Transit oriented development in Canada

[Aylmer]

Although you've gotta be careful with high density zoning. Very long story short, when you zone high, the cost of land shoots up. As the profit of any project becomes increasingly marginal, and both sellers and developers will sit on the land for years, awaiting the highest possible yield. This is especially true of concrete and steel construction (anything above 5-6 storeys) because it's ridiculously expensive to build. It makes more sense to sit on valuable land with potential (which you can sell or leverage) than to build something that might lose you money.

TLDR: Zoning for high density as of right slows development to a crawl. You've removed the regulatory barriers, but put up a higher economic barrier to development.

This isn't a problem in an area which is already built up because it's already built up. But when you're starting from scratch (as we are in most non-downtowns), developing at a rate of 2% of lots per decade (a generous rate) is too slow to make the place feel not completely empty. But 5-6 storey zoned-areas develop at 10-15% per decade, enough to fill an area in a reasonable time drame. You end up in this counter-intuitive situation where zoning for 40 storeys gives you more potential density, but lower actual density than 5 storeys. There are exceptions to this, such as when a developer buys the land before it gets rezoned, such as Ottawa's Zibi.

Before Cities zone for height, they need to make sure that it's going to serve to actually build.

[J.OT13]

Originally Posted by Aylmer

Although you've gotta be careful with high density zoning. Very long story short, when you zone high, the land shoots up. The profit of any project becomes increasingly marginal, and both sellers and developers will sit on the land for years, awaiting the highest possible yield. This is especially true of concrete and steel construction (anything above 5-6 storeys) because it's ridiculously expensive to build. It makes more sense to sit on valuable land with potential (which you can sell or leverage) than to build something that might lose you money.

TLDR: Zoning for high density as of right slows development to a crawl. You've removed the regulatory barriers, but put up a higher economic barrier to development.

This isn't a problem in an area which is already built up because it's already built up. But when you're starting from scratch (as we are in most non-downtowns), developing at a rate of 2% of lots per decade (a generous rate) is too slow to make the place feel not completely empty. But 5-6 storey zoned-areas develop at 10-15% per decade. You end up in this counter-intuitive situation where zoning for 40 storeys gives you more potential density, but lower actual density than 5 storeys.

Before Cities zone for height, they need to make sure that it's going to serve to actually build.

Doesn't have to be towers. Montreal or Paris are prime examples of density without towers. Agora in Gatineau's Le Plateau offers both density and community feel without the towers. That development is far better than the towers in a parking lot proposed all over Ottawa.

[Aylmer]

Originally Posted by J.OT13

Doesn't have to be towers. Montreal or Paris are prime examples of density without towers. Agora in Gatineau's Le Plateau offers both density and community feel without the towers. That development is far better than the towers in a parking lot proposed all over Ottawa.

Exactly. Projects like Agora wouldn't be possible if those lands were zoned for height. It's the counter-intuitive trap which has sterilized so many station areas across the country. And honestly, I wish I knew how to put that toothpaste back in the tube...

[Truenorth00]

Originally Posted by Aylmer

Exactly. Projects like Agora wouldn't be possible if those lands were zoned for height. It's the counter-intuitive trap which has sterilized so many station areas across the country. And honestly, I wish I knew how to put that toothpaste back in the tube...

Make funding conditional on density within a certain distance of the station. Want funding for your LRT or subway line? Need 10 000 residents or FTE jobs within an 800m radius of every station of your line. Or zoning to achieve this in 15 years.

[Acajack]

REM trains have begun doing test runs on the south shore of Montreal, in the Brossard area.

[Innsertnamehere]

Originally Posted by Aylmer

Although you've gotta be careful with high density zoning. Very long story short, when you zone high, the cost of land shoots up. As the profit of any project becomes increasingly marginal, and both sellers and developers will sit on the land for years, awaiting the highest possible yield. This is especially true of concrete and steel construction (anything above 5-6 storeys) because it's ridiculously expensive to build. It makes more sense to sit on valuable land with potential (which you can sell or leverage) than to build something that might lose you money.

TLDR: Zoning for high density as of right slows development to a crawl. You've removed the regulatory barriers, but put up a higher economic barrier to development.

This isn't a problem in an area which is already built up because it's already built up. But when you're starting from scratch (as we are in most non-downtowns), developing at a rate of 2% of lots per decade (a generous rate) is too slow to make the place feel not completely empty. But 5-6 storey zoned-areas develop at 10-15% per decade, enough to fill an area in a reasonable time drame. You end up in this counter-intuitive situation where zoning for 40 storeys gives you more potential density, but lower actual density than 5 storeys. There are exceptions to this, such as when a developer buys the land before it gets rezoned, such as Ottawa's Zibi.

Before Cities zone for height, they need to make sure that it's going to serve to actually build.

I wouldn't argue this at all. Hamilton recently pre-zoned it's downtown core for new development and has seen an unprecedented increase in development applications. Pre-zoning has lowered the cost of doing business and made it a much simpler process, attracting developers. Same thing with Vaughan and Mississauga - both downtowns are pre-zoned and are seeing much faster growth rates than other areas that aren't.

Land prices do increase to reflect the new entitlements coming from pre-zoning, but many developers actually prefer it as it minimizes risk. There are many developers that specialize in high risk sites and attaining entitlements (Kingsett Capital is a big one in Toronto, they zone sites and almost always flip them), but most builders just want to do exactly that, build. Pre-zoned sites allow them to do that.

Speculation in real estate is mostly for small time meddlers. Sitting on land generates no value, you are relying on others to generate the value for you through either surrounding infrastructure improvements or the tightening of the market. Value is created by making the land more valuable - either by developing it or increasing it's potential to be developed.

Pre-zoning also doesn't have to be for 30+ storey buildings. Toronto's avenues are mostly pre-zoned and have seen an uptick in mid-rise construction, which is normally a very expensive form of development. But developers do it because of the existing entitlements.


Possibly my favourite pre-zoned site storey is in Stoney Creek, where a site has gone undeveloped from the 1970's when a developer got zoning approvals for unlimited height and density (how tall would someone really have built in that area back then?). Now there is an application in for three 50 strorey buildings. As of right. On the side of the QEW. Nobody would even think of trying to build that kind of density in the area if the entitlements didn't already exist.