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  #1  
Old Posted Oct 13, 2020, 4:45 PM
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Why Does Toronto Have *So Many* Proposed Buildings?

I get that the city is absolutely booming.. but 300+ proposals? Im just curious
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  #2  
Old Posted Oct 13, 2020, 4:51 PM
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Also have to look at the time of the proposal. 300 proposals doesn't = 300 u/c or completed future towers. Often in times of very favorable market conditions and demand, developers will pour in the investment or consideration. While it may be 300 proposals, think of it as 300 parcels or properties, like a flower pot, waiting for potential germination if the conditions are ripe.

Toronto has boomed tremendously over the last few years.

2000 to 2020: Built and/or u/c. All for 100m+ for the last 20 years.

For Toronto: 237!
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Old Posted Oct 13, 2020, 4:59 PM
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  #4  
Old Posted Oct 13, 2020, 5:32 PM
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The market had basically insatiable demand for high-rise, investor-oriented condo units for the past 10+ years, and giving the city's zoning guidelines, only a few select corridors where such buildings were allowed.

If you own a piece of land in one of those corridors, you'd be doing yourself a disservice by not taking it through a zoning exercise even if you have no intention of ever carrying the project through to completion. Putting together a quick proposal and going through the entitlement process could increase the value of your land by 5-10 times, and adds another proposal to the list.

So you have a bunch of projects that sell out quick and are quite profitable, which emboldens other developers to keep buying/assembling sites, and well as other more casual landowners to try and boost the value of their holdings.
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  #5  
Old Posted Oct 13, 2020, 6:35 PM
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1) Population growth and desire for urban living.

2) Lots of very cheap capital.

The second one is probably the bigger factor.
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  #6  
Old Posted Oct 13, 2020, 6:39 PM
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"Proposed" is not a thing. It's not a metric of any use.

Of course Toronto has a shitload of new towers, and will build shitloads more and I think the previous posts answer the "why".
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  #7  
Old Posted Oct 13, 2020, 6:41 PM
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Toronto has so many proposed buildings just to make dc_denizen jealous.
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  #8  
Old Posted Oct 13, 2020, 6:51 PM
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Quote:
Originally Posted by MolsonExport View Post
Toronto has so many proposed buildings just to make dc_denizen jealous.
Toronto has a shitton of proposals because it has a shitton of demand for highrises and the market is furfilling the demand
the more interesting question is why does Toronto have so much demand, i am sure others will answer that in this thread
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  #9  
Old Posted Oct 13, 2020, 8:40 PM
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Quote:
Originally Posted by MolsonExport View Post
Toronto has so many proposed buildings just to make dc_denizen jealous.
Very tempting answer! LOL

Not true.......but I award points nonetheless!
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  #10  
Old Posted Oct 13, 2020, 8:48 PM
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Quote:
Originally Posted by Nite View Post
Toronto has a shitton of proposals because it has a shitton of demand for highrises and the market is furfilling the demand
the more interesting question is why does Toronto have so much demand, i am sure others will answer that in this thread
trump.
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  #11  
Old Posted Oct 13, 2020, 8:50 PM
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Quote:
Originally Posted by jbermingham123 View Post
I get that the city is absolutely booming.. but 300+ proposals? Im just curious
You've received some good answers here.

I'll skip over the proposed-vs-construction bit, which has been tackled.

Instead I'll answer the demand side.


1) Immigration is everything, Toronto is adding in the range of 125,000 residents every year to the GTA; some years a bit more, rarely less. Those people need places to live, work etc. If, for argument's sake, those people represent 40,000 households, you need 40,000 new housing units just to keep pace.

Add to that, that we're really talking here about hirise/skyscraper projects here; as opposed to single family homes; and consider that Toronto's job growth in inordinately in its core, traffic/commutes are long, and there's a Greenbelt curtailing sprawl.

2) Temporary Foreign Workers are everything; if you are a highly-skilled worker, with a job lined up here, that pays at/above median pay in your sector, Canada have your paperwork ready in as little as 2 weeks to come here.

Those folks need a place to stay too.

3) As do vast numbers of foreign-students. Many of whom stay and get citizenship, as Canada allows students to stay after completing an education and gain Canadian years of work experience; which offers a path to citizenship.

They also need places to stay.

4) In addition to these factors, you have a society with among the highest rates of post-secondary attainment in the world (also fueled by the above noted foreign student growth) which in turn fuels many projects related to University expansion. (some of which show up here due to height).

