The Condo Comedown and the Rise of Human-Scale Housing

Condos promised “urban living for everyone.” What we got instead were small floor plans, big fees, and an amenities arms race that rarely maps to daily life. Think of the Downtown Athletic Club era Rem Koolhaas writes about in Delirious New York, towers competing to out-perform each other. Today’s version is the same impulse with shinier marketing: more amenities, higher prices, and layouts that don’t actually fit how people live.

Meanwhile, the homes that quietly work in the background of every major city are known as the Missing Middle. Missing Middle can be defined as a wide range of different housing types, and can often be referred to as the middle ground between single-detached homes and apartment buildings, such as plexes, Additional Dwelling Units (ADUs), walk-ups and more. This housing typology is not new, there have been several competitions across North America to introduce new styles of these housing types in neighbourhoods in Vancouver, Toronto, Calgary, and more.

Before we dive too deep into the solution, let’s see where we are at with the condo market.

The state of Condos in Cities

In many markets, condos are designed with investors in mind, instead of a living space for the final user. In markets like Toronto and Vancouver, a large share of new condo completions are investor-owned, Statistics Canada estimates that in 2022 nearly 39% of Toronto condos and 34% in Vancouver were held by investors. This happens because projects whose presale math contradicts from end-user liveability, by offering mostly small, one bedroom apartments. With low interest rates fuelling condo-sales and pre-sale “flips” for the last decade, the bubble has begun to pop, leaving these small, once lucrative assets, empty. Today, condo sales are falling, and inventory will begin to level out as active projects reach completion.

In major cities such as Vancouver and Toronto, condos have became so investor-oriented, that developers were guilty of stripping back quality after pre-construction sales were completed. Downgrades, such as cheaper laminate flooring and countertops, low-grade cabinetry, faulty windows, and crashing glass panels onto the sidewalk. By 2019, 38% of Toronto condos were investments, in Vancouver, it got up to 41%. However, post-Covid we are in a completely different position. As of today, the inventory of unsold units in Toronto is more than 23,000 - young people are no longer looking at condos as persuading investments for their future, instead it is perceived as a liability that could damage their future. With the majority of the citizens being priced out of the available inventory,, and the increase in bureaucratic limitations to build the necessary typologies, younger populations are moving out of cities in a pursuit to find ownership-based homes. So, what will we build now? Middle missing housing.

Human-scale Housing

I am writing this from a medium density metropolitan pocket of the world, Montreal, Canada. A city in which we have depanneurs scattered across most streets, close relationships with our neighbors, and many courtyards and parks where people come together.

Human-scale housing is achieved by using missing middle housing typologies. Missing middle housing is a functional way to design a city that opens up opportunities for several levels of income to come together, and to be matched with the type of housing that fits their needs. With the resurgence of this typology now being a priority of across Canada, and many parts of the US - the demand of beautiful, sustainable, and affordable designs is beginning to surge.

The Missing Middle Initiative, one of the leaders in this up and coming missing middle typology has a simple objective for Canada:

”A Canada where every middle-class individual or family, in every city, has a high-quality of life and access to both market-rate rental and market-rate ownership housing options that are affordable, adequate, suitable, resilient, and climate-friendly.”

There are many types of buildings that can be considered missing middle, it is anything that is more dense than a detached single-family house, but less dense than a mid-rise building, such as Duplex, Fourplex, Courtyard buildings, townhouses, mid-size multiplex, triplex, and live-work buildings. The major benefits derive from the walkability, lower-perceived density, connection to the street, and community catalyzers, such as shared courtyards.

This solution has already begun in places like Calgary, Alberta. Rezoning for missing middle housing has reduced bureaucratic red tape, and allows developers to propose and building without prolonged approval processes. This new initiative seeks to fill the gap in housing types, particularly in the inner city, by promoting diversification.

How do we achieve this?

Achieving different types of housing in areas that are perhaps not accustomed to change, begins with collaboration between the demand of the final user and the supply of the businesses building the projects. We are already beginning to feel the effects of a decreased number of people asking for high-density dwellings, such as condos. In response, municipalities have begun to rezone parcels of land to accommodate for diverse densification designs. The next step is identifying how these new housing typologies can be successfully constructed at scale. One of the major advantages of building tall, high density buildings, is that they are efficient. The same floor plate can be repeated, it generates consistent work for the contractors, and they have high margins for developers. The problem is that just because something is hyper efficient does not mean it is good for the end user. So, how can we mesh efficiency in process to a type of housing that does benefit the families that will one day move in?

The alignment of demand and supply. It sounds so simple, but currently in the Architecture, Engineering, and Construction (AEC) industry there is a massive disconnection between what people want and what is actually being built. MLS data communicates what’s already built, Pre-sales data communicates what’s already going to be built, and architecture firms post their portfolios, of what's already been built. Market research within this industry is closer to Noah’s Ark, then a functional economy, we’ve been saying “Build it and they Shall Come” for decades.

Creating agency for people, by understanding the demand from specific demographics will give more insight into the types of housing we should be building. With an influx of technological advancements, and the ability to capture actionable information regarding all communities across Canada, the goal should not just be about building more. But building the homes we need.