How Condo Investors Can Take Advantage of the Baby Boom in Downtown Toronto with Jeanhy Shim of Housing Lab Toronto

Andrew la Fleur: Hi, and welcome back to the show. You’re listening once again to truecondos.com. On today’s show I have a very special guest, and her name is Jeanhy Shim. Jeanhy is the president of Housing Lab Toronto, which is a consulting company that works mostly with property developers in Toronto and condo developers in particular. Jeanhy has got over 22 years of experience in the Toronto real estate market, and she’s been involved in every aspect of the development process, from start to finish, over the years that she’s been in the industry.

We talked about a lot of different things today, but a couple of things that I think that are most interesting to the condo investor from our conversation. One would be around her take on where Toronto stands, and how Toronto compares to other world cities, especially with our real estate market. Jeanhy does a lot of travelling, and she actually leads trips with people in the development industry, overseas, and to cities around the world, where they go and they learn about what other cities, and other developers are doing with their housing markets.

She’s got a very unique perspective on Toronto and how … What makes us unique, and what makes us special, verses other cities in the world. Again, it’s just another reminder, I’ll let you hear what she has to say about that, but it’s another great reminder in why we’re investing in Toronto and why in particular, we’re investing in the downtown core of Toronto.

We are a very unique city worldwide, we need to really recognize that as Torontonians, we often I think … I don’t know if it’s because we’re Canadian, or just it’s hard to see ourselves for who we are, but we are very unique city in the world. We have a very unique opportunity, here as Canadians, as Torontonians, to be able to afford and invest in a great, great, world class city, which is basically impossible to do for most people anywhere else in the world. I won’t steal all her thunder on that.

The other key point that we talk about is families. Families in condos, and larger condos, and Jeanhy is very passionate about this particular issue. She’s done a lot of work in this area, and she also is, personally, raising her family in a condo downtown. We talked about that, and how the city and how we as city builders, and investors and people in industry, can affect change and bring more families downtown and make that a bigger possibility and a better option for people, for families to do.

Also, how we as condo investors can potentially take advantage of this trend and the fact that there are more and more people and more and more families, who are looking to live downtown. How we can take advantage of that as condo investors. Those are some of the issues we talked about today on the show. I won’t talk any longer. We’ll get to the interview itself. For all the show notes on this episode, and links to reach Jeanhy, and her company, Housing Lab, you can head on over to truecondos.com/jeanhy, J-E-A-N-H-Y, Jeanhy. All the show notes will be there. OK, so here it is, my interview with Jeanhy Shim.

Andrew la Fleur: All right, it’s my pleasure to welcome to the show, Jeanhy Shim. Jeanhy is the president of Housing Lab Toronto, which is an independent housing research and consulting company that is rethinking how we grow our city and community. Jeanhy welcome to the show.

Jeanhy Shim: Thanks Andrew.

Andrew la Fleur: Excited to have you here and to chat with you about what you do, and the condo market and a lot of different things. Why don’t you start by telling us a little bit about yourself, your background, how got started in real estate?

Jeanhy Shim: Andrew I’ve been working in the condominium development industry, primarily in the Toronto area, for the past 22 years. I got into the business way back in 1992 at the tail end of the market crash, when we were doing receivership sales for banks, and I’ve kind of been … I’ve been working in all aspects of condominium development. I started out on the brokerage side by doing admin quite frankly in sales centers. When I graduated in 92 there was no jobs.

Then I worked primarily on the developers side since then with all the major brokerages, I’ve worked on the market analysis side a lot, with Consultants. I ran Urban Nation, so I’ve really seen the whole business from all the different angles; construction, development, finance, market analysis, so essentially what I’ve been doing the last 22 years in the city.

Andrew la Fleur: How did Housing Lab come about? You decided to go off on your own and start this company, you’ve worked in-house for developers, you’ve worked for other consulting companies, how did your latest move with Housing Lab Toronto, how did that come about? Why did you start to start Housing Lab?

Jeanhy Shim: We started up Housing Lab Toronto just over two years ago and though I left a big developer in order to start up the company, what I realized, kind of looking at the landscape, is that there were growing needs, housing needs out there that were not being met. The industry, the last few years, has really been taken over by investors, not a bad thing. They really supplied a lot of the much badly needed new rental stock for the city. I also saw that no one was really speaking to residents, to real people, and listening to and understanding their housing needs.

It’s a different type of buyer, we call them end users. It’s a different way of selling, they require … They’re looking for different types of product, but I realize that in order to grow the city, and to provide a variety of housing types, that with my company and using research, in my experience, that I could start to part influence city builders to help them understand the new market opportunities. When they start delivering a wider variety of housing types, I think are really needed to build, help the communities. You can’t just have one type of housing type. You really need the full lifecycle housing that will accommodate people as they age and allows them to age in place.

