Over the past several years, Canada’s approach to building more housing has been to assume that what works in one region of the country must work everywhere – and no idea exemplifies this mindset more than our federal government’s belief that handing out millions of dollars to cities to legalize fourplexes will somehow solve our housing crisis.
To be clear, multiplexes are not a bad idea. In the right places, they can add meaningful housing supply. Toronto is a good example of where the economics can sometimes work. But the unfortunate reality is that in many other parts of the Greater Toronto Area, the numbers just don’t work.
Let’s take the City of Markham as an example, where the mayor recently used his strong mayor powers to block the legalization of fourplexes.
Housing advocates are furious because they believe his decision is blocking much-needed supply to help solve our housing crisis. But is that actually true?
To better understand the potential for fourplexes in Markham, let’s consider what’s been happening in Toronto.
If you look at where multiplexes are actually being built in Toronto, the pattern is fairly consistent. Builders typically buy an older detached bungalow for under $1 million, demolish it, and build a fourplex — often with an additional garden suite or laneway unit — then rent each unit for just over $3,000 per month. At those prices, the math can work.
But that model doesn’t translate to Markham.