From the ground down
Why GTA home builders are responsible for getting to the core
We’re used to the sight of condominium towers all over downtown Toronto being built or already built. But more than likely, few of us are aware of the critical infrastructure and services, like sewer, water and transportation connections, which are prerequisites to the construction of each and every one of these buildings.
“When you do a development in the downtown core, you don’t just dig a hole, put up a building, and that’s it,” says Steve Upton, incoming chairman of the Building Industry and Land Development (BILD) and vice president of development for real estate developer Tridel. “There are a lot of other things that a builder has to take into consideration to make sure the [structure] gets built and functions properly.”
Upton, whose company is a leading builder of condominiums in the Toronto area, sheds light on the critical infrastructure underlying the construction of a downtown condo — how the project is planned and built, and who pays for the upgrade and expansion of vital services.
Tie in or upgrade The most basic infrastructure needed for a condo building to function would be the systems for handling water, sewage and stormwater from rain or melting snow. But while these services are already in the ground at most sites in downtown Toronto, the developer must determine — through a feasibility study conducted prior to submitting a development application to city officials — if the existing systems’ capacity is sufficient to service a new project. If they’re inadequate, the developer has to upgrade the services.
“Sometimes the most important part of your home is the part you don’t see: the systems that ensure health and safety for those living in that new home and community,” Upton explains.
Other infrastructure required for condo buildings would be the gas lines, hydro service and fibre optic lines for telephone and Internet services. The developer also must assess the impact that the new building would have on local roads, traffic, transit, parking and pedestrians. For example, would roads or sidewalks need to be widened? What streetscaping fits the neighbourhood — for instance, planting trees or adding lighting? A developer would also be responsible for infrastructure requirements such as parking garages.
Start from scratch Things are different, however, when building a community from scratch, such as those in the Kleinburg-Nashville area in the City of Vaughan. This part of the growing city was in need of infrastructure investment and it took the form of not just sewer and water systems but also some major transportation improvements.
The city planned for more than 8,000 people and jobs to come to this new community and worked with the development community to get the services in place in time for the new residents and businesses.The majority of the growth-related infrastructure, which cost about $37 million, was designed, constructed and funded by the developers of the new communities.
David Stewart of Vaughan-based TACC Developments says, “The process took about eight years to ensure that the 3,000 new homes of Nashville Heights, a community that will have schools, shops, parks, trails and a mix of housing, will also be served with the necessary water, sewer and transportation connections.
“To get the job done properly, our company recognizes that we have to work closely with municipal and regional partners, as well as residents’ associations and conservation authorities because the requirements and benefits are across the board,” says Stewart. “This project will generate over $200 million in development charges paid to the City of Vaughan,York Region and the school boards. These charges will help pay for new infrastructure, transit and other community improvements.”
The cost of a new sanitary sewer was front-ended by the developers, and the municipality and the region applied development charge revenue to the related water system enhancements. Surrounding neighbourhoods also benefited from road improvements that came as a result of growth. For example, Hwy. 50 was widened, and Hwy. 27 and Major Mackenzie Dr. were improved.
Who pays? When critical infrastructure needs to be expanded or upgraded to service a new condo development, the developer pays for it. “The city gives you a list of contractors, and you do it at your own cost,” Upton says. “It can be expensive, but it’s necessary in order to service your property.”
As well, downtown developers are often required by the city to bury hydro lines below ground, an added cost that is typically borne by the builder.
In some cases, for instance, when a community is going to be built from scratch, the developer will front-end the cost of the incoming infrastructure. That means that the developer shares the cost and the risk with the municipality.
Builders also pay development charges, which are levies imposed by the city to fund growth-related capital costs across the municipality — childcare, parks and libraries; police, fire and emergency medical services; roads, transit, sewers and water and stormwater management.
Best laid plans…
If the developer can tie into existing services and infrastructure, building a condo downtown can entail a less costly and less arduous process. However, building downtown might also come with surprises that a developer with a new subdivision on a vacant field will not encounter.
“Sometimes you get in the ground and you don’t know what you’re going to find,” Upton says. “The city’s drawings and the things they’ve done engineering-wise over the years aren’t always up to snuff. And when you get surprises, that’s when the extra costs come in.
“When you’re excavating to put in a stormwater pipe, for example, you don’t want to go down and hit a gas main that you didn’t know was there, [and] all of a sudden, you have to replace a whole gasmain piping system!”
In an area where new infrastructure has to be built to support future homeowners, there can be surprises too. Wildlife habitat, natural heritage and archeological areas have to be identified through development studies and planned for accordingly.
As the GTA continues to grow, improving and installing infrastructure becomes critical to residents’ health, safety and quality of life.