Andrew la Fleur: You said something interesting before we started recording about what makes your company different from other consulting companies out there. Maybe you can expand on what makes you different from the other consulting groups that are out there.

Jeanhy Shim: I guess what I meant in terms of really talking to people, is what we primarily do is really listen to and engage with real residents to really understand their housing needs, their aspirations, their frustrations. Then we work with clients, they really help that come out guide are a lot of our recommendations and help our clients to really understand how to develop their products to really hit the nail on the head and really service what the needs are out there. It’s quite unique out there in terms of consulting and I felt that that is a white space that really no one was doing much research in that space.

Some developers out there they’ll do market surveys but the type of research we do is not just, hey here’s the survey monkey survey. Do you want granite counter tops or [inaudible 00:07:47] stone or do you want hard wood or laminate. Those aren’t the types of questions that I’m talking about.

When I talk about research, I’m talking about really understanding fundamentally people value their behavior, their lifestyle because all of those things are ultimately inform your housing needs.

At the end of the day as you probably know Andrew, real estate is all about understanding people and what drives them. You spend a lot of time branding and trying to understand different target markets types in every industry. It’s all about understanding what drives people’s life decisions. It’s not always rational behavior, right? As you know in real estate is not only about what are market rates and how much money do I make. Often there’s a lot of other aspirational values to consider as well.

Yes with Housing Lab Toronto it’s really, we take a very holistic approach to understanding market opportunities and demands, understanding that it’s more than just some numbers that the [inaudible 00:08:44] can crunch that. It’s about understanding people and if you probably know from your work, and your clients, sometimes they do things that seem irrational. It’s because are often driven by values behavior aspiration.

Andrew la Fleur: Yeah and something very interesting you said or summarized what you’re saying is, a lot of the other companies are backward looking in terms of what’s happening in the past verses you’re all about looking forward.

Jeanhy Shim: Yeah, important to obviously understand who your competition is, how much they sold for, obviously [inaudible 00:09:15] about important stuff. If you’re trying to push the envelope and set the benchmark a bit higher in trying to be a bit more innovative, that’s where you need to start to get a bit more creative and to really be forward thinking. I mean not everyone is an early adapter I say in our industry.

There’s probably a handful of developers I would consider as early adapters meaning that for various reasons, they will take a bit more of a risk whether it’s because of the personalities in the company or whether is because of their balance sheets or for various reasons. Like I said, it’s not everybody, right? Not everybody can be a Steve Job, right? That doesn’t mean we don’t try because …

Andrew la Fleur: Right.

Jeanhy Shim: We build a balance. The balance made it’s a well-rounded neighborhood.

Andrew la Fleur: Let’s talk about the market. I’m sure you get asked this question all the time, but everyone is always curious to hear different people’s take on it. Is there a condor bubble in Toronto, what do you see?

Jeanhy Shim: I have been asked this question like ever since I was running Urban Nation and this is like well, well over 10 years ago. I guess eventually the bubble people will be right that’s… think what people, I mean it’s…Canada intends to be very, I’m not going to say negative, but Canada is a very highly fought after country in terms of immigration. People are flocking here in numbers that when you visit other cities and I lead all the build housing tours to other cities, we visit other developers and they are just, they are flabbergasted when we tell them our growth numbers. We kind of take it for granted in Toronto right? I mean our housing market has been so strong because we have consistently had such high and strong immigration and we forget that people want to move here.

This is a great country, yes we have our issues in transits and infrastructure but at the end of the day it is a safe haven for our investment money, it is a safe place to live, it is a place where people want to come here so that really has … The whole time that I have been in the business, like I said I started in 92 we were at the tail end of a pretty bad recession, the market started picking up in that kind of mid-90s a lot of that was driven by the hand over in Hong Kong to China in 1997. Those global issues actually drove a lot of immigration investments here and in the condo market in the mid-90s.

I don’t know if you remember, we really started picking up the on our tours ironically. It wasn’t a downtown Toronto thing because that is where a lot of the money was coming in order to invest in condominiums out there as people kind of moved here. Then we’ve kind of… The immigration and certainly as our economy started picking up, the immigration just remained quite strong and the good thing with this despite all the changes of government is that one consistent thing is all the government whether conservative or liberal have remained very committed to an open door policy and high levels of immigration which is very important for our growth.

Our natural birth rate is falling and we really, really need that and the reality is that we have more people moving into the city, they all need housing of one form or another. Whether it is rental or shared or low rise or high rise. I think also immigration is interesting because of its cultural impact and it is something that I have seen is like a lot. If you look at, I study all the immigration reports and where are people coming from, levels of education and all that but that again informs the type of Canadians and their potential housing needs. If you look at the countries where most of our immigrants have been coming from, they are coming from countries where for example investing in a condo as a family investment is not unusual, buying a condo for your kids to live in when they go to [inaudible 00:12:44] is not cultural unusual or raising a family in an apartment is not a culturally unusual thing.

