Toronto transit suburbs that lay just outside the downtown core have seen the lowest levels of new housing developments in the city, according to a new report from the Canada Mortgage and Housing Corporation (CMHC).
The CMHC report took a look at development levels from 1990 to 2018 in Toronto’s many Forward Sortation Areas (FSAs) — a way of grouping geographical areas based on the first three characters of their postal codes.
The report states that the highest level of housing completions overall was actually found in FSAs farthest out from the city centre, peaking around 20-30km out. In FSA’s within 5km of the city centre, new housing completion was also high, thanks to strong condo building activity.
The FSAs that fell in the 5-15km range, however, “saw the lowest average of completions,” according to the report. These areas are known as Toronto’s transit suburbs, which are the areas where transit use is greater than 150% of the city average for their commute to work but is less than 150% of the city average for other purposes.
This lack of development is likely the result of two things: fewer “incentives to build tall apartment buildings when compared to central areas,” and “fewer available lots to build single-family homes (compared to remote suburbs).”
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The 5-10km range, in particular, saw the lowest construction activity in the Toronto transit suburbs, which lead to a U-shaped curve representing the level of new housing completions by distance.
In the downtown core, property lots come with relatively high prices, which incentivizes landowners to build larger complexes to ensure a higher profit per square foot of housing.
“As we move further away from the city centre, the condominium supply mainly decreases in Toronto,” the report says.
The report found that overall, there are two patterns that have likely caused these development trends. The first is an apartment boom in the downtown core “fuelled by the growth in white-collar service activities downtown and the surge of people seeking an urban lifestyle.”
The second is suburbanization pushing “more families into auto suburbs and exurban areas.”
In the future, the report predicts, this trend will likely cause suburban areas to face some additional costs that come with more people living there, such as needing to invest in infrastructure and dealing with higher roadway congestion and greenhouse gas emissions.