COstar - Richard Lawson

Like a lot of U.S. cities, the Boston area has been grappling with how to make rental housing affordable. Now the Boston Federal Reserve is joining a growing chorus around the country with a solution: Relax zoning restrictions on density so more apartments can be built.  “Density restrictions play a key role in limiting multifamily supply,” the Boston Fed’s New England Public Policy Center said in a new study. Allowing more density combined with relaxing height restrictions is the most “fruitful policy reform for increasing supply and reducing multifamily rents.”

It is a similar consensus playing out across the country as cities and states try to address housing shortages and affordability. Spurring much of the urgency is record growth in apartment and other residential rents across the country last year that has stayed above historical levels this year.

"Increasing density around public transit and opening underused or vacant commercial areas to housing development should be implemented immediately."

California has aggressively passed laws to address housing and affordability, including increasing density around public transit and opening underused or vacant commercial areas to housing development. Other states with legislation in the works include Oregon, Arizona, Maryland, North Carolina, Maine, Washington, New York and Massachusetts. But local municipalities often push back by asserting that zoning should be strictly within their power.

Boston-area rent growth hit record levels at 10.7% in both the three months of last year and the first quarter of this year, according to CoStar data. It has slowed to 5.9% year over year. The Boston metropolitan area, which includes parts of Connecticut, Rhode Island and New Hampshire, has a population of 4.9 million, the 11th most populous in the country.

Though rent growth in the Boston area is not as high as some markets in the Southeast where it topped 20%, Boston-area apartment rents are some of the priciest in the country. Average asking rents run $2,680 per month, more than $1,000 higher than the national average.



Massachusetts Gov. Charlie Baker signed into law in January 2021 a requirement that municipalities in the Massachusetts Bay Transportation Authority’s operating area allow multifamily development within a half mile of transit. Those rules are now in place and affect suburban cities more than Boston itself, where transit-oriented development has been occurring.  The Boston Fed study said the law could “result in greater housing supply and lower housing costs” to areas outside the urban areas closer to the city.

Ed Pinto, director of the housing center for the American Enterprise Institute, a nonpartisan think-tank that favors free-market approaches, told CoStar News the solution seems simple enough but the “not in my backyard” influence hinders efforts to change zoning requirements.

“The NIMBYs are basically shameless,” Pinto said, noting that they will argue on one hand they don’t want apartments and about-face to argue the need for affordable housing.

The NMHC report noted that most of the 49 apartment developers surveyed said they encountered NIMBY opposition, which increased project costs by 5.6% to confront NIMBYism and delayed project completion on average by 7.4 months.

“Any steps local and state lawmakers take to expand the development and production of badly needed housing right now are steps in the right direction,” Paula Cino, vice president for construction, development and land use policy with the NMHC, said in an email statement.

She added: “Policymakers at all levels of government should be doing all they can to put forward creative and meaningful policies that make it easier to build new housing of all types and at all price points.”



CMHC - Patrick Perrier

From its peak in February 2022 to last August, the seasonally adjusted average MLS® price for the entire country fell by 15.6%. This drop in housing prices was expected by forecasters — and by CMHC — given the anticipated return to more sustainable market conditions than those seen in 2020 and 2021. The negative impact of increasing interest rates required to bring inflation under control also played a role in declining prices.

Based on this decrease in the average price of homes, the tendency would be to believe that property values in Canada have weakened significantly.  It’s important, however, to understand that changes in the average price may also reflect a change in the composition of transactions across the different price ranges.

In addition to the supply and demand of a market, the characteristics of units being sold also affect the selling prices of homes. The size, location, appearance and other features of a property can affect its demand and price.

The most common home price measure is the average MLS® price, which is calculated from sales made through real estate brokers. It’s calculated by dividing the total value of transactions by their number.  A variation in the proportion of less expensive properties in total sales — due to the type or location of the properties sold — creates a composition effect. If this variation is significant, the change in the average price may primarily reflect a change in the characteristics of the properties sold, rather than an actual variation in property values.

For example, an increase in the share of sales of condominiums, which are generally of lower value than single-family homes, could cause the average home price to fall, even if the value of each property is unchanged.

In Canada, the seasonally adjusted average MLS® price peaked in February 2022 at $786,000. It was $663,000 in August 2022, which represents a 15.6% drop. For the same period, the MLS® Home Price Index decreased by only 7.4%.  The 8-percentage-point difference between the rate of decrease of the average MLS® price and that of the MLS® HPI could be explained by a shift in the composition of sales toward lower-value homes. In other words, more than half of the decrease in the average MLS® price since February would be explained by a composition effect, with the remainder explained by a real weakening of prices.

For Toronto, the average price decreased by 12.0% from its peak in February to July. During this period, the MLS® HPI decreased by 8.6%, so the actual weakening of prices accounted for just over 70% of this decrease in the average price in Toronto, while the composition effect contributed less.

As the impact of rising interest rates and the expected economic slowdown takes full effect on the housing market, the actual weakening of prices should become more pronounced. The gap between the average MLS® price and the MLS® HPI is also expected to tighten.








