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Average vacancy nears all time low while rents rise faster
than inflation.
In 2018, growth in demand for purpose-built rental apartment
units outpaced the increase in supply across the country, causing
the vacancy rate to drop to 2.4%— down significantly from 3.0%
in 2017.
CMHC cites increased international migration, an increase in
youth employment, and an aging population as reasons for the
declining vacancy.
In addition, many millennials are choosing to rent over
purchasing a home.
“They like the flexibility to live wherever they want, to be able to
move and not worry about selling,” said Ben Meyers of Bullpen
Research & Consulting.
However, Matt Danison, CEO of Rentals.ca, said the new
mortgage stress test, higher interest rates and home prices have
dramatically increased the number of people looking for rental
accommodation this year.
“With near record-high immigration in Canada and record-low
unemployment, demand for housing is high, but flat or declining
resale house prices due to current and expected future credit
tightening has deterred many would-be first-time buyers from
entering the ownership market. That demand overflow is being
felt in the rental market, where very few Canadian markets are
offsetting demand with new rental supply,” added Danison.
Bob Dhillon, CEO of Mainstreet Equity, adds that rising interest
rates and the new federal mortgage stress test have made it more
difficult for prospective buyers to purchase homes, pushing them
into the rental market instead.
The average property listed on Rentals.ca in the first quarter of
2019 was offered for $1,869 per month, an increase of 4.3% from
Q4 2018. The median rental rate was $1,764 per month, which
represents a more significant jump of 6.9% quarter-over-quarter.
Per-square-foot rents for various housing types across Canada,
according to Ben Myers, are: $3.33 for condo units; $1.83 for
purpose-built rental units; $1.75 for basement apartments; $1.56
for single-family homes; and $1.34 for townhomes.
Average lease prices in purpose-built rental buildings completed
since 2005 in Toronto grew 17% to $3.09 per sq. ft. as higher-rent
properties were completed in the past year, Bloomberg reports.
According to Urbanation, the growth in condo rents rose a recordbreaking 9.3% in 2018 in the GTA. The average rental rate of a
condo in the GTA hit $2,310 in Q4. Average rents in the suburban
areas of the City of Toronto at $2,192 were 13% lower than in
Downtown Toronto ($2,520), Urbanation states.
Developers are finding that there is growing demand and big
opportunities in niche markets.
Co-living
Co-living is a type of housing where two or more unrelated people
live together. Each person signs their own lease for a private
bedroom and often bathroom within a residence and share
common living areas such as a family room, dining area, kitchen.
Typically, co-living includes fully furnished apartments, down to
bedding and kitchen utensils and may include such amenities as
housekeeping, laundry, Wi-Fi and planned social activities.
Co-living has become attractive, especially among young renters.
As cities become denser and more expensive, co-living addresses
some of the issues around urban living.
This type of housing is attracting big names in real estate and
big money.
WeWork opened two locations under the shared-living brand
WeLive in the United States. Its apartments in New York City range
from studios to four-bedroom units, and typically cost less than
similar buildings in the neighbourhood.
In March 2019, Common announced a US $100 M expansion in
southern California with Proper Development, an LA real estate
development company, making the two companies the largest
co-living operator and developer in Southern California. In 2017,
Common raised US $40 M of series C venture funding, led by
Norwest Venture Partners, a venture and growth equity investment
firm, according to the Wall Street Journal.
Medici Living Group raised US $300 M in January 2019, as part of
a joint venture with investment firm W5 Group, to develop 1,500
units across the US under its co-living brand, Quarters, according
to The Real Deal.
Ollie has raised US $15 M in financing from Aviva Investors
Real Estate Capital Global Co-Investment Fund, according
to TechCrunch.
Homeshare has raised US $5.7 M led by Lightspeed Venture
Partners in 2018, according to Axios.
Roam, which has raised US $3.4 M in seed funding, is poised
to open more locations this year in New York City and London.
It already has spaces operating in Miami, San Francisco
and Tokyo.
ALTA LIC, a high rise development located in Queens, NY, opened
in May 2018 with 466 apartments. Of those, Ollie is operating
169 as furnished co-living suites with a total of 422 bedrooms.
