Development Costs and Affordability. In Context

(1)

Development Costs and

Affordability

(2)

WHAT ARE WE LOOKING AT?

CASE STUDIES: Our Approach

• 4 different development scenarios based on actual projects in

Toronto

• Assumed the rent needed to create a viable project

• Explored all potential costs:

• construction costs

• land cost (if relevant)

• municipal fees and charges

• Identify obvious barriers

(3)

WHAT ARE WE LOOKING AT?

a single, detached house

• designed for one family

• on its own lot

(4)

WHAT ARE WE LOOKING AT?

taking a single, detached house

• designed for one family

• on its own lot

converting

it to

three units

• exactly the same building

• dividing into three units

(5)

WHAT ARE WE LOOKING AT?

taking a single, detached house

• designed for one family

• on its own lot

demolishing it

to create

three new units

• built form is different than the

surrounding buildings, BUT

• consistent with permitted

height, front yard, side-yard

and rear-yard setbacks

(6)

WHAT ARE WE LOOKING AT?

taking a single, detached house

• designed for one family

• on its own lot

demolishing it

to create

ten new units

• built form is different than the

surrounding buildings, BUT

• consistent with permitted

height, front yard, side-yard

and rear-yard setbacks

(7)

WHAT ARE WE LOOKING AT?

taking two single, detached houses

• designed for one family

• on its own lot

a 28-unit building

• built form is different than the

surrounding buildings, BUT

• consistent with character of

street and surrounding area

assembling two

lots to create

(8)

• Based on real-world examples

• Establish an understanding of financial

barriers for future discussion and

consultation

• See how financing might work with

preservation of neighbourhood

character and zoning

WHY A CASE

STUDY

(9)

1 2 3 4

Case Study #1

254 Havelock Street credit: www.multitach.com

(10)

(11)

1 2 3 4

Case Study #1

254 Havelock Street credit: www.multitach.com

(12)

(13)

(14)

one house into

three units

254 Havelock Street

PARAMETERS

• Existing three-story semi-detached dwelling • R Zone DEVELOPMENT VISION +3 mo nths Subm it Buildi ng Pe rmit +3 mo nths Start C onstruct ion +6 mo nths Comp lete Co nstruct ion +1 mo nth Subm it PPR Toda y Acquire Prope rty

13 months

1

CASE STUDY #1

• Internal reconfiguration to accommodate multiple dwellings

• Triplex with family suite on top two levels • Rental housing

• No parking

(15)

• Rent required to pocket $1,200/month in income:

$1,650 / month (avg)

• Median household income in the neighbourhood:

$77,547

• Affordable rent for median income household:

$1,940 / month

254 Havelock Street

CASE STUDY #1

RENTAL BREAKDOWN

KEY CONSIDERATIONS

• Municipal fees: $77,842 ($38,921 per new unit)

• Rents possible if municipal fees were waived:

$1,550 / month (avg) (-$100/month)

CONSTRUCTION (HARD + SOFT COSTS)

$396,842 $260 PSF CARRYING COSTS (INTEREST) $6,204 $ 4 PSF

14%

1%

14%

71%

$365 PSF OVERALL DEVELOPMENT CHARGES $77,842 $51 PSF Construction Development Charges + HST Land & Carrying Cost

COST BREAKDOWN

LAND ACQUISITION $76,316

(16)

(17)

1 2 3 4

Case Study #2

68 Burnaby Blvd credit: www.multitach.com

(18)

(19)

(20)

one house into

three new units

+ 4 m onths Subm it Buildi ng Pe rmit +3 mo nths Obtain Buildi ng Perm it Start C onstruct ion +12-14 month s Comp lete Co nstruct ion +3 mo nths Subm it PPR Toda y Acquire Prope rty

Location

Map

• Demolish existing two-story detached dwelling • R Zone

68 Burnaby Blvd

24 months

CASE STUDY #2

• New triplex with family suite on top two levels • Rental housing

• No parking

• No Variances or Site Plan Amendment required

PARAMETERS

(21)

• Rent required to break even by year three:

$3,050 / month

• Median household income in the neighbourhood: $77,547

• Affordable rent for median income household:

$1,940 / month

68 Burnaby Blvd

CASE STUDY #2

RENTAL BREAKDOWN

KEY CONSIDERATIONS

• Municipal Fees: $115,014 ($57,507 per new unit)

