The outer ring beyond the outer ring. Cheap land. 400 series Highways. Good labour markets.

The first Land Conference held in Toronto June 2nd was prompted by controversy surrounding the recent introduction of a draft plan for growth in the Greater Golden Horseshoe and new planning legislation called Places to Grow by the Government of Ontario. 

The draft plan calls for establishment of a green belt in the Greater Golden Horseshoe, an area that includes two nested rings, an inner ring that includes the GTA (Greater Toronto Area) and Hamilton and an outer ring comprised of the suburban 905 area and communities beyond 905 stretching from Niagara to Clarington and north to Barrie.   To accommodate anticipated population growth and to retain the proposed green belt the plan calls for a 40% increase in new homes being located in existing urban areas.

Robert MacIsaac, Mayor of the City of Burlington, – – described the Province's plan as doing something that has been ‘appalling neglected by Governments literally for decades.’ He said the old system where the Golden Horseshoe had ‘six or seven regional governments who weren’t particularly well co-coordinated as not a sustainable system’.  Although he is a proponent of the plan, he highlighted the challenge of getting public support by saying, “The only thing people oppose more than sprawl is intensification".

George Carras, President of RealNet Canada Inc. – – underscored the potential impact to the real estate industry of regulating land development. He presented information showing that in the past 5 years there has been $40B in property transactions of over $1,000,000 in the GTA. Land transactions account for 40% of the total, $12B in residential land and $4B in ICI land. Contrary to a popular impression that office sales dominate the property markets, land transactions were the largest sector by dollar value in 2004. 

Controversial aspects of the growth plan emerged at the conference including the question of how much land will the Golden Horseshoe have available for development if the plan is implemented.  According to Don Given, founding Partner and President, Malone Given Parsons Ltd. – – Provincial estimates show a requirement for 70,000 hectares of land by 2031, 43,900 for residential and 25,200 for industrial. While the Province claims this land is already available, a study conducted by Given’s company shows only 33,000 hectares would be available for development, about half the required land. The other half will have to come from outside the planned urban boundaries.

Timing issues related to the difference between single family and multi-unit development were also raised. Multi-unit housing, a key component of the Provincial urban intensification initiative has a much longer development time frame than single-family housing. Single family is built then sold while multi-unit housing is pre-sold then built. Multi-unit housing developments meet community resistance and take longer to design and build.  Mark Mandelbaum, VP Land Development for H&R Developments appealed to the municipalities and Province to streamline the multi-unit housing development process.

Inadequate infrastructure, particularly public transportation, was raised as a potentially critical impediment to the success of the plan.  Delays in establishment of the Greater Toronto Transit Authority have raised doubts about timely delivery of infrastructure requirements. Dave Caplan, Ontario Minister of Infrastructure, reiterated the Provinces commitment to invest $30 Billion in infrastructure over the next five years and establishment of a sustainable infrastructure plan. 

One of the anticipated consequences of the plan is a significantly higher cost of land. Bidding wars over available land have already started according to Fraser Nelson, V.P. of Metrus Development Inc.. He referenced a recent 50 acre land negotiation by his company where a farmer raised his price 400% upon learning his property was not in the proposed green belt. He added that while Metrus has sold building lots 18 months in advance of construction uncertainty about land availability and municipal approvals has significantly shortened the time.

Other concerns regarding the plan relate to the need for more industrial land and lack of emphasis on employment generating activity. Frank Clayton of Clayton Research – – noted that a Provincial report prepared by Hemson Consulting – – incorporates employment figures that are extrapolated from population growth projections rather than being calculated as a stand-alone factor. Don Given raised a specific case of land adjacent to Highway 401 designated for green space in the draft plan that he described as ideally suited to industrial use.

Where is the growth going to take place in Ontario? Frank Clayton explained that people are going to locate where they can find employment. He noted there has been a trend for industry to locate well outside the Golden Horseshoe where there is cheap land, 400 Highway access and access to labour e.g. Toyota in Woodstock. Furthermore the Hemson's report says 43% of future jobs are going to come from the industrial sector. He said, "there is an outer ring beyond the outer ring" broader than the Golden Horseshoe that we should start to think about.

Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

Read more

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