I think that build up things in a real estate basically banks may not get it but because they tend to punch different types of numbers whereas these other types of cultural things are more intangible right? They have had a very big impact. When people ask if there is a bubble I think fundamentally at the end of the day, obviously markets have ups and downs but housing demands remain generally consistently strong. Yes, affordability is getting a bit more challenging but people are finding creative solutions or they are actually renting perhaps longer than they normally would have but then on the flip side that is good for all of our condo investors, right? Who are actually looking for tenants.

Andrew la Fleur: Yes.

Jeanhy Shim: I’m not a doom and gloom, I’m also realistic enough but as I said having… It travels a lot and doing these housing tours and going to other cities, particularity in Europe where they would love to have the growth that we are having that just drives a lot of demand fundamentally. Unless you see that drop off or unless there is a major global recession, really it’s nothing to say in the markets and they continue to grow and never decline.

I think this whole thing about a bubble is you have to really look at the fundamental that are driving our market and we are not being driven by circulation as we know. We are driven by, these are real people, real and whether they are… Even investors. They are real investors right? As you probably know from some of your clients, they are buying and they are renting. They are holding and renting lease as good long term investments.

Andrew la Fleur: Yeah, speaking of your trips to other cities around the world you mentioned you lead housing trips where you take developers and people in the industry to see what is going on in other cities. I think recently you were in Milan, is that correct?

Jeanhy Shim: That’s right yes. For the building and industry and land development association, I’m a member. I volunteer and I organize our annual housing study trips. We have been to most of the cities in North America. New York, Chicago, Miami, Vancouver, like all the big ones and then overseas I have taken the group to London, we have done Copenhagen, Malmö, Berlin and this year we did Milan and Torino. The whole purpose is to go out there and just, it is to get inspired.

It is not that they do better things there it is just that they do things differently and it is about coming back with new ideas and so yeah, it is quite an interesting tour. We were just in Milan and the Italian economy is not doing well. Milan is obviously in the heart of the industrial north and certainly doing better than other parts of Italy.

Interesting, I mean their housing, their condo market is really driven by they are catering for the top 5% of the population, like the luxury buyer. Even then they have built whole communities, beautiful projects but they are only 30% sold. The whole, the way they finance their projects everything is kind of very different but still also works in terms of getting inspired and getting some ideas. What was interesting fundamentally for the group was to see that when you have a city that’s not growing, you basically don’t have much of a housing market and that is certainly the case in Milan and even all these other cities that we visited. When we tell people how busy, trying to add on average, it is not 100,000 anymore probably 70,000 to 80,000 new people a year net.

They just don’t understand those numbers. Those are their annual growth numbers. I sorry, they’re 10-year growth number. Milan was very interesting a lot of really innovative stuff happening there but for the developers who went it was like how do you make the numbers work or because you catering to the luxury market sure you are selling at $1000 a square foot, so that just gives you a lot more leeway to do a lot more things, right?

Andrew la Fleur: Right, right.

Jeanhy Shim: Then the Toronto market where our market is as you know it’s has been and continues to be driven by that the mid-market product, right? Ours per square foot is not $1000 per square foot is more like $600 there, right? Again, not as affordable as 10 years ago but still relatively affordable.

Andrew la Fleur: Based on your travels and the many trips you have been on what can we learn from other cities and what can other cities learn from Toronto? Like what is it that Toronto does that’s world class? What is it that Toronto is lacking from your travels?

Jeanhy Shim: I mean I always find it interesting that people from other we are the most active real estate and certainly in Western World, I mean I know in China there’s more activity but I think that what I always found very unique about Toronto is yes we have an affordable housing crisis, we do have long waiting lists, undeniable we have problem with affordable housing. Yet I have always maintained that we are the most affordable city to more people than any other major industrialized city in the world. I mean I have lived and worked in London, England and Washington DC and Montreal is a different case but in terms of when you look at for example London or Washington, we are more affordable to more people than any of these other major cities. In London and New York, where can you find a 30 year old who can afford to buy their own home in their downtown core?

Andrew la Fleur: Exactly.

Jeanhy Shim: You can’t. I think people and I again people might say, “Well, but that is a 400 square foot shoe box.” I’m like, “Yeah, but you are 32 years old, you are single you have no kids, you work 80 hours a week, but it’s the fact that you own something and that you are able to.” As much that there is always criticism about units are too small often that people, people only know what they know, right?