Rents range from US $1260 to $2200 per month. The cost of a
bedroom also includes wi-fi and weekly housekeeping services,
including bed linen, towels and toilet paper, along with shampoo
and hand soap.
According to Christopher Bledsoe, Co-Founder and CEO of Ollie,
the company managing the ALTA’s co-living apartments, these
co-living suites earn an average of 44% more income in rent per
sq. ft. than the conventional 297 luxury apartments at the 43-story
tower. The net operating income from these units is 30% more per
sq. ft., even with the extra cost of co-living amenities.
Student Housing
Once considered a niche subset of the rental housing sector,
purpose-built student housing has matured into an institutionally
acceptable asset class. An increase in college enrolment and a
lack of investment in on-campus housing have together created
a housing shortage for college students in many markets, writes
Paula Poskon, Founder, STOV Advisory Services. Developers
have been seeking to fill this with off-campus student housing.
The student housing sector has been attracting more interest
and capital. Over 1.5 M students are enrolled in Canadian postsecondary institutions and generate a huge demand for housing.
A recent report in the Economist revealed that student housing
attracted US $16 B worldwide investment in 2016, as sovereign
wealth funds increasingly target the sector.
Since 2016, CPPIB along with its partners, GIC and The Scion
Group LLC, have invested over US $40 B in student housing
properties in the US.
“We are 10 to 15 years behind those markets, even though
our student population is growing at a much higher rate fuelled
by both domestic enrolment and our increasing share of
international students.”
ASH REIT, which focuses on student housing, launched in July
2018. Since then, the private REIT has acquired seven properties
across Ontario containing more than 3,300 beds. Included in this
total is a four-building portfolio which was purchased at the end of
Q1 of this year.
Former professor Chris Galea, Founder and President of Micro
Boutique Living, has two apartment buildings in Wolfville and
Antigonish, with a third in Charlottetown under development.
The buildings offer fully-furnished units that are 300 sq.ft. in size
with a full kitchen and bathroom. Depending on the location, the
apartments start at about $800 per month for a school-year lease,
with a full-year lease starting at $695 per month.
Seniors Housing
An important factor in driving demand for facilities that cater to
seniors’ needs is the growth in the population aged 85 and older.
Canadians in this age group also show a strong tendency toward
collective dwellings, with 31% living in this type of housing in 2017,
according to the PwC Emerging Trends reports.
In its May 2019 regional reports for the asset class, CMHC
reported that the vacancy rate for seniors’ residences went up
over the past year in British Columbia, Nova Scotia, Quebec, and
Saskatchewan. Vacancy went down in Alberta, Manitoba, Ontario,
New Brunswick, Prince Edward Island, and Newfoundland.
In Ontario, the vacancy rate for standard spaces remained
relatively unchanged, dropping to 10.3% from 10.4%. The average
rent for a standard space increased by 3.9% to $3,759.
The vacancy rate for standard spaces in Quebec stood at 7.2% in
2019, compared to 6.9% last year. The average monthly rent for
standard spaces was $1,788.
The overall vacancy rate for independent living spaces in seniors’
residence across British Columbia increased for the first time
since 2012, from 3% in 2018 to 4.2% in 2019. Average rent for
independent living space in BC increased by 5.4% to $3,275
in 2019.
At the end of 2018, Revera has announced a JV with Edmontonbased ONE Properties to develop new retirement communities in
key Canadian urban markets.
The first project the two companies will build together is Clifton
Place, a 290-unit community in Edmonton with a range of agein-place options for independent living, assisted living and
memory care.
Ventas announced in June that it had acquired a Class A portfolio
of 31 purpose-built seniors housing communities and four inprogress developments in the Quebec market by investing through
an 85/15 percent equity partnership with Le Groupe Maurice.
The portfolio is valued at C$2.4 B, including construction in progress.
Over 1.6 M Canadian households are considered in “core housing
need,” meaning that people live in places that are too expensive
or unsuitable.
In November 2017, the federal government unveiled its
10-year, $40 B National Housing Strategy (NHS), which is being
administered by CMHC.
