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Great Gulf recently announced a 77-unit project at 544 King St. W. as a mixed-use building that will have just four one-bedroom units, while fully 94 per cent are two- and three-bedroom layouts.City of Toronto

Toronto's high-rise condo developers are increasingly realizing they can play a role in meeting the needs of buyers looking for "missing middle" housing – and are starting to plan buildings that are no longer dominated by one-bedroom or studio units.

In recent decades, city planners have urged developers to set aside only 10 per cent of a building's units for multibedroom uses and it wasn't uncommon to see buildings sprout up in the core consisting almost entirely of studio or one-bedroom units. A 2017 study by Ryerson University and Urbanation Inc. found only 41 per cent of 105,000 condos in the planning-construction pipeline were two-bedrooms or larger.

In some of the new proposals, that ratio has more than flipped. A recent announcement from Great Gulf for a smallish 77-unit project at 544 King St. W. describes a mixed-use building with only four one-bedroom units – fully 94 per cent are two- and three-bedroom layouts.

Developers reached by The Globe and Mail regarded that proposal as unusual, if not unheard of, but also an indicator of the changes they have observed in the market.

"In the last three to four years, we've seen a steady increase of sales in the larger suites, and in some cases there was greater demand on the bigger suites than on the smaller suites," says Dominic Tompa, vice-president of sales at the Daniels Corp. In the company's Wesley Tower building in Mississauga's city centre, more than 50 per cent of the 450 units in the 43-storey tower are two-bedroom or larger, including three-bedroom units just under 1,000 square feet in size.

The two groups pushing hardest for units with more space and more bedrooms are downsizers and young families. The former are not quite ready to trade in a 2,000-plus-square-foot house for a 500-square-foot condo, and the latter are looking for affordability in core neighbourhoods where detached-home pricing has soared in recent years.

"Not everyone wants to move to the suburbs when they have kids," says Jared Menkes, executive vice-president of high-rise residential at Menkes, who himself lived in a condo building when he started his family. Mr. Menkes says that where once a typical Menkes tower might have two or three multibedroom units a floor, buildings the company is planning now (like the gigantic proposal for Sugar Wharf that could host 700 or more units) might feature three or four multibedroom units a floor.

The limiting factor for young families is still cost, with average condo pricing in the city recently crossing $1,000 a square foot, particularly in the downtown core. But according to Mr. Menkes, there is a sweet spot.

"People are tending to stay under 1,000 feet for three bedrooms so that it's somewhat affordable," he says. "It's a little crazy, but it's still the affordable solution: You can't get a [detached] house in downtown for less than $1.5-[million] to $2-million."

The other demographic competing for the missing middle are downsizers from some of Toronto's priciest neighbourhoods, which is exactly the kind of buyer Camrost Felcorp is targeting with its newest proposal for Leaside called Residences of Upper East Village at Laird and Eglinton.

Located right next to the new Eglinton LRT line, currently under construction, 54 per cent of the multitower proposal's 283 units are going to be two-bedrooms or larger (roughly 89 two-bedroom apartments and another 66 a mix of two-plus den and three-bedrooms). Only 16 per cent will be one-bedroom and even those will all be larger than the typical single, pushing closer to 600-square feet.

"We're excited to provide the next stage of life for the Leasider that is sitting on a $1.8-million home looking to make the adjustment to condo life," says Joseph Feldman, development manager at Camrost, who says the building also seeks to locate about 50 per cent of units in the podium, including some of the large suites (traditionally, a condo tower's largest units were on top floors and priced as luxury penthouse-style houses).

"I hope we are aiding affordability situation: We have 117 units that are under a million dollars," in the project, says Mr. Feldman, who recognizes that's not exactly affordable for big chunks of the city. "It's all relative: a $600,000 two-bed plus den, relative to the house prices in the immediate area, that is affordable. That's one thing that condominiums can bring to the market."

This large four-bedroom detached house in Toronto that backs onto a ravine sold for $302,000 over the asking price.

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