This bulletin illustrates how the City has developed and how it will continue to grow over time. It summarizes information predominantly from the City of Toronto’s Land Use Information System II, providing an overview of the development projects received by the City Planning Division between January 1, 2008 and December 31, 2012 and supplemented by other data sources such as CMHC, Statistics Canada and the Toronto Employment Survey. This bulletin can be found on the City of Toronto’s website at: http://www.toronto.ca/planning/grow.htm
Highlights Toronto is growing with strong development prospects helping to bring more people and jobs into the city. Between January 1, 2008 and December 31, 2012: • Over 148,200 residential units and 2 4.25 million m of non-residential GFA were proposed in the City of Toronto. • 69,300 new residential units were constructed. • 82% of this new residential development is proposed in areas targeted for growth by the City’s Official Plan. • The Downtown & Central Waterfront area is the main location for residential and office development, with 41% of the residential units and 39% of the non-residential GFA proposed in the City. • 116,600 units and 2.58 million m2 of non-residential floor space proposed are under review or have been approved, but have not yet been built. Toronto will continue to grow as proposed developments receive approval and building permits. • Among the Centres, North York Centre has the most residential activity with 38% of the proposed residential units. Yonge/Eglinton Centre has the most non-residential space proposed, with 37% of all non-residential GFA proposed in the Centres. • Over 34,300 of the proposed residential units were along the Avenues identified in the Official Plan. • 25% of the City's proposed nonresidential floor space is in the Employment Districts of the Official Plan. • Downtown Toronto accounts for about one-quarter of all the office space currently under construction in Canada.
September 2013
How Does the City Grow? Introduction Toronto is Canada's most populous city, the focal point of development and growth, and the heart of the Greater Toronto Area (GTA). For many years now, Toronto has experienced a surge of both residential and non-residential growth. This bulletin is another in an annual series and examines how and where the City has been growing over the past five years and how it will continue to develop in the near future. Toronto's Official Plan, which came into force in June 2006, is the guide for development in the City over the next few decades. Its central geographic theme is to direct growth to appropriate areas and away from the City’s stable residential neighbourhoods and green spaces. The Official Plan targets new development to approximately 25% of the City's lands and strives to protect the remaining 75% from significant intensification. The locations recognized as being most appropriate for growth are those identified in the Official Plan's Urban Structure Map as Avenues, Centres, the Downtown1 and Employment Districts2, as well as other areas in the City designated as Mixed Use Areas and Employment Areas.
The Official Plan's Urban Structure Map is included in this bulletin as Map 1 on page 2.
Population and Employment It is important to understand Toronto's growth in the context of its population and employment. The Growth Plan for the Greater Golden Horseshoe, brought into force by the Provincial Government in June 2006, manages growth and development throughout the region that stretches around Lake Ontario from Niagara Falls to Peterborough, with Toronto at its centre. The Growth Plan, as amended, forecasts for 3.19 million people and 1.66 million jobs in the City of Toronto by 2031.3 The City’s population is on track with the population forecast in the Growth Plan. The Growth Plan anticipated a 2011 population including Census undercoverage of 2,760,000. The City’s 2011 Census population is reported as 2,615,060. Given that the Census undercounts the City’s population, the City's estimated actual population in 2011 is 2,753,100 ± 15,400.4,5 This is very close to the
profile TORONTO - 1
Map 1: Official Plan Urban Structure Map 2 – Toronto City Planning – SEPTEMBER 2013
level anticipated by the Growth Plan. In 2006, the City's population, including undercoverage, was 2,610,100 ¹ 14,600. With an increase of 143,000 people between 2006 and 2011 or an average of 28,600 people per year, Toronto is well on its way to reaching the forecasted 2031 population. Statistics Canada also reports where people are working. These data include people working at home and those with no usual place of work. Prior to 2011, this information was collected through the nowdiscontinued long-form Census. In 2011, the new voluntary National Household Survey (NHS) was used to collect the Place of Work data. Due to the differences in data collection methods, the NHS data cannot be compared to the Census data. Further research to explore this is under way. In June 2013, the Growth Plan for the Greater Golden Horseshoe was amended with revised forecasts. On the basis of the forecast background study, Toronto will need to add approximately 7,200 new jobs each year between 2011 and 2031 to reach the Growth Plan forecast.6 The Toronto Employment Survey is an annual survey that collects employment information from each business establishment in the City. According to Toronto Employment Survey results as shown in Table 1, in the ten years between 2001 and 2011, an average of 4,530 jobs was added in Toronto each year. In the five-year interval of 2006–2011, an average of 10,720 jobs was added each year. As a survey of business establishments, the Employment Survey does not capture the growing number of people who work at home nor all of
those who do not have usual places of work (e.g. construction workers). Thus total employment in the City is higher than reported by the Survey. The results from the Employment Survey demonstrate that employment is growing in the City. Table 1: City of Toronto Jobs Year
No. of Jobs
1996
1,154,200
2001
1,286,300
2006
1,278,000
2011
1,331,600
Source: Toronto Employment Survey, Toronto City Planning
Toronto Housing & the GTA According to the Canada Mortgage and Housing Corporation (CMHC) data shown in Table 2, Toronto has represented an average of about 28% of the housing completions in the Greater Toronto Area (GTA) since 1983. As seen in Figure 1, Toronto has been recovering from the low levels reported in the mid-1990s and is now producing about the same number of new dwelling units as it was during the peak in the late 1980s.