They sound obvious but when you are… If you look at the majority of our developers and architects and kind of the decision makers in our cities, they tend to be of an older generation and they only know what they know. When the only reality you know is your 5,000 square foot home, with the three car garage and a cottage in [inaudible 00:18:45], it is understandable. You just don’t get it, right? You don’t get how can somebody live in 400 square feet?

Andrew la Fleur: Right.

Jeanhy Shim: I think that is one thing that I have noticed traveling around the world that we do a very good job in delivering homes to real people. Like I said that are relatively affordable and yeah the size is small but at the end of the day, when you are a first time buyer, beggars can’t be choosers, right? Sure you would all love the 2000 square foot condo but you live within your means at the time then we are delivering an amazing product at a great location, you think about it for a young person.

Andrew la Fleur: Yeah.

Jeanhy Shim: You think about the amazing downtown neighborhood and the quality. Yes, there is issues of quality but generally speaking we are delivering, our industry delivers very high quality, good quality housing. What can we learn from other cities? I think the biggest take away has certainly has been, yeah in London and Berlin all these cities they seem to be pretty wacky and amazing architecture. Again when you are looking at how much they are getting prices for a foot, of course you have a lot more leeway to do the sexy thing when you are selling for $1,500 a square foot which is… That’s not our market, right? The biggest thing, take away we have learnt is that these other cities that we have found they do a much better job in designing buildings and how they meet the streets which I know Jennifer Keesmaat and her team in the city have been focusing a lot more on that the gate thing, right?

That inter-phase where the building meets the streets. How would you design that? In the past we weren’t doing a very good job we were doing a better job now. I think when you go to Europe and constantly what we found is that that whole, the relationship and how you integrate the building is not about necessarily the look of the building, that is a very subjective thing it is about good planning and design to actually how it inter-phases. That is one thing that we have learnt and also the mid-rise building, their courtyard building those are all the things that are great takeaways I know from the groups that I have taken over the last few years.

Andrew la Fleur: Great. Let’s talk about your work with the Children Discovery Center for those who aren’t familiar. What is it and why does it exist? How did it come about?

Jeanhy Shim: The Children Discovery Center is Toronto’s first and only children’s museum geared specifically to kids under six. How this came about was a variety of things. 11 years ago I was visiting my nieces who were two years old at the time we were, they were living in San Francisco with the Bay Area Discovery Museum and which is a children’s museum. I remember 11 years ago this is way before I had my daughter and my daughter has just turned six. Possibility before I even thought of having kids. I remember at that time looking back and going, “Holy Crap, why doesn’t Toronto have a Children’s Museum?”

I was away that there were children museum in all other major cities even in London and Ontario had one at that time way back when. I always wondered and I thought one day I’m going to bring this back to Toronto because it doesn’t exist and that is the type of person I am, I like to make things happen and kind of different things. Then fast forward I had my daughter and then with my new company and I’m raising my daughter in a condo right now living downtown. I grew up in the immigrate dream in the house in the suburbs and used to commute in the Go Train or drive et cetera. We have chosen to stay downtown which means we don’t need as many cars, we can walk, we have other options all to benefits.

Then with my own daughter what I realized she just turned six this year is that I realized that there was a baby boom. I saw it in my own condos I was living in and the neighborhoods I live in just walking around. Even more so now that my daughter is six like the real condo baby boom is starting to hit now. Even at six years old, I noticed it and there is a growing group of people living in condos. People have started to have their kids a bit later in life as well. There is that period of probably five to ten years at least where you are living the amazing single life downtown, right or a couple with no kids.

Andrew la Fleur: The good life.

Jeanhy Shim: People are, inevitably people have kids. There is more people today than a generation of those who choose not to have kids. The reality of it is, statistically speaking that the stats show that two thirds of legally married and a lot more couples do end up having at least one child. Again my research side, I started researching into it and I have the numbers that back up what I was seeing and experiencing is that there is a baby boom happening downtown. The numbers speak of it. With my daughter I realized that again living with her and living downtown as we have membership and Rome and Science Center, look everywhere, right?

Andrew la Fleur: Yeah.

Jeanhy Shim: We realized that, it developed mentally and I have learnt a lot parent. I’m not an early childhood development expert. What I have learnt is that obviously kids brains, they are not born with fully developed brains like we have, right? That it takes about 19 years for them to actually fully, psychologically develop the brain. I realized that taking Maya places was that, yeah it was nice to go to Rome and the Science Center and have some kids there but nothing was really geared to kids under six, like developmentally geared to them. Interactive, meaningful, engaging and also when you look at camps or classes, I was like, “Oh, the world has got a Saturday morning class.” I was like, “Oh, it was 7:00.” Or the sleep over at the zoo or I’m sure have experienced these with your kids is that you get all excited and you realize it is all for the older kids.

