News   GLOBAL  |  Apr 02, 2020
A Message to Our Readers
 9.7K     0 
News   GLOBAL  |  Apr 01, 2020
EarthCam Time-Lapse Documents Rafael Viñoly-Designed New Stanford Hospital Construction
 41K     0 
News   GLOBAL  |  Apr 01, 2020
Resort Town
 5.5K     0 

I ran across this posting courtesy of an Urban Planner friend of mine. The posting is by Jonathon Diamond of Well Grounded Real Estate. The posting speaks to the costs and investments required for both rental and condo housing and why in regard to the development of new supplies of rental housing in Toronto, the developers "Can't make the numbers work". Interesting reading and although not specifically about zoning issues, would/could/is impacting the outlook for taking advantage of these changes, and the post does touch on the issue of zoning. Read for yourself below or source the original at https://www.linkedin.com/in/jonathan-diamond-7682326b/?originalSubdomain=ca

Condo Vs. Apartment

There's a massive deficit of purpose built rental apartments in Toronto. The main reason is that developers "can't make the numbers work". We hear this all the time. So what does this mean? In a previous post I attempted to compare and contrast the economics of condo and purpose built rental to show how they differ. The present post is a detailed follow up.

In collaboration with Oakbank Capital Group, we (Well Grounded Real Estate) modelled out a representative development project as a purpose built rental and as a condo. To do so, we kept all variables the same where reasonably applicable, e.g., construction costs, construction durations, land costs etc. and so the only differences were the unique economic features between purpose built rental and condo.

These models are presented in the figures below. The two figures on the top row show the cumulative sum of all capital inflows and outflows over a 37 month construction schedule and the two figures on the bottom row show a breakdown of the total project costs & capital sources and the allocation of capital in these projects.

These figures show why purpose built rental is so challenging, with the primary inhibitor being the massive equity requirements, or the inverse being the low debt service coverage.

These are different models with two different realities. The purpose of this post is to expand on the "numbers don't work" to show what that really means. In this way, policy can be angled to better afford apartment production, especially now when Toronto suffers from such a deficit in rental housing. A few suggestions: defer HST until disposition, reduce development charges, planing and zoning reform to permit more efficient built forms such as eliminating angular planes and setbacks and updating fire code, and permitting density in lower density areas. Lastly, we need to innovate more efficient and better models for building that are iterative, eg productization and offsite construction.

We hope you find this interesting!

CC Gabriel Diamond

1684270097959
 
@ADRM , @allengeorge, @innsertnamehere, @ProjectEnd and @HousingNowTO will likely take particular interest in the report to the next Planning and Housing Ctte linked below.

Its the new more flexible standard (draft) for angular plane on midrise sites.

Report:


Standards:


These are examples of what may be permissible in the new standards (as you can imagine there are details and caveats)

1685024303837.png


1685024324517.png

1685024358203.png


From the report:

1685024440601.png


1685024472878.png



There's far too much text to just copy/paste everything so I'll put this bit, and then say, follow the links for the rest:

1685024550024.png

1685024566370.png
 
wow... What a turnaround from staff in just such an insane number of ways.

Staff have long contended that "market feasibility / building costs have no bearing on planning" as if city planning is completely disconnected from financials somehow. Even just the report acknowledging that removing angular planes will reduce building costs is a huge step forward on that front.

This paragraph is also pretty notable:

There may be opportunities where an increased building setback from the rear property line and provision of fewer or no step-backs is appropriate. This option should be considered on a site-by-site basis and informed by pedestrian level wind testing (Figures 5 & 6)
Click to expand...

This represents a significant step away from staff treating the guidelines as a hard policy document which must be met no matter what, and moves closer to acknowledging that they are *guidelines* and that in some cases a different design could work.

In general this is a huge step forward and is generally much closer to what I would consider to be reasonable transition policies.