• Rents possible if municipal fees were waived:

$2,800 / month (-$250/month)

$1,170,000 $390 PSF CARRYING COSTS (INTEREST) $50,438 $ 17 PSF

8%

4% 4%

84%

$465 PSF OVERALL LAND ACQUISITION $60,000 $20 PSF DEVELOPMENT CHARGES $115,014 $38 PSF Construction Development Charges + HST Land & Carrying Cost

(22)

(23)

1 2 3 4

Case Study #3

2165 Gerrard St East credit: www.multitach.com

(24)

(25)

(26)

one lot into ten

new units

May 2 020 Subm it PPR #2 Augu st 202 0 Subm it Buildi ng Pe rmit Novem ber 2020 Obtain Buildi ng Perm it Start C onstruct ion • One 50’ X 150’ lot

• Existing single detached dwelling • R Zone Dec 2 019 Subm it PPR #1 Augu st 201 9 Acquire Prope rty

2165 Gerrard Street East

CASE STUDY #3

• Demolish and sever into two lots • Fourplex & laneway suite on each lot • Rental housing

• No parking required

• No Variances or Site Plan Amendment Required

PARAMETERS DEVELOPMENT VISION Septe mber 2021 Comp lete Co nstruct ion (6-12 month s)

28 months

(27)

• Unit Mix

• 8 two-bedroom units • 2 laneway houses

• Rents required for a viable project: $1,960 - $3,300 /

month

• Median household income in neighbourhood:

$69,026

• Affordable rent for median income household: $1,725

/ month

• Municipal fees: $477,462 (avg $47,746 per unit)

• Rents possible if municipal fees waived: $1,800

-$3,000 / month (-$160-300/month)

2165 Gerrard Street East

CASE STUDY #3

RENTAL BREAKDOWN

KEY CONSIDERATIONS

$4,762,105 $390 PSF LAND ACQUISITION $1,260,000 $106 PSF

6%

CARRYING COSTS (INTEREST) $352,141 $ 29 PSF

8%

HST $590,874 $48 PSF DEVELOPMENT CHARGES $477,462 $39 PSF

5%

17%

64%

$610 PSF OVERALL COST BREAKDOWN Construction Development Charges + HST Land & Carrying Cost

(28)

(29)

1

2

3 4

Case Study #4

722 & 724 Marlee Ave

(30)

(31)

(32)

two lots into a

28-unit building

Feb 2 020 Subm it SPA + Rezo ning Feb 2 021 Subm it Buildi ng Pe rmit June 2021 Obtain Buildi ng Perm it Start C onstruct ion

• Demolish & assemble two lots • 28 unit suites

• 10 one-bedroom units • 18 two-bedroom units • 20 below-grade parking spaces

• Requires Rezoning & Site Plan Approval

Dec 2 019 Subm it PPR July 2019 Acquire Prope rty June 2023 Comp lete Co nstruct ion

722-724 Marlee Avenue

48 months

CASE STUDY #4

• Two 50’X150’ adjacent lots

• Existing single detached dwelling on each lot • RD Zone

PARAMETERS

(33)

• Unit mix

• 10 one-bedroom units • 18 two-bedroom units • 20 parking spaces

• Rents required for a viable project • one-bedroom: $2,490 / month • two-bedroom: $2,840 / month

• Median household income in neighbourhood: $63,778 • Affordable rent for household earning median income:

$1,595 / month

722-724 Marlee Avenue

CASE STUDY #4

• Municipal fees $1,215,102 (avg $43,396 per unit)

• Rents possible if municipal fees & parking waived • one-bedroom: $2,000 / month (-$490/month)

• two-bedroom: $2,280 / month (-$560/month)

RENTAL BREAKDOWN

KEY CONSIDERATIONS

COST BREAKDOWN

$11,555,000 $470 PSF

7%

CARRYING COSTS (INTEREST) $970,000 $40 PSF

7%

6%

14%

66%

Construction Development Charges + HST Land & Carrying Cost

$708 PSF OVERALL DEVELOPMENT CHARGES $1,215,000 $49 PSF HST $1,155,000 $47 PSF LAND ACQUISITION $2,500,000 $102 PSF