The term “urban sprawl” defines the grey, wandering expanse of commercial properties, strip malls, and suburbia that stretches endlessly from the heart of significant urban centres. The words have long been associated with environmental degradation, aesthetic and cultural emptiness, and urban planners’ bad dreams. In the Greater Toronto Area and surrounding Golden Horseshoe – Canada’s most populous region – creeping sprawl has consumed thousands of acres of prime farmland, raising widespread concern. As David Suzuki put it in a 2013 Toronto Star editorial: “continued sprawl threatens the health and well-being of our communities and the ecosystems that sustain us.”
In 2005, the Government of Ontario instituted the Places to Grow Act, a massive, multi-year program that “supports economic prosperity, protects the environment and helps communities achieve a high quality of life across the province,” according to official provincial literature. By creating a 7,300 square kilometre green belt around the Golden Horseshoe and implementing strict limitations to development outside existing municipal boundaries, the Ontario government sought to curtail unrestricted suburban expansion. In the past decade, Places to Grow has redefined the GTA housing market, and contributed to a steep rise in condo ownership and Toronto condo rentals.
In terms of pricing, the Canadian real estate market is divided into two categories: Toronto and Vancouver; and the rest. The price of a single family home in Vancouver is more than double the national average, and Toronto doesn’t lag far behind. In both cases, a primary pricing factor is land availability. Out west, the Pacific Ocean and Rocky Mountains restrict Vancouver’s ability to grow outwards, while Toronto is bounded to the south by Lake Ontario and to the north by the Places to Grow-instituted greenbelt.
“It’s essentially a grow up not out approach to the region’s future,” said RealNet Canada president George Carras in an article from the Business News Network. “If housing requirements over the next 20 years call for another 2.4 million people to move here, the kind of housing you’ll have is driven by the kind of housing you can create. You can expect more high-density, less low-density, and the price behaviour is going to vary between those two because of supply and demand.”
At the end of 2014, just 7,200 single detached homes were under construction in the GTA, compared to 57,000 condo units. As a result, the February 2015 price gap between new houses and new condos reached $300,000. This is good news if you’re looking into Toronto condo rentals, but significantly less positive if you’re planning to purchase a house. Climbing prices have made traditional bedroom communities like Markham and Vaughan largely unaffordable to first time home-buyers, who are looking as far afield as Kitchener and Barrie in pursuit of a front yard.
The detached housing market is expected to be put under further pressure as millennials continue to age into prime candidates for suburban migration. http://rentingtoronto.com/ontarios-a-place-to-grow-act-turns-ten-what-does-the-policy-mean-for-the-toronto-condo-rentals-market/ http://rentingtoronto.com/ontarios-a-place-to-grow-act-turns-ten-what-does-the-policy-mean-for-the-toronto-condo-rentals-market/ http://rentingtoronto.com/ontarios-a-place-to-grow-act-turns-ten-what-does-the-policy-mean-for-the-toronto-condo-rentals-market/ http://rentingtoronto.com/ontarios-a-place-to-grow-act-turns-ten-what-does-the-policy-mean-for-the-toronto-condo-rentals-market/In the next ten years, the widespread availability of Toronto condo rentals (25,571 units were completed in the GTA in 2014) will push the housing price gap to an expected $750,000 to $800,000.
“Condos will continue to play an important role in the GTA property market for three reasons,” explained Carras in a Toronto Star op-ed. “They represent the primary source of affordable home ownership options; they’re still a key source of rental-unit supply; and they represent a proven property-investment opportunity.”
A Place to Grow might not bode well for developers or prospective buyers of detached family homes, but the environmental realities of unchecked urban expansion makes the legislation nothing less than a necessity. Although the act is up for review in 2016, its forward looking statement peers ahead to 2041, calling for “compact development that makes the best use of our limited land supply and offers a diversity of choices for living, working and enjoying culture.” As such, the Golden Horseshoe’s residential housing market is likely to become increasingly competitive and expensive for the foreseeable future, while Toronto condo rentals will continue to offer a convenient, affordable alternative to home ownership.
If you’re interested in Toronto condo rentals, or are seeking to rent out your condo unit, contact Renting Toronto today. Our company has been in the business of connecting great tenants with competent, qualified landlords since 1999.