This one "small" change should instantly improve the feasibility of most avenues sites for development drastically. I expect to see a lot more midrise applications moving forward, especially now with parking regulations gone.. I could see a lot of 8-10 storey midrise applications with stacker parkng accessed off the rear lane and no underground.

Honestly I would probably take it a bit further and just require a single 2.5m step back above the 6th storey and be done with it.. but that's me.
 
Undead said:
Would it make sense to also loosen the 750 sq.m. floorplate area requirement?
Click to expand...

Its already a 'guideline' and planning has allowed buildings with floor plates a fair bit larger.

Its just that the onus is on the proponent to 'justify' the exception and show that the purpose of the 750m2 (access to sunlight/limited shadows etc.) is being reasonably served by the design choices made.

I think it would be fair to say planning has made exceptions tough to get at times, excessively so perhaps; but I would also say, relatively few developers have come to planning with compelling cases, its more often simply that
they would like it that way or its the only way that their site works for them.

If you come to the table understanding that what the City would like to hear is 'Why this works for everyone else', then you're much more likely to get a positive reception.
 
Undead said:
Would it make sense to also loosen the 750 sq.m. floorplate area requirement?
Click to expand...
I don't think the 750 sq.m. floorplate area requirement applies to these Mid-Rise Buildings which the City caps at 11-Storeys...
 
HousingNowTO said:
I don't think the 750 sq.m. floorplate area requirement applies to these Mid-Rise Buildings which the City caps at 11-Storeys...
Click to expand...

It doesn't.

But this is a general zoning reform thread, and I took the question in that vein.
 
I went to the mayoral housing debate yesterday, and nobody has any new plans. Everybody just wants to do more of the mix of what is currently being done. Some want to cut red tape (which is being done, if not enough), some want to do more city-owned housing (not my preference, and it's been done for decades, though not much recently) and Mark Saunders just wants to be a "better leader". Lots of talk of rent supplements, with no thought about where the people carrying the supplements will actually find a place to live.

But there is a consensus that we need to make it more permissive to build housing, which will help no matter what they do.
 
evandyk said:
I went to the mayoral housing debate yesterday, and nobody has any new plans. Everybody just wants to do more of the mix of what is currently being done. Some want to cut red tape (which is being done, if not enough), some want to do more city-owned housing (not my preference, and it's been done for decades, though not much recently) and Mark Saunders just wants to be a "better leader". Lots of talk of rent supplements, with no thought about where the people carrying the supplements will actually find a place to live.

But there is a consensus that we need to make it more permissive to build housing, which will help no matter what they do.
Click to expand...

I applaud you for attending the debate; though I don't agree w/your characterization of Matlow's proposal (more City-built housing).

To be clear, he is not proposing the old TCHC model; but rather the Vienna model (mixed-income housing with deeply affordable units included, where the market rents subsidize the below market rents, and more affordable units than the Housing Now plans, because the City would attempt non-profit operation, rather than for-profit operation, and the City can borrow more cheaply than private builders).

His plans, in terms of scale aren't sufficient, but are limited the resources the City has.

As compared to the status quo, its still an improvement.
 
The city has always been relatively flexible on the 750sm floor plate - reasonable enough I’ve never seen it as a big issue. Huge floor plates often create terrible units anyway.

Where I would like the city to change their thinking is allowing more rectangular towers again - they always ask for more square floor plates which create much worse unit layouts. A 20mx37.5m tower creates excellent floor plans and is what should really be encouraged.
 
A bunch of them also just threw out "rent supplements" as some sort of solution, as if there are apartments for people to live in if you give them 800 or 1000 a month as a rent supplement. They all know better, but say it anyways.
 
evandyk said:
A bunch of them also just threw out "rent supplements" as some sort of solution, as if there are apartments for people to live in if you give them 800 or 1000 a month as a rent supplement. They all know better, but say it anyways.
Click to expand...
Well none of them can truly relate to the struggle of the average citizen.
 
You must log in or register to post here.

Back
Top