The Greater Toronto Area draws many prospective home buyers and real estate investors for a number of reasons — economic opportunities, access to post-secondary education and cultural offerings, to name a few. Desire to live in the GTA has been a major driving force behind new residential development in the region, and there’s more demand for housing coming.
With heightened national immigration targets set to continue into 2023 and more families forming across Ontario, coupled with the flexibility of remote working and other changes influenced by the COVID-19 pandemic, areas in and around the GTA are likely to continue growing.
Serena Quaglia, vice-president of strategy at TCS Marketing Systems, tells us more about what areas of the GTA are seeing interest from builders and what communities we’re likely to see expand in the near future.
When it comes to sourcing communities for potential development, what features attract new home builders to specific regions or help them identify opportunity? What demographic, economic and geographic factors go into deciding where to build housing?
Land development is not like buying a new car where developers point and say, “I like those features, I want that.” The complex challenge for new home builders is availability and cost of developable land.
I worked for a legendary developer who used to say, “God isn’t making more land.” The Greater Toronto Area is constrained by Lake Ontario to the south and conservation areas to the north and east. God isn’t making more vital wetlands and biodiverse ecosystems that keep humans, animals, fish, birds, trees, water and air healthy either.
There are many considerations to factor in, such as the cost of land coupled with the expense of servicing the land as well as supporting pipes, roads, telecom, new schools. There’s water treatment and waste capacity limits. Builders can build new homes but do municipalities have enough infrastructure in place to manage the increase in sewage? This is coupled with urban design guidelines, like height restrictions, which are all considerations.
For land that is fully-serviced, the challenge is the cost. During COVID-19, the speed at which the cost of construction materials skyrocketed was like something out of a science fiction novel.
The challenge will be delivering affordability when the price of a 2×4 plank has gone from $1.76 to $9 (reportedly in some markets) in what felt like overnight.
Are there any particular GTA cities or communities that are exploding right now in terms of development and are seeing interest from builders? Are there any areas that you think will see more attention from developers in the near future?
GTA communities that are exploding right now can be found in the east such as in Whitby and Oshawa where there is developable land, great infrastructure, efficient transit corridors and proximity to cottage country. There are also areas in the west like Kitchener, and in the south, Welland.
Regarding future development, TCS Marketing Systems is working with a visionary developer in North Bay who is building the first environmentally-sustainable, mass timber Passive House community in Ontario on Lake Nipissing. We believe North Bay — Ontario’s best kept secret — is going to pop in 2022!
When it comes to new development areas in GTA, what pre-construction projects come to mind that are driving growth in these communities? What amenities, features and conveniences do they tend to offer?
Fusion Homes’ work in downtown Guelph with The Copper Club at The Metalworks immediately comes to mind in that the site literally fuses with the best the city has to offer, such as its walk-score, proximity to shops, restaurants, the city theatre, the downtown trail, the Sleeman Centre and more.
On a much-larger scale (about 177 acres) the revitalization of Mississauga’s waterfront at Lakeview Village — developed and built by Greenpark Group, Branthaven, CCI Development Group of Companies, TACC Construction Ltd. and Argo Development Corp. — is said to have a “range of housing options, space for education and office, an Innovation District, an extensive parks system and a network of trails, pathways and direct access to local transit,” all of which are very desirable.
Back in the earlier days of the pandemic, there was a lot of talk about the Urban Exodus as city dwellers moved outwards to more suburban areas. In light of this trend, has this prompted more developers to seek out building opportunities in the outskirts of the GTA? How has population growth and movement impacted developer decisions over the last 18 months?
It should be noted that land development does not turn on a dime. Financing land acquisition deals coupled with regional and municipal development approvals takes years to come to fruition.
There may have been an “urban exodus,” but it had an immediate effect on the resale market. The new construction industry was waiting for lumber, windows and soffits to arrive in Ontario that were stuck in shipping containers held up by quarantine measures south of the border.
That said, all our new construction sites located to the east and north of the city sold quickly at peak COVID.
Going forward, developers will continue to try to do the best they can to acquire and build-out projects to meet increased demand in Toronto and across the GTA, where economically feasible.
According to new research by the Smart Prosperity Institute, Ontario needs to build one million new homes in the next ten years to keep up with population growth and family formation. Where could we expect these new homes to be built? How could an extra one million homes change the dynamics of the GTA as a whole?
There is already a disconnect between demand, supply, hard costs, approval processes, Canadian winters limiting the number of days builders can pour concrete, the availability of trades and cranes, construction timelines, affordability and consumer expectations. So, delivering 100,000 homes a year (times ten) would be an amazing feat.
However, being the eternal optimist that I am, if this is an actual goal, the reality is that these one million homes will be in vertical buildings, not single-detached, low-rise homes.
I’m not an urban planner who can speak to how regional dynamics might be impacted, such as traffic, transit, school class sizes, access to hospital beds and so on. But I can say in Toronto and in municipalities across Ontario, there are exceptional urban strategists, municipal planners, developers, architects, engineers, designers, consultants and affordability advocates working together every day on figuring out how to best solve the feasibility equation of demand, supply, cost, location, infrastructure and labour.
The work-from-home movement is here to stay in some shape or form. With employees now able to work remotely and not necessarily within proximity to the office, how do think this will drive demand for new housing in all parts of the GTA? Are we looking at a future where smaller Toronto cities could emerge, or housing density could increase in existing regions?
Yes, both simultaneously, especially if one million homes in ten years in Ontario is collectively mandated by all three levels of government.
