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Toronto’s housing market often overlooks a significant demographic: families.
While there's a growing trend toward compact living and urban density, the demand for larger units that cater to families' needs remains largely unmet. This oversight not only limits housing options but also represents a substantial missed business opportunity for private sector developers, especially in today’s market.
Families, especially those with children, require more than just a one or two-bedroom apartment.
A three-bedroom unit, like the one in which I reside, offers the necessary space without the excess that comes with a standalone house. It's about meeting the needs of families in terms of bedroom count rather than sheer size.
Not to mention that other needs could be offered as part of the building, and not necessarily in the unit, like a mud room, or stroller parking. This approach not only accommodates larger households, but also fits within the urban fabric, promoting density without sacrificing livability.
Urban living advantages: Terrace vs. backyard
One of the misconceptions developers have is the belief that families won’t give up on the traditional backyard.
In reality, amenities like a terrace or communal outdoor spaces can serve as excellent substitutes. These areas provide opportunities for spending time together as a family, just like a backyard without land inefficiency.
Furthermore, common outdoor amenities facilitate neighbour interactions, strengthening the sense of community. My own experience highlights how such amenities can enrich the urban living experience, offering a balance of privacy and social engagement.
The market potential ignored
This generation (“Millennials”) values efficiency, proximity, and convenience — qualities offered by urban living, but often lacking in the suburbs.
Unlike our parents, who were willing to spend significant time commuting, today's families seek homes that minimize travel time and maximize the quality of life. Living in the city means being closer to work, schools, amenities and social activities, reducing the need for long commutes and enhancing daily efficiency.
Developers often underestimate the market potential of larger units for families. There's a prevailing assumption that only investors can afford pre-construction purchases, leading developers to focus on smaller, more affordable units.
This oversight not only narrows their customer base, but also drives families toward suburban living where larger homes are more readily available, simply because not enough is offered in more urban, central locations.
Market adjustments: The lessons from Uber and Airbnb
Comparing the housing market to other industries, such as Uber and Airbnb, reveals significant market adjustments that have led to their success.
Uber had to convince us that it is safe to get into a car with a complete stranger. Airbnb taught that exact same thing about hosting strangers and staying over at a complete stranger’s home.
Similarly, developers have the opportunity to innovate by recognizing the demand for larger family units within urban environments, and educating their market about the advantages of such a purchase.
To capitalize on this overlooked market, developers must reassess their approach to who their buyer is.
The perfect Blue Ocean Strategy
As discussed in the book Blue Ocean Strategy, successful business strategies often involve envisioning what will be taken for granted in the future, but does not exist now, and working towards that vision.
Apartments designed specifically for families fit this criterion perfectly. By recognizing and addressing this gap in the market, developers can not only drive financial success but also significantly contribute to the livability and inclusivity of our cities.
Those who take the lead in this emerging market will address one of Toronto’s greatest opportunities.
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