The City continues to be an exceptionally attractive location for residential development in the GTA, especially for high-density condominium apartments. CMHC recorded a total of 69,300 residential units completed in Toronto between 2008 and 2012 and 79% of these units were condominium apartments, an all-time high in Toronto's development history.7 According to the 2011 Census, the number of occupied private dwellings increased 68,547 between 2006 and 2011. CMHC reports 58,074 dwelling units were completed in the City during the same period (May 2006 to April 2011). This does not include demolitions, which would indicate somewhat fewer net new units. That the Census reports more units occupied than were completed suggests that the 2011 Census has captured a significant number of dwelling units that may have existed in the City at the time of the 2006 Census but were not classified as "occupied" at that time. This in turn suggests a higher net undercount in the 2006 Census for Toronto than was officially reported.
Table 2: Dwelling Completions, Greater Toronto Area Year 1983-1987 1988-1992 1993-1997 1998-2002 2003-2007 2008-2012 Total Average 1983-2012 Average 2003-2012
Toronto
GTA
39,689 44,962 25,711 41,227 57,899 69,335 278,823 9,294 12,723
148,540 167,526 105,029 184,446 205,331 171,518 982,390 32,746 37,685
Toronto % of GTA 26.7 26.8 24.5 22.4 28.2 40.4 28.4
Source: CMHC, Monthly Housing Now - Greater Toronto Area Reports
profile TORONTO - 3
Dwelling Units
Figure 1: Toronto & GTA Dwelling Unit Completions 50,000
100%
40,000
80%
30,000
60%
20,000
40%
10,000
20%
0 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0%
Toronto Completions
GTA Completions
Toronto Percentage of GTA
Source: CMHC, Monthly Housing Now - Ontario Reports
Toronto's Proposed Development Toronto's development industry is strong and continues to produce new projects. In the five year development pipeline between January 1, 2008 and December 31, 2012, 1,645 development projects, comprised of 148,200 residential units and almost 4.25 million m2 of non-residential
Gross Floor Area (GFA), have been submitted to the City Planning Division for review and approval. A number of these proposals have been built during this time period. The majority of the development proposed in the City is occurring in areas that the Official Plan has targeted for growth. Table 3 contains
the breakdown of residential and nonresidential development proposed in these targeted growth areas, as well as the stages of development, while Maps 2 and Map 5 (on pages 5 &13) show the distribution of residential and non-residential developments throughout the City respectively. As seen in Figure 2, since the Official Plan came into force, 82% of the residential units are proposed to be built in the Downtown, in the Centres, along the Avenues, and in other Mixed Use Areas throughout the City. Almost two-thirds (62%) of the non-residential GFA was also proposed in these same areas (Figure 3), while the remaining 38% of the non-residential GFA was proposed in the Employment Districts or other Employment Areas, which the Official Plan also targets for growth. Across the City, 79% of the 148,200 residential units and 60% of the nonresidential GFA proposed between 2008 and 2012 do not have building permits issued. This amounts to over 116,600 units and 2.58 million m2 of non-residential GFA that are either
Table 3: Proposed Development in City of Toronto Applications Received between January 1, 2008 and December 31, 2012 Number of Projects City of Toronto Growth Areas Downtown and Central Waterfront Centres Etobicoke Centre North York Centre Scarborough Centre Yonge / Eglinton Centre Avenues Other Mixed Use Areas All Other Areas Stage of Development Projects Submitted (not approved) Projects Approved (no permits issued) Projects with Permits Issued
% of Projects
1,645
% of Proposed Res Units
148,242
Proposed Non Residential GFA (m²) 4,249,835
% of Proposed Non-Res GFA
230 36 11 12 4 9 262 113 1,004
14.0 2.2 30.6 33.3 11.1 25.0 15.9 6.9 61.0
60,290 12,872 4,084 4,870 0 3,918 34,326 14,294 26,460
40.7 8.7 31.7 37.8 0.0 30.4 23.2 9.6 17.8
1,671,919 148,676 51,527 35,316 6,567 55,265 591,357 207,854 1,630,420
39.3 3.5 34.7 23.8 4.4 37.2 13.9 4.9 38.4
405 366 874
24.6 22.2 53.1
75,887 40,754 31,601
51.2 27.5 21.3
1,262,626 1,322,611 1,664,989
29.7 31.1 39.2
Source: City of Toronto, City Planning: Land Use Information System II
4 – Toronto City Planning – SEPTEMBER 2013
Proposed Residential Units
profile TORONTO - 5
Figure 2: Proposed Residential Units in Growth Areas
Other Mixed Use Areas 9%
Centres 9%
Downtown and Central Waterfront 41%
Figure 3: Proposed Non-Residential GFA in Growth Areas Other Mixed Use Areas 5%
Centres 3%
Downtown and Central Waterfront 39%
Avenues 14%
Avenues 23% All Other Areas 38%
All Other Areas 18% Source: City of Toronto, City Planning: Land Use Information System II
Source: City of Toronto, City Planning: Land Use Information System II
awaiting approval or awaiting construction. City Council has approved an average of 19,500 residential units per year over the last five years, and a large proportion of the development proposed in that period has yet to be built, indicating a continuation of strong construction activity in Toronto in the coming years.
