these guys.
AlvinofDiaspar
Moderator
From the Star:
Markham plan could contain sprawl
Developers frustrated by a Markham initiative to freeze town farmland, create denser housing
Published On Sat Jan 09 2010
A groundbreaking plan to freeze Markham's expansion onto prime farmland could voluntarily take the fast-growing suburban powerhouse where no GTA municipality has dared go: upward but not outward.
Several councillors are pushing for a permanent "food belt" within the town's borders that would be preserved for agriculture until at least 2031. This is land politicians and developers have typically considered ripe for development.
Markham already has one of the most ambitious sprawl-fighting plans in the GTA, and this experiment is being watched closely by other municipalities.
Supporters say dramatic action such as the food belt proposal, along with "thoughtful" intensification along major corridors, is needed to curb growth, limit traffic congestion and create housing density that can support public transit. That message was brought home this week with a report showing how quickly congestion on GTA highways is worsening.
The proposal is a huge boost to the burgeoning local-food movement. Advocates say that if these lands are preserved, traditional farms and new farms that support the multicultural food needs of the region can and will thrive.
Others, however, wonder whether Markham's plans for intensification, particularly along Highway 7 and Yonge St., will catch fire in a real estate marketplace traditionally focused on low-density, single-unit homes.
"This is the most important decision that council is going to make in the next 50 to 100 years," says Markham Councillor Erin Shapero, who along with fellow Councillor Valerie Burke co-authored the local food belt plan.
"It's a completely different way of thinking," says Burke. "We are at the crossroads. We have to get this right. We can't continue to sprawl. It's unsustainable when you think of climate change, peak oil and local food security. We have to get this right."
Markham is already pushing for 60 per cent of future growth to come through intensification – a figure that could now go even higher. But the food belt plan takes the town in a different direction from other GTA municipalities.
Growth communities in the GTA such as Milton, Vaughan, Pickering and Whitby, in formulating their plans for the next 20-plus years, intend to urbanize significant amounts of potentially developable green space outside their official "urban boundary."
Markham, on the other hand, is debating preserving the entire area developers dub the "white belt" – buffer lands, still zoned agricultural or rural, that lie between the provincially protected Greenbelt and the current edges of the urban area.
The white belt often becomes a battle zone between environmentalists, who push to keep those areas as is, and developers who speculate on that land in hopes of building on it years down the road.
Markham's white belt represents 2,000 hectares, about 16 per cent of the town's total land area. When combined with the 24 per cent that is already part of the protected Greenbelt, the plan could leave 40 per cent of the municipality as "green" space.
In contrast, Brampton has already taken steps to zone the entire area within its limits for urbanization.
So has Oakville, although it mitigated the impact by preserving a master-planned network of environmentally sensitive green spaces in a large area that, for the time being, remains agricultural. A similar region-wide system was recently approved by Halton for areas surrounding Milton and Halton Hills.
Burke says expanding Markham would be the easy, business-as-usual approach. It would not, she adds, tackle the sprawl that for decades has negatively shaped the GTA.
Adds Shapero: "Insanity (as Einstein said) is doing the same thing over and over again and expecting different results . ... This kind of sprawl is insanity. There is another way."
The development industry is frustrated by what's seen as Markham's 11th-hour decision to change tack.
Town staff had earlier consulted extensively and recommended a plan that would have allowed outward growth on 1,000 hectares.
"Maybe this is a sign of a municipal election," speculates Stephen Dupuis, head of BILD, the Building Industry and Land Development Association, which represents the development industry. "Stuff like this tends to flourish closer to election. The anti-development forces get more vocal because being anti-development is always popular."
Dupuis warns that if the town doesn't expand, it will have no choice but to become a lot denser, because the provincial Places to Grow plan allocates population targets to regions – and in turn to towns and cities – and those targets must be met.
And residents often take a dim view of higher density building: "The province wants intensification, and generally the communities don't want it."
Burke and Shapero argue that poll after poll shows residents are passionate about preserving farmland.
Markham can't have its farmland and eat it, too.
They even float the idea that more established urban centres such as Toronto and Mississauga, which have the infrastructure already, should take on a greater share of growth through redevelopment and intensification.
Ironically, the food belt idea comes as the province appears to be losing its appetite for strong anti-sprawl measures – particularly putting a stop to "leapfrogging" development north of the Greenbelt.
A recent change of heart led to provincial support for two massive employment zones along Highway 400 in the Simcoe County towns of Innisfil and Bradford West Gwillimbury.
Critics warn such moves will lead to unsustainable sprawl all the way from the Holland Marsh to Barrie.
Mark Winfield, a professor of environmental studies at York University, says Markham planners and politicians have seen what's happened in such places as Mississauga and are repelled.
"They are also recognizing that the urban form they had developed was becoming a problem in terms of economic development, particularly traffic congestion due to extremely low-density housing" that makes public transit untenable, Winfield says.
Until last month, it looked like Markham was going to settle for modest urban boundary expansion. Then, council suddenly voted unanimously to consider the Shapero-Burke proposal. It also approved further consultation with residents and farmers this month.
