The arrival of Ottawa’s first “micro-condo” development is another sign housing has become out of reach for many local buyers, a leading industry advocate says.
Toronto developer Urban Capital and local builder Tamarack Homes are teaming up to launch Smart House Ottawa, a nine-storey project at the corner of Bank and Flora streets featuring 151 condo units ranging from 315 to 586 square feet.
Prices start at $179,900, with the most expensive, two-bedroom corner units topping out at $354,900. Urban Capital recently opened Smart House’s downtown sales office with a special event for owners of the developer’s other properties in Ottawa, and it ended up selling all six of the smallest, 315-square-foot units in just a couple of hours.
The “micro-condo” craze has already caught on in many major metropolitan areas around the world where space is at a premium, including New York, Tokyo and Toronto, but this is the first time the concept has been tried in the nation’s capital.
John Herbert, the executive director of the Greater Ottawa Home Builders’ Association, says the fact that the cheapest units were snapped up that quickly proves the city’s housing market is in deeper trouble than many people think. “It’s interesting to hear how well they’re doing,” he says. “It’s all price-driven, I think. I think the fact that these units are selling as well as they are indicates just how serious the affordability situation is.”
Urban Capital partner David Wex says the building, which is slated to be ready for occupancy in the summer of 2017, is designed to appeal to people who want the benefits of downtown living at a reasonable price.
“The only way to press the reset button and get affordability back is to make units small,” he says. “If you’re going to make units small, you have to make them smart.”
The builders of micro-condos are doing that, he says, by using space as efficiently as possible. For example, the kitchen countertops are retractable, the dishwasher pulls out of a drawer, stoves have only two burners instead of the traditional four and the washer and dryer are combined in one unit.
“Every element is very, very efficient,” he says.
High ceilings and large windows also help make the space “feel bigger than it is,” he adds.
The building’s central “productivity area” will feature amenities such as a large-scale printer where residents can share desks and use a boardroom for meetings if they wish to work from home, he says. A large kitchen and dining room will be available for tenants who wish to entertain guests, and a central office will house bulky equipment such as ladders and steam cleaners for residents to use when needed.
Mr. Wex says Urban Capital is targeting a range of customers, including first-time buyers, investors and people who prefer a “pared-down lifestyle.” He says he knows the project won’t appeal to everybody, but he believes there is enough of a market in Ottawa to make it viable.
“This is narrow-casting,” he says. “The majority of people are not going to want this. But we’re not talking to the majority. We’re talking to that minority that loves this.”
He uses a car analogy to illustrate his point.
“Some people buy a Mini. You could say, ‘You could have a bigger car for the same price.’ (They say) ‘I don’t want a Malibu. A Mini and a Malibu might be the same price, but I don’t care if I get more space in a Malibu, I just don’t want it.’”
David Sugarman, a real estate broker with Coldwell Banker Rhodes and Company, says he doubts micro-condos will ever become a major part of the city’s housing scene. Downtown living doesn’t have quite the same broad appeal in Ottawa as it does in larger cities such as New York and Toronto, he says, and he’s not sure the rental market for such small units will be robust enough to make a lot of investors dive in.
“I think it would be hard to sustain a lot of this very micro-living sort of stuff (in Ottawa),” he says.
Still, he adds, “You have to be innovative and sometimes test the market. If nobody liked it, there’d be no sales.”