The number of active condo listings skyrocketed by 70 per cent, hitting a record high of 10,688 for any month
This recent data underscores a paradox in urban planning and the disconnect between developers and the market. A survey by the Toronto firm Devron Developments revealed that nearly half (47 per cent) of Greater Toronto Area (GTA) residents view condos as a viable long-term housing solution, and more than half (53 per cent) of current condo owners open to purchasing a larger unit for extended living. Despite this apparent readiness for larger living spaces, the developers continue to flood the market with smaller units.
Pouyan Safapour, president of Devron, explained that the disconnect between developers and the “end-users” — those who eventually live in the completed units — begins at the pre-construction level.
“There’s this misconception that it is hard to design and sell to the end user, and if we’re not designing and selling to the end user, who appreciates and cares about features and sizes of the suites, we’re going to be selling to investors,” Safapour said. “Investors want something that is smaller and easy to transact, and so we developers fall prey to this way of thinking.”
Safapour also noted that, in an effort to keep construction costs low, developers predominantly build smaller units, which exacerbates the shortage of family-friendly homes. It’s an approach also rooted in misconception, he believes.
“There’s a business case showing that a building with less units by way of having larger suites, on average, actually costs less to build because there are less kitchens, less washrooms, and much less development charges,” Safapour said.
He explained that a typical 40-storey building in downtown Toronto could save upwards of $20 million in construction costs by building larger suites, around 1,100 square feet each.
Safapour and his team are currently bringing multi-room, family-friendly suites to market through their 39-storey project, 101 Spadina, located at the intersection of Spadina Ave. and Adelaide St. in downtown Toronto. Still, the broader industry is lagging behind.
In 2020, the City of Toronto released guidelines aimed at addressing the shortage of family-friendly sized condos, encouraging developments to include at least 25 per cent large units, with 10 per cent being three-bedroom and 15 per cent two-bedroom units. Despite these efforts, developers are failing to meet the targets, further exacerbating the housing shortage for families.
Matti Siemiatycki, a professor of urban planning at the University of Toronto, said the city could be doing more on their end to encourage and support family-centric residential building in Toronto.
“The City, within its own purview, can be investing in the public places and amenities and making sure that those investments are being timed in such a way that they’re available earlier in the completion process,” Siemiatycki said.
He recalls Toronto’s renowned condo neighbourhood, CityPlace, situated between Bathurst Street and Spadina Avenue just north of the Gardiner Expressway, where “a whole generation grew up before there was a local school and a rec centre.”
Safapour believes that for the first time in a long time, the wants and needs of end-users in the condo market aren’t being buried by inflated investor demands.
“What’s happening right now is quite healthy, because it’s become a buyer’s market and the consumers’ preferences are actually being seen,” Safapour said, “and they’re saying, ‘We don’t just want small units.”