Shapero and Burke are optimistic they have the momentum to push the idea through at the February council meeting.
----------------------------
PLANNER-SPEAK
A glossary of planner's terms:
Places to Grow: An ambitious provincial plan to curb sprawl that directs 40 per cent of all growth in southern Ontario regions to occur through intensification within the built boundary.
Municipal boundary: The "borders" of the municipality.
Built boundary: The limits of where buildings stood in 2006.
Urban boundary: Indicates all land, including agricultural land, zoned by municipalities for urban expansion.
White belt: Agricultural land that lies outside the urban boundary of a municipality, within its municipal boundary, and is meant to accommodate farming and future growth.
Greenbelt: An area of agricultural and environmentally sensitive land that is protected by provincial legislation.
Provincial mandate: Province must approve all boundary expansion requests put through by municipalities.
Nodes and corridors: Main roads and areas outside of existing neighbourhoods where intensification will occur.
http://www.thestar.com/news/gta/article/748485--markham-plan-could-contain-sprawl
AoD
Markham plan could contain sprawl
Developers frustrated by a Markham initiative to freeze town farmland, create denser housing
Published On Sat Jan 09 2010
A groundbreaking plan to freeze Markham's expansion onto prime farmland could voluntarily take the fast-growing suburban powerhouse where no GTA municipality has dared go: upward but not outward.
Several councillors are pushing for a permanent "food belt" within the town's borders that would be preserved for agriculture until at least 2031. This is land politicians and developers have typically considered ripe for development.
Markham already has one of the most ambitious sprawl-fighting plans in the GTA, and this experiment is being watched closely by other municipalities.
Supporters say dramatic action such as the food belt proposal, along with "thoughtful" intensification along major corridors, is needed to curb growth, limit traffic congestion and create housing density that can support public transit. That message was brought home this week with a report showing how quickly congestion on GTA highways is worsening.
The proposal is a huge boost to the burgeoning local-food movement. Advocates say that if these lands are preserved, traditional farms and new farms that support the multicultural food needs of the region can and will thrive.
Others, however, wonder whether Markham's plans for intensification, particularly along Highway 7 and Yonge St., will catch fire in a real estate marketplace traditionally focused on low-density, single-unit homes.
"This is the most important decision that council is going to make in the next 50 to 100 years," says Markham Councillor Erin Shapero, who along with fellow Councillor Valerie Burke co-authored the local food belt plan.
"It's a completely different way of thinking," says Burke. "We are at the crossroads. We have to get this right. We can't continue to sprawl. It's unsustainable when you think of climate change, peak oil and local food security. We have to get this right."
Markham is already pushing for 60 per cent of future growth to come through intensification – a figure that could now go even higher. But the food belt plan takes the town in a different direction from other GTA municipalities.
Growth communities in the GTA such as Milton, Vaughan, Pickering and Whitby, in formulating their plans for the next 20-plus years, intend to urbanize significant amounts of potentially developable green space outside their official "urban boundary."
Markham, on the other hand, is debating preserving the entire area developers dub the "white belt" – buffer lands, still zoned agricultural or rural, that lie between the provincially protected Greenbelt and the current edges of the urban area.
The white belt often becomes a battle zone between environmentalists, who push to keep those areas as is, and developers who speculate on that land in hopes of building on it years down the road.
Markham's white belt represents 2,000 hectares, about 16 per cent of the town's total land area. When combined with the 24 per cent that is already part of the protected Greenbelt, the plan could leave 40 per cent of the municipality as "green" space.
In contrast, Brampton has already taken steps to zone the entire area within its limits for urbanization.
So has Oakville, although it mitigated the impact by preserving a master-planned network of environmentally sensitive green spaces in a large area that, for the time being, remains agricultural. A similar region-wide system was recently approved by Halton for areas surrounding Milton and Halton Hills.
Burke says expanding Markham would be the easy, business-as-usual approach. It would not, she adds, tackle the sprawl that for decades has negatively shaped the GTA.
Adds Shapero: "Insanity (as Einstein said) is doing the same thing over and over again and expecting different results . ... This kind of sprawl is insanity. There is another way."
The development industry is frustrated by what's seen as Markham's 11th-hour decision to change tack.
Town staff had earlier consulted extensively and recommended a plan that would have allowed outward growth on 1,000 hectares.
"Maybe this is a sign of a municipal election," speculates Stephen Dupuis, head of BILD, the Building Industry and Land Development Association, which represents the development industry. "Stuff like this tends to flourish closer to election. The anti-development forces get more vocal because being anti-development is always popular."
Dupuis warns that if the town doesn't expand, it will have no choice but to become a lot denser, because the provincial Places to Grow plan allocates population targets to regions – and in turn to towns and cities – and those targets must be met.
And residents often take a dim view of higher density building: "The province wants intensification, and generally the communities don't want it."
Burke and Shapero argue that poll after poll shows residents are passionate about preserving farmland.