I remember back the Bay Area Discovery Museum and I thought, you know what? With my company has one in Toronto one of the areas that I’m pushing is research and promoting f how to get more family friendly housing in the downtown court. I thought this is going to be my company’s city building initiative. I’m going to bring the children’s museum to the city. It is a grassroots initiative, there is no government or big corporate support surprisingly. I think I was a bit too outside the box for them. I also launched, this is a pilot project. The Children’s Discovery Center means that I approach one of my clients, the Garrison Point Development on Liberty Village. They are clients of mine, I approached them and I was like, “Hey, you have got this 20,000 square foot building it used to be the Municipal Licensing Office, do you think I could take a little tour of it.”

I did and it was perfect and I pitched them and said, “Hey, do you think you could donate this building for us to use as a pilot project to prove that there is a demand for a permanent Children Discovery Center or Children’s Museum in Toronto?” Garrison Point they have got great town’s homes and family size condos units. We all felt that it was a good kind of relationship. They came on board as one of our key supporters and they gave me the use of this building. I renovated it and we just opened up on May the 23rd.

I put together a team, an advisory board of early childhood development experts because I’m just the mom and I don’t know what I know though my experience. I put this special team and that’s how we become a Children’s Museum. We are not a glorified indoor playground. There is actually is a lot of Rhyme and Reason. If you go to our website childrendiscoverycenter.com you will see we have got 10 discovery zones. They all have different theme and they are geared specifically to the mind of kids under six years old.

Very engaging, very educational but it is also a program place. The whole philosophy of the place is very based on play. The kids under six it is not about flash cards or videos you can show them or an app, it is all about creativity and play and letting them explore that is how kids naturally are born to learn. That is the whole philosophy of this place. It is not a place we sign up for classes, or camps, or drop your kids off, we are not a daycare it is a place where kids come. The other day we had a girl she showed cup at 9:30, they left at four, we closed at 4:30.

Andrew la Fleur: Wow. There you go.

Jeanhy Shim: Kudos to the parents and it is just about letting the kids just play and discover. Because it was so engaging, there weren’t no meltdown. That’s kind of part of my what I have argued with Jennifer Keesmaat and planners and counselors has been it is not enough to compel developers to build three bedrooms. Yes, obviously three bedrooms are the housing types that we should have, it is not good enough to just have one bedrooms and small units downtown I agree.

I also argue that the reason why young families will choose to stay in the neighborhood whether it is downtown or otherwise is often they look at is there family friendly infrastructure. Whether it is a park or schools and I’m not saying Children Discover Centers is the answer to everything but I think it is about contributing to the landscape of the downtown area where we have a lot of bars and restaurants and cafes and shops and everything, but we need more than that, right?

Andrew la Fleur: What is your vision for, this is a pilot project, but what is your long term vision for this?

Jeanhy Shim: The pilot project, we are open until the end of September or a little bit longer I hope if my clients don’t need the building back right away. The whole goal is to prove that there is a need for permanent location. I’m actually already in talks with five clients who have various downtown mixed youth development about a permanent location. A permanent Children Discovery Center will be 40,000 square feet, so double the size we have now.

Andrew la Fleur: Wow.

Jeanhy Shim: For the space and I’m actually going to program it for 12 and under. Developmentally what I have learnt from my esteemed advisers in my advisory board is that zero to six is considered a developmental grouping in terms of brain development and seven to 12 is what they call a middle year. It is a whole other group and I have got a ton of amazing ideas for the seven to 12 that are very different, right? My daughter is six and half and I’m starting to see and I’m sure you will experience with your kids that there is a change. The goal is to do the 12 and under and also I kind of have to because my daughter is six and a half and she’d kill me if I opened a Children’s Discovery Center and she couldn’t go.

Again in all seriousness there is this demand, the response so far has been phenomenal. People come here and say, “Oh God, we always wondered why there is no children museum in Toronto.” Again there is really nothing for young kids that are…

Andrew la Fleur: Like you said, I mean if you traveled anywhere else in the world certainly in North America, there are great children’s museums all over the place. I have been to a few of them as well, yeah and it’s a big City like Toronto we have got a bunch of museums with kid related programming but like you said most of it is geared for older kids. There is nothing like it in Toronto and you go to other cities and these places are just packed with kids and parents.

Jeanhy Shim: The other thing I’m doing with the Children Discovery Center is my company Housing Lab Toronto we are also going to be starting next month a research laboratory. Jennifer Keesmaat and the city of Toronto are partnering with us and what I preach to the city of Toronto was nobody has asked me what I do. Measured, studied, quantified what millennial and generation that housing, urban family housing demand looks like, what the frustrations are.

