Give up the dream: Why Toronto homebuyers should forget single-detached homes

by Sarah Caicco

Current and future residents of Toronto should give up the dream of owning single-detached homes.  Toronto buyers should instead consider mid- and high-rise dwellings, which not only come with a reduced price tag, but with key long-term benefits of high density housing such as environmental sustainability and better health outcomes. Yet, despite the cost, single-detached homes remain overwhelmingly desired by prospective homebuyers. A study by the Ontario Real Estate Association in 2016 found that half of Toronto residents who plan to buy a home in the next two years seek a detached house – an increase of 21 per cent from the year prior.

The first major problem with seeking single-detached housing in Toronto is that it is unaffordable for all but the highest income earners. In March 2017, the average price of a detached home in Toronto hit $1,573,622, a 29.8 per cent increase from 2016, according to data released by the Toronto Real Estate Board. The Building Industry and Land Development Association (BILD) said in August that the average price for a new low-rise single-family home hit $1,316,693, a 45 per cent increase from the year prior. Even a semi-detached home in Toronto now costs an average of $1.08 million. BILD cites high demand for these housing types as a critical factor for soaring price levels.

These are striking numbers considering that average incomes, while relatively high in Toronto, are still far below the income level necessary to afford these prices. Based on 2016 Census data, the median family income in Toronto is $78,280. For lone parent families that number is $45,440. Experts suggest that to afford a single-detached house in the GTA, household income must be just over $200,000.

The next major problem with desiring single-detached housing in the city is that it often perpetrates spread-out suburbanization, environmental degradation, and car-dependent lifestyles. Living in low density housing means residents must travel farther distances to reach their destinations, encouraging the use of motor vehicles. Today, it is widely accepted that car-dependent lifestyles are harmful to air quality, water resources, natural resources, and green space. It is also no small secret that car-dependency in Toronto means encountering frequent (and worsening) traffic jams.

If affordability, environmental sustainability, and automotive traffic are not enough reason to give up the dream of single-detached housing, there is an increasing body of literature suggesting that low density housing in “suburbia” leads to relatively poor health outcomes. For instance, a new longitudinal study finds that housing densities of less than 1,800 units per square kilometre increases the probability of resident obesity by about 10 per cent through encouraging sedentary behaviour, which might include driving to stores and work on a daily basis.

There is also a case to be made for higher density housing, such as mid- and high-rise condos. For starters, these units are much more affordable. In 2017, the average GTA condo apartment costs $511,000, which is considerably lower than the cost of detached houses. While condo prices are rising faster than any other housing type in Toronto, condos remain cheaper on average.

Condo units are also becoming more commonplace for families with children. According to the latest Census data, while the total number of families in Toronto rose by only 3.9 per cent between 2011 and 2016, the total number of families living in condos increased by 8.9 per cent. In Toronto, 30 per cent of households with children live in mid- or high-rise buildings. In the downtown core, this number rises to 66 per cent. Parents highlight affordability, conveniences, and reduced commute times for choosing to raise children in city high-rises. Toronto condo developers like Lindvest have responded to family demands by increasing the average size of condo units. In August 2017, the Altus Group found that the average size has increased by 51 square feet from the year prior.

The City of Toronto is also helping to make condo units more attractive to families. It is currently undergoing a study entitled Growing Up: Planning for Children in New Vertical Communities to guide new condo development to better function for larger household sizes (draft guidelines were released in 2017). This is a good start, but further steps will need to be taken to push developers to accommodate families. A report by Ryerson City Building Institute (CBI) in late 2017 found that not enough multi-bedroom units are being built in the condo market to meet demand. Only 38 per cent of condo units planned to be built in the next five years will have two or more bedrooms. While this is up slightly from the 2012-2017 period where 35 per cent were two-plus, Ryerson CBI suggests that demand will far exceed the upcoming supply.

The good news is that Toronto is on the right track.  The number of condos for rent nearly doubled between 2008 and 2013. While single-detached dwellings comprise 53.6 per cent of private occupied dwellings in Canada, single-detached homes in Toronto account for only 40 per cent of Toronto dwellings and apartments account for 44 per cent[1]. Latest Census data shows that Toronto comprises the largest share of dwellings in high-rise buildings (five or more storeys), where nearly 3 in 10 dwellings are high-rise apartment units.

As Toronto and developers make conscientious efforts to shift preferences towards higher density housing, it is now time for future Toronto homebuyers to give up the age-old dream of the single-detached home and accept its affordable and sustainable alternatives.

[1] The remaining household types in Toronto include duplexes, semi-detached homes, row houses, and other single-attached houses and movable dwellings.

Sarah Caicco is a 2018 Master of Public Policy candidate at the School of Public Policy and Governance at the University of Toronto. She holds an Honours Bachelors of Arts in Philosophy with specialization in Justice, Political Philosophy, and Law. Her policy interests include housing affordability, transportation, and regional infrastructure