Are Multiplexes coming to 'your' neighbourhood?
Wednesday Jun 07th, 2023
Unfortunately, you may not have a choice.
Multiplexes could be coming to your street. Actually, any Toronto street because a recent Toronto council decision has changed everything. Construction, of multiplexes, is now allowed in all city neighbourhoods which have been dominated by, and have only, single-family homes.
In Toronto, multiplexes are defined as low-rise housing containing 2-4 units within a single building. Until May 10th, zoning bylaws had restricted their presence in many parts of the city.
Every year our population is growing. Toronto is expecting at least 700,000 new residents by 2051 and many are, and will be, unable to afford a place to live, with the average home costing more than $1.3 million. So, our city is looking to multiplexes to increase the housing supply.
Yet, questions remain as to how much new housing will actually arise from this policy change and how affordable it will be — even if a greater supply and diversity of housing is sorely needed. Economics will largely determine where multiplexes get built — and they may be less likely to be developed in some upscale neighbourhoods due to the costs involved.
"We need a wider variety of housing types to accommodate diverse kinds of households," said Valerie Preston, an urban housing expert at Toronto's York University.
And while multiplexes could help deliver more varied housing options for larger families or others who need it, it’s likely to be very expensive to develop, rent or buy.
"It will do nothing directly for affordability," said Preston, who expects multiplex development to have limited impact on the city's overall housing supply due to the costs of acquiring and developing property - land, materials, labour etc.
Demand and land
Increasing density, outside of condo towers which typically offer smaller units, has been welcomed by many housing advocates.
The approach of adding a gentle level of density is one that other jurisdictions are exploring, both in Canada and elsewhere.
In B.C., the provincial government intends to propose legislation this year which would allow 3-4 units on a single-family lot. Similar housing strategies have been enacted in some U.S. cities and New Zealand.
But putting more housing on existing lots could drive up the value of the land below.
"Obviously, the more units you can put on a piece of land, the more it's worth," said Jane Londerville, a retired associate professor of real estate at the University of Guelph.
But she points out that not every suburban lot or structure will be appropriate for this type of development. “Investors and homeowners seeking additional income will move ahead "when the numbers make sense.”
However, Gregg Lintern, Toronto's Chief Planner, acknowledges it's unclear if the provision of more “missing middle” housing including multiplexes, laneway housing and garden suites will create much affordable housing.
"It's private-market housing," he continued. "Whether it creates housing that is more affordable, only time will tell.”
This all brings up the question: Who is going to own and rent out these multiplexes. Will it be private investors or institutional investors or even public housing providers? The answer: It will likely be private investors.
Next question: Will it be beneficial for tenants, who will have to rely on landlord choices and managerial capabilities?
He said these concerns raise questions about whether such development will impact rents and house prices "in a positive way."
Another BIG question on my mind
If, and when, we do start to see ‘hobby landlords’ convert single family homes and build new multiplexes, will there be any legal construction/building codes and inspections to ensure these are proper living spaces for tenants? Will Owners be required and accountable to build safe and sound units? So far, I haven't see anyone mention this in any reports I've read.
Complexity and costs
People who want to convert their homes into multiplexes will have much more complex projects than they think, requiring significant investments. It's really going to be cost-prohibitive for many people when it comes to how high the costs will be.
Despite the challenges, some construction professionals are already hearing from potential clients – real estate investors and families. However, it’s going to be a slow process for the new ‘low rise multi-unit properties’ - and a huge learning curve for everyone. So, it will likely take years to impact Toronto’s housing supply.
A more vibrant Toronto
Is this going to solve Toronto’s housing problem? Probably not, but it could help make certain neighbourhoods more affordable. The residential parts of Toronto, where this kind of housing hasn’t been allowed, are also the areas that have the most land available for this kind of use.
Even though they’ll be low rise, what do you think about our small neighbourhoods having a more intermixed living dynamic?
With files from CBC's Metro Morning and the CBC's Jon Hernandez