The disparity between completions and absorptions is higher over the last 5 years compared to the two previous
Dwelling Unit Completions and Absorptions Given the large number of residential units recently proposed and completed in the City, it is fair to ask whether this reflects growing housing demand or the early signs of an overbuilt market. Along with their Starts and Completions Survey, CMHC also conducts a Market Absorption Survey to determine when residential units are sold or rented once a structure has been constructed. Table 4 compares the number of completions and absorptions in Toronto over the last 15 years. In 2012, 13,500 residential units were completed and 12,000 units were absorbed, making the unabsorbed percentage in 2012 the highest (12.2%) in the 15-year span. 6 – Toronto City Planning – SEPTEMBER 2013
5-year periods (1998-2002, 20032007) where the number of units completed and units absorbed roughly kept pace with each other. The Market Absorption Survey data by dwelling type addresses this issue. It shows no significant net increases in unabsorbed units for freehold and condominiums units (see Appendix on page 15). Supply and demand are well balanced. The bulk of the unabsorbed units are in the rental market. Rental completions represented 9% of total completions, but only 4% of total absorptions. The higher rate of unabsorbed rental units is not the result of oversupply of
Table 4: Dwelling Unit Completions and Absorptions, City of Toronto Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 January to June 2013 Total Average 1998-2012 Average 1998-2002 Average 2003-2007 Average 2008-2012
Completions
Absorptions
4,382 7,576 9,199 6,349 13,721 13,119 10,438 15,136 12,420 6,786 13,450 12,473 13,088 16,850 13,474 9,029 177,490 11,093 8,245 11,580 13,867
4,348 7,290 9,399 6,522 13,293 12,478 10,575 15,126 11,962 7,159 12,878 11,704 12,075 15,868 12,009 8,639 171,325 11,422 8,170 11,460 12,907
Completions minus Absorptions 34 286 -200 -173 428 641 -137 10 458 -373 572 769 1,013 982 1,465 390 6,165 -329 75 120 960
"Unabsorbed" Percentage 0.8 3.9 -2.1 -2.7 3.2 5.1 -1.3 0.1 3.8 -5.2 4.4 6.6 8.4 6.2 12.2 4.5 3.6 -2.9 0.9 1.0 7.4
Notes: 1. The data in Table 4 reflects the total number of units for each 12 month period. Due to cyclical variations in the construction and sales industry that are unequally distributed throughout the year 2013 year-to-date data has been excluded. 2. "Unabsorbed Percentage" is the ratio of Completions minus Absorptions to Absorptions. 3. The total number of Completions in Table 4 varies from Table 5 due to co-operatives and unknown market types. In 2011 there were 29 completed co-operatives in the City of Toronto. Source: Canada Mortgage Housing Corporation, Market Absorption Survey Custom Tabulation.
this type of unit. The methodology of the Market Absorption Survey requires that buildings must be 100% completed and the building sold before the units become counted as "absorbed". The recording of absorptions will tend to lag completions in the latest periods of the Survey. Therefore, the data on absorptions and completions needs to be interpreted with caution.
Proposals and Approvals Over Time The pipeline of development proposals provides a moving fiveyear window on proposals and approvals over time. There has been a steady pattern of strong housing activity in Toronto. An average of 102,800 residential units were
proposed and under review in each of the 5-year development pipelines since 2006. Figure 4 displays the five-year pipelines over this period. The 2008 global recession resulted in fewer active proposals, but the market began to recover by the end of 2010. One ongoing driver of this activity has been extremely low interest rates, resulting in very low mortgage rates to consumers. Although the number of residential units proposed has decreased compared to 2011, this pipeline shows a considerably higher number of proposed residential units than all preceding pipelines from 2006. Apartment units account for an average of 93% of all residential units across the development approval pipelines, while row/townhouse and single/semi-detached units account for 5% and 3% respectively.
