Vaughan’s downtown gets first purpose-built rental apartment building

36-storey apartment building by Vaughan-based real estate investment trust SmartCentres.

Yorkregion.com
Feb. 14, 2020
Dina Al-Shibeeb

To quench the thirst for rental units amid a supply shortage in York Region, Vaughan’s emerging downtown is getting its first purpose-built rental apartment building.

On Feb. 10, Steve Clark, minister of municipal affairs and housing, attended the groundbreaking for a 36-storey apartment building, by Vaughan-based real estate investment trust SmartCentres.

The building will unleash 450 rental units into the market and it will have a one-acre private park, access to a 25,000-square-foot super amenity, concierge and dog park, among other features.

The building is in SmartVMC, with its last three letters being the acronym for Vaughan Metropolitan Centre to further market the emerging downtown also known as VMC. Mitchell Goldhar, executive chair of SmartCentres, has previously said that SmartVMC is expected to be a pedestrian-first, new urban centre with downtown amenities, including a nine-acre central park and convenient, safe walkways and paths for both pedestrians and cyclists.

A Minister's Zoning Order helped bring forth SmartVMC by allowing the relocation of an existing retail store in what the government described as “Ontario cutting red tape to create jobs and bring housing to York Region” in a news release Feb. 10.

In December, SmartCentres and its joint venture partner Penguin, both owned by Goldhar, announced the lease for an existing Walmart at 101 Edgeley Blvd. will be terminated to open up land for new condos in downtown Vaughan.

The release also said the relocation project is backing Ontario's Growth Plan for the Greater Golden Horseshoe by bringing more housing around major transit hubs in “communities that are growing quickly,” such as Vaughan.

Clark also said he was “pleased” to have made a Minister's Zoning Order to “make it faster and easier for Vaughan to develop more housing and employment, which is a priority for our government.”

The Planning Act authorizes the minister of municipal affairs and housing to make zoning orders for regulating the use of land and the location, use, height, size and spacing of buildings and structures.
In addition, the zoning order had the support of the retailer, Vaughan city council and York region council.

“This project supports our government's plan to connect people to places and to build healthier, safer communities,” the minister said in agreement. “It shows the great results that can be achieved for communities when local partners and government work together," he added.

Government encouraging development

On top of that, to encourage the construction of more rentals, the government has allowed development charges for rental housing to be paid over a five-year period instead of up front.

The relocation will add 50 new retail jobs to the retail store. It would also make approximately four million square feet available for redevelopment of the existing site into new homes and other uses, creating approximately 2,000 construction jobs.

Meanwhile, Vaughan’s Mayor Maurizio Bevilacqua said the groundbreaking development is “in alignment with Vaughan's commitment to meet provincial density targets and find a complete range of housing solutions for our diverse and rapidly expanding city.”

Urbanation’s research has shown that there were 17,082 new purpose-built rentals submitted for approvals in the Greater Toronto Area -- a 43-per-cent increase from 2018.

Will this ease prices?

With the lack of affordable housing crisis in Toronto, could the GTA and its emerging cities such as Vaughan possibly be the cheaper alternative?

Kean Birch, an associate professor in the department of geography at York University, said, “Short answer is no” as “prices will go up across the board, around the GTA, since low interest rates raise the value of all housing assets.”

Birch has previously argued in a widely published opinion piece that as interest rates fall, asset prices for homes “will rise as investors move out of safer assets such as government bonds for more valuable future returns.”

He argues that as long as real estate is seen as a “valuable asset,” buying homes continues to be “a more attractive investment asset.”

“Even now, I don't know if Vaughan is cheaper than Toronto,” he added.

With Vaughan witnessing an explosion of new condos last year, Birch said, “Condos have become - effectively speaking - an investment vehicle so more condos won't ease prices.”

It all “depends what type of rental units are constructed,” Birch said, citing others who beg to differ.  Jennifer Keesmaat, the urban planner who served as Chief City Planner of Toronto from 2012 to 2017, believes “more mid-rise apartments will ease housing affordability,” he said.

However, “I'm less sure about that.”

“We may need to see more diversity in tenure types (e.g. more co-operative housing) for there to be any impact on affordability.”

With the government’s push to reduce development charges to entice more development, Birch also doesn’t expect this move as helpful in reducing prices.

“Developers are not going to reduce their investment expectations and reducing charges would simply saddle the cities with the huge costs underlying new housing developments (e.g. roads, sewers, water, stormwater) and reduce municipal income, which taxpayers would then end up paying, I imagine.”

Also, it’s “investment expectations” that “determine” when developers “build so that they receive the highest return.”

“The only way to ensure faster building times would be to change the approval process so that development approvals have a time limit to them (e.g. 1 year).”