Toronto has spent two decades making homes smaller. It's worth being precise about why, because the usual explanation is wrong — and the reason it's wrong is what makes family-sized rental worth building right now.
Why Units Got Small
The standard story is that developers shrink units to cram more doors onto a site and collect more rent lines. That's not really what happened.
What happened is a race to affordability. Buyers and renters have a ceiling on what they can pay in absolute dollars — not per square foot, but per month or per purchase. As prices climbed, the only way to keep hitting that ceiling was to sell or rent less space. Units got smaller because the total price had to stay reachable, and square footage was the thing that could be cut.
That's a rational response to the market as it was. It's also how a city ends up full of shoebox units and short of anywhere for a family to live.
The Math That Changed
Two things break the old logic on a small multiplex site.
Zoning caps the unit count, not the floor area. Toronto permits four units as-of-right almost everywhere, and six in the districts where sixplexes are allowed. Once you've hit the permitted number of homes, subdividing further isn't an option. The question stops being "how many units can I fit" and becomes "how much home does each of these units get."
The taxes came off. The full HST rebate on purpose-built rental and Toronto's development charge exemption on the first six units removed a large fixed cost that used to sit on every project. Development charges in particular were levied per unit — which quietly punished density and rewarded nothing about size.
Put those together and the per-square-foot math inverts.
Why Bigger Units Cost Less Per Square Foot
The expensive parts of a home are not the square footage. They're the kitchen, the washrooms, and the mechanical systems — HVAC, plumbing stacks, electrical service. Those costs attach to the unit, not to its size.
A studio and a three-bedroom home need roughly the same kitchen and the same heating and cooling system. The studio amortizes that cost over 450 square feet. The three-bedroom amortizes it over 1,300. Same expensive components, three times the space carrying them.
So on a site where the number of units is already fixed, building bigger homes lowers your cost per square foot. The bedrooms and living space you're adding are the cheapest square footage in the building.
What the Homes Earn
Rent per square foot is lower on a large home than a small one. That's the number people quote, and on its own it's misleading — because you don't collect rent per square foot. You collect it per home.
A three-bedroom home rents for meaningfully more than a studio does. Bigger homes carry higher rents in absolute dollars, and they cost less per square foot to build. Both of those move the same direction, and together they make family-sized rental a strong asset rather than a concession.
And the household on the other side of that lease is getting a better deal, not a worse one. A family renting one of our homes is paying for space they can actually use — three real bedrooms, storage, somewhere to be outside — at a price that works for a middle-class household. That's the whole point. The rent per square foot being lower is precisely what makes the space reachable for the people who need it.
Then there's scarcity. Family-sized rental is genuinely hard to find in Toronto — a household that needs three bedrooms and can't afford to buy has almost nowhere to go. Scarce things hold value. As the city keeps growing, we expect the gap between what exists and what families need to widen, not close, and we expect these homes to become more valuable because of it.
Families also stay. A building of one-year tenancies carries costs that never show up in a headline rent roll: vacancy between tenants, turnover and make-ready, marketing, and the management overhead of a building that never settles. Households with kids in a local school don't move every year. Over a decade, the distance between gross rent and what an owner actually keeps is narrower than the per-square-foot comparison suggests.
What We Don't Do
We don't under-develop. If a site permits six homes, we're not building four or five to make a point about size. Leaving permitted density on the table is its own kind of waste, and Toronto can't afford it.
What we do is design the right product for the site — the correct unit mix for the lot and for the neighbourhood around it. Sometimes that's five three-bedroom homes, as at FAMILY 1. Sometimes it's a range, as at NEIGHBOUR 1, where seven homes run from 500 to 1,400 square feet and one bedroom to three-and-a-half — because a couple starting out and a family with three kids both belong on the same street, at different points in the same life.
The unit mix should answer to the site and the neighbourhood. It shouldn't default to the smallest thing the code allows.
What "Family-Sized" Actually Means
The phrase gets used loosely, so here's what we mean by it.
Real bedrooms. Not a den that a listing calls a third bedroom. Rooms that fit a bed and a dresser and have a door that closes.
Storage. The most consistently omitted thing in new rental construction, and the thing families notice within a week. Strollers, bikes, seasonal clothing, sports equipment.
Outdoor space. Dedicated, not