Despite sky high Canadian real estate prices, the country’s cities aren’t as dense as many think. The Fraser Institute, a Canadian think-tank, analyzed a number of cities and compared their density. The study concludes that Canadian cities have plenty of room for densification. Missing was whether there’s an economic need for it. The study emphasized building a city to just physically accomodate people, rather than a healthy and stable economy. Let’s take a dive through their numbers, and look at how these cities rank in terms of economic output as well.
Canadian Cities Can Stand To Be More Dense
The study from Fraser Institute’s Filipwicz concludes that Canadian cities aren’t overly dense, and can stand more densification. Debate over. Not really. Canadian cities are less dense than many of their peers on the list, but they’re also much poorer. Many of the Canadian cities on the list are already lagging on economic output. This should ring alarm bells for these governments that are advocating density, without considering the lack of economic opportunity. Without even considering this problem, this country’s major cities are looking to create less affordable places, with even less opportunity than their peers.
Canadian Cities Rank Low On Density
The most dense cities were the usual suspects. In first was Hong Kong, with 25,719 people per km2. Paris was in second, with 21,067 people per km2. In third was Athens, with 17,036 people per km2. These are global capitals, and have been for centuries – they had a lot of time to plan for density.
Canadian cities rank substantially lower on the Fraser Institute’s list. Vancouver, the country’s most dense city, came in 14th on their list, with 5,493 people per km2. Montreal was the second most dense Canadian city, at number 17, with 4,916 people per km2. Toronto was the third Canadian city, with 4,457 people per km2 (20th). Canada’s most dense city is less than a fourth as dense their list’s most dense. The conclusion, Canadian cities can stand more density.
Source: Fraser Institute. Better Dwelling.
Canadian Cities Rank At The Bottom of That List For Economic Output
Sure, we can stand more density – but how is the current density doing? Generally speaking, density is a sign of economic opportunity. Afterall, no one’s moving to San Francisco just because they can physically accomodate more people. Dense cities should have a high level of economic output as they grow, otherwise you stand to create a greater level of wealth disparity. We decided to add GDP per capita, and rank this list to see how these cities are doing in terms of economic output.
The highest GDP per capita were in the middle of the list. Innovation hub Boston, comes in first with a GDP per capita of US$76,204. The finance capital of Amsterdam came in second, with a GDP per capita of US$76,204. The business hub of Houston came in third, with a GDP per capita of US$74,204. The growing density of these cities is clearly tied to their ability to generate huge amounts of economic activity.
Canadian cities rank close to the bottom of that list for GDP per capita. Toronto had a GDP per capita of US$45,771, making it 22nd. Vancouver wasn’t far behind, with a GDP per capita of US$44,337, making it 23rd. Montreal had a GDP per capita of US$38,867, ranking it 25th. By this measure, Toronto isn’t the next San Francisco – it’s the next Detroit.
Source: Brooking Institute. Better Dwelling.
Canadian cities are placing an increasing amount of focus on density, but not what people are actually doing in these cities. Consequently, housing has become one of the most important industries in the country, which is a disastrous setup if you think about it. The country isn’t trying to figure out how to warehouse people generating economic activity. We’re trying to figure out how to warehouse people building warehouses for people. Consequently, the price of housing in these cities is amongst the highest in the world, with a relatively low amount of density. More on that next time though.
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Hit the nail on the head here, Mr Wong. Canadian cities will be great places where everyone wants to live, but we’re being overly ambitious to the point it’s destructive. It’s easy to create great economic opportunities for a few people, and have people attracted to that opportunity. It’s near impossible to attract people first, then try to figure out what to do with all of these people.
The strategy we’re adopting is like turning us into a developing nation, then trying to develop again. It’s ridiculous.
Born and raised in Vancouver, but it’s slowly rotting from this point. There’s a condo on every block, and we’re building density. My kids were professionals (earning a good income), and had to move in order to have a better work life balance. When doctors and lawyers can’t afford to live in your city, you’re killing it off slowly.
We can keep focus on density, but we won’t have a city by the end.
Very insightful. It looks like you folks are taking Better Dwelling to the next level in 2018 adding new analytical dimensions to your materials. Thank you.
Very informative and Eye-opening. Hope Government think rationally and take calculated measures.
