Kelly McParland: How Toronto built a condo glut amid a housing shortage
While agonizing over six-plexes, the city is eagerly filling its crowded core with a bevy of new towers so high they've been accorded their own descriptive. At least eight 'supertall' skyscrapers are in the works, the largest (for now) being the SkyTower at the very foot of Yonge Street on the Lake Ontario shoreline, in a neighbourhood once envisioned as a sort of waterfront oasis away from the downtown crowds, but long-since abandoned to forests of obstructive condo towers and office buildings.
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SkyTower is just the first of six high-rises planned for an address that was previously home to the Toronto Star newspaper, traditionally a campaigner for a 'liveable,' low-rise city, but which decamped last year for a posh location a short distance away.
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At 105 storeys, SkyTower is six storeys taller than 19 Bloor West, another 'supertall' planned farther north at the confluence of Yonge and Bloor, ground zero for high-end shoppers and fashionistas. That structure, in turn, is just down the street and nine metres taller than The One, a much-troubled 85-storey real estate catastrophe that's been through partnership battles, financial crises, creditor protection and high-wire legal warfare in the decade since it was announced as what would then have been the city's tallest condominium building. It's now being revamped and completed by a court-approved builder after failing to attract a buyer a year ago.
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Glitzy as the supertalls may appear, they find themselves thrusting skyward in a market fast plunging in the opposite direction. A survey by research firm Urbanation Inc. reported that a total of just 502 condo units were sold in the second quarter across the entire Greater Toronto and Hamilton region, an area stretching well beyond Toronto itself to include some seven million people.
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That's down 69 per cent from last year, and 91 per cent below the average of the past decade, the lowest levels in 30 years. Only 170 of those sales were in Toronto itself. Meanwhile, 19 Bloor West alone is expected to add almost 1,300 new units when it's completed.
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Don't reach for your hankie just yet, mind. For years now, Toronto condo sales have been largely a game of buy-and-flip. Some 70 per cent of new units went to investors hoping to make a quick profit by flipping the end product once construction ended, or renting it out at eye-watering rates. But rents are falling along with the market glut, leaving investors holding units worth less than they agreed to pay and having trouble borrowing enough to cover the difference. Dozens of developments have been cancelled or delayed as a result, many stuffed with tiny units 400- to 600 square feet in size, built by developers persuaded people would happily attempt to raise families in shoeboxes.
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Anyone old enough to remember when Canadian teams still won Stanley Cups should know that busts are as integral to the real estate business as tyrants are to Russia. There hasn't been a serious one in Ontario since a crash in the 1990s that lasted about seven years, so a substantial shock now could hardly be deemed unreasonable.
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Maybe it will force some useful changes. Something has to happen to that mass backlog of tiny, unwanted boxes in the sky. You can't solve a housing shortage with base prices starting at $1 million. Nor can you pretend you're building 'homes' when seven in 10 go to quick-buck investors planning to flip them at the first opportunity.
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If Toronto politicians want to get serious about a problem they love to moan about but never really address, they'll organize a future with fewer hundred-storey playpens that will 'Transform Toronto's Skyline' — as if that should be a priority for an overcrowded city with some of North America's worst traffic — and recognize that a few hundred six-plexes would do a lot more to serve home-hungry people than another vanity project in the sky.
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