Late in the 20th century, city planners and politicians decided to try out a theory that had been widely discussed: Subway lines were perfect corridors for housing intensification.
Toronto could no longer spread out; single-family homes just could not handle the demand from a population expanding at about 100,000 a year.
Yes, there was an opportunity to practice intensification along the north Yonge Street corridor, but that was just one small pocket in a very large city.
So, what about building a new line along Sheppard Avenue East? Land for redevelopment into high-rise condos was available. The area was right in the geographic centre of the city. This might be the chance to practice what planners had been preaching for years.
Eight years ago, the Sheppard subway line opened and the construction of condominiums has been going non-stop ever since.
The area from Victoria Park Avenue in the east to Kenneth Avenue, one block west of Yonge Street, and from Hollywood Avenue in the north to Highway 401 in the south was the sixth-busiest condo submarket in the Greater Toronto Area at the end of August, according to RealNet Canada Inc.
At an average price of $422 a square foot, it also ranks well down on the price scale — the 11th-cheapest area in the GTA.
"In real terms, that means suites are an average $50,000 less than those in the North Yonge corridor," says Steven Hurst, vice-president of analytics at RealNet.
"Historically, north Yonge was one of the busiest submarkets but that area is pretty much built out now and the Sheppard corridor is fast taking over."
One of the things that has set Sheppard apart from other submarkets is the size of its projects and their developers. This is an area where large companies are taking on large developments — whole planned communities.
Daniels Corp., for example, has already done nine towers in its NY Towers project and has a 10th under way — Arc — on the northeast corner of Bayview and Sheppard avenues. It is in preconstruction sales for another three on the south side of Sheppard, three blocks east of Bayview.
"We acquired the land in 1999, got our approvals in 2000 and started building," says Niall Haggart, Daniels vice-president. "The planners wanted the tallest structures set towards the 401, with mid- and lower-rise condos descending in height as you move towards Sheppard Avenue.
"That is the stage we are at now."
Further east toward Leslie Street, Concord Adex Developments Corp. is setting out to duplicate the success of its Concord CityPlace community, built on what were formerly railway lands south of Front Street and flanking Spadina Avenue.
It acquired 44 acres from Canadian Tire and is in the early stages of developing Concord Park Place, which will have 16 high-rise condos plus a handful of townhouses, all centred around a nine-acre park. There will be 4,000 new condo suites in all.
"The size of the parcels of land available and the wishes of the city for entire new neighbourhoods drew the largest, most experienced, best-financed developers," says Alan Vihant, Concord Adex vice-president of development. "You need considerable equity and long experience to take on projects like this."
Granted, the area was a bit slow to take off, RealNet's Mr. Hurst says. "There were 600 units sold in 2002, but by 2006 that had dipped to just 429. Then last year sales boomed to 1,400 suites."
By the end of this past August, 631 suites had been sold along the corridor.
So what is the lure? It is a combination of being on the subway, the existing neighbourhood and price, says Dan Flomen, president of TFN Realty Inc.
"The big draw is the subway plus easy access to the 401 and Bayview and Leslie, which are great north-south routes," he says. "But you also have to look at the neighbourhood. You are surrounded by some of the nicest single-family homes in Toronto."
Barbara Lawlor, president of Baker Real Estate Inc., which is sales agent for the Daniels projects, says the neighbourhood is indeed a major drawing card, especially with the Bayview Village Shopping Centre at Bayview and Sheppard.
"It is one of the top shopping centres in Canada," she says. "It offers absolutely everything, from fine dining to a great supermarket, and what is more, you can just walk to it from your condo."
But the success of existing projects coupled with increased city demands and greater delays in getting approvals for new projects means prices are certain to rise, says Mr. Haggart of Daniels.
"It is inevitable," he adds. "Right now, for example, our Merci project [at NY Towers], targeted at first-time buyers, sells at around the $500-a-square-foot mark. Prices will go up from there."