With a surge of articles both in the United Kingdom and Canadian Press, one has to ask what is driving condo development in cities? Is the demand being created by home-owners who need housing and would like to live in mid to high-density development? Or is it by foreign investors that are using condominium development as a form of investment? I believe it is a very fine line between the two group, with the amount of people immigrating into Toronto and the Greater Toronto Area we must create housing for them to live and with current planning constraints condos are able easily justifiable. However, most condominiums lack the size for today’s modern Canadian family.
According to French and Hopkins (2012) “There is definitely a foreign investment component to the new condo industry – it makes up the vast majority of sales right now.” All the articles on this topic echo the same sentiment that there is nothing wrong with foreign investment since it is beneficial for trade. However, this is a correlation between foreign investment and the demand for housing and inflation of prices. Meaning, as long as there is development and higher house prices it is good for the economy.
With condos increasing the housing stock, there is data showing not all of the units are being sold out. With this in mind and the current lack of affordable housing in the GTA there should be some type of policy allowing that these units being able to house those that need access to housing. But, maybe this is too much of utopian thinking.. Marotte (2014) points out “the units end up staying empty or only briefly occupied…One study last year said that nearly one-quarter of condos in some Vancouver areas were empty or occupied by non-residents.”
I think it will be difficult to attempt to solve this question in a short blog post, yet one factor of condo development is foreign investments. If the rise in condo development continues municipalities should start thinking of by-laws that will allow for a certain percentage of condo units being allocated for affordable housing. With a policy like this, it would continue to allow for development and at the same time house those that lack the access to housing.
Here are some more articles that discuss the rise of condo development and foreign investment:
Photo By: Chris Baker