Compared to apartment units, the proportion of ground-related units proposed began to decrease in 2011 and has remained near 5% since then. There are two reasons for this decrease. The first results from the actions of the Federal Government in 2011 and 2012. The Department of Finance began to tighten mortgage insurance rules in 2008, in the face of the U.S housing collapse. Government-insured mortgages had their amortization period cut to 35 years from 40, and "no money down" sales were eliminated with the requirement of a minimum down payment of five percent. While these actions had only a modest effect on the housing market as so few homes fit these criteria, the 2011 changes were more dramatic. The maximum
Figure 4: Five-Year Residential Pipelines - Residential Units by Dwelling Type 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000
96% 90%
89%
90%
91%
50,000
92%
92%
95%
96%
3% 2%
3% 1%
94% 94%
95%
93%
4% 2%
4% 2%
3% 4%
40,000 30,000 20,000 10,000 0
7% 3%
8% 3%
7% 3%
6% 3%
6% 2%
6% 2%
3% 3%
2% 2%
Apartment
2006 2007 2007 2008 2009 2009 2009 2010 2010 2011 2011 2012 2012 Q4 Q2 Q4 Q2 Q1 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 98,817 93,652 93,546 93,103 86,600 84,210 82,540 83,054 83,947 93,999 121,524 110,932 113,917
Row/Town
7,716
8,527
7,521
6,171
5,609
5,540
3,883
3,373
2,897
2,516
2,488
2,837
3,807
Single/Semi
3,736
3,355
2,964
2,577
2,330
2,255
1,579
1,416
3,442
3,259
3,065
2,927
825
Notes: Each Pipeline represents all active development applications submitted within the five-year period ending with the quarter indicated. The 2006 Q4 Pipeline covers the five-year period beginning January 2002. It includes 198 projects and 24,701 residential units proposed between January and October 2006, before the Official Plan was adopted. 2009 Q1 data was used in place of 2008 Q4 because of data issues. Units are classified by generalized residential land use. Units in Mixed Use projects are not included. Percentages do not always total 100 percent due to rounding. Source: City of Toronto, City Planning: Land Use Information System II. profile TORONTO - 7
Figure 5: Five-year Residential Pipelines – Residential Units by Stage 100% 90%
22%
25%
25%
21%
34%
35%
32%
22%
21%
23%
26%
21%
22%
19%
21%
28%
29%
53%
50%
32%
80% 70% 60%
36%
34%
34%
32%
33%
34%
33%
22%
46%
46%
Figure 4: Five-Year Residential Pipelines - Residential Units by Dwelling Type 50% Figure 4: Five-Year Residential Pipelines - Residential Units by Dwelling Type Figure 4:40% Five-Year Residential Pipelines - Residential Units by Dwelling Type Figure 4: Five-Year Residential Pipelines - Residential Units by Dwelling Type 30% 20%
42%
40%
40%
47%
44%
45%
45%
41%
45%
10% 0%
2006 2007 2007 2008 2009 2009 2009 2010 2010 2011 2011 2012 2012 Q4 Q2 Q4 Q2 Q1 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Permits Issued 23,765 26,880 26,236 21,823 20,583 19,268 20,499 22,887 18,922 21,611 40,828 22,071 25,251 Approved 39,736 36,034 36,062 32,398 32,416 31,037 28,011 28,874 30,631 32,633 27,943 32,662 34,404 Submitted 46,768 42,620 41,733 47,630 41,540 41,700 39,492 36,082 40,733 45,530 58,306 61,963 58,894 Notes: Each Pipeline represents all active development applications submitted within the five-year period ending with the quarter indicated. The 2006 Q4 Pipeline covers the five-year period beginning January 2002. It includes 198 projects and 24,701 residential units proposed between January and October 2006, before the Official Plan was adopted. 2009 Q1 data was used in place of 2008 Q4 because of data issues. Units are classified by generalized residential land use. Units in Mixed Use projects are not included. Percentages do not always total 100 percent due to rounding. Source: City of Toronto, City Planning: Land Use Information System II.