Part of the National Housing Strategy (NHS), the Rental
Construction Financing Initiative provides low-cost loans to
encourage the construction of rental housing, which is affordable
to middle-class Canadians across the country. The initiative has a
total of $3.75 B in loans available to encourage the construction of
more than 14,000 new rental housing units.
The federal government has promised to pour more funds into its
low-cost loan fund to support the construction of rental housing.
A top-up was announced in the 2019 budget which would amount
to $10 B over nine years.
Regions across Canada have begun to unveil their latest initiatives
aimed at boosting local affordable housing supplies.
The new plan has received the endorsement of both BILD
and REALPAC.
As part of its Housing Vancouver strategy, the city has
implemented the Moderate Income Rental Pilot Program as well
as Rental 100 strategies to help it reach its goal of creating 20,000
new units of market rental housing by 2027.
The Moderate Income Rental Housing Pilot Program encourages
development proposals for new buildings where:
• 100% of the residential floor area is secured rental housing
• At least 20% of the residential floor area is made available to
moderate-income households earning $30,000 to $80,000 per
year
The pilot program will select up to 20 proposals for submission of
rezoning applications between January 1, 2018 and July 1, 2019.
Developer incentives include increased density, development
charge waivers and expedited processing.
Rental 100 encourages projects where 100% of the residential
rental housing units are secured for 60 years or life of the building,
whichever is greater. Similar incentives are provided and also
include the relaxation of unit size to 320 sq. ft. (provided the
design and location meet the city’s liveability criteria).
The theory is that more market rental housing gives higher-earning
residents more options to choose from, lowering the pressure on
demand for lower-priced rental units.
Action Ottawa is the city’s primary program for increasing the
supply of low-income affordable housing in Ottawa. Action
Ottawa combines city incentives with funding from all three
levels of government to help private and non-profit developers
build new affordable rental housing for moderate and
low-income households.
Ottawa Community Housing acquired 933 Gladstone Avenue
along the O-Train corridor. The 7.4-acre site was bought from the
Canada Lands Corp. for $7 M in May 2017. The OHC is planning
a mixed-income community for the “Gladstone Village” made up of
subsidized housing and market-value housing.
Montreal will be tabling a bylaw in June requiring condo
developers to build a certain number of off-market units for every
new residential tower they build. In October of last year, the city
announced a plan to create 12,000 social and affordable housing
units on the island by 2021.
As part of the plan, the city would also pass a bylaw approving
a $50 M loan over 10 years to buy buildings or land that comes
up for sale in order to develop community and social housing.
Montreal is in the process of acquiring 3,000 housing units and
has started building 300 homes.
Edmonton is tackling the affordability by launching a ‘missing
middle’ infill design competition. The ‘missing middle’ refers to low
rise multi-unit housing which is the type of housing the city says
is essential to creating complete communities with a variety of
housing options for people at every stage of life and income level.
The city is soliciting proposals to design a multi-unit, mediumdensity, or ‘missing middle’, housing development on five City of
Edmonton owned parcels of land at the northeast corner of 112
Avenue and 106 Street in the Spruce Avenue neighbourhood.
The winning team will be given the opportunity to purchase the site
and build their winning design.
Developers are shortening the time period between unit sales
and construction start to minimize unforeseen construction
cost increases.
Real estate projects across Canada totalled $210 B in construction
costs last year, led by $87 B in 1,550 residential projects.
Approximately 210,000 new homes are expected for 2019, with an
additional $85 B in residential renovations projects in the pipeline.
Construction cost increases are projected to average 6% to 8% in
2019, according to BTY Group’s annual Market Intelligence Report.
A high-quality 2,000 sq. ft. detached house would cost up to
$500,000 in hard construction costs to build in Vancouver. In
Toronto, this house would cost $430,000 and in Ottawa, Calgary
or Edmonton, the cost would run around $360,000, according to
the Altus Group’s Canadian Construction Cost Guide 2019.
Construction costs have jumped 23.6% since 2004 in the US,
according to “What’s Up With Construction Costs?” a report by
BuildZoom Economist Issi Romem. The housing cost spike that
started in the mid-2000s at the tail end of the pre-Recession
building boom was initially caused by increases in material costs;
the continued rise is now mostly a factor of rising labour costs.
