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In episode 74 of the Toronto Under Construction podcast, Ben sits down with Toronto real estate experts Jeff Brenner from Castlepoint Numa and Kiran Mirok from Resident to explore the pressing issues shaping Toronto’s development landscape. The conversation spans critical topics such as high-density development on Toronto’s waterfront, recent zoning policy shifts, and the future of luxury housing in the Greater Toronto Area (GTA). The guests kick off the show by sharing a short introduction about themselves and discussing their roles in some of Toronto’s most prominent real estate projects. Kiran shares her experience at 1:41, followed by Jeff at 3:29.
Waterfront Development and the Brightwater Community
Ben opens the discussion with a look at Storeys’ article, Mississauga Residents Voice Concerns Over More Density Proposed For Brightwater Community. This article highlights concerns from Mississauga residents regarding proposed density increases for Brightwater, a prime real estate site on the Toronto waterfront. The site, located within one kilometre of the Port Credit GO Station, is envisioned as a connected, vibrant 15-minute community. However, recent development adjustments increasing building heights and adding 900 additional units have raised concerns among locals. Resident Ross McHattie voiced a common question, “By how much?” Ben turns to Jeff, asking, “Given the lack of current demand in the market, do you think developers are wasting time by seeking higher densities, when you can’t sell those units right now?” Jeff shares his views on density at 6:31. Ben then asks Kiran, “At every public planning meeting, some NIMBY complains about soulless condos or some form of the complaint made by the local Mississauga man at that meeting about social isolation of high-rise. What would be your response to these complaints about high-rise apartment living?” Kiran responds at 9:45 with her thoughts on fostering community in high-density spaces.
Canadians’ Preference for Single-Family Homes
The next question Ben asks comes from an article from RENX Homes, titled Canadians Still Dream of a Single-Family Home, Despite High Costs. The article reveals that 64% of Canadians still prefer single-family homes, with fewer favoring condos or townhomes. According to Wahi CEO Benjy Katchen, “I think it’s deep-seated. It’s hard to change culture,” adding that this ambition for single-family suburban homes will likely continue unless larger, affordable condos become available for families. Ben humorously critiques the poll’s approach, noting, “My preference would be to have a chauffeur driving me and my kids in a mini-bus with an espresso machine and fresh pastries, but in reality, I can afford a Kia minivan and day-old donuts from Coffee Time.” He asks Kiran, “I just don’t see a pathway to delivering 1,500 to 2,000 sq ft three-bedroom apartments to families in high-rise buildings. Do you?” Kiran shares her perspective on the practical challenges of building larger units in Toronto’s urban core at 13:13. Jeff joins at 15:18, answering Ben’s question, “In Toronto’s future, do you anticipate that the development industry will continue to deliver small apartments aimed at investors, tenants, and young professionals, and when those folks get older and have children that they’ll move farther out, the other 416 area, the suburbs, or leave the GTA altogether?”
Zoning Policy Updates: Toronto’s Major Streets Plan
Ben references another Storeys article, Toronto To Allow Townhouses And Small Apartments On ‘Major Streets’, which describes how City Council has voted to permit more townhouses and up to six-storey residential buildings on major Toronto roads without rezoning applications. According to the article, “The City voted 21-3 to support the creation of these structures on specific major Toronto roads — without having to apply for rezoning applications. These apartment buildings may include up to 60 units. The move is said to open up space on some 31,000 lots throughout the city.” Ben asks Kiran, “Does Resident have any interest in pursuing 6-storey and 60-unit buildings?” Kiran shares her response at 19:21. Ben then turns to Jeff, asking, “I like the Missing Middle as much as the next guy, but I’m not convinced it is going to move the needle much on housing supply. The GTA needs at least 25,000 to 30,000 new apartments a year to satisfy demand, I don’t think you get too far building four to 10 unit buildings. 60-unit buildings is a good start, but 8- to 12-storey should have been the starting point.” Jeff responds at 21:14.