insured amortization was dropped to 30 years, and mortgage refinancing was limited to 85% of property value. In 2012, the maximum amortization period was dropped to 25 years, maximum refinancing was reduced to 80% of property value and the availability of government-backed mortgage insurance was restricted to homes with a value of $1 million or less. The 2011 and 2012 changes had the effect of increasing the overall costs of home ownership. This would have a larger effect on higher priced homes, which in Toronto's case are typically ground-related housing. The second reason for the decrease, especially in the most recent pipeline, is due to the new City-wide Site Plan control bylaw that was enacted in June of 2012. This new bylaw expands the Site Plan exemption to single detached houses, semi8 – Toronto City Planning – SEPTEMBER 2013
detached houses and townhouse projects that include no more than four units and front on public roads. This triggered a drop in the number of ground-related residential Site Plan applications submitted. Applications which were under review but were caught by the expanded exemption were withdrawn. Between 2008 and 2011, 112 ground-related residential Site Plan applications were received. In the last year of the five-year pipeline, only 22 applications were received. This ground-related development no longer requires Site Plan approval and therefore is not captured by the planning applications pipeline. Not all proposed units are approved, and not all approved units are built. In the most recent pipeline, approximately 58,900 residential units are not yet approved, 34,400
units have received approval, and 25,300 units have building permits issued or were completed. Figure 5 shows that at any given time, approximately 45% of the proposed residential units are under review, 32% have been approved and 23% have building permits issued. This means that at any point in time, approximately 55% of the residential units in the pipeline have been approved and are awaiting construction. This pattern remained consistent throughout the past decade.
Downtown The Downtown and Central Waterfront area is the most prominent location of development activity in the City and contains the largest percentage of proposed residential development in all the City’s growth
areas. Between January 2008 and December 2012, 60,300 units and 1.67 million m2 of non-residential GFA were proposed in the area. This comprises 41% of the residential units and 39% of the non-residential GFA proposed in the entire city. Map 3 shows the distribution of residential and non-residential projects throughout the Downtown. A large portion of the residential development is proposed south of Queen Street, with another large cluster of units along Bloor Street east of Avenue Road. The nonresidential developments are more dispersed throughout the area with large projects occurring along Yonge Street, from Bloor Street West to Front Street, and another cluster in the area of Spadina Avenue south of Queen Street West.
Centres The four Centres are focal points of transit and infrastructure that are vital to the City’s growth management strategy. The distribution of the 36 projects proposed in the Etobicoke, North York, Scarborough and YongeEglinton Centres can be seen in Map 4. These projects contain almost 9% of the City’s proposed residential units. About 12,900 units as well as 148,700 m2 of non-residential GFA are proposed in the Centres. The residential projects in the Centres are generally high-density development with an average of 500 residential units per project. This is the highest average in the growth areas, higher than the Downtown which has an average of 390 units per residential project. North York Centre has the
most residential activity proposed in the Centres with 38% of the residential units, while the Yonge/Eglinton Centre has the most nonresidential development activity among the Centres with 37% of all proposed non-residential GFA.
Avenues The Avenues are corridors along major streets well served by transit which are expected to re-develop incrementally over time. They have been an effective alternative to the Downtown and the Centres for redevelopment and have 34,300 units and 591,400 m2 of non-residential GFA proposed since January 2008. This is about 23% of the City’s proposed units and 14% of its proposed non-residential GFA.
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Other Mixed Use Areas
All Other Areas
Employment Districts
Outside of the Downtown, Centres and Avenues, there are numerous other locations throughout the City that are designated as Mixed Use Areas, which encourage a broad range of commercial, residential and institutional uses, such as local shopping areas along minor arterial roads. These additional Mixed Use Areas have another 14,300 units and 207,900 m2 of non-residential GFA proposed.
Table 3 shows that almost 26,500 units or 18% of the units proposed in the City are outside of the growth areas – the Downtown, Centres, Avenues and other Mixed Use Areas. These projects are generally smaller replacement or infill projects, in areas designated as Neighbourhoods.
There is a long-standing trend towards core cities in North America metropolitan areas losing manufacturing activities to suburban locations over an extended period of time.8 Toronto is no different than these other cities. Employment in the manufacturing sector in Toronto has been decreasing almost every year since 1983, from 25% to 10% of total employment in 2012. However, at the same time, Toronto's employment activity has grown and diversified.
This accounts for 10% and 5% of the City's proposed residential units and non-residential GFA respectively.
10 – Toronto City Planning – SEPTEMBER 2013
There is 1.63 million m2 of nonresidential GFA also proposed in these other areas, most of which is in the Employment Districts or other Employment Areas which the Official Plan targets for nonresidential growth.
Employment Districts are part of Toronto's Urban Structure as described in Chapter 2 of the Official Plan.