We are actually going to be launching, so myself I have a research company that work with called Heads Up. We are actually going to be doing a very rigorous and proper research laboratory and reaching out to all the people who visited Children Discovery Center. Obviously if they opted in to our research, I’m like, “We have already got this, I have got this database of people who have come.” We would be approaching them and if they opted in to our studies, we will actually measure and we will have our results by the end of the year and they will be the first time anyone has actually quantified it.

Right now it’s pretty anecdotal. I can tell you my anecdotal stories about my experiences in condos and I’ve got stories that really in order to advise good policy and planning and all that stuff that’s important to city building. They need to base that stuff on tax. What I’m hoping is the research component of children’s discovery center will help contribute again to city building in every different way.

This initiative of mine has been hitting all different notes and at the end of the day its helping kids. Its creating great environments but also like I say hopefully it will help promote and inform our decision makers who actually are writing the policies right? The official plans and all those things that guide how our city’s going to grow in the next 10, 20 years.

Andrew la Fleur: Yeah exactly. What do you think is really going to take to get more families in the court the way I see it is that we’ve got political will like the politicians, the policy makers. They want to see it. You’ve got the demand forces like families, like you said they want to live downtown, they want to be in family size units downtown. You’ve got the affordability issue where people just can’t afford low rise housing anymore. You’ve got lots of things pushing for more family oriented housing.

On the other side of the equations, you’ve got a development model that you’ve got to pre-sell 75, 80% of a building before you can get financing. It’s extremely difficult to sell three bedroom units or larger units that are not going to be finished for three, four or five years. Everything is weighted towards smaller investor units. You’ve also got a lack I think of quality schools in the downtown court for families to say this is … I want to be in this area for this school kind of thing.

Those are the forces that I see at play here in favor in but also opposed to it happening. How do you see it and how do we move towards a better, more complete city where we do have families who want to live downtown and live a good quality of life and have good quality schools able to actually do that.

Jeanhy Shim: I think I agree with you, all of those points that you mentioned are all very valid. I think that we need a concerted effort, I think that the policies to date that I’ve seen has been really just a compelling developers to build more three bedrooms. I know my former councilor Adam Vaughan he’s now our MP. Wonderful gentleman, very big picture thinking and he was pushing a lot of that getting developers to build three bedrooms. The irony at the time I was yeah I’m like we’ve got our three bedrooms, there were like 800 square foot three bedroom geared to investors who’ll rent them out to three UST students right at[Inaudible 00:32:58]bucks a month.

Andrew la Fleur: Right.

Jeanhy Shim: You’ve got what you wanted and I’m not saying it was ill informed necessarily. What I’m saying is I think a lot of the knee jerk reaction unfortunately in our industry, because there are no facts, there’s no research to really… Everything’s so anecdotal is that get the development industry will pay for it. Which I think everybody has to work together; it’s a coordinated effort, certainly the developers. When I worked with Street Car on their project in the upper beach, small mid rising so I think those are the perfect opportunities to integrate larger, family size units.

There’s these buildings that deliver faster, the streetcar projects that’s less than 50 units. We had three bedroom suites, 12 to 1300 square feet with 250 square foot outdoor spaces and a lack of back yard. The average price was about $700,000 and we sold out in about a month. I wouldn’t argue that [Inaudible 00:33:49] large suites themselves, the big selling feature obviously is a great location, great schools in that area, great school district, but it was really the layout. We are able to listen to real people; we are able to deliver the product that actually they wanted. Price wasn’t an issue because if you look at the average price of a home on the beach, relatively speaking, brand new condo [Inaudible 00:34:09] made it affordable right, there’s affordable toe hold into a high demand neighborhood.

I believe that up in the city side, there’s a whole other discussion about fixing the schools and cleaning the parks and that whole thing needs to be looked at more seriously, because you’re right. Schools I know in my neighborhood, I live in the [Inaudible 00:34:29] neighborhood and a lot of the condo families here I see them the ones that started to get grade one and plus for school. They are leaving this area because they don’t feel the school is very good. If you look at the ranking, you can see that the rankings aren’t good, if you believe in those ranking but just the sense is that the school’s not good and its driving their housing decisions. There’s fields are.

That’s one thing I think at a municipal level what the city planners can do is that there are tools that they can use to encourage the development of more larger suites. That’s compelling developers to build them. The other two are development changes or levies you know what I mean, or give them a break on development charges and levies and fees. Right now, it is quite to a developers disadvantage to build larger suites, put it that way. The fees are higher, just is a lot of reasons why. The mid rise buildings for example there’s a lot of stand cost, which are the same whether you’re building in a 50-story building or an eight story building.

