Real estate

Born and raised in Canada’s largest city, Josh Mitchell was eager to apply his knowledge in a new urban context upon completing his master’s degree in urban planning at the ��߲ݴ�ý.

But after spending six years at the New York City Economic Development Corporation, most recently as a senior vice-president of real estate transactions, Mitchell is ready to return home after accepting a position as U of T’s director of real estate, where he will take the reins on the ambitious Four Corners real estate strategy.

The new strategy not only addresses the need for more student and faculty housing, innovation space and active retail space, but also sets a goal of generating revenue for the university.

“It was always my intention when leaving U of T to go and look at another city, take those skills and experiences and bring it back home and do something impactful,” Mitchell says. “The Four Corners strategy is incredibly comprehensive and has a thoughtful vision.

“Coming into it with that groundwork already locked in, I’m excited to finally take that vision and excel when the rubber hits the road and negotiate the best deals for the institution.”

Recently approved by Governing Council, the Four Corners strategy focuses on building commercially viable non-academic amenities and services on the edge of U of T’s downtown Toronto campus as well as at U of T Scarborough and U of T Mississauga. An example of such a project is the new Schwartz Reisman Innovation Centre, a 750,000-square-foot innovation complex made possible through a $100-million investment by Onex founder and CEO Gerald Schwartz and Indigo founder and CEO Heather Reisman.

Revenue generated from Four Corners projects will be used to set up a strategic investment fund for the university, with a goal of eventually matching the annual revenue generated by U of T’s endowment.

Mitchell says Four Corners’ “double-bottom line” real estate strategy is what attracted him.

“We’re making sure that this project is financially feasible, but more importantly, the strategy is about enhancing academic and non-academic elements of the U of T student experience,” he says.

“It’s not just about financial returns – there’s a greater purpose there.”

Scott Mabury, U of T’s vice-president of operations and real estate partnerships, calls Mitchell “the best possible person” to roll out Four Corners.

“This is a bit of a homecoming for Josh after going down to New York City, arguably one of the most competitive real estate markets in the world,” Mabury says. “There, he demonstrated an ability to succeed in creating projects that bring people together even if their interests are disparate or perhaps not aligned.”

One of the New York projects Mitchell recently spearheaded is the forthcoming Union Square Tech Training Center, located in Manhattan’s “Silicon Alley.” The 240,000-square-foot mixed-use building will have 70,000 square feet reserved for a training centre, which has been touted as helping bridge the gap between the tech industry and New Yorkers seeking affordable job training.

“He understands the business from top to bottom, east to west, and we’re extremely fortunate to be getting someone with this track record and experience to the U of T team,” said Mabury.

As for Four Corners, Mabury cites the new 23-storey student residence at the corner of Spadina and Sussex Avenues as an example of how the development strategy aims to meet the university’s – and the city’s – needs. He adds that plans to develop more housing at U of T Scarborough and U of T Mississauga are also under way.

Finding innovative ways to fulfil the needs of the U of T community is something Mitchell is looking forward to doing through the Four Corners strategy.

“There’s basically a laundry list of amenities that would really enhance the downtown Toronto campus, as well as the Scarborough and Mississauga campuses,” he says. “Those are incredibly opportunistic portfolios. There’s underutilized land to do really interesting things with.”

Another plus: coming back to work at his alma mater after a six-year hiatus from the city means seeing U of T with fresh eyes.

“Being born and raised in Toronto, you grow up with certain biases about the city,” he says.

“But when you leave for five or six years and come back, you see everything with a fresh perspective. I’m really looking forward to doing that.”

Rising housing prices and Scarborough’s social revolution

krisha — Thu, 21 Jul 2016 17:03:59 +0000

Rising housing prices and Scarborough’s social revolution

krisha Thu, 07/21/2016 - 13:03

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The suburban skyline in Scarborough. Photo by Benson Kua, via Flickr

Bianca Quijano

Author legacy

Bianca Quijano

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“The city of Toronto as a whole, Scarborough in particular, is in the midst of a social revolution,” says city studies professor

July is looking to be another record-breaking month as housing prices in Toronto continue to soar.

Scarborough, in particular, has seen the steepest increases this year. Prices of single detached houses in the area have risen to an average of $625,000 – a 44 per cent increase since 2012. Are these the tell-tale signs of a real estate bubble?

Writer Bianca Quijano spoke with Professor John Miron from the department of human geography.

