Slowing Down, Sustainably? The UrbanToronto Pro Q2 2023 Report

Urbantoronto.ca
Sept. 13, 2023

While the second quarter of 2023 saw an increase in development applications to the City of Toronto from Q1, year-over-year applications were down considerably, according to the latest data from UrbanToronto's UTPro data subscription service.

Developers submitted applications for 52 new large projects to the City of Toronto in Q2, a 40% decline from the 87 proposals from the same period last year. While many applications propose to construct multiple buildings, the total number of new buildings being proposed also declined by 51%.

In fact, virtually every change we track has declined substantially--total number of dwellings, total Gross Floor Area, median storeys proposed, and total Floor Space Index all declined by more than 50% from last year. Living spaces also decreased as well, from 886 square feet of residential GFA per unit, to 721 square feet being proposed in Q2 of this year (a 19% decrease).

The one bright spot in this year's report is that the total number of bicycle parking spaces continued its uphill climb: from 16,059 units in Q2 last year, to 21,340 units this year (a 33% increase). Moreover, while last year only 0.46 bike parking units were proposed for every dwelling unit, this year that proportion jumped up to 1.38. Auto aficionados do not have to fret however, since despite the decline in total car parking spaces, per unit that ratio increased from 0.43 in Q2 of 2022 to 0.65 in Q2 of 2023.

The decline in the number of units being proposed is also affecting the unit mix as well. Whereas last year, only 60% of units were studios or 1-bedroom units, this year that number jumped to 64%.

While the maximum number of storeys proposed jumped from 75 to 80 this year, the additional 5 storeys only amounted to an extra 5 metres (21 feet) difference in height between the two buildings. This may indicate a trend for lower ceiling heights to rein in costs.

While total commercial GFA declined year-over-year, there may be signs of a rebound in this sector. In Q2 last year, only 7.6% of total GFA was designated as commercial. This year, that share increased to 9.7%. Similarly, while only 18.4% of projects last year had an office component, this figure jumped to 21.1% this year.

Toronto developers are still clearly cautious about the future state of the market, as is reflected in the application data. Not only are they proposing fewer new projects, but they are proposing smaller projects on average as well. However, developers do seem to have some confidence about the future: the city is still expected to grow, transportation will be more bike-friendly, and obituaries for offices were written too soon.