Excellent article. I live in the Niagara Region in Southern Ontario, which has seen housing prices skyrocket, alongside high unemployment numbers. In spite of both the provincial and federal governments assertion that they are creating jobs, we have a 7% jobless rate, and much more alarming Youth jobless rate of 9.5%. We also have a decreasing participation rate.
http://www.stcatharinesstandard.ca/2018/01/07/niagaras-jobless-rate-remains-high
In an area that has seen a huge jump in the value of homes, alongside a rise in youth unemployment, one has to wonder where is the disconnect?
If our most educated, and technically sound generation cant find work and contribute to the economic growth of our country, then we are in real trouble.
This is exactly what I’ve been telling people who blindly believe and say that Toronto is a world class city with its home values justified – numbers say otherwise.
you can really see the lack of infrastructure now in our growing and aging cities. They need to spend billions upgrading transit , roads to deal with urban density and sprawl.
Sadly it appears they have not kept up on this but gladly keep aggressive immigration policies because if we didn’t, they’re wouldn’t be more SIN numbers to tax.
Spend billions…to deal with urban density and sprawl. Which is it? Oh you were trying to tie in your partisan BS to the article in an attempt to validate your clearly political comment. Good for you puddin’….see you tomorrow.
I’m not sure anyone is “actively” placing a focus on density, they are simply trying to take a piece of the speculative pie. Officials and developers are interested in real estate just like they are interested in Bitcoin – mania is mania. Prices went up because money was cheap, loans were lax, tax revenue was multiplying and greater fools were at the ready.
For me, this speaks against conventional “they aren’t making any more land” wisdom. There’s plenty of room, vertically. Plenty of room means plenty more development, which means oversupply and (in concert with other factors that include B20) an inevitable, crashing end to the mania.
I lived in Toronto for two years (2015/17). Rented a condo, downtown, high up, with a nice view of Lake Ontario. At night, you could look across the skyline and see darkened apartments, with no tenants around 8 or 9 pm. Down the hall from my place, there was a bigger condo, with an even better position and probably, a better view. For six months prior to leaving Toronto, I would walk towards the elevator in the morning, and notice the same thing on the door of that condo: The flyers local businesses stuck on the door never changed. The door to the condo had not been opened in nearly six months. No one rented the condo out, nor cared to come by. If you, walked around a few floors, you would notice the same phenomena. By the spring of 2017, it was hard to find a good rental in the city at a reasonable price, yet it seemed so many condos were vacant. Density was hardly a problem for the city.
Maybe we are hoping that attracting more immigrants is going to prop up the real estate market? https://en.m.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_immigrant_population
Based on my experience, Southern Ontario is very unique with a strong mix of industries ranging from financial to software to manufacturing. Literally within 1.5 hours from Toronto. The migration to toronto is less about jobs within the city but the lifestyle and benefits provided.
Sorry, you’ve lost me here. Lifestyle costs money, isn’t it?
The argument presented in this article is these high GDP cities have higher paying jobs, attract more people, increasing density and demand for the housing so pricing goes up.
That is the case for New York, London or Boston but not Toronto…you go 1.5 hours outside of these cities and it is barren. I can buy a 3 bedroom house with two car garage for under $200K. They have listing for $100K….think about it. Wealth drops as you move away from the core city however, that is not the case for southern ontario. Mississauga, Brampton, Vaughn, Oshawa, Orangeville, Aurora, etc, etc…all have strong economic drivers. People are living in the City and commuting out…look at the GDP for all of southern ontario to look at how natives can afford housing…
I’d suggest you not to press this argument unless you seriously believe that GDP per capita for Southern Ontario is higher than for Toronto.
I would suggest that the GDP per capita for the Kitchener-Waterloo-Guelph area is much higher than Toronto.
I notice the glaring absence of Calcutta from both lists.
Also, Mexico City.
Worth mentioning is that Beijing is not mentioned.
@Justin Thyme: “I would suggest that the GDP per capita for the Kitchener-Waterloo-Guelph area is much higher than Toronto.”
No, it’s lower. Though it’s not that far behind.
In 2013, MSN rated Guelph just behind Toronto, $54,959 to $55,316. Really close. Bit it also noted that Toronto was dropping, Guelph was increasing. https://www.msn.com/en-ca/news/other/which-canadian-cities-have-the-highest-gdp-per-capita/ss-AAmThqR#image=9
Not sure if they included Mississauga with Toronto.