Romem notes that the key drivers of construction costs are still
“lots and local regulations,” the combination of high land prices
and restrictive land-use policy. But in especially expensive metros,
labour costs have also vastly accelerated the cost of construction.
In fact, a study commissioned by Altus concluded that rising
construction costs would be one of the biggest challenges facing
developers globally over the next 5 years.
Increasing construction costs are being felt most heavily in the
high-rise sector in Toronto, says Paul De Berardis, Director of
Building Science and Innovation for the Residential Construction
Council of Ontario (RESCON).
De Berardis points to the RLB Crane Index, which tracks the
number of cranes towering above 13 cities across North America.
The latest index counted more cranes in Toronto than in New York,
LA and Chicago combined. With a limited pool of skilled trades
and developers competing for both access to that labour as well
as materials — including cranes — to get projects underway,
contractors have been able to charge more and more.
“Everyone’s competing for these limited resources,”
De Berardis continues.
Indeed, a skilled labour shortage in Ontario in the past three
years has slowed the growth of construction companies,
prompting some to turn down work and others to decline to bid on
projects, according to the 2019 Contractor Survey, by the Ontario
Construction Secretariat. Of those surveryed, 59% said the
shortages led to significant increases in project costs.
Labour shortages are expected to worsen. In the next 10 years,
about 91,000 construction workers are expected to retire, 40,000
of whom are in the GTA, says Katherine Jacobs, Director of
Research at the Secretariat.
The recently removed US tariff on Canadian steel and aluminum
will provide some relief to costs, given that steel is a main
structural component of condos. However, HVAC costs are up
about 30% while rebar and glazing have jumped about 20% in the
past three years, reports Phil Pavitt, Director, BTY Group.
Niall Finnegan, co-founder of a cost consultancy company,
Finnegan Marshall Inc., says that rising soft costs are a big factor
in the highrise sector. Increases in city development charges,
land costs, school board levies and commissions have all
increased soft costs to about 75% of hard costs and all contribute
to higher sales prices.
According to BILD, government fees, taxes and charges have
been adding as much as 25% the cost of an average new home
in the region.
The growth of the Boomer and Millennial age groups across North
America is forcing landlords to pay closer attention to the demand
of these cohorts.
The millennial generation made up 22% of Canada’s population
and surpassed 37 million as of July 1, 2018.
The age group that now encompasses the boomer generation
makes up 27% of the population, compared with 18% in that age
group two decades ago.
According to Environics Analytics, millennial households account
for 19% of all households, approximately half the number of
households headed by baby boomers. However, over the next 10
years, as mortality shrinks the baby boom generation, the number
of households headed by millennials will start to exceed those
headed by baby boomers.
These two divergent generations are primary drivers of demand
in the apartment market. Millennials preferring the flexibility that
renting affords while boomers are downsizing and are choosing
the convenience of maintenance-free living.
“The American dream has been redefined and ... I think it comes in
that aspect of homeownership and the white picket fence ... I think
that white picket fence moving forward might be a Starbucks and a
gym,” Altus Group US Director of Research Chuck DiRocco said.
An increasing number of baby boomers are choosing renting over
buying because there are fewer financial strings attached and less
hassle related to property upkeep. Moreover, renting puts people
in prime locations, within walking distance to jobs, shops, and
entertainment, which would perhaps be hard to get in otherwise,
according to US rental search company RentCafé.
Community and neighbourhood amenities are the focus of the
latest trends. Having a recreational center on site and planned
activities to engage in with neighbours are some of the most
sought-after amenities for the Boomer age group. Living in a
neighbourhood that provides easy access to public transportation
or walkable communities that have grocery stores, restaurants,
and healthcare facilities within walking distance is high on the list
of demands.
While smart apartments are resonating with millennials, technology
is also appealing to older renters. In a recent US survey, 80%
of Boomers are interested in new technologies to reduce their
home expenses, such as smart thermostats or apps to control
appliances. 76% are interested in technologies to monitor their
health at home, such as sensors, alerts, or medication reminder
apps, Multifamily Executive reports.
Millennials are choosing to live in smaller units than boomers and
with smaller apartment units come larger common areas. Bisnow
reports that “having access to quality common areas and coworking spaces has become paramount for apartments built in the
metros millennials are flocking to.”