Again, the city is very serious about its commitment to mid rise neighborhood there’s things that they can do, policy tools and things they have under their control that can encourage and facilitate more mid rise buildings. Right now like I said, a lot of it is geared if you just look at the numbers it’s geared towards doing the larger scale projects. Do I think families are going to live in 80-story towers downtown? No. Do I think that this means is no potential for family housing in high-rises? No I don’t believe that either. I think that we just need to get more creative. The project that I live in, we’ve got a 25-story tower, with an eight-story podium building and I’m in a ground floor unit, that’s about 1100 square feet. Again, like the town home unit, we’ve got some terrace units that are larger.

There are opportunities to integrate those. Yes for the larger building we do have to wait longer so there’s that whole thing about how do we get families to wait 5 years, 3, 4, 5 years for a bigger building? You’re right, there are some other issues. I think that it is the coordinated effort in order to create the conditions that will facilitate or encourage more families to stay downtown. I also think that ironically that transit and that infrastructure perhaps for our generation we’re considering saying no we’re not going to commute in. Ironically the bad infrastructure is actually should compel more families to stay downtown. I know personally I put more value on my time. I’d rather spend an hour with my daughter just sitting in a highway so I can live in a 3,000 square foot houses in Nelson and use the backyard once or twice a year.

That would still be interesting actually talk to people who go out to the suburbs to the dream house and look at why did you move out here. Often it’s the back yard, my kids can run around, I can barbecue. Actually measure, how many barbecues do you have a year [Inaudible 00:37:30] and how often do you let your kids run in the back yard? I thought that would be kind of interesting people aspirations versus what reality is. Then the other reality is so how long do you spend in your car commuting. There’s a value to your time right?

Andrew la Fleur: Yes.

Jeanhy Shim: I don’t mean to evade your question but I think there’s an opportunity here I see to hit it from many different angles but it has to be a coordinated effort. Sort of a housing, all these things. We can’t declare all the backs of the development industry. They’re part of the solution but they are not the only solution. Then there’s the whole thing about political leadership and political will and that’s a whole other conversation right?

Andrew la Fleur: Absolutely. What are your thoughts on the planned new school for City Place? Do you think that could be a model if it works well? Do you think that will become a beacon for families to be going to that school? Do you think that could be a model like will that be a wake up call to the city to say, “Wow we need more schools, we need more family oriented planning downtown.”

Jeanhy Shim: Yeah, I mean the irony is that all these condos have been built and often the for example basic things like traffic lights and stuff. Not even these how late they are in coming, although the development applications were submitted five, six years ago. You know how many units are being built; you know how many parking spaces you require the developer to build. You know how many cars there are going to be. It’s always funny when the city acts like, “Oh we had no idea.” You have all that information. You didn’t plan it well. I can just, you see all the developments downtown and the frustration with the district traffic because they haven’t put the lights in yet. Then finally, they go in five years after everybody’s moved in but the school I think it’s very interesting that people have been shocked.

We know it’s in building. The whole time I’ve been in the business, especially the first 10, 15 years it’s driven by that young first time buyer and they are mid 20s, late 20s or early 30s. It was amazing that nobody could have had the foresight out and say all these young people living there town, they’re going to hook up and they’re going to have kids. Nobody seems to think about that and the City Place School is I think a great example where the clock is ticking now for the city. They are now rushing to get the school built because in their original agreement with the developer there are stern timelines and deadlines. Ironically six, seven years ago when we first got pregnant we were living at Tiptop Loft.

I was like the City Place School will be amazing. By the time my daughter’s four years old, the school actually was supposed to be finished two years ago. I remember way back when thinking oh this is going to be perfect there’s going to be a brand new school, by the time Mia is [JK 00:40:14] she can go there. Obviously she didn’t and now they’re scrambling. I think the model’s delayed in terms of integrating community center. The Waterfront school which is our local school, they already have the community center integrated into it and a daycare. It’s a wonderful model a very different, like there’s a lot of overlap of infrastructure and much more useful facilities.

I know that when they open if you just look at the numbers, I know my friend the babies. There’s a ton of them and they’re chomping at the bit to find a good school. The quality of the other schools downtown. I’m not talking about the quality of the teachers; I’m talking about the buildings, the infrastructure. They are old buildings, they’re crumbling there. We’re lucky down here at the Waterfront school because relatively new buildings compared to the other buildings but definitely there’s a [Inaudible 00:41:06]. I think that the City Place School will be a great model for other neighborhoods about the proper negotiation with the development, with the developers to bring these kind of initiatives about.

Andrew la Fleur: That’s great. We can go on and on I’m sure about this, it’s a very interesting issue. Last topic I want to cover in our conversation is around given the fact that a lot of condo investors listen to this podcast. Is investing in this condo market. I want to ask you if you’re an investor yourself, if you’ve invested? You’ve been in the business a long time if you’ve got stories to tell us. Where do you see for the individual condo investor, where do you see the opportunity today?