Each of the 22 Employment Districts has a unique employment character and many are undergoing a gradual shift in focus from traditional manufacturing to a more diverse employment structure. In 2012, the manufacturing sector accounted for about 30% of all the jobs in the Employment Districts.9 These Employment Districts are also attractive locations for the creation of new, small businesses.10 With 1.66 million jobs forecasted for the City of Toronto by 2031,11 the protection and enhancement of the Employment Districts is vital to the City’s economic health. The developments proposed in the Employment Districts, as seen in Table 5, will help the City reach its forecasted growth potential. The Employment Districts have 1.1 million m2 or 25% of the City’s proposed non-residential GFA (see Map 5). While overall employment in these Districts has declined over the past 5 years, new development could bring new life and new jobs to many of these areas. Building permits have already been issued for about 30% of the proposed GFA in Employment Districts, which amounts to 313,200 m2 of new nonresidential floor space in 91 different projects. Over the next few years, as building permits are issued for the projects that have been approved, another 301,500 m2 of non-residential GFA in 44 projects will be constructed in the Employment Districts. Of the 22 Employment Districts, 40% of the proposed non-residential GFA is concentrated in three Districts: Duncan Mills, South Etobicoke, and
Tapscott/Marshalling Yard. Over 429,600 m2 of non-residential GFA is proposed in these three Districts, which accounts for 10% of all nonresidential space proposed in the entire City over the last five years. While most of the lands in the Employment Districts are designated as Employment Areas in the Official Plan, there are a number of areas outside of the Districts that are also designated as Employment Areas. According to the Official Plan, "Employment Areas are places of business and economic activity. Uses that support this function consists of: offices, manufacturing, warehousing, distribution, research and development facilities, utilities, media facilities, parks, hotels, retail outlets that are ancillary to the preceding uses".12 Employment Areas exist in Centres, Employment Districts and along the Avenues. The large majority of Employment Areas are located inside Employment Districts. Not all lands within Employment Districts are designated Employment Areas, some are Mixed Use and other uses. In all the lands designated as Employment Areas in the City of Toronto, 1.2 million m2 of nonresidential GFA was proposed in the last five years. As shown in Table 5, this amounts to 28% of all the nonresidential GFA proposed for the entire City. About 12% of this space or 142,300 m2 was proposed in Employment Areas outside of the Employment Districts.
Toronto Office Market Over the past several issues of How Does the City Grow? we have commented on the health of the GTA office market in general, and the Downtown Toronto area in particular. The office market is vital to Toronto's economy, as about 47% of the City's jobs in 2012 are classified as office employment.13 Demand for office space remains strong. For some time, the GTA office market has been characterized by decreasing vacancy rates and increasing net rents in most parts of the GTA market. This situation stands in sharp contrast to much of the rest of North America. In an analysis of 75 office markets across North America, Toronto ranks 7th as having the lowest office vacancy rate.14 Downtown Toronto is the largest employment centre in the regional economy and Canada's premier business office centre. The Toronto Downtown area recorded a positive absorption (new space occupied) for the first two quarters of 2013 of about 20,700 m2, which was almost 30% of the total absorption for the GTA office market for the same period.15 In the current quarter, the Downtown's overall vacancy rate fell to 4.3% from 5.1 % in the first quarter of 2013.16 These rates compare favourably with suburban areas such as the GTA East (8.7%), GTA North (5.8%) and GTA West (11.5%) for the current quarter. This is despite these three areas having asking office rents of one-half or less than that recorded in Downtown Toronto. Office tenants are continuing to find Downtown Toronto as a preferable office location and are prepared to pay a premium to be there.
profile TORONTO - 11
Table 5: Proposed Development in Employment Districts Employment Areas Applications Received between January 1, 2008 and December 31, 2012 Employment Districts1 Proposed Number % of Non of Projects Residential Projects GFA (m²)
1,645
City of Toronto
Employment Areas2 % of Proposed Non-Res GFA
Proposed Number % of Non of Projects Residential Projects GFA (m²)
% of Proposed Non-Res GFA
Proposed NonRes GFA in Emp Areas as % of Emp District
4,249,835
197
12.0
1,077,188
25.4
208
12.7
1,177,719
27.7
