Shrinking condos, growing houses: Why homebuilders are increasingly going to extremes
If you feel the walls are closing in on your new condominium apartment, you are not imagining it. Condominium sizes in Canada have been shrinking over the years.
At the same time, the reverse is true for single-detached (SD) homes, which have been getting bigger.
The size of a dwelling unit determines the likely occupant. Smaller units are suitable for smaller families or individuals, and larger units are usually inhabited by larger families. The footprint of new housing, thus, should reflect the current and anticipated demographics of a place. If family sizes are expected to decline in the future, for example, you would expect builders to plan smaller units.
Earlier in May, Statistics Canada reported on dwelling sizes and the assessed property values in British Columbia, Nova Scotia and Ontario. The data was collected under the Canadian Housing Statistics Program, which was launched in 2017 to develop an improved understanding of residential property ownership in Canada.
The median size of a condominium apartment (living area) built in Ontario in 2016-2017 was 665 square feet. New condominiums are 35 per cent smaller than the condominiums built in the eighties and 33 per cent smaller than those built in the nineties.
Apartment sizes have shrunk in British Columbia as well, but not to such an extent. Newly built condominiums there, with a median size of 775 square feet, are approximately 16 per cent smaller than those constructed in the eighties and nineties.
The shrinking size of condominiums, which are frequently found in urban areas, might be a reflection of changing urban demographics. The 2016 Census discovered that for the first time, one-person households had become the most common household type in Canada.
Never before have people lived alone in such large numbers in Canada. At 28.2 per cent of all households, those living alone outnumbered couples with children, the second most dominant cohort.
Household size in Canada has been shrinking for over a century. The average household contained 5.6 people in 1871. That number fell by more than half to 2.4 in 2016. Couples having fewer children and the increase in one-person households contributed to the decline in household sizes.
Shrinking condominium size is perhaps reflecting the decline in family size in Canada. Assuming that smaller-sized household need less shelter space, newly built condominiums are reflecting this demographic reality.
But can condominium sizes decline even further? In some cities, they already have. Writing in the Canadian Journal of Urban Research in 2018, Marc Vachon identified a new class of condos — the micro condo. A micro condo is anywhere between 290 and 495 square feet. In San Francisco, for instance, a unit can be as small as 220 sq. ft., provided 70 sq. ft. are dedicated to a bathroom and a kitchen.
At such small sizes, something has to give. These units often lack amenities, such as laundry machines and even ovens. In downtown Toronto, a new condominium development boasts 162 units under 480 square feet each. Instead of a standalone oven, the units are equipped with convection microwaves.
This should hardly be surprising. In an app-driven society that promotes a skip-the-dishes lifestyle, is there any time or room for baking? Ovens are the ostensible collateral loss in the quest for cheaper rents and lower prices.
Declining household sizes, however, do not explain the increasing size of single-detached homes. Statistics Canada found that at 2,380 square feet, the median above-grade living area of single-detached houses built in 2016-2017 in Ontario was 30 per cent larger than the homes built in the eighties and nineties. Recently built detached homes are twice the size of homes built in the sixties or earlier when household sizes were much larger.
In reality, detached houses have even more space, as below-grade living areas are not included in square footage calculations. Finished basements supplement the already larger living area above-grade by serving as play areas for the kids, mini-movie theatres for adults, and bedrooms for guests.
The location of detached housing in the suburbs, where land is cheaper, partially explains why ground-oriented housing has increased in size. In the City of Toronto, for instance, single-detached homes accounted for a mere 5 per cent of all housing starts in 2018. In the rest of the Greater Toronto Area, detached housing accounted for 30 per cent of the starts.
The growing size of the new detached housing is also reflecting the evolving suburban lifestyles where staycations, barbecues, computer games, and binge-watching of shows and movies on video streaming services are making people spend more time indoors than before.
It appears the future of housing in Canada will evolve along the two extreme trends: Smaller-sized households will find refuge in ever-shrinking condos, and growing families will nest in more expansive homes, further and further from downtown cores.
That could leave an opening for forward-looking homebuilders to diversify the types and sizes of homes they are building to account for smaller household sizes overall.
Murtaza Haider is a professor of Real Estate Management at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at http://www.hmbulletin.com.