Monday, 16 April 2012

The Greenbelt and the Future of the GTA

All in all, I'm a pretty big fan of Greater Toronto's greenbelt policy.  It protect 1.8 acres of prime farmland and green space around the Greater Golden Horsehoe from St. Catherine's around the bend of Lake Ontario to Oshawa. It runs north to Markham, Vaughan and Newmarket. It provides clean waters and healthy local food at a time when buying local is practically a religion and the number of farmer's markets continue to grow around  Toronto. It also curbs the urban sprawl that has led to some pretty ugly and almost unfixable corners of Scarborough, Mississauga and beyond.

But what does a greenbelt policy have to do with real estate? Well, lots. There's a reason why places like Vancouver and Manhattan cost so much. They're land locked. So in a place like Manhattan, there's nowhere else to build but up. And it ain't cheap.  When there's no where else to build, the cost of the existing real estate shoots up. And now that the GTA has borders, the same thing could occur. So, hooray, there's no sprawl, hooray for more local food, but not hooray for higher prices for homes. Land is becoming increasingly less available and the land that's left is becoming more expensive. You can't just keep building out because now there's a green wall to stop you.

Developers cannot afford to build houses on the land that is inside the greenbelt. So, they build condos. Really big ones when they can. That is one reason there are so many condos being built in the GTA, more than any where else in North America. It's not cost effective to build houses. Developers will lose money unless they go beyond the green part of the green built and build far outside of greater Toronto. 

You can't blame the green belt exclusively for causing higher prices in our city and the incredible increase in the number of high and mid-rise condos. Toronto has demand.  Young professionals increasingly want to live closer to work, near friends and great restaurants.  Interest rates are also low, which makes it easier to qualify for larger sums of money. 

And of course, the greenbelt policy in our area can change at any time. It is, however, considered one of the best greenbelt policies in the world. I can't see it changing any time soon. Plus, I like it. It encourages smarter growth, better planning and in the long term, just makes Toronto a more pleasant place to live, even if it's a higher premium. 

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