The Future of Ontario — Part 2: Mid Sized Cities
This is Part 2 of a series of articles exploring the future of Ontario in a post-COVID world. Part 1 is here.
Mid-sized cities (MSCs) will be where most of the excitement and growth will occur in the next 10 years in Ontario.
As I covered in Part 1 of this series and in an earlier post, the Toronto that we know today is done. Young people may still flock to the city in droves for school and a few years post-grad, but the big magnet that Toronto had for young people was jobs. It was where all of the money was, and the culture grew to support that crowd.
Now that many jobs have become decoupled from the cities they’re “based” in, it’s the wild west as far as where people can live and work. As the insane real estate market right now has indicated, the choice for many is a detached house in a MSC. People with money tied up in a condo or a young couple who was in the process of saving for a down payment have all fled Toronto. And they’re buying up homes in MSCs.
This mad dash for more space and a better quality of life has turned places like Kingston, Belleville, Peterborough, Oshawa, Brantford, St. Catharines, Guelph, Kitchener, Waterloo, London, and Windsor into battlegrounds for real estate. Prices have shot up across the board, thanks in large part to low interest rates and the desperation for people to flee condo living in a city under lockdown.
What impact will this have on MSCs in 10 years?
The demand for detached homes will drive much of the growth of MSCs from a population and geographical perspective. Unfortunately, this is only going to worsen the sprawl issue that cities in the GTA have already gone through.
Demand for condos in Toronto has plummeted, so this could provide an opportunity for developers in many MSCs to build up and help shape the demand for housing. Not everyone wants a house, so many buyers could relish the opportunity to pay cash for a condo in a city where their quality of life will be higher.
This will also provide an exciting opportunity from a commercial standpoint. Most of the migrants to MSCs will be white collar workers who are “employed” in Toronto or the GTA.
While local white collar businesses may not immediately benefit from the influx, local restaurants, cafes, and retail spaces may benefit from the influx of people and money. Local downtowns, where many local independent businesses launch, have an exciting opportunity ahead of them.
I have focused a lot on homebuyers/homeowners, but what about those who currently rent?
MSCs will experience a huge increase in home values. This is already creating a negative impact for locals as far as housing affordability goes, as many do not have the benefit of higher wages that Toronto can provide. Natural cycles of young people renting and saving for a home purchase will be disrupted as prices have jumped so quickly.
This will cause a few scenarios:
- There will be more people renting in MSCs. New migrants will raise the entry level to home ownership, and unless wages increase to keep up (ha!), more people (especially university/college educated people under 35) will need to prolong home ownership and continue renting
- People will get fed up and leave. MSCs will begin to see an exodus of people who either sold their home and want to “cash out” or young people (esp. couples) who want to purchase a home. Some renters may even flee because rent prices may continue to increase at an unsustainable rate.
This dovetails nicely into Part 3: The Future of Small Town Ontario
