A brief history of condos

There is not much written about the history of Ontario's condominiums. I suppose that they are still so new and the types of condominiums are changing so rapidly, with every one being slightly different in how they are managed, no one has thought them worth the huge effort a written history would require.

First condos
The first high-rise condominium development in Ontario was Horizon House built in Nepean, (now part of Ottawa) and registered in 1967.

Within the province, the majority of condo corporations were townhouse complexes while in Toronto, high-rise towers were common.

The first condos were designed to be housing for families and were built as large two and three-bedroom units. The majority of units were owner-occupied with only minority of units rented out.

Replacing rental buildings

In 1974, a superior court judgment stated that condo owners have an unfettered right to rent their units. That prevented condo corporations from being able to restrict the number of units that could be rented.

This ruling opened condos to the possibility of becoming de facto rental buildings having dozens—or even hundreds—of individual absentee landlords.

Rent controls         
Rent Control in Ontario was initiated in July 1975 by Bill Davis's Conservative government after the demand for rent controls became a major issue in during the 1975 provincial election.

Rent controls made the tenants happy but the construction of new rental apartment buildings slowed dramatically as landlords feared that they could not pass on cost increases to their tenants. The supply of rental accommodation slowly decreased as the province's population grew.

Since few investors wanted to build or buy rental buildings, the developers built condos instead which lead to a large increase in condo corporations.

Rent control reform
In 1997, Mike Harris's Conservative government enacted The Tenant Protection Act. The major change was that any rental unit in the province of Ontario that was built, or came onto the rental market after 01 November 1991, was exempt from rent controls.

Small-time investors saw that they could make money by purchasing condo units and renting them out as their units were exempt from rent controls. The developers started catering to "investors" who bought condo units to rent and had no interest in living in their units.

A growing number of condos in the GTA now have up to 50-80% of their units occupied by renters and the owner-residents are an unhappy minority.

Going upscale
Condos in Ontario started as modest developments marketed towards seniors and new home buyers. Within ten years, the developers started building luxury condo buildings with the prestigious Queen's Quay Residences on Toronto's lake front being built in 1978.

The high cost of building and maintaining expensive amenities such as indoor swimming pools, basketball courts and security gate-houses resulted in shared facilities where two or more side-by-side condos shared the cost of maintaining the expensive amenities.

The big crash
In 1989 the Canadian real estate industry as a whole and the condo industry in particular crashed. Condos lost up to 1/3 of their value.

It took ten years before the market recovered and sales stayed strong until the financial crisis of 2008. The condo market plunged but then made a quick recovery and the boom continued ever since.

Short-term rentals
Some owners and a few companies started renting their condos by the day or week as if they were hotel suites. In 2002, a condo corporation on Front Street was successful in the courts in stopping the short-term rentals in their building. Their victory set a precedent for all condos in Ontario.

However, after this court ruling, some developers deleted the "single-family unit" clause in their new declarations and replaced it with clauses allowing roomers, boarders and short-term hotel-type rentals; whatever the municipal by-laws permitted.

Tridel, and other developers, also added language in the declarations of some of their new developments to allow for short-stay rentals complete with with laundry and maid services—in effect turning some of the condo residential units into hotel suites.

The market expands
Developers started offering different types of condos to attract as many buyers as they could. Condos became like cars, available in all models, shapes, sizes and styles.

Investors, businessmen and merchants bought condo units in industrial buildings, shopping malls (the Pacific Mall is a well-known retail condo) and office buildings. Investors bought individual guest rooms in hotels. Condo resorts were built in cottage country.

Developers starting offering different types of residential condo units. Along with the traditional towers and townhouses, they built stacked townhouses, residential units on top of retail stores and commercial offices.

A recent development in Yorkville is offering exclusive luxury penthouses on the top floors with more modest residential units below. The segregated top floors have separate elevators, a lobby within a lobby and some exclusive amenities.

The modest early condos, like the Model-T Ford, were left behind by towers featuring massive lobbies and expensive resort-like amenities.

In the 1990s, mid-rise condo towers were being built along Toronto's major four-lane streets that ran through residential areas and which had good bus or streetcar service. The amenities were modest—if they had any. These pocket condos consist of three to seven floors of residential units sitting on top of street-level retail shops.

No Parking
As developers made the downtown condo towers higher and higher, they ran out of practical space for underground parking. Along with shrinking unit sizes and storage lockers becoming an expensive option, developers stopped offering a free parking spot with each residential unit. Then a few of them stopped offering any parking spots at all. Bicycle racks became the new norm.

Affordable housing
Since privately owned condos could solve Ontario's shortage of rental units, why couldn't they provides society's need for affordable housing? Using Section 37 money, some left-wing city councillors, non-profit groups and developers are starting to add a few "affordable housing" units  and subsidized rental units within some new condo developments.

This is the newest frontier in condo housing that is being played out now.


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