A recent survey of 1,000 US multifamily renters conducted by
lock manufacturer Schlage and Wakefield Research shows
that millennials are overwhelmingly willing to pay more for an
apartment equipped with automated or connected devices.
The survey indicated that millennials are even willing to
sacrifice other amenities, such as a parking space, to live in a
smart apartment.
Landlords are discovering that today’s renters are looking for a
community that offers more than a pool and a gym.
“As technology gets more advanced, so do amenities,” says
Caitlin Walter, Vice President of Research at the National
Multifamily Housing Council. “The old fitness center with treadmills
and weights isn’t going to cut it. Now, renters want a Peloton.”
Developers are cautioned to look at overarching trends and
determine how to apply them to their specific development.
Some landlords are turning to companies like Amenify to assist
them with providing amenities to the residents. Amenify is a
resident experience platform which provides a turnkey solution for
amenity services. Amenify handles all the work for services such
as pet care, fitness, cleaning, ride sharing and concierge support.
In March, Amenify raised US $2.7 M led by RET Ventures.
Older buildings are vying for tenants against brand new builds
and condos in Canada’s major cities.
Older apartment buildings are competing for tenants alongside
newly built apartments and condos. Landlords are finding ways
to reposition their buildings to stay competitive by adding high
demand amenities and by making cost-saving retrofits.
Building owners are upgrading their amenity packages to include
smart devices. The next generation of smart devices, such as
energy-efficient lighting controls and intelligent thermostats gives
tenants the ultimate control over their own environment. These
amenities can generate substantial efficiencies in energy use that
can help control operating costs while appealing to environmentally
conscious and tech-savvy tenants.
Redevelopment is also focused on creating collaborative group
space, like gathering and community space in common areas.
“Tenants are looking for gathering spaces and common areas that
promote interaction, such as dog runs, outdoor grills and eating
areas, and recreation spaces such as putting greens, nature
trails, and bocce-ball courts,” says Tim Lee, Principal at Olive
Hill Group. “It’s important to incorporate these spaces in modern
multifamily renovations.”
“We’ve started putting fitness centers into our older buildings,
because people really do expect it,” said Laurie Zucker, the Vice
Chair of Manhattan Skyline, which owns and manages several
thousand apartments. The conversion from oil to gas heating
freed up rooms that had housed mechanicals, enabling them to
repurpose the space.
Manhattan Skyline has also tweaked the offerings at West River
House on West End Avenue at 81st Street, a 1983 apartment
house where the “amenities floor” included three racquetball courts
and a fitness center. Both to address the changing demographics
of the building and to compete with new properties, two of
the racquetball courts were sacrificed to expand the workout
facility and to build a playroom for younger children, as well
as a multipurpose room with a Ping-Pong table for teenagers,
according to an article in the New York Times.
Mike Mulqueen, Lead, CDM Business Development (MURB) at
Toronto Hydro says that the most popular retrofit that apartment
buildings are undergoing is lighting upgrades which accounts for
70% of the projects that he sees.
More apartment owners are making mechanical replacements
and realizing significant savings. “Increasingly we’re starting to
look at some of the smaller motors in buildings such as fan coil
replacements,” said Mulqueen. “These are fractional horsepower
motors but collectively consume a lot of energy. There are new,
highly efficient Electronically Commutated Motors (ECM) in the
market now that for a small increase in cost can save between
30-40% of the energy consumed by these units.”
To improve the efficiency of older buildings, the tightening of the
building envelope during renovations is important in terms of
energy efficiency and cost savings. In both older mid- and highrise residential buildings, replacing conventional double-glazed
windows with triple-glazed units can improve various aspects
of the building envelope’s performance, reports John Losak,
Principal of Kasol Building Sciences Ltd.
At the Harvard Business Review, Dell and Intel co-sponsored a
piece that states “the rapid introduction of new IoT solutions allows
building operators to make their properties smarter without having
to undergo costly retrofits.”
Wi-Fi is being used to bring intelligent building systems to
older apartments. “We are looking more and more into wireless
technologies and putting infrastructure into the cloud as much
as possible for storage and data management,” said Anil Ahuja,
President of CCJM. “Wireless technologies are also the key to
making the built environment of ‘dumb buildings’ more smart
[because] we don’t have to open up the floors and the walls [to
update infrastructure].”
