Condo boom squeezing families out

It is the dominant form of housing under construction in urban centres across the country. But smart design and effective use of space cannot compensate for the fact that the condominium is siwmply too small for families. The typical unit is one bedroom and averages about 600 square feet.

According to Canada Mortgage and Housing Corp., multi-family units made up half of the 117,500 units constructed in the first 11 months of 2009 in cities of 10,000 people or more. Condominiums represent the bulk of the multi-family housing segment, although it does include other categories such as townhouses.

As local politicians continue to approve increased density in city cores, it raises a big question: Will there be any room left for families downtown?

"There is no room for them, certainly not in these condos they are building," says demographer David Foot, author of Boom, Bust & Echo. "Families need yards for their kids and that's not available in the condo. Condos are a great place if you are going to crank up immigration levels. That's where immigrants start, but it's not where they end up, I might add."

What he sees happening in downtown cores is a mix of low-income, single twenty-somethings mixing with high-income families who can afford the shrinking mix of single-family detached homes still available in cities.

He says empty-nest Baby Boomers, craving a return to the city from the suburbs they retreated to when the children were at home, are also taking over condos, some of them buying multiple units and knocking down walls to create large, 2,000-square-foot residences.

"But that's too expensive for most young families," says Mr. Foot. "It's downtown in your twenties, suburbs in your thirties and forties."

Adam Vaughan, a Toronto city councillor whose ward encompasses a large part of the downtown area, is taking measures to put more families in condos.

"In looking at the profile of the buildings we are building, we came across a startling statistic: Less than 1% of the units were three bedrooms or more," says Mr. Vaughan. "Middle-class families are smaller and smaller, with a two-child average, but a three-bedroom is what you need to accommodate a family."

He says the implications of building only one-bedroom buildings are serious. "We are generating the space to start families but not to house them," says the councillor.

The city has put in provisions that force builders seeking increased density with their properties to have 10% of the units be three-bedroom or more. The city is also trying to ensure there are knockout panels between units so that people can buy two one-bedroom units and convert them to one unit.


None of the measures are working, says Stephen Dupuis, chief executive of BILD Building Industry and Land Development. "Those [threebedroom] units are always the last to sell," says Mr. Dupuis.

"When people are ultimately faced with a choice and the unit size that they need in the city is $700,000, they immediately look to [the suburbs]," says Mr. Dupuis.

Condo cities are not only a Toronto phenomenon. Even in St. John's, condominiums are taking over the waterfront. That said, a high-rise building in Newfoundland's capital is typically just four storeys.

"The downtown condos are under pressure. There's not enough inventory available," says Larry Hann, a real estate agent in St. John's. He says downtown living can cost $400,000 for 1,250 square feet of space on the ground floor of a new building.

Mr. Hann says empty nesters and young professionals are buying near the waterfront while families get pushed farther out of the city.

Carleton University professor Linda Duxbury says commute times might not be an issue for smaller centres, but even in cities like Ottawa, the rise of the condominium and move to the suburbs is creating a major source of stress for families.

"You are really debating dwelling versus yard space. But the problem is most of the services you need to support families today are in the city," says Ms. Duxbury. "People need to factor in they are getting yard space at the expense of 40 or 50 hours on the road."

David Goodman is a commercial realtor in Vancouver, where a shortage of land has forced the city to become an apartment community. "There are families who like living close to core ... but the cost of real estate still drives people away."

He says the future for families might be lower-density townhouses, which tend to be cheaper on a square-foot basis than condominiums and don't come with heavy condo fees.

Either way, families might have to rethink the type of dwelling they need.

Mr. Goodman grew up in Montreal, Canada's largest apartment market. "Most of us grew up in an apartment," says the realtor, adding he doesn't feel any worse for it.

(prepared by Garry Marr/Financial Post/National Post)