The Four-Storey Trap on Toronto’s Major Streets

Hi Reader,

Over the past year, I have found myself giving newer and first-time developers the same warning:

"Please don't build 4-storey Buildings! That is what our ecosystem is quietly yelling at you!"

The main reason this conversation keeps coming up is the changes that have happened over the past couple of years in Toronto planning. Mainly the EHON (Expanding Housing Options in Neighbourhoods) and one of its core tenets, i.e. Major Street permissions.

I am not a planner, so I will leave the detailed planning analysis to the experts. But the practical takeaway is important:

On many major-street sites, it is now more realistic to contemplate a six-storey, 30-unit apartment building than it has been in decades.

That creates real opportunity—but also a new set of risks.

The Good

The door is opening (or is already slightly open) for many new developers and projects to help address our housing crisis. For the first time in decades, many stakeholders are working together to make this a possibility.

The Bad

Our ecosystem is very slow to adapt. It is like turning around a massive oil tanker. While we see a lot of movement (or at least talk about the movement), it will probably take another 12-18 months for the real effects of these changes to become visible across the board.

The Ugly

With change comes opportunities (and also pitfalls). The more experienced developers are watching the situation closely for the right time to dive in, but many newer (smaller developer or investor types) are rushing into this. Picking up sites on the premise of "as-of-right" buildings. This is where we run into the same conversation, "Don't build 4-storey buildings".

The truth is, the extra revenue from going from a 3-storey to a 4-storey building is almost never enough to cover the additional cost and complexity it brings to the project. To be clear, we are talking about sites affected by major streets, i.e. tight, urban, infill projects. It is a different story if you are building on a large floor plate.

The code changes, the elevator becomes a factor, with more units, you need more power, etc. It just becomes very hard to make it pencil.

That is why our advice is often:

Either keep the project at three storeys and pursue a relatively straightforward multiplex, or test whether the site can support a full six-storey apartment building.

Bottom line, we need projects to work, and more is not always the answer.

If this was useful, please share it with someone considering a development site in Toronto.

If you have a site you'd like us to look at, just hit reply and let us know.

Thanks,

Payam

P.S. Here are some resources about this topic if you want to learn more.

A recent webinar we did with my friend Blair Scorgie - EHON, Major Streets, & Mid-Rise Housing: Opportunities and Pitfalls
A podcast episode with Janna Levit & Samantha Eby - As-of-Right Isn’t a Slam Dunk: Insights On The Toronto Multiplexes
A couple of friends, Conrad Speckert and Jack Keays, have recently published a book that explains this in greater detail. Here is the link to purchase their book (We have no affiliation with the sales).

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