In response to huge demand, developers are building purposebuilt rentals at rates unseen in decades.
With 1,849 new rental units beginning occupancy since in the
first quarter of 2019, GTA rental completions have reached a 25
year high according to a report from Urbanation. A total of 42,841
purpose-built rental apartments were proposed for development
but had not yet started construction as of Q1 2019. The number
of purpose-built rentals under construction in Q1 2019 was 10,694.
As part of the Well development, RioCan and Woodbourne have
partnered to deliver more than 900 purpose-built rental suites
in three buildings. “The residential apartments we’re building
encompass a mix of one-, two- and much-needed three-bedroom
suites,” said Woodbourne president Jake Herman. “The state-ofthe-art amenity space will include a fitness centre and wonderful
outdoor living spaces.”
Two new market rental buildings have been proposed for the
site of Sunnybrook Plaza in Leaside. RioCan REIT has teamed
up with Concert Properties and has revised the original plan
and will include a 16 and 11 storey development containing a
total of 417 rental units. The buildings will contain retail and
office components.
In February, Zahlco Developments announced it had purchased
two Brantford properties for the development of a nine storey,
205 unit rental apartment with ground floor retail space and
adjacent townhomes. Brantford has one of the lowest vacancy
rates in Canada.
In October 2018, Habitations Trigone and its partner, Fonds
immobilier de solidarité FTQ, broke ground on a new rental
project, Viva-Cité Saint-Constant. Phase 1 will consist of 154
apartments and construction on Phase 2, which will consist of
174 units, will begin in the summer. The apartments are geared to
the over 55 age group and will feature many condo-like amenities.
Groupe Mach’s redevelopment of the CBC tower and the land
located west of the site is a 4.5 M sq. ft. mixed-use project that
will see the construction of approximately 15 new buildings. The
Quartier des Lumières will include more than 3,000 residential
units comprised of condos and rental apartments. Construction is
expected to begin in 2020.
Brivia Group plans to build Montreal’s tallest residential tower,
the $400 M, 61-storey 1 Phillips Square, as part of a phased
billion-dollar development in the city’s downtown. The first tower
will contain more than 500 units. Amenities include about 10,000
sq. ft. of common areas on the 50th floor, including an outdoor patio.
There will be lockers for Amazon-type parcels (some refrigerated), a
pool, water features, spa, gym, yoga studio, lounge and juice bar.
In Ottawa, this fall, Timberbank will deliver three midrise rental
buildings containing almost 350 units as part of its Heron Gate
multi-billion dollar development. The development, once fully built
out, will contain approximately 5,500 units in 57 buildings. Up to
20% of the units will be deemed affordable.
At the beginning of the year, Colliers reported that in Edmonton
alone, there were seven residential projects underway, which were
slated to add approximately 1,540 units to the downtown market.
An additional seven residential projects with a total of 3,200 units
were in preliminary stages. CMHC estimates that 38% of condos
are investor-owned in Edmonton.
Battistella Developments is building a 19-storey tower in Calgary’s
Beltline. The 177 condos are being marketed to the investor
market. The building “Nude” sold 20 condos in the first month of
marketing. It is slated for completion in 2021.
“We are bullish on the Calgary rental market,” Chris Pollen,
Battistella’s Director of Sales and Marketing, told Western Investor
in November. He explained that the rental vacancy rate in the
Beltline is closer to 3% and that recent new concrete rental towers
in the zone are fully tenanted. Unlike BC, Alberta has no foreignbuyer tax, no speculation tax and no rent controls.
Early this year, GWL Realty Advisors broke ground on a 21-storey
market rental tower at 1500 Robson Street in Vancouver’s West
End. One-third of the building will be made up of 2 & 3 bedroom
units suitable for families.
The building has both indoor and outdoor amenities such as
fitness, yoga and lounge rooms as well as a rooftop patio with
an outdoor fireplace, seating area and dining space being
incorporated into the building’s design. The penthouse floor of the
tower has been set aside as a common area for all tenants, and
the building will be pet and cyclist friendly.
