Housing sure ain’t what it used to be. Most of us are now very aware of that little nugget of knowledge here in Toronto. Only ten to fifteen years ago, it was quite reasonable for a middle income earner to buy a house in a transitioning neighbourhood like Leslieville or the Junction. You didn’t even have to be coupled off. One income could do it. Even houses in Trinity Bellwood and Cabbagetown could be had for a reasonable price back then. I’m not saying this to make newer Toronto buyers sad. I’m not trying to make sellers feel special or wise for buying early enough. I’m simply laying out an important fact: Houses are in very short supply in a growing city. So, we’re left asking the obvious question: Is Toronto building the right kind of housing?

Right now, Toronto builds a lot of condos. Maybe you’ve noticed? They’re mostly large condo buildings where developers can build up. They do not build very many houses or even low rise condos. There are some small-time contractors who may tear down a bungalow with a wide lot and build two houses on it, but this does not make a very big impact to the housing stock in this city. This mass building of condos has had an effect on price. Houses in low supply cost a lot more than they used to, especially since so few of them are built any longer. It’s not just houses in short supply these days. The list can also be extended to include townhouses, some conversion lofts and low rise condos.

It’s not just about supply though. It’s about demand too.

Many people want houses, townhouses and low rise condos, but that’s not the kind of housing that is coming to market via new construction.

But why don’t many Torontonians want more condos with smaller units? I believe it has to do with our development as a city. Condos are a relatively new phenomenon. As a city, we have not been accustomed to living in high rises for a very long time. Very few of us have grown up that way. In cities like New York, it would be very typical for families to grow up in an apartment building. So, there have been many New York families who have happily lived and created great memories in apartment buildings. In Toronto, condos have mostly been built for singles or young couples or downsizers. There are far more one bedroom condos per capita in Toronto than in New York. Our condos are not built for larger families, and we don’t have a history of living in denser apartment housing. Even when larger three bedroom condos were built, these were hard to sell until recently. Also, let’s not forget that developers have figured out that more smaller condos in a building will net more profit than a condo with larger units. So, they have some financial incentive to build less family sized condos.

Looking ahead, the future of new condos seems to be focused on building even smaller units or micro-units to keep housing affordable, but also profitable for developers. The logic is that smaller condos will be more affordable for those who want to live in the city, but don’t make the money needed to have a larger space.

This leads to the big disconnect. For the most part, people in Toronto don’t want to live in condo micro-units in large condos buildings. They want to live in a house or a bigger condo unit in smaller buildings. And by people, I’m crossing over many generations.

Younger generations still want a house eventually. Some want to raise a family. Some need the extra space for pets or their offices or their visitors. A recent study from the U.S. point to a sharp increase in multi-generational houses. These houses contain grandparents or more often young adults who have rebounded home because they are trying to save up for their own home or because they have an unpaid internship or because there parents were able to buy a large house when it was much cheaper.

So, where do these young adults go? If they want a house, they can still buy one in Toronto, but not every one could afford it. Some will turn to condos. Some will turn to the suburbs. But what I am overwhelmingly seeing is Toronto producing a whole lot of tiny condos for people who don’t want to live in small spaces. To be fair, it is reasonable to say that some people will just have to suck it up a little. We live in a big city and space is at a premium. The demand dictates that space will cost more. Still, we should be doing something to create more than just micro-condos where your washroom needs to covert into a kitchen and then your bedroom.

Here are my suggestions for Toronto and future buyers:

1. BUILD BIGGER UNITS – Time for developers and the City to start building condos that can fit more than one person, and possibly some families. There are signs on this with condo projects like Cabin but we need more of these.
2. BUILD BETTER TRANSIT – If people want bigger space and it’s too expensive to buy in the city, make it easier to get in and out of the city, past the Green Belt. Let’s stop thinking of Toronto, Oshawa and Hamilton as different places. Yes, they have their distinctive features and unique histories, but we need to start functioning more as a region and not separate city fiefdoms.
3. BUY WITH SOMEONE ELSE – If you really want a big house and you want to live in Toronto on a middle class budget, consider buying a house with someone else. Many are already split up into two or more units. It’s one way to share the cost of owning a house and the cost of the mortgage.

At the end of the day, prices in Toronto are not going to get any cheaper over the long run. You may have to get creative if you want to live the way you want to live in this city. It can be done!