Just last week, someone blamed me for the high real estate prices in Toronto. This individual firmly believed that real estate agents, like me, were the reason property prices were so high in this city. I calmly explained that I do have the best interests of my sellers in mind when I sell property. My goal is to obtain the best price for them. Still, I’m not the cause of high Toronto real estate prices. I’m also not the reason why there are not enough properties to buy in Toronto.

So, who is? Well, I believe this blame is shared, and in some ways, no one is fully to blame. And really, it’s not just a Toronto problem. It’s a problem around the world in many cities. But there has to be some reason that we arrived at this point. If I had to pick one entity that has contributed to this problem the most, whether directly or indirectly, that would have to be the government. From municipal to national governments, across party lines, we have seen a lot of mistakes made. In the past 20 years, I would say the biggest problem to impact Toronto real estate was the overemphasis on legislation designed to reduce the demand to buy real estate while ignoring the supply side, until very recently. It’s also a development problem. More specifically, where and what we can build has been limited for a long time in this city.

It is apparent to anyone with eyes that there is a lot of construction in Toronto. So, supply is coming in, but it’s largely pushed into specific zoned areas. So, we have areas where there are a lot of condo high-rises and areas where there are a lot of houses, but not a lot in between. There are far fewer stacked townhomes, mid-rises, duplexes, and triplexes mixed in with other housing types. The missing middle refers to a shortage of housing options between low-density, single-family homes and high-density, high-rise condominiums. If you’ve ever wondered why there seems to be a gap between towering condominiums and single-family homes, you’re not alone. So, let’s dive into the puzzling concept of Toronto’s missing middle and explore some ideas to bridge the gap and bring back some equilibrium to Toronto’s housing landscape. So, what’s going on?

THE CURIOUS CASE OF THE NEGLECTED MID-RISE

In Toronto, we know there are mid-rises and townhomes. They do exist. I have bought and sold many, but compared to houses and large condo apartment buildings, there are few of them. Several factors contribute to the absence of mid-density housing in Toronto. Zoning regulations that favour single-family homes or high-rise developments would be one. Another would be the limited availability of suitable land and the financial feasibility concerns for developers to develop this land for the middle. Additionally, market demands and trends have predominantly focused on either large-scale developments or detached houses, neglecting the potential of the missing middle. Simply put, many developers don’t feel they can turn around the kind of cash you need to build them. Plus, until very recently, most of the Toronto zoning restricted them from being built. Luckily, there was a moment of clarity at the Toronto City Hall because City councillors have voted in favour of allowing multiplex development to be done throughout the city for a more “equitable approach to growth.” This puts an end to largely exclusionary zoning that has dominated most of Toronto. Will it lead to a windfall in more missing middle properties? I still think there would need to be some encouragement for developers, builders, and even families to build these. I feel step one has been done here, but we need a step two. In other words, the zoning has been changed, now we encourage developers to act.

THE VANISHING MIDDLE-CLASS HOUSE OPTION

I grew up in a bungalow. They were, and still are, common all across Canada back then, but in Toronto today, they are becoming an endangered species. Decades ago in Toronto, houses were purchased by many property owners across many socioeconomic groups: working class, middle class, and wealthy property owners. Some houses were humble and small. Some were ornate and lavish. The humble and small ones were often lived in by working-class families. If you walk around any Toronto neighbourhood with a higher proportion of bungalows, you’ll notice that many of them have been torn down to build much larger houses. So, that housing stock that used to be working class is often now the purchase of a wealthier individual. I’m not here to blame these bungalow destroyers. They are priced out of some neighborhoods too, and they are coming up with creative ideas on how to build the home they want. They then look to find big lots to build big homes. Bungalows have those big lots. Little homes on big lots. The result of this, however, is that houses are increasingly out of reach for the middle class of Toronto.

MORE MIDDLE FOR STRONGER NEIGHBOURHOODS

In some Toronto neighbourhoods where the missing middle is missing, we are lacking age diversity. Neighbourhoods, local businesses, schools thrive when there are different age groups, income levels, and people from all walks of life. Developing the missing middle in Toronto offers advantages. It provides more diverse housing options to accommodate different lifestyles, household sizes, and income levels. Mid-density housing promotes a sense of community, fosters walkability, and allows for better main street utilization. By revitalizing under-utilized areas and increasing housing supply, the missing middle can contribute to addressing affordability challenges in the city and revitalize some neighbourhoods.

I suppose the next question would be: What can we do about it? Introducing incentives for developers can be an effective strategy to encourage the construction of mid-density housing. Incentives might include expedited permitting processes, density bonuses, reduced development charges, or tax incentives. These measures can help offset the financial challenges associated with developing mid-density projects and make them more attractive for developers. It’s one thing to change the bylaws around what can be built where, but it’s another thing to build the missing middle.

Toronto’s missing middle may be a complicated puzzle, but it’s one puzzle worth our time. I’m glad the government is finally looking at the supply side of things to improve our lack of inventory and to diversify what can be bought in Toronto. I’m not sure it’s enough, but it’s a good start.