Airport Corporate Centre
1
0.5
16,850
1.6
1
0.5
16,850
1.4
100
Consumers Road
7
3.6
36,949
3.4
7
3.3
36,949
3.1
100
Don Mills
2
1.0
4,119
0.4
2
1.0
4,119
0.3
100
Dufferin Keele North
12
6.1
44,350
4.1
11
5.3
43,044
3.7
97
Dufferin Keele South
9
4.6
45,893
4.3
9
4.3
45,893
3.9
100
10
5.1
145,474
13.5
10
4.8
145,474
12.4
100
23
11.7
80,680
7.5
22
11.0
81,635
6.9
101
5
2.5
19,611
1.8
5
2.4
19,611
1.7
100
Liberty
8
4.1
35,677
3.3
7
3.3
35,542
3.0
100
Milliken
12
6.1
45,591
4.2
12
5.7
45,591
3.9
100
7
3.6
37,056
3.4
5
2.4
8,528
0.7
23
Overlea
3
1.5
6,518
0.6
3
1.4
6,518
0.6
100
Rexdale
15
7.6
64,801
6.0
15
7.2
64,801
5.5
100
Scarborough Highway 401 Corridor
13
6.6
63,584
5.9
13
6.2
63,584
5.4
100
1
0.5
276
0.0
1
0.5
276
0.0
100
South Etobicoke
20
10.2
137,070
12.7
15
7.2
123,077
10.5
90
South of Eastern
5
2.5
30,309
2.8
5
2.4
30,309
2.6
100
11
5.6
93,072
8.6
11
5.3
93,072
7.9
100
Total Employment Lands
Duncan Mills Highway 400 Corridor
3
Laird
North West Etobicoke
South East Scarborough
South West Scarborough Steeles & Victoria Park Tapscott/Marshalling Yard West Central Scarborough
3
Weston Road/Junction
1
0.5
11,366
1.1
1
0.5
11,366
1.0
100
24
12.2
147,057
13.7
24
11.5
147,057
12.5
100
7
3.6
5,671
0.5
6
2.9
6,895
0.6
122
1
0.5
5,214
0.5
1
0.5
5,214
0.4
100
22
10.6
142,314
12.1
Outside Employment District Stage of Development Projects Submitted (not approved) Projects Approved (no permits issued) Projects with Permits Issued
62
31.5
462,481
42.9
68
32.5
483,688
41.1
44
22.3
301,496
28.0
48
23.0
379,290
32.2
91
46.2
313,210
29.1
92
44.5
314,741
26.7
Note: 1. The Employment Districts table can not be directly compared with Table 3: Proposed Development in City of Toronto because the Avenues as broadly shown on the Official Plan Urban Structure Map run alongside and overlap portions of some Employment Districts. See Map 1 on page 2. 2. Designated Employment Areas exist in Employment Districts, Centres, and along Avenues as well as in other areas of the City. 3. These Employment Areas contain projects for which the net change between the current uses and the result of what is proposed is a net loss in GFA. The two projects in the Employment Districts but not in the corresponding Employment Areas result in a net loss of GFA, consequently the corresponding total GFA in the Employment Areas is higher. Source: City of Toronto, City Planning, Land Use Information System II
12 – Toronto City Planning – SEPTEMBER 2013
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Table 6: Recent Downtown Toronto Office Development Projects Net Size (m2 ) 84,000
Address Bay/Adelaide Centre Phase II
Developer / Tenant Brookfield
120 Bremner Blvd
Bremner Tower (Part of the Southcore Financial Centre)
MaRS II (661 University Ave) 444 Front St 88 Queens Quay West 333 King Street East 134 Peter St/381 Queen St W 1 York St Total
MaRS Globe and Mail Oxford/ RBC First Gulf Allied REIT, QRC West Menkes/HOOPP
63,000 73,000 38,000 84,000 9,000 28,000 74,000 453,000
Source: Colliers, If You Build It, Will They Come?, revised summer 2013, and CBRE Toronto Downtown Office Market Snapshot, June 2013
Given this continued strong demand, developers are building again. Currently, there are eight buildings under construction, which will add over 453,000 m2 in the next 2 to 3 years (Table 6). This is a level of development highly reminiscent of the late 1980s, when millions of square feet of office inventory were added to the GTA every year. CBRE notes in their June 2013 Toronto Downtown Office Market Snapshot that, "Even the last major office development cycle, which saw 4.4 million ft2 (409,000 m2) completed between 2009 and 2011, pales in comparison."17 To put this in perspective, in the second quarter of 2013, Downtown Toronto accounted for about 92% of the office space under construction in the GTA. Downtown Toronto accounts for about one-quarter of all the office space currently under construction in Canada.18 CBRE observes that the last significant office building in the Downtown was completed two years ago: the 60,000 m2 PwC Tower at 18 York Street which was fully leased at the time it was ready for occupancy.19 It is estimated that a further 15 office
14 – Toronto City Planning – SEPTEMBER 2013
buildings are actively being planned in the Downtown (Figure 6). These projects are scheduled to come to market between 2016 and 2018. It should be noted that there are other major non-office developments occurring throughout the City. This includes the Ripley's Aquarium, the Delta Hotel in the Southcore
Financial Centre, the expansion of Yorkdale Shopping Centre, the Union Station revitalization, and the Athletes' Village and other facilities for the Pan/Parapan American Games 2015.
Figure 6: The second phase of the Bay/Adelaide centre under construction, with the first completed phase, which had been dormant for over a decade, behind it. A third phase is planned which will eventually add a further 84,000 m2.
