THE BLOG

The Inevitable Rise Of High-Density Low-Rise Living

04/04/2017 05:42 EDT | Updated 04/04/2017 05:47 EDT
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An apartment building stands in the suburb of Rhodes in Sydney, Australia, on Sunday, Jan. 8, 2017. Australian house values increased at the fastest pace in seven years in 2016, as record-low interest rates helped fuel demand for property despite warnings such price increases may be unsustainable. Photographer: Brendon Thorne/Bloomberg via Getty Images

By Lydia McNutt

For the doubters out there, Toronto's housing landscape is proof that Darwin's theory of evolution is, in fact, the real deal. As single-detached houses join the list of endangered species here in the 416, we're seeing the emergence of new forms of high-density housing, made to survive this storm of rising prices and dwindling supply, all by virtue of their very design.

What's behind the housing crisis?

Depends who you ask. Some cite population growth while others point the finger at overseas investors, NIMBYs or government policy. The latter, argues the home-building industry, has all but halted new single-detached development, straining existing supply and pushing prices ever higher.

The Building Industry and Land Development Association (BILD) reported just 1,001 new lowrise homes available for sale in builder inventories as of the end of February. This includes single-detached homes, semis and townhomes. Ten years ago that number was 17,304. BILD president and CEO Brian Tuckey called the scarcity of single-family lowrise homes "almost inconceivable."

On a national scale, the Canadian Home Builders' Association (CHBA) further identified a need for, and a lack of, high-density lowrise homes geared toward families. The CHBA calls this shortfall the "missing middle."

The CHBA report, The Housing Supply Deficit - Not Enough Homes for Families with Young Children, points to a significant and growing mismatch between housing demand and what home builders are able to supply, given planning and zoning patterns and the lack of available serviced land.

"CHBA's research shows that current patterns of urban development fail to address the needs of young families," says CHBA CEO Kevin Lee. "This is the 'missing middle' in our largest and fastest-growing communities."

The CHBA report carries with it a warning: if current trends continue, Canada will see a shortfall of 300,000 family-oriented homes in the next 10 years.

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(Photo: Lydia McNutt)

In the meantime, prices continue to rise. The average single-detached home in the GTA increased to $1,205,815 in February 2017, according to the Toronto Real Estate Board (TREB). And you can expect prices to continue their upward trajectory, with an expected increase of 10 to 16 per cent this year, TREB predicted in its Review and Outlook 2017. This is on top of the 17-per-cent price growth in 2016.

So, what can we do about it?

Again, it depends who you ask, but with no end to rising prices in sight, a necessary evolution is a likely necessity. And it's already happening.

According to one developer, stacked townhomes can alleviate the stress on the single-family market, for a number of reasons. Cost is certainly one of them.

"The fact that more units can be built and sold per acre allows all costs to be better distributed across a greater number of units," says Joseph Alberga, director of sales and marketing at Lindvest. The developer is currently offering stacked townhomes at Brownstones at Westown in Toronto, and Grand Cornell Brownstones in Markham.

Cost savings include wood-frame construction no need for expensive elevators, and omitting amenities like pools. "All contribute to keeping the unit sale price more affordable, not to mention significantly reducing the shared monthly condominium maintenance fees," Alberga says.

"Stacked townhomes provide a way to achieve greater density and still provide homebuyers with a housing style which very much feels close to the ground and still provides each homeowner with their own front door."

The rise of high-density lowrise

While alternate lowrise concepts are still relatively new to the GTA, these more practical, less costly ground-oriented homes have already caught on in Vancouver, says Bob de Wit, CEO of the Greater Vancouver Home Builders' Association. This city has been experiencing housing price pains for some time now, and could give Torontonians a window into what the future of lowrise living could look like.

"Laneway homes and stacked townhomes have been well accepted in Vancouver as a form of 'gentle density' as relative to higher density condominium housing forms. Laneway homes in particular have been very popular in the City of Vancouver proper, and now are beginning to roll out to the surrounding suburbs as land prices continue to climb. A great next step will be when cities begin to stratify and/or change tenure arrangements, so that homeowners can transfer ownership of laneway homes or carriage houses. That'll open up wholly new opportunities for families to gain access to certain neighbourhoods.

"The great thing about gentle densification is that it provides ground-oriented housing that is family-friendly for buyers who cannot afford a traditional single-family home," says de Wit. "For most purchasers, I would think, the price and locational advantages outweigh the party-wall issues."

Coming to a neighbourhood near you

Torontonians, high-density housing could be coming to a laneway near you. The University of Toronto recently announced that two laneway houses are in the works in the downtown Annex neighbourhood, with construction completion anticipated for fall of 2018. These units will be used as housing for grad students and visiting faculty, and if all goes according to plan, UofT could build up to 50 more.

For more essential real estate reading, visit YP NextHome.