5) Because employment growth in inordinately in the core area of Toronto, that growth is accommodated by new office towers. With a vacancy rate under 3% in Class A office space, more is on the way.

6)Both domestic and overseas investors also play a material role in buying up condos, many to rent, and some merely to hold.
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  #12  
Old Posted Oct 13, 2020, 8:52 PM
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There are cities in the US growing faster than Toronto, except the physical and cultural preference is for single-family homes. In Toronto, demand is met by apartments and condos.
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  #13  
Old Posted Oct 13, 2020, 9:00 PM
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It has so many proposed buildings because the vast majority will get built.

Pre-Post COVID, Toronto's population is booming resulting in huge amounts of condo/apt buildings. Also Toronto in the last 50 years has gone from a relative nobody to one of the world's biggest financial centres, a high-tech mecca, and a great worldwide reputation for it's livability and vitality resulting in a huge amount of needed office space.

Toronto also, except for the fast developing Waterfront, never had any gaps in it's urban development. The City has relatively little room for massive infill due to brown fields or dying manufacturing areas so there is no where to go but up. Canadians are also, by far, the most receptive Westerners to feel totally comfortable living in high rises which is why all of our cities are over represented in this regard.

In the downtown area, the condos are built because there is a continuous demand to live in Toronto because of the city's livability, incredible vitality, cosmopolitan make-up, and dizzying number of things to do 24/7/365. Toronto draws in all these people because it is Toronto.
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  #14  
Old Posted Oct 13, 2020, 9:05 PM
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Quote:
Originally Posted by C. View Post
There are cities in the US growing faster than Toronto, except the physical and cultural preference is for single-family homes. In Toronto, demand is met by apartments and condos.
Ummm.

https://dailyhive.com/toronto/toront...-north-america

Which City in the U.S. grew faster than Toronto in 2019?

Certainly, Dallas is a close second......
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  #15  
Old Posted Oct 13, 2020, 9:16 PM
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Population growth + Foreign investors + Low Interest Rates + Devaluation of Currency + Artificial Land Scarcity Mandates = Skyscrapers!
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  #16  
Old Posted Oct 13, 2020, 9:38 PM
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Quote:
Originally Posted by Nite View Post
Toronto has a shitton of proposals because it has a shitton of demand for highrises and the market is furfilling the demand
the more interesting question is why does Toronto have so much demand, i am sure others will answer that in this thread
It's been discussed countless times here but it's something that I like to theorize about so I'll indulge.

The crux of the thesis is that Toronto has very strong fundamentals that drive demand for actual living spaces close to downtown and close to our limited subway network (relative to our size). Multiple reasons for why Toronto has higher demand for central high-rise living compared to other North American cities:

- Attracts immigrants (and a huge number of students) from places where urban high-rise living is the norm.

- Highway congestion is terrible (you could definitely argue top 5 worst in Canada/U.S.) and moving 35 minutes outside the core doesn't solve affordability or commuting issues like it did in the 90's. Greenbelt capping adjacent sprawl, and terrible highway connectivity beyond the greenbelt severely limits options for exurban commuting.

- Toronto's catchment area for recent university grads is pretty massive. There's almost 400,000 students on the 401 corridor between London and Kingston. University enrolment has exploded over the last 20 years, and Toronto acts as the economic centre for this band of recent graduates.

- Combining the last two points, employers have become increasingly convinced that suburban office parks are not in their future plans. Downtown consolidations to attract young talent and be accessible to transit are becoming the norm. Office vacancy rates in Mississauga have ballooned to 15-20%, while downtown Toronto plummeted to sub 2%. As the jobs continue to consolidate, location becomes even more important for young renters.



Now there's other places where there's high demand for downtown living as well that don't seemingly build new monster crappy condos every other day. Why is there not a large pipeline of purpose-built rental buildings in the city? why is condo/strata ownership so common when renting is typically the norm in dense urban centres? This is the second part of the theory as to why the Toronto market behaves like a bonfire with gasoline thrown on it.

well-capitalized foreign (and some domestic) investors have basically taken on the burden of the rental market. To build a 500-unit rental tower, you need to have pretty deep pockets, good credit-worthiness to take on a lengthy mortgage, and a long-term investment horizon. REITS, private capital funds, institutional players like insurance companies, etc. typically dominate this market. It takes a decent amount of time to secure tenancies and you need to be careful about your total market exposure when you plan on owning these assets for 30+ years. Plopping out a massive rental tower every year is a good way to lose your shirt if the market dips.

