About a decade ago, the Ontario government launched an initiative that has since had an incredible impact on the real estate industry in Toronto and across the province, called Places to Grow. According to the official government website dedicated to this strategy, the idea behind it is to support development that promotes “economic prosperity, protects the environment and helps communities achieve a high quality of life across the province.”
The goal is to protect agricultural lands in the province (and GTA in particular) from encroaching urban sprawl, effectively creating a “Green Belt,” limiting where new subdivisions could be built.
The execution of this program the past few years has resembled region-specific plans that are meant to guide policy decisions within that region. Toronto, for example, has adopted a strategy that involves “growing up, not out,” spurring the unprecedented growth of condominiums in the GTA, particularly high-end, luxury condominiums.
According to Judy Hazan of the Epoch Times, back in the year 2000, Toronto’s luxury condominium market was practically non-existent. Hazan spoke to three upper level executives at Baker Real Estate based in Toronto, and they argue that One Post Road on Toronto’s Bridal Path changed everything. President and CEO of Baker Real Estate, Barbara Lawlor, had this to say:
“One Post Road was a leader in luxury living—there was so little luxury in our city—One Post road really captured the imagination. It was the beginning of the luxury market in Toronto. Today, we have five 5-star hotels with residences atop and we have other really glorious buildings like One Bloor and The Ritz Carlton, so the luxury market has really grown.”
The “grow up, not out” philosophy behind Toronto’s regional growth plan has resulted, in general, in the development of far more condo towers, which ultimately translates into less and less space for low-rise homes, which is undoubtedly a factor in the escalating prices of such homes in the city. Despite the growth in the high-end condo market, the relative price difference between a condo and a detached/semi-detached home make condos the more affordable option for first-time buyers. In today’s economy and real estate market, it has become exceedingly difficult for first-time home purchases to be houses; condos are now the starter property of choice for those who want to buy instead of rent.
According to Ryan Starr of The Toronto Star, the impact Places to Grow has had on lowrise development, has been substantial, but seldom talked about. The creation of a Green Belt has led to astronomical increases in the price of land that is left behind for lowrise development to occur, which leads to higher home prices. What some real estate development companies are doing, as opposed to building on expensive land, are moving even further out, beyond the Green Belt, in an attempt to lure would-be homebuyers out of the city where prices are far more affordable, into areas such as Brantford, for example.