Major transit investment in Canada’s largest cities is presenting
new opportunities for developers.
Ottawa’s new LRT is set to open sometime in 2019 and
development has started to sprout up around the new lines.
Trinity Group Inc. is building a group of three towers ranging
in height from 50 to 59 storeys near the planned Bayview light
rail station.
Developments in Lebreton Flats and in Little Italy will also benefit
from the new light rail transit system.
“With the graduation of transit service to rail, you’re seeing a new
generation of buildings that are a notch up in sophistication,” says
Alain Miguelez, a Project Manager for Community Planning with
the City of Ottawa. An example is the newly built 45 storey Icon
development located at the Carling Station.
In Toronto, thousands of residential units are in various stages
of development along the Eglinton Crosstown, which is still
under construction.
Contributing to this number will be the redevelopment of
Celestica’s 60.5-acre campus at Don Mills. Aspen Ridge acquired
the site for $347 M earlier this year.
The master plan for the site includes 18 condominium buildings,
30 townhome buildings, 300,000 sq. ft. of office space and retail,
more than five acres of parks and playgrounds, and a large
community centre complete with two hockey rinks, a basketball
court and a full gym.
Brookfield, InterRent REIT and CLV Group have entered into a
JV to develop three sites totalling 8.5 acres at the Burlington GO
station. The three parcels are located on Fairview Street and were
acquired for approximately $65 M.
The multi-phase mixed-use development features access to the
GO train and the 403/QEW highways.
A significant mixed-use redevelopment is coming to a 5.1-acre
property at the southwest corner of No. 3 Road and Alderbridge
Way in Richmond BC – across the street from the Canada Line’s
Lansdowne Station. The ‘Atmosphere’ complex will contain seven
buildings totalling 932,000 sq. ft., including 650,000 sq. ft. of
residential space, with a mix of market, rental, and affordable
housing options. Over 600 residential units will be built.
Owners Westbank and QuadReal are planning a multi-phased
redevelopment of Oakridge Centre located at West 41 Street and
Cambie. The 29-acre redevelopment will include a renovated
Oakridge Centre Shopping mall and once complete will contain
a million sq. ft. of retail space, 500,000 sq. ft. of office and
approximately 2,600 homes. It is located by Canada Line’s
Oakridge - 41st Avenue Station, which is getting major upgrades.
Cadillac Fairview will be developing a new suburban downtown
area around its CF Fairview Pointe-Claire mall in Pointe-Claire,
on Montreal’s West Island.
The project will include a mix of condos, townhomes, hotels and
other uses on land surrounding CF Fairview Pointe-Claire. A new
REM LRT station will service the site.
In Edmonton, the City has partnered with Brookfield to prepare
a 7.5-acre former lumberyard for sale to developers. The site is
located along the northeastern light rail line.
Despite slow approval processes, new government initiatives appear
to be aiding in the construction of new apartment buildings.
A new white paper published by the Ontario Building
Officials Association reports that current approval processes
hamper the development of affordable housing in Ontario.
The paper estimates that
“Premier Ford announced $1 B in funding for affordable housing
last month, and the Prime Minister committed another $1.3 B
before that, but cumbersome processes are going to delay making
that housing available to the people who so desperately need it,”
says OBOA President, Matt Farrell. “We applaud this commitment
to funding and are encouraged by current efforts to review the
development process for efficiencies that can save government,
businesses and residents, time and money.”
As part of its National Housing Strategy, the federal government
envisions 42,500 units of new rental supply will be built Canadawide for tenants with modest to low incomes, leveraging the Rental
Construction Financing Initiative. Almost two years since the
program was launched, only five projects encompassing 500 units
have been approved under the program launched in 2017, but the
2019 budget reports “more than 50 projects have been prioritized to
receive a loan.”
A massive LPAT appeals backlog is holding up the construction of as
many as 28,000 housing units in Toronto, according to the Toronto
Region Board of Trade.
Despite these delays, Urbanation reports that 10,694 apartments
units were under construction at the end of the first quarter.
In addition, Greenwin Inc. and Choice Properties REIT completed
the acquisition of the 0.9-acre parcel of land located at 26 Grenville
St. and 27 Grosvenor St. in downtown Toronto, in April of this year.