On why suburban Scarborough has seen a surge in housing prices:

The traditional argument in real estate is that prices of different classes of real estate assets in different neighbourhoods increase at the same rate. There can be exceptions. If you’re in an area of Japan affected by the radioactivity from Fukushima then property values are going to be depressed for a long time. It’s a long-term economic perspective that may or may not be correct when we’re looking at mortgages in the short-term.

When I was a young man I bought an apartment in downtown Toronto. My parents lived in suburban Scarborough. I lived in my condominium for 30 years. It cost $45,000 when I bought it. It had two bedrooms and two bathrooms. My parent’s house was also $45,000. It had four bedrooms, 2.5 bathrooms, two-car garage, detached and on a good-sized lot. Forty years later I sold my parents’ house for more or less the same price as I could have gotten for my apartment.

There’s no such thing as local hot markets or cool markets – at least not over the longer term. In the shorter term, when you talk to real estate agents there are hot markets and cold markets. For a moment, one area looks attractive and people start buying. Then it gets expensive, prices get pushed up and people start looking somewhere else that’s similar but not as expensive. So they start buying in that neighbourhood. It’s like popcorn. It keeps moving around. But when you view it over five years or ten years, they all tend to increase together.

Scarborough is not really this new wonderful place to live. Compared to others it was just a relative bargain. House prices in Scarborough will eventually go back into the same state relative to other parts of Toronto that it was in before.

On Scarborough's social revolution and how real estate markets affect the way we live:

The city of Toronto as a whole, Scarborough in particular, is in the midst of a social revolution. This social revolution is changing the way we do things, the nature of consumption and behavior, what’s acceptable, what’s not acceptable. To me it’s evidenced in the condominiumization of Toronto. I lived for 30 years in one of the first condominiums of Toronto. To me, what it means is increasing control over the daily lives of its residents.

Over time, there is a growing body of rules that you have to adhere to if you’re going to live in one of the condominiums or townhouses that are coming up. If your aspirations don’t match with that of the project, the only alternative for you is to sell your unit and buy property somewhere else.

People will find themselves increasingly constrained. In the old days, if you lived in a single detached house, you could pretty much do things that you wanted to do: playing loud music and having friends over late at night are examples. But in condominiums your freedom to live the kind of life you want is becoming more restricted.

Also, new residents typically want something different from what previous residents occupied. With hot housing markets in existing neighbourhoods, we find much new construction, renovation, and often intensification. Construction noise, traffic and congested schools can be very disruptive to existing residents. Existing residents who are homeowners can take some solace in knowing their property values have gone up, for renters however, there may be little upside.

On whether Toronto is in a housing bubble:

I say 1986 to 1988 was clearly a bubble. Prices doubled in three years. Then they fell by 30 per cent. Somewhere between three months and a year was all it took to fall 30 per cent. I use that as a benchmark. Prices have to increase that quickly again for this bubble to burst. I don’t think we’re at that stage yet. Prices certainly have gone up very rapidly from 2005 to the present time but it will come to an end. The general rule is that the rate of increase of house prices is about two-thirds of the rate of increase of the Consumer Price Index. We’re well above that level at the moment. But there will be a period coming up soon where it will be much slower.

On buying a house in Scarborough:

Don’t think of housing as a good investment. It’s not a good investment – over the long term it generally loses ground relative to the Consumer Price Index. If you want to invest in the long term so that you earn more than the rate of inflation then you have to invest in something other than housing. In 1988 when the prices dropped in Toronto it wasn’t until 2005 that they started rising substantially. So if you bought a house in 1988, at the height of the market, in 2005 you still hadn’t recovered your money and that was 17 years later. People think that prices will keep increasing forever and ever. That’s not true. We have protracted periods where prices have not increased very much at all.

How you balance all of your priorities in life is also another thing to keep in mind. For example, now I live in an old part of Pickering built in the 1950s. It’s by Lake Ontario, backing onto the Rouge River. It has ample parking, lots of big trees and shade. It’s a wonderful area with 50 to 100 ft. lots. You go to a new subdivision in Pickering and the houses are built very close together. You can’t step on your driveway without looking at your neighbour’s car. There are no trees, no privacy, no shade. I look at this and think that people can’t possibly live here. But they all sell quickly. Some people don’t want to spend their money on housing. They want to spend it on other things that are more important to them. That trade-off determines what people are going to buy.

See the original of the photo at the top on Flickr

Real estate

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U of T alumnus back from New York City to lead Four Corners strategy

Rising housing prices and Scarborough’s social revolution