Like many housing markets across the country, the Toronto region is lacking for resale inventory. In September, for instance, new home listings in the Greater Toronto Area were the lowest in two decades.  In many cases, homes are getting pulled from an ice-cold resale market – and rented out.

Over the first three quarters of this year, more than 24,000 low-rise homes were rented in the GTA, an increase of 29 per cent from the same period in 2021, according to John Pasalis, president of Realosophy Realty. His analysis focused on detached and semi-detached homes, along with freehold townhomes that were rented on the Multiple Listing Service system.

Mr. Pasalis has looked at GTA homes that were listed for sale between May and July, but did not sell by the end of August and were taken off the resale market. Of that group, nearly one-quarter of condos and about 8 per cent of low-rise homes were leased. And that doesn’t include homes that were rented outside the MLS system – for instance, places that were advertised on Kijiji, Craigslist and elsewhere.

“I think the spike this year is people who said, ‘Forget it, the market is not doing well. I’m just going to rent it out, rather than try to sell it,’” Mr. Pasalis said.

The rental market is red hot, with demand bolstered by strong population growth, while many hopeful buyers are getting priced out of homeownership by rising mortgage rates. On a per-square-foot basis, the average condo rent in the GTA jumped 17 per cent in the second quarter from a year earlier, according to real-estate consulting firm Urbanation. For some renters, it won’t be the most secure form of tenancy.

“If someone’s looking at a home that was previously or currently listed for sale and lease, it’s very possible that owner may try to sell it in the next year,” Mr. Pasalis said.







1616 OUELLETTE AVENUE - WINDSOR - $9,200,000 / $76,003 Per Suite / 4.61% Cap Rate

This is a large "multi wing" 4 storey rental apartment building in downtown with a total of 121 suites.  This is a vintage rental property dating from the 1920's and has 2 elevators and 2 steam boilers with brick exterior and flat roofs.  The property was a former hospital and has surface and underground parking.  Most of the building included one bedroom and bachelor suites with the average suite size being around 500 sf.  The building was in the same ownership for decades and was in poor condition with rents far below market.  The building was fully exposed at no price and was purchased by a private investor.

78 BRAEMAR DRIVE - BRAMPTON –  $63,250,000 /  $413,400 Per Suite / 3.00% Cap Rate

This sale is of a 14 storey concrete rental apartment building sitting on 3.4 acres of excess land (development potential).  There are mostly 2 bedroom suites in the building, on site laundry and surface and underground parking.   There is a brick exterior, double windows, flat roof, balconies and elevators.  The building is heated with a hot water gas fired radiant system.  Rents in the building are far below market and there is development land.   The building was fully exposed to the market and was purchase by Equiton.

70 GEORGE BUTCHART DRIVE - NORTH YORK - $15,034,768 / $283,675 Per Suite

This property is located in Downsview Park and represents and brand new rental build under the affordable housing program.  The 4 storey concrete building has a glass curtain exterior, balconies, double windows and flat roof.  There are 53 suites with most being one and two bedroom.  There is one elevator and 43 underground parking spaces.  The building was constructed by Mattamy Homes and sold to Plazacorp.

11 1/2 ROSE AVENUE - TORONTO - $5,000,000 / $813,330 Per Suite / 3.00% Cap Rate

This is a low rise house form frame building located in Cabbagetown.  The property contained a total of 6 large rental apartment suites and had a brick exterior, double windows and flat roof.  There was on site laundry and limited surface parking at the rear.  The asset was well maintained and the site was just under 0.12 acres.  The property was not marketed and sold to a private investor.

1602 BATHURST STREET - TORONTO - $10,300,000 / $2321,875

This is a purpose built rental apartment investment comprising 4 floors and 32 suites.  The asset was well maintained with brick exterior, double glazed windows, and flat roof.  The building dates from the 1920's and has had the same owner for many decades.  It is located north of St. Clair Avenue West and is in walking distance to a subway entrance and LRT.  The suite mix comprised of mostly one bedrooms. This is a frame walk up building and tenants pay their own hydro.  Rents are below market and the property was not fully marketed and purchased by Starlight.






Together the team has completed over 1,500 transactions and has sold over $7.0 billion in apartments and development land. Put us to work for you and see the results. NO ONE has sold more buildings than our group. Experience, knowledge and professionalism will insure you get the right deal or the highest price if you are selling.

The Apartment Group is a dedicated team of professionals specializing in the sale of multi-residential investment properties. With over 40 years of combined experience, the team brings together their strengths including strong negotiation and sales skills along with highly technical market analysis and appraisal methods.

We are a boutique Brokerage but have the capabilities of the larger houses without the overhead. We have: an internal database of over 10,500 active apartment and land Buyers; a list of all apartment building owners in the Greater Toronto Area; our web site gets over 50,000 hits a month; we highlight properties for sale through our newsletter which reaches 10,000 investors monthly.


President & Owner,
Direct: 416-907-8280


Broker of Record, Owner
Direct 416-907-8281


Direct 416-996-7713