The two-tower development will contain 700 purpose-built rental
units, 30% of which will be maintained as affordable rental housing
for a period of 40 years.
The purchasers acquired the property as part of the Provincial
Affordable Housing Lands Program, established to leverage
provincial land assets for development of market and affordable
housing across Ontario.
In Vancouver, the Moderate Income Rental Housing Pilot Program
aimed to approve up to 20 projects by its closing date of July 1. So
far, applications have included proposals for 14-storey high-rises on
East Hastings St. and five-storey low-rise projects in Kitsilano and at
Renfrew and Broadway, Postmedia reported in May. In total, 7 of the
20 proposals have begun the rezoning process.
Under this program, PCI Developments has proposed two buildings
on East Hastings that would produce 212 rental apartments, 43 of
which would be rented at non-market rental rates.
In Coquitlam alone, there are three new non-market rental projects
are about to break ground, with help from provincial funds, money
from the city’s affordable housing reserve and incentives, such as
reduced parking and higher density.
In Year One of the legalization of pot, balancing the rights of
tenants has become a challenge for some landlords.
The Smoke Free Ontario Act says that you may not smoke in
elevators, stairwells, hallways, parking garages, laundry facilities,
lobbies, exercise areas and party or entertainment rooms. This
applies to both condos and apartment buildings.
The Act restricts cannabis smoking to wherever tobacco smoking
is allowed, and this can be further limited by municipalities or
property owners. Landlords can also add terms to new lease
agreements prohibiting cannabis use in rental units. However,
landlords generally cannot change the terms of existing leases.
Apartment owners and condo corporations are free to set
restrictions in rental agreements, leases and bylaws, including
making individual apartment units, wings, or entire buildings
smoke-free.
Condos must amend their by-laws if they want to create nonsmoking buildings.
Apartment buildings can include provisions in their leases to
restrict smoking, however, it is not entirely clear whether this will
be upheld by the Landlord and Tenant Board, Shira Kalfa of Kalfa
Law writes.
Whether a tenant can have a disability-related right to grow
medical cannabis in a rental unit is still an unanswered question.
Home cultivation is a concern for many landlords because the
best conditions for cannabis growth include warm temperatures,
extensive lighting and high humidity, thus creating the potential for
property damage or fire risks.
The right to consume medical cannabis is protected by provincial
human rights legislation, but this may not be the case for
cannabis growth.
An amendment to the Residential Tenancy Act, Bill 30, which was
introduced by the BC government in April 2018 now grants landlords
the right to retroactively prohibit both smoking and growing cannabis
in all residential units. This means landlords can update current
leases to ensure their “smoke-free” designation isn’t just limited to
tobacco. Tenancies with agreements that do not address the smoking
of tobacco will also be considered cannabis-friendly.
In Ontario, the province’s tenancy laws currently make it illegal
to modify a rental lease before that lease comes due. Landlords
will be unable to regulate cannabis consumption in their apartment
buildings with existing tenants—only with those who apply for
tenancy after legalization takes effect.
Similarly, in Alberta, renters living in multi-family dwellings may
be restricted from smoking and growing cannabis based on
rules established in rental agreements moving forward, but
not retroactively.
According to a new survey of BC multi-unit housing residents
commissioned by the Clean Air Coalition of BC, the majority
of residents said they would support government measures to
increase BC’s stock of 100% smoke-free multi-unit housing.
David Hutniak, CEO of LandlordBC, states, “second-hand smoke
grievances are a key source of tenant complaints.”
This Summer, non-profit developer Options for Homes is launching
its latest development, The Humber. It will be Toronto’s first
smoke-free condo building, limiting the consumption of tobacco
and cannabis to vaporizers. As well as being family-friendly, this
eliminates the problem of smoke pollution, smoke transfer between
suites and balcony fires in multi-unit residences.
The Humber, which will be located in Toronto’s west end will rise
22 storeys and feature 232 suites in a mix sizes, including five
townhome-style suites, with two-thirds of suites in two- and threebedroom configurations suitable for families.
Real Insights is powered by Altus Group’s Investment Transactions research. For more information, please visit altusgroup.com.