Jennifer Keesmaat is the City of Toronto’s former chief city planner. Recently, she partnered with real estate developer Jason Marks to launch Markee Developments. The new group’s first project is Tyndale Green, a purpose-built rental project at the site of Tyndale University near Bayview and Finch. Post City spoke with Keesmaat about the impact of the pandemic on the real estate market.
How has the pandemic changed development?
I do think one of the lasting legacies of that is a broader recognition that, no matter what twists and turns happen in the broader economy, if we’re not building purpose-built, affordable rental housing, there’s going to be a segment of the population that is excluded from the housing market.
Has this impacted affordability?
Back in March, everyone was, like, does this mean it’s going to be easier to access affordable housing? Or is it going to be worse? And one of the things that we’ve discovered is that, in fact, anything that isn’t part of the higher end of the market is still completely detached from wages. We would like to see the average rent to be in keeping with the average wage. That’s how you know you have some stability. But that hasn’t gotten any better. In fact, if anything, it’s gotten even worse. So I think a lasting impact for me is a recognition that, OK, no matter what kind of shifts we see in the global economy, it’s almost like affordable rental and rental in particular is in its own little bubble. And we need to be thinking about it as something that needs to be provided, particularly for essential workers.
Any second thoughts to planning a rental community?
I don’t think that’s a long-term impact, for a simple reason, which is that some of the key drivers behind the rental market are on hold right now. That’s kind of like saying you will no longer have restaurants because right now the restaurant industry is failing. The restaurant industry will come back. It absolutely will. But it’s on hold right now. And there’ll be a lot of damage done in the meantime, for sure.
What will drive the rebound?
When it comes to rental, if we look at some of the key drivers, one is immigration. Well, what’s happened during the pandemic? Immigration has been on hold. Is immigration going to be on hold for the long term? Absolutely not. In fact, the Canadian government has made it clear that it is going to double immigration targets, once we get out of lockdown, to catch up the lost ground. That is going to drive rental supply. Another is foreign students.
How do you see the rest of the year playing out in real estate?
My prediction is that the demand is going to be very strong, for a couple of reasons. One is the high level of disposable income that people have been accumulating… And so you’ll probably see more movement once the lockdown is lifted and once we do have a vaccine. Look, the supply challenges that we had before the pandemic haven’t gone away. We still have a shortage of supply. When you bring those factors together, it’s very likely; although, I will tell you, I’m always the one on the panel who kind of shrinks when you ask for the predictions because the real estate market is so unpredictable. But I think every indication is that we’re going to see a very strong rebound, you know. It’s going to be like the roaring ’20s.
For the full interview with Ms. Keesmaat check out our new real estate podcast out soon on Apple iTunes and on TRNTO.com. And to hear more of her thoughts, get your tickets to Post City’s 2021 Real Estate Roundtable virtual event taking place on Thursday, Feb. 25. Register for the event at trnto.link/rert2021.