Jeanhy Shim: I think that obviously that the low hanging group of most investors are the smaller units along the subway. The reality is when you have new households forming, whether there are new Canadians moving from overseas. Or whether they are the young kids growing up and leaving the family home, the reality is often that the smaller units are what they rent right. It’s either because of your age and you’re single why do you need big place, and often it’s driven by costs. I think that being on the subway transit, both are all still good investment locations regardless of, I don’t think someone can argue there is a glut. I mean we’ve had no rental construction or purpose built for so many years and we still playing catch up.

Yes there’s been a lot of rental spots, or new condo spots that have been delivered or will be delivered in the next few years. Have we reached the saturation point? I don’t think anyone can predict that. Remember if you look at the demographic which I study a lot, the youngest generation of the baby boomers are only now are starting to graduate or they are in the middle of and or finishing college and university. Remember they are that next world of renters. I’m not worried about over the next two or three years all these investors of the rental units and who’s going to rent them.

Again if you study demographic which I do quite a bit and lifecycle housing, yeah maybe these kids will graduate and are living in mom and dad’s home a bit longer. Which we notice that can be [Inaudible 00:43:24] yes they tend to be more it emerged that inevitably they do move out, so I think that’s fine. I think that the investment opportunity that fewer investors look at are the larger suites. I understand obviously it’s the bigger commitment in terms of money and down payments but and especially in mid rise buildings. Most of these buildings are sold to end users as I mentioned. That doesn’t mean that there’s not a demand for a three-bedroom rental or you know what I mean, a larger rental or a housing…

Andrew la Fleur: Yeah, absolutely.

Jeanhy Shim: I think that that’s kind of a bit of a sleeper. Especially the small mid rise buildings. Most investors tend to flock to the big towers on the subway. For obvious reasons like I just said, there’s transit. There are a lot of great neighborhood mid rising rental buildings which are also very well serviced by transit because they are in neighborhoods. They actually are not a lot of investors who buy in them because the developers either don’t cater to them. The projects I did with Street Car Development years ago about mid rising rental buildings, eight stories you know like 100 suites. We never proactively just sold exclusively to the investment community.

We sold first and foremost to the end users and real people the neighborhood. We always had about 20% of our suites sold to investors. Again these are long-term investors, and these are the ones who are a bit more forward thinking and realizing like OK you know what, there’s not a lot of competition in this building. There’s only a handful of rental units so it’s a good investment. Whereas often you buy these big towers. I’m not saying it’s a bad investment but you’re competing with 400 other people for tenants.

I think that’s a bit of a sleeper for investors if they take the time and understand neighborhoods and there’s a lot of great small and dull projects that are being launched in our wonderful neighborhood. I think that’s an untapped opportunity that for the astute investor who wants to diversify I think that that’s still a great area of opportunity.

Andrew la Fleur: Very interesting. Jeanhy thank you very much for your time today, I really appreciate it. Hopefully you enjoyed that and hopefully we can have you on the show again soon. If people want to get a hold of you or learn more about Housing Lab Toronto what’s the best way to do that?

Jeanhy Shim: housinglabtoronto.com is my company website. If you do have kids under the age of six please come support our pilot project. childrensdiscoverycentre.com, we’re open every day 9:30 to 4:30. Andrew I invite you and your family to please come as well and experience. Your kids will love it; it will be quite a great experience for them.

Andrew la Fleur: Yes it’s definitely on our summer to do list for sure.

Jeanhy Shim: Right. Thank you for reaching out and hopefully this helps kind of… I’m happy to share my experiences, they are just my opinions but take them, as you will.

Andrew la Fleur: No its great, a lot of great insights. I think we learned a lot here and we very much appreciate your time taking it out today. Thank you very much and hopefully we will have you on soon.

Jeanhy Shim: OK great. Thanks so much Andrew.

Andrew la Fleur: OK bye for now.

Jeanhy Shim: All right bye, bye.

Andrew la Fleur: All right there you have it. That was my interview with Jeanhy Shim from housing lab Toronto. I hope you enjoyed that, I hope you learned something from today’s episode. Once again for all the show notes from this episode, links to the Children’s Discovery Center and Housing Lab Toronto and Jeanhny Shim just head on over to truecondos.com/jeahny and you can get all the show notes there.

Once again thank you so much for listening to the show, thank you for your support, your emails, your comments and messages and of course your reviews. That’s right, reviews are very important to the show and they really help get the word out there about the show. If you have been listening to the show and you enjoy it, or if you don’t enjoy the show, let me know what you think and leave me a review on iTunes for the show and that would be very much appreciated. OK until next time I hope you have a great week.

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