Case Study: 405 Sherbourne St

Introduction

The City of Toronto is recognized as an international center of business, arts, and culture, and has the largest population in Canada with 2.6 million people. It is a rapidly growing cosmopolitan with an urgent need for building housing supply to accommodate present and future Torontonians. As it stands, housing today is as unaffordable as ever for Torontonians, with the average home price hitting $1.3 million in 2022. 

The City of Toronto launched the HousingNow initiative in 2019 as part of a multi-faceted approach to address a full spectrum of housing issues in Toronto. This program spearheads the development of housing supply in mixed income, mixed use, and transit oriented neighborhoods. Out of the estimated 12,350 units that will be added to the housing supply, approximately 4,920 will be developed into purpose-built, affordable rental homes. HousingNow was created with the purpose to demonstrate how housing can be built in unexpected places, propose viable development plans for the housing supply target set forth by their mandate, and achieve the vision of housing affordability imagined by the City of Toronto. 

Challenges

Determining development feasibility is a lengthy process that includes consulting multiple players, and the HousingNow team had limited time to put their affordable housing proposal together. For this phase of evaluation, the team was given six days to present their development proposals for evaluation by the City of Toronto. This was in stark contrast to the timeline of a previous evaluation, where they had six weeks to evaluate sites by hand. With a greatly reduced timeline, it was imperative for the team to be able to efficiently and accurately determine development potential to demonstrate housing potential to the City of Toronto. 

Most data does not live in a centralized repository, which makes finding and accessing necessary data an effort, cost, and time burden. Development data is not an exception, where zoning, land constraint, and construction cost data is owned by different municipalities and private firms. Data is often found behind a paywall and scattered, and requires the time to gain access that the HousingNow team could not afford. 

A realistic development possibility would also have to be financially viable. Using the commonly used metric of an individual’s housing costs being thirty percent of their income, the goal was to create as many affordable housing units as possible. However, the construction of the building is much too costly to be financially viable to lease out the units completely under market rate rent in Toronto. This left the HousingNow team in a juxtaposition of finding an appropriate ratio of creating affordable and market rate housing. In addition, a sufficient unit mix had to be determined to help address affordability and suitability. Smaller units help increase unit count, however it would not address the problem of ensuring that the units would be suitable enough for everyone, such as family units and partners. To satisfy their mandate, the HousingNow team had to determine a building that would be affordable, suitable, and feasible for everyone.

Solution

HousingNow used UrbanSim’s feasibility tool, Penciler, to quickly test out different development forms within their short timeline. The team knew that considering a rezoning scenario was imperative due to the zoning for one of their sites only allowing for a three storey building, which is not sufficient to achieve the housing targets set forth by the City of Toronto. With Penciler’s robust capabilities of determining development potential and the flexibility to include custom constraints, the HousingNow team was able to model out different builds that could be supported by the site. Penciler’s building form feature also gave them the ability to present strong visuals, which helped the HousingNow team demonstrate the impact the building would have on its surrounding neighborhood. Penciler helped the team visualize the possibilities of what a building with many more stories could look like and whether it would be feasible to build on the selected lot.

In addition to its ability to quickly mock up different development possibilities, Penciler has a site’s necessary development data pre-loaded on its platform. The HousingNow team was able to treat Penciler like an open data platform where the site’s zoning notes, height, setbacks, and parking requirements were easily accessible at their fingertips. This helped the team better understand the limitations of the constraints they were working with, and supported their argument that this should be relaxed to achieve more housing. In addition to accessing the site’s existing zoning, the team was able to easily adjust the constraints to simulate a rezoning scenario and view building iterations based on those proposals. Not only is the target site’s information available, it is also possible to view this data for other sites, which helps in comparison analyses. 

With Penciler’s financial feasibility function, the HousingNow team was able to put in their target affordability ratios and determine whether the various building iterations could be financially supported. The financial feasibility portion supported the HousingNow argument that a building with more stories would both provide a larger amount of affordable housing and would be more achievable within a certain budget. They were able to demonstrate that the value of building more floors would help offset their fixed costs, and their variable costs increases would be marginal. Finally, Penciler’s exclusive feature of determining an appropriate unit mix helped finalize the details of the building.

Impact

The initial zoning for a target site for HousingNow started at 3 stories with ample parking space. The HousingNow team felt that this zoning did not reflect the characteristics of the neighborhood that is mixed-use, transit accessible, and close to employment centers, and used the UrbanSim tool, Penciler, to assess different height and density proposals. They also wanted to make the argument that the existing zoning was not sufficient to address the ambitious affordability goals set forth by their mandate. *Quote* With the use of the Penciler platform, the team was able to get some target numbers to the City before their first round of iterations began. Demonstrating development and financial feasibility, the conversation with the City began at a twenty-plus stories model. The eventual proposed development stands 25 stories high, with 266 units included into the housing stock. This proposal has passed through approvals, and its first occupancy is expected in 2025.