The Ongoing Condo Market Slowdown
Ben then brings up a BILD press release titled August 2024 New Home Sales in the GTA Hit Historic Lows – Down 46% from August 2023. The release highlights that “there were 464 new home sales in August, down 46 per cent from August 2023 and 73 per cent below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence.” Justin Sherwood, SVP Communications & Stakeholder Relations at BILD, notes, “The crisis is real and will be reflected in the next several years by fewer jobs, fewer new homes, and compounded affordability challenges.” Ben asks Jeff, “Your firm has developed a number of condominium apartment projects. But I know recently, you’ve been underwriting a number of your projects as rentals. How do the returns compare between the two tenures?” Jeff explains at 24:35 how his firm is adapting to the condo market downturn and whether rentals are an alternative. Ben then turns to Kiran, asking, “Do you think we’ll see more movement to lower all of these charges and fees like DCs, application fees, land transfer taxes, HST, Building permits, community benefit charges, etc?” Kiran shares her take on government fees at 26:52, reflecting on how these changes could impact affordability. Jeff offers his perspective on affordability at 28:35, responding to Ben’s question, “Do you think that everything adjusts to push developer margins back to their long-run risk adjusted return levels?”
The Rise of Partnerships in Real Estate Development
Ben turns the focus to partnerships in real estate, referencing a RENX Homes article titled Housing Developers Share Experience, Expertise, Risk with Partnerships. Kathy Di Silvestro, president of Crystal Homes, explains, “Cost savings are significant but time savings are also significant. Even if we’re two separate landowners side by side, we’ll process our applications together for convenience. The benefit to us is the time saved, which is money saved.” Ben asks Kiran, “How is Resident looking at their deals currently? Do you anticipate bringing in partners?” Kiran shares how Resident approaches partnerships at 35:50. Ben then asks Jeff, “People understand how to underwrite a deal, but how do you underwrite a partner? Do you call lenders, cost consultants, their previous development partners, their equity providers, or do you simply break bread with them?” Jeff explains Castlepoint’s partnership evaluation process at 37:01.
Spotlight on Weston Park: Mixed-Use Development
Highlighting the Weston neighbourhood, Ben discusses Weston Park, a mixed-use development project led by Jeff’s firm, which will feature two residential towers with retail and community spaces, including the historic Weston Park Baptist Church. Noting the area’s potential, Ben asks Jeff, “You’ve bet big on the area, as have many other major developers, but no one has moved yet. Give us your thoughts on the area, and why we haven’t seen any condo launches there yet.” Jeff shares his thoughts on Weston’s potential and the unique challenges and rewards of developing in emerging neighbourhoods at 41:25.
The Luxury Condo Market in Toronto’s Annex neighbourhood
Ben brings up a proposed luxury condo at 208 Bloor Street West in Toronto’s Annex neighbourhood, set to add a 28-storey, rose-gold-colored tower to the skyline. Ben asks Kiran, “The luxury market tends to be the first to stop during a market slowdown and the last to recover. There have been a lot of luxury and super-luxury launches over the last decade, are you convinced that there is still more demand out there?” Tune in at 44:04 for Kiran’s response. Ben then turns to Jeff, asking, “You worked on a high-end project at 10 Prince Arthur, but that project was ultimately sold to another developer, why did you decide to part with that property?” Jeff explains the rationale behind Castlepoint’s decision to part with that property at 47:10. The conversation concludes with a discussion on affordability, with Kiran sharing her views at 51:10 and Jeff offering his insights at 52:49.
Lastly, the guests answer Ben’s famous Rapid Fire with questions like: Do you think single-family rental communities will become an asset class in Canada? Instead of at-grade townhouses or retail, could you do fourplex at grade in a high-rise new condo project and sell it to an investor? Who would win in a one on one basketball game, me or your husband? What is too high for Castlepoint Numa, 50-storeys, 60-storeys, 70-storeys?, Does the GTA new condo market sell 35,000 units in a year at any point over the next 25 years? You have an upcoming development in Grimsby, was this special circumstances, or are you looking to do more outside the GTA?
Tune in now to episode 74 of the Toronto Under Construction Podcast!
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