On a quiet street in East York lined with mostly two-storey single-family houses, their front porches decorated with skeletons and spiderwebs for Halloween, builder Behzad Ayon’s team is hard at work on a massive project.
But unlike the handful of other new builds in the neighbourhood just off the Danforth Avenue near Main Street, this one is going to be five rental units instead of one new luxury home.
“When I initially purchased this property that wasn’t the goal. I thought I was going to build a custom home,” said Ayon, the managing partner of Aria Build, who bought the lot at 191 Gledhill Ave. in 2021 for almost $1.1 million and tore down the existing bungalow.
“But the way the market was going we thought this was a lot more ideal.”
Ayon, who has been in business for about five years, has a background in creating luxury homes.
But now with higher interest rates and lower home prices, “the numbers don’t really make sense.”
So he’s pivoted to rental housing in the form of multiplexes.
The city has allowed up to four units, plus garden or laneway suites, without special permission since 2023, and in June, passed a bylaw permitting up to six units in the old city of Toronto, East York, and the ward of Scarborough North.
“That’s huge, and if you’re able to take a single-family dwelling and put five units in there it’s a lot more profitable than building a custom home and selling it,” said Ayon.
“The builders that do custom homes for resale are really taking a big hit.”
The average cost of a property in Toronto has fallen about 20 per cent since the market peak in 2022. Meanwhile, the cost of construction is high, and it’s more expensive to borrow money.
This all makes it harder to buy a property and make a profit building and selling a luxury house, and makes clients less likely to commission dream homes.
However, multiplexes have proven controversial, especially in more suburban wards where neighbours and some city councillors have expressed concerns about parking, especially where transit is limited, and the impact of added density on city services.
Ayon had to go to the Committee of Adjustment in December, the panel that makes development decisions, to get special permission to go over what was allowed, namely on height.
Several neighbours opposed the project at the time, raising concerns about the impact to privacy, parking and traffic.
The four apartments and garden suite are spacious with lots of natural light, at around 1,000 square feet with the basement at 1,100 square feet.
All the units, including the garden suite, are two-bedrooms with two-and-a-half baths, distinct from the shoebox condos that have dominated the Toronto rental market for over a decade.
There are no parking spots, but each rental has a separate entrance and private outdoor space.
Ayon has used luxury touches such as European sliding doors, white oak cabinets, and limestone stucco on the exterior. Everything fits on the large lot of about 25 by 172 feet.
Ayon is also building a second garden suite for the neighbouring property, which is almost finished.
Ricky Ng said he and his parents saw what was going on next door and wanted a similar suite for themselves.
The estimated cost for Ng’s garden suite is about half a million dollars. And at about 600 square feet the new bonus home is actually bigger than his parent’s original postwar semi. Ng, a 32-year-old civil servant, plans to live in it, but his parents may rent it out down the line for retirement income.
“We just wanted to maximize what we could do with it especially given the lot, so it ended up essentially just being a whole other house without a basement,” he said.
“From an affordability perspective, it is a major difference compared to trying to find something out there in the Toronto area, or even all the way to the rest of the GTA,” Ng said.
Ayon said the main fourplex-plus-garden-suite project will be finished within six to eight weeks, and rent will be $2,500 for the basement unit; the main, second, and third-floor units will go for $3,000 each; and the garden suite $3,500.
He’s also planning a similar fiveplex project on nearby Dunkirk Road, as well as a tenplex on Coxwell near the hospital and another tenplex east of Gledhill, intending to sever large lots and do two fiveplexes side-by-side for both.
“The city’s changing, it’s becoming a lot more dense and they’re allowing a lot more development, there’s good opportunities out there,” he said.
But the transition hasn’t been without challenges. For example, he had to upgrade the electrical system to 400 amps, double the standard, for the multiplex, which was expensive.
Kevin Mellor and Lenny Petrilli, architectural designers and co-owners of Veralinea Design Studio Inc., are the architects for Ayon’s project.
They said they’re happy to see density coming to these residential neighbourhoods that have been exclusively single-family homes.
And when the bylaw first came out in 2023, “the phone did start ringing for these types of projects.”
But a lot of the interest “kind of fizzled out because people ran the numbers.”
“You yourself have to take that risk,” Mellor said, as it takes time through renting to recoup the upfront costs, which can run upwards of $2 million per multiplex.
Meanwhile, garden suites are less expensive to build, the children or in-laws of the owners can live in them, or they can be rented out for extra income.
“It’s not the multiplexes we see as much. It’s the garden suites, we get probably 10 times as many calls on garden suites as we do multiplexes, ” he added.
