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After a decade spent catering to the 25-34 age demographic and building small studio or one-bedroom condos, a report says, the city faces a shortage of large units as that cohort starts having children.

Mark Blinch/The Globe and Mail file photo

The Greater Toronto Area's condominium boom is failing to produce enough larger, family-friendly units to accommodate a coming wave of millennials due to hit prime child-bearing age, a new report warns.

A study by Ryerson University's City Building Institute and Urbanation, a real estate consulting firm, says that only 41 per cent of condominiums under construction or in preconstruction in the GTA have at least two bedrooms. That's down from 67 per cent in buildings completed in the 1990s.

After a decade spent catering to millennials in the 25-34 age demographic and building small studio or one-bedroom condos, the report says, the city faces a shortage of large units as that cohort ages and starts having children. The GTA will be home to an additional 207,000 residents in the 35-44 age bracket over the next decade, steeper growth in that demographic than it has seen for 20 years.

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The report, entitled Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?, warns that many of those millennials will be looking to "upsize" and find larger – and affordable – condos in which to raise families in the city. But if they cannot find those units, the report says, they may be forced to seek more affordable housing on the city's fringes, or even beyond the province's Greenbelt.

According to new census numbers released this past month, Toronto has outpaced Vancouver as the country's least affordable city for housing, with Statistics Canada reporting that 33.4 per cent of Toronto households spent more than 30 per cent of their income on housing costs in 2016.

To make things worse, also competing with millennials for those scarce larger condo units will be a cohort of downsizing baby boomers. The report says that over the next decade, 484,000 people in the GTA will turn 65.

"We may have been able to get by without building a lot of family housing over the last 10 years because the big demographic, millennials, have been young, they haven't needed family-friendly housing," said Graham Haines, research and policy manager for the Ryerson City Building Institute and one of the report's authors. "Over the next 10 years, that's going to be changing."

He says policies and incentives need to be devised to encourage developers to build affordable mid-rise condo projects with larger units, perhaps in areas outside the downtown.

Politicians and planners in the City of Toronto have fretted for years about the lack of family-friendly condos in the rapidly growing downtown. Earlier this year, after a two-year development process, the city produced a series of proposed design guidelines to better accommodate children in the city's "vertical communities."

The city's previous efforts appear to have had modest effects. Ryerson's report does show a modest increase in the number of units with two or more bedrooms in the development pipeline, due to city demands for minimum numbers of three-bedroom units during the rezoning process. However, the report notes, with three-bedroom condos average $918,000, many families cannot afford them.

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David Fleming, a Toronto real estate agent and industry blogger, says attempts to force developers to produce family-friendly condos are swimming against powerful market tides, as many developers believe they can make more money selling small condos. Even when prodded to produce more two- and three-bedroom units, some developers have made them so small they still cater to the single and childless, and not families, he says.

"The planners' heart was in the right place. The city stepped in and said we need more three-bedroom condos. … The problem with that is they didn't say how big they needed to be," Mr. Fleming said. "So what you've seen is a heck of a lot of 750-square-foot, three bedroom, two-bathroom condos … It's basically like building a dorm."

Take a fast stroll through the streets of Cityplace in Toronto near Front St and Spadina Ave. The area previously criticized for being a glass condo jungle has grown into a true neighbourhood.
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