The argument that the communities along Avenues should have to put up with any old unsuitable development foisted on them so the developers can make a profit versus face no development at all is ridiculous - a parking lot holds promise for the future, a community is condemned to put up with unsuitable buildings until they fall down. Where one developer saw potential, so too will others - hopefully ones with a different business model.
AmJ
Let's say this lot is worth somewhere in the ballpark of $20M (no idea how far off I am).
The way I see it, as a developer, you have one of three options (fair warning: gross oversimplification ahead):
1) Build tall: divide the cost per square foot into many modest, affordable units. This works out to around 200 units, which means the building is over 20 stories high.
Result: the City rejects your proposal because it doesn't fit the context or density limits of the neighbourhood. You take it to the OMB, which flips a coin and sides with the City. The mob of drooling, idiot NIMBYs holding torches and pitchforks outside your door heads to the local sports bar to celebrate.
2) Build luxury: divide the cost per square feet into a few large units starting at around $1.5M. Make the finishes really nice so that wealthy people will buy here.
Result: The bank loan officer laughs at you and rejects your proposal. Only urbandreamer would consider spending that much for a unit in this location, and he would rather be homeless than live in a condo.
3) Hold onto the property (which remains a parking lot) for a few decades until: a) the City changes their density requirements making proposal #1 possible, or b) someone strikes oil nearby so that option #2 becomes possible.
Result: You get sick of waiting and sell the land to another developer, who waits for the City to get on the provincial government's bad side (a weekly occurance) in some unrelated matter (say, TTC funding) and quickly takes option #1 to the OMB (only with a much uglier design) and wins. Congrats, you now have a very tall and ugly blight on what should be an important intersection and the neighbourhood never emerges from its 1970s time capsule. Occurence of rusty car parts on front lawns and porch sofas increases tenfold.