That’s PRIME Real Estate: Understanding Development Trends in the GGH

The Greater Golden Horseshoe hosts a dynamic housing market which has experienced rapid and dynamic growth over the last decade. Using WSP’s PRIME for Cities platform, our team is able to assess residential development trends to understand this demand in different ways.

In today’s fast-growing communities, smart growth is key to a region’s prosperity. This has been a key consideration in Ontario’s Greater Golden Horseshoe (GGH), being a 32,000 km² area formally recognized as a metropolitan super-region following the unprecedented growth pressure within its municipalities in the early 2000s; this pressure is especially heightened within the inner-ring municipalities, known as the Greater Toronto-Hamilton Area (GTHA).

img-Urban Structure of the Greater Golden Horseshoe-Government of Canada 2016

Figure 1 | Urban Structure of the Greater Golden Horseshoe (GGH) (Province of Ontario, 2016)

 

The GGH is home to approximately one-third of Canada’s population. In 2011, the region was home to 8.68 million people and 4.61 million jobs, and those numbers are projected to increase by 50 per cent in population and 30 per cent in employment by 2041. To manage this forecasted growth in a cohesive and coordinated manner, the Province of Ontario created or updated four policy documents:

  • the Growth Plan for the Greater Golden Horseshoe;
  • the Greenbelt Plan;
  • the Oak Ridges Moraine Plan; and
  • the updated Niagara Escarpment Plan.

The four planning documents outline where and how future population and employment growth should be accommodated, and identify where further urbanization should be discouraged. These plans play a crucial role in transforming the shape of development within the GGH by encouraging urban intensification and infill development and requiring municipalities to utilize land resources more efficiently than ever before. This is particularly true within the GTHA, which grew by more than one million people and 450,000 dwellings between 2001 and 2011.

 

Key trends

Coupled with this policy framework are demographic factors which characterize and contribute to this growth: think, increased population, national in-migration and economic strength, and quality of life aspects that make the GTHA and GGH an attractive urban region for a variety of populations and businesses. More specifically, three overarching trends are manifesting within the demographic and socio-economic composition of the GGH.

 

Over the past couple of decades, growth patterns across the GTHA have undergone a fundamental shift from primarily single-family suburban dwelling to higher-density housing types. From 2006 to 2013, there was a region-wide shift in the new-build housing split from lower-density housing forms to mid-rise and higher density living, led largely by Toronto’s condominium boom. As market and policy directions favour higher-density alternatives, this paradigm shift toward urban housing will continue.

 

The GGH region is home to residents representing over 200 different ethnic groups. Approximately 40 per cent of the GGH’s population is comprised of immigrants, totaling approximately 3.8 million people. However, the distribution of immigrant populations is not uniform across the region, being largest in the GTA municipalities. Intra-regional migration is also a factor in population growth, with the trend of older cohorts moving from Toronto to other GGH municipalities.

 

The Royal Bank of Canada (RBC) and the Pembina Institute’s 2012 Home Location Study found that over 80 per cent of GTA residents would give up a large home and yard to live in a “location-efficient” neighbourhood that is transit-friendly, walkable and offers shorter commute times. Supporting this preference, there has been an increase in both local and regional public transit ridership since 2001.

 

 

PRIME database

These key trends have resulted in heighted demand for, and supply of, housing within this region. The pace of new residential units in the GTA has seen steady overall growth, with an increased growth rate of 6.8 per cent between 2011 and 2016. Powered by WSP’s PRIME for Cities platform, Figure 2 presents a finer-grained analysis through a spatial heat map of post-2016 residential development (starts and completions) to-date, to provide more insight into how and where the region is growing most rapidly. The higher intensity areas, as depicted by the red zones, are mainly within the GTA, with only a few other areas experiencing this level of growth.

img-Residential Development in the Greater Golden Horseshoe

Figure 2 | Residential Development in the Greater Golden Horseshoe (GGH)

 

The red zones within the GTHA appear somewhat connected, forming along linear corridors which radiate outwards from the City of Toronto and are supported by transportation networks (highways, transit, commuter rail lines, etc.)

Additional hotspots are also found in some outer-ring municipalities, being those areas within the GGH outside of the inner ring boundary in Figure 1. For example, PRIME trends monitoring indicates that significant development, commensurate with the significant public investment in rapid transit, has occurred.

 

Development applications (2016-2018)

WSP’s PRIME platform indicates that over 150,000 residential units have been developed or approved in the GGH since January 2016. In addition, approximately another 100,000 units are currently in the development pipeline awaiting approval. However, the number of residential units that have resulted from these applications is not equally divided between the GTHA and outer ring municipalities; the GTHA received 66 per cent of the new units developed over this two-year period, while the outer ring GGH municipalities have only received 34 per cent. This implies that the GTHA has received larger-scale developments which have resulted in more units per application that the outer ring GGH municipalities.

img-Residential Development Applications and Unit Counts by Dwelling Type

FIGURE 3 | GGH RESIDENTIAL DEVELOPMENT APPLICATIONS AND UNIT COUNTS BY DWELLING TYPE (JAN 2016 - JUL 2018) (SOURCE: WSP)

 

Development trends (2016-2018)

Nearly 70 per cent of residential units in the GTHA have been multi-unit developments. The dominance of multi-unit developments is so prominent within the GTHA that more single and semi-detached homes were built within the outer ring GGH municipalities than within the GTHA.

However, there are fewer development applications for multi-unit developments than other dwelling types when compared to the number of units outputted by these developments. For example, there were just over 40 more applications for townhouse dwellings than for multi-unit apartments, yet three times more units were developed from apartment dwellings than from townhouse dwellings within the GTHA. This speaks to the nature of the housing type; apartment dwellings are generally associated with higher densities, and thus result in more units than other dwelling types. This trend also supports the finding of less development applications yet more units within the GTHA.

An interesting trend to note is that more townhouse dwellings have been created within the timespan of this analysis than single and semi-detached dwellings within the GTHA. This may suggest that higher-density ground-related uses are more favourable for development within the GTHA than their lower-density counterparts. 

Although the GTHA municipalities share a similar dominance in new multi-unit developments, they manifest differently within these landscapes. The tallest buildings are being developed in the City of Toronto, while the shortest are within the Region of Durham. 

With the exception of Toronto, the rest of the GTHA’s apartment dwellings range between six to 10 storeys, on average. Similarly, aside from Toronto and the Region of Durham, the tallest buildings range between 31 to 41 storeys. 

On a final note, the taller building heights in Toronto have allowed for more density and resulted in the higher amount of residential units developed in recent years; this is evident in Figure 4, which displays a high degree of red zones found within Toronto compared to the other municipalities. 

img-Breakdown of residential development per GTHA municipality

Figure 4 | Breakdown of residential development per GTHA municipality (Jan 2016 - Jul 2018)(Source: WSP)

 

Conclusions

It is evident that the GGH has and will continue to foster a market for growth, particularly within the GTHA. The high rate of immigration, an innovative and agile economy, and a high liveability index will continue to attract people and jobs to the GTHA region, with anticipated growth of 3.2 million people and 1.1 million jobs by 2041.

As these changes continue to unfold at a rapid pace, tools such as WSP’s PRIME for Cities platform will allow us to maintain a finger on the pulse of the land development market and understand this demand at different scales along the way.

 

If you are interested in learning more, please contact us at Prime@wsp.com.

 

Note: All historic demographic information has been sourced from Statistics Canada. All projections have been sourced from the Growth Plan for the Greater Golden Horseshoe, Province of Ontario, 2019.


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