Appendix Table 1: Dwelling Unit Completions and Absorptions by Type, City of Toronto Freeholds Year 2008 2009 2010 2011 2012 2013 Jan-June Total Condominiums Year 2008 2009 2010 2011 2012 2013 Jan-June Total Rental Year 2008 2009 2010 2011 2012 2013 Jan-June Total
Completions 2,071 2,231 1,286 1,449 1,528 834 8,565 Completions 10,058 9,322 10,923 14,568 9,961 7,187 54,832 Completions 1,321 920 879 804 1,985 1,008 5,909
Absorptions 2,069 2,221 1,378 1,425 1,529 800 9,422 Absorptions 9,982 9,371 10,437 13,838 9,831 7,033 60,492 Absorptions 824 112 260 605 649 806 3,256
Completions minus Absorptions 2 10 (92) 24 (1) 34 (857)
"Unabsorbed" Percentage 0.1 0.5 -6.7 1.7 -0.1
Completions minus Absorptions 76 (49) 486 730 130 154 (5,660)
"Unabsorbed" Percentage 0.8 -0.5 4.7 5.3 1.3
Completions minus Absorptions 497 808 619 199 1,336 202 2,653
"Unabsorbed" Percentage 60.3 721.4 238.1 32.9 205.9
-9.1
-9.4
81.5
Notes: 1. The data in Table 4 reflects the total number of units for each 12 month period. Due to cyclical variations in the construction and sales unequally distributed throughout the year 2013 year-to-date data has been excluded. 2. "Unabsorbed Percentage" is the ratio of Completions minus Absorptions to Absorptions. Source: Canada Mortgage Housing Corporation, Market Absorption Survey Custom Tabulation
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How the Data is Collected The development information presented in this bulletin was extracted from the Land Use Information System II, maintained by the City’s Research and Information, Strategic Initiatives, Policy & Analysis section of the City Planning Division. Staff collect detailed information from every development application received by the Division, as well as any revisions to the applications made throughout the planning process. Information is also collected from building permit applications. The result is a rich body of data describing the location and built form of development projects across the City of Toronto throughout each stage of development.
Endnotes 1
2
3
4
For the purposes of this bulletin, any reference to the Downtown includes the Central Waterfront Area. According to the Official Plan, "Employment Areas are places of business and economic activity. Uses that support this function consists of: offices, manufacturing, warehousing, distribution, research and development facilities, utilities, media facilities, parks, hotels, retail outlets that are ancillary to the preceding uses". City of Toronto, City Planning, Official Plan, 4-12, Policy 1, 2006. The Official Plan was adopted before the Growth Plan came into force. By provincial legislation, the Official Plan must be brought into conformity with the policies of the Growth Plan. Toronto's Official Plan contemplates the city having 3 million people and 1.85 million jobs by 2031. The 2006 Growth Plan forecasts 3.08 million people and 1.64 million jobs in the City of Toronto by 2031.The amended Growth Plan, including revised forecasts, came into effect in June 2013. The estimated net undercoverage rate of the 2006 Census for the Toronto CMA is 4.94% ± 0.56% per Table 16 – Toronto City Planning – SEPTEMBER 2013
1.2.2, 2006 Census Technical Report, Statistics Canada, Cat.No. 92-567-X. 5 The estimated population and net undercoverage rate of 5.02% for the Toronto Census Division is per Statistics Canada, Annual Demographic Estimates, 91-214-XWE and the estimated coverage error for the Toronto CMA. 6 Hemson Consulting Ltd, Greater Golden Horseshoe Growth Forecasts to 2041, Technical Report, November 2012. 7 Canada Mortgage and Housing Corporation, Housing Now – Greater Toronto Area Reports. 8 Kneebone, Elizabeth (2013) Job Sprawl Stalls: The Great Recession and Metropolitan Employment Location, Brookings Institution. 9 City of Toronto, City Planning, Toronto Employment Survey, 2012. 10 City of Toronto, City Planning, Employment Districts Profile, July 2010. 11 The Official Plan was adopted before the Growth Plan came into force. By provincial legislation, the Official Plan must be brought into conformity with the policies of the Growth Plan. Toronto's Official Plan contemplates the city having 3 million people and 1.85 million jobs by 2031. The 2006 Growth Plan forecasts 3.08 million people and 1.64 million jobs in the City of Toronto by 2031.The amended Growth Plan, including revised forecasts, came into effect in June 2013. 12 City of Toronto, City Planning, Official Plan, 4-12, Policy 1, 2006. 13 City of Toronto, City Planning, Toronto Employment Survey, 2012. 14 Colliers International , If Your Build It, Will They Come, Updated Summer 2013. 15 Cushman & Wakefield, Marketbeat Office Snapshot, Greater Toronto Area, Q2 2013. 16 Cushman & Wakefield, Marketbeat Office Snapshot, Greater Toronto Area, Q2, 2013. 17 CBRE, Toronto Downtown Office Market Snapshot, June 2013. 18 CBRE, Canada Office Marketview, Q2, 2013. 19 CBRE, Toronto Downtown Office Market Snapshot, June 2013.
Please direct information inquiries and publication orders to: City Planning Division Strategic Initiatives, Policy & Analysis Metro Hall, 22nd Floor Toronto, Ontario M5V 3C6 tel: 416-392-8343 fax: 416-392-3821 TTY: 416-392-8764 e-mail: cityplanning@toronto.ca