Come 2008, the market is flooded with foreign capital from personal investors. I don't need to have the financial backing of a pension fund if I have 1,000 people lining up to pay cash for a condo unit that they plan to rent out. You can try and be a long-term rental landlord and make 8% over 20 years, or you could pre-sell an entire condo building in a week and effectively create hundreds of tiny independent landlords while making an 18% IRR over a two-year development timeline. No long-term exposure to the market, I can probably get away with ~20% equity up front when I securitize and borrow against my pre sales, and I'm on to the next project in three years. I don't really even give a shit about the quality of the building itself. I have my reputation as a developer, but no financial obligation if the windows fall off five years later. An apartment REIT at least has a vested interest in maintaining the quality of their asset during its life. Any way you slice it condo development is just a better business model if the demand is there. The demand has consistently been there, and so any formerly small-time developer can put in a rezoning application, set up a sales centre, and you have another proposal you see on your list there.

TL,DR: Toronto has lots of demand for living space in the core. The availability of private capital means that condo development reigns supreme and operates on greatly expedited timelines compared to a market better balanced with purpose-built rental. Low barriers to entry for condo development and generous rezoning practices (from a provincial body that often overrules local planning) is a recipe for lots of proposals.
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Last edited by suburbanite; Oct 13, 2020 at 9:48 PM.
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  #17  
Old Posted Oct 13, 2020, 10:14 PM
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From 2000 onward, Toronto's share of completed, and u/c projects during this period. Every other circle, 2000 to present time including u/c AND completed towers slated to end 202X.



463 towers, 14 floors or greater during this range in comparison to other Canadian cities. Toronto has been killing it!

Now... I tried a similar comparison, Toronto and NYC for 2000 onward for completions, and u/c, and the damn thing crashed or wont generate a chart. Too much activity!!!

So I'll just throw the figure as the state is just with the city itself and no other comparison (side-by-side), 577.

... for 2000 onward.

Toronto, the Canadian "City".
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  #18  
Old Posted Oct 13, 2020, 11:26 PM
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Global interest rates are near - nil , the rich worldwide are flush with cash , and Toronto aspires to be a kind of Dubai of North America , where rich third world elites stash their cash in a safe asset (housing ) supported by a cooperative and compliant government . Sort of like Miami a while back

Housing is a principal industry in Canada , and obeys very different fundamentals there than in most of the rest of the western world
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  #19  
Old Posted Oct 13, 2020, 11:40 PM
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Originally Posted by dc_denizen View Post
Global interest rates are near - nil , the rich worldwide are flush with cash , and Toronto aspires to be a kind of Dubai of North America , where rich third world elites stash their cash in a safe asset (housing ) supported by a cooperative and compliant government . Sort of like Miami a while back

Housing is a principal industry in Canada , and obeys very different fundamentals there than in most of the rest of the western world
"Aspires to"

Do you have any evidence that Toronto has created any policies, marketing or other strategies intended to attract wealthy foreigners into the housing market? Or that these policies have resulted in a high proportion of foreign-owned properties? If so what percentage is it?
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Old Posted Oct 13, 2020, 11:50 PM
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One reason that should be noted specifically for the growth in tall buildings, is that relative to the high level of demand (as mentioned due to both population growth and investment pressures) the amount of actual land available for development is quite small.

Here's the city's zoning map - it's a bit more complex than this at the local level, but essentially the yellow-coloured areas that make up the vast majority of the city's land area are zoned exclusively for low-density residential (mostly single-family, though in some areas small multi-family is permitted as well). Purple areas are industrial uses, with no residential permitted.

Larger multi-family development is largely limited to the orange, brown, and in some cases red zones. And given the scarcity of such land relative to demand for housing, land values are priced accordingly - thereby necessitating tall skyscrapers to in order to make a financially viable project on those sites. If higher density development were allowed as-of-right in the "yellow belt", we'd likely see fewer high-rise developments:


https://urbantoronto.ca/news/2020/03...ousing-toronto


Map of active residential projects, as of August 2019. The vast majority of growth is directed towards a relatively small proportion of the city's land area:


https://urbantoronto.ca/news/2019/08...rdable-housing
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