Markham can't have its farmland and eat it, too.
They even float the idea that more established urban centres such as Toronto and Mississauga, which have the infrastructure already, should take on a greater share of growth through redevelopment and intensification.
Ironically, the food belt idea comes as the province appears to be losing its appetite for strong anti-sprawl measures – particularly putting a stop to "leapfrogging" development north of the Greenbelt.
A recent change of heart led to provincial support for two massive employment zones along Highway 400 in the Simcoe County towns of Innisfil and Bradford West Gwillimbury.
Critics warn such moves will lead to unsustainable sprawl all the way from the Holland Marsh to Barrie.
Mark Winfield, a professor of environmental studies at York University, says Markham planners and politicians have seen what's happened in such places as Mississauga and are repelled.
"They are also recognizing that the urban form they had developed was becoming a problem in terms of economic development, particularly traffic congestion due to extremely low-density housing" that makes public transit untenable, Winfield says.
Until last month, it looked like Markham was going to settle for modest urban boundary expansion. Then, council suddenly voted unanimously to consider the Shapero-Burke proposal. It also approved further consultation with residents and farmers this month.
Shapero and Burke are optimistic they have the momentum to push the idea through at the February council meeting.
----------------------------
PLANNER-SPEAK
A glossary of planner's terms:
Places to Grow: An ambitious provincial plan to curb sprawl that directs 40 per cent of all growth in southern Ontario regions to occur through intensification within the built boundary.
Municipal boundary: The "borders" of the municipality.
Built boundary: The limits of where buildings stood in 2006.
Urban boundary: Indicates all land, including agricultural land, zoned by municipalities for urban expansion.
White belt: Agricultural land that lies outside the urban boundary of a municipality, within its municipal boundary, and is meant to accommodate farming and future growth.
Greenbelt: An area of agricultural and environmentally sensitive land that is protected by provincial legislation.
Provincial mandate: Province must approve all boundary expansion requests put through by municipalities.
Nodes and corridors: Main roads and areas outside of existing neighbourhoods where intensification will occur.
http://www.thestar.com/news/gta/article/748485--markham-plan-could-contain-sprawl
AoD
lead82
Senior Member
Markham seems like the most progressive council we have in the GTA. Their downtown plan is fairly dense and now this. Mind you they still have a long way to go to reduce car dependency, but they are taking the right steps to curb more sprawl and improve transit.
Mike in TO
Senior Member
Pilinha, I didn't mean to come off as condescending - that wasn't my intent.
Anyways - land sale price transactions are available from various different publications, so it's not top secret stuff, so I don't see why you'd suggest someone is lying. Secondly there's obviously profit to be made, but it's also a highly risky business and there are a lot of public benefits from the business (and concerns from various angles as well). Costs for building vary by project and can be split up in different ways depending on your perspective. Typically hard construction costs (materials + labour) make up about 45%-50% of a project pro-forma.
Regent Park is not an example of inclusionary zoning. Municipalities in Ontario do not have that zoning tool at their disposal. TCHC (City of Toronto essentially) owned the land and brought in private sector partners to develop a mixed-use / mixed-income community.
This is probably the wrong thread for this discussion given 'sprawl' topic.
doady
Senior Member
Hardly. Markham is the only municipality in the GTA that is opposed to social housing.
adma
Superstar
It's maybe the most inherently genteel council--enough to wrap itself in the DuanyPlaterZyberk cloth more than any other.
But by and large, the "progressivism" is more an Erin Shapero thing--she might be the most underrated municipal pol in the GTA...
But by and large, the "progressivism" is more an Erin Shapero thing--she might be the most underrated municipal pol in the GTA...
wyliepoon
Senior Member
Markham has a very long way towards creating that urban "utopia" that its politicians are dreaming about today.
One problem with Makham has to do with transit dependency. Not only does Markham have to shake off its dependency on cars, something that most suburbanites consider a right and unlikely to give up, it also has to shake off its dependency on its current transit setup, with north-south routes almost entirely dependent on TTC buses, strong emphasis on Viva and not much else, and its skeleton schedules. I think the first step towards transit dependency is to increase bus frequencies along major thoroughfares to a level similar to neighbouring Scarborough or North York, which have similar demographics to Markham but have much higher bus ridership. If TTC is unable to provide that service level, then YRT/Viva should provide their own vehicles to meet that service level, and running express inside Toronto to feed into the TTC rapid transit system.
Another problem is where the intensification is going to go. If Markham freezes its current development boundary for the next 20 years, will it be able to promote intensification in a healthy way for the next two decades? Downtown Markham is currently under construction, and Langstaff is in the works. After that maybe Buttonville Airport will be shut down and redeveloped. What's next? I can see the office parks between 404 and Warden, Steeles and Hwy 7 being redeveloped and intensified, and an unlikely scenario would see suburban homes demolished to make way for denser developments, North York-style. However, both can potentially result in Markham residents and businesses revolting against intensification and going NIMBY and pro-sprawl. The pro-intensification elements in Markham need to tread very carefully to prevent this.