A colleague of mine sent me this Bloomberg article today and said, "Here's an article about things you already know." The article cites a recent report by Altus Group that compared government-related fees on new housing across Canada and the U.S. What they discovered will not surprise any of you who are in the industry: Toronto has some of the highest government-imposed charges on new homes.
For new condo apartments, the report found that government charges can add up to as much as C$124,582 per unit. That's about 50% higher than the average unit in the U.S. and about 30% higher than the average unit in Canada (see above chart for the list of cities). While all of us in the industry can appreciate this, I don't think most homeowners and tenants understand this. Hopefully they're reading this post.
This week, Matthew Yglesias of Vox makes the case for raising kids in the city . Spoiler: Driving sucks. Cities have lots to do. And parks can be better than lawns. However, he also talks about why this proposition is becoming increasingly difficult for many families. Here are a couple of excerpts:
Now the father of a 4-year-old son, I live in Washington, DC, a city that is, mercifully, marginally more affordable than New York, and I wouldn’t want to raise a family any place other than the city.
But unfortunately, families are disappearing from American cities even as city living in general has become fashionable again for those who can afford it.
Children cost money. And they take up space. And urban space has become much more expensive — repelling growing families. This suits the proclivities of smug suburbanites just fine, but as someone who grew up in a big city in the 1980s and 1990s when city living was both less fashionable and more affordable, it seems like a tragedy to me.
I didn't grow up in the city . Though, I spent time in apartments and other higher density housing. And I don't have kids. But I find this topic interesting. It's also an important one. I don't believe that the childless city is a good thing.
Rachelle Younglai and Chen Wang's recent piece in the Globe and Mail on suburban household debt (in Canada) has a number of interesting stats. Here are some of them:
Looking at debt service ratios across the country, the most financially stressed neighborhoods in Canada are almost exclusively in the suburbs. (Map of the Greater Toronto Area shown at the top of this post. Data from Environics Analytics.)
34 of the top 100 most financially strained neighborhoods in Canada are located in Brampton, Ontario.
Brampton has grown at 2x the rate of Toronto over the last decade.
43% of Brampton's housing was built between 2001 and 2016.
80% of homeowners in Brampton have a mortgage compared to 63% across the Toronto region as a whole.
80% of Brampton's property tax revenue comes from residential property (not surprising). In comparison, 47% of Toronto's property tax revenue comes from commercial properties.
About 2/3 of Brampton's work force leaves the city for their job. This makes sense given the above point.
The other thing the article talks about is the increase in the average household size in many suburban communities as a result of people renting out parts of their house.
One Brampton gentleman is quoted as saying that he rents his basement out to 3 or 4 students and his upstairs bedrooms to two truckers. This translates into typically 6 vehicles parked in his driveway.
Assuming this is the trend, I wonder how much of this additional income is being reported to CRA. Because if it's not, then it could be throwing of these debt ratios and making the financial situation look more dire than it is.
In any event, I think this speaks to, among other things, the role that many suburban communities now serve for new immigrants coming to Canada. They are doing what they can to try and get ahead.
It's also worth noting that if you look at the above map of the Greater Toronto Area, the lowest "debt spots" are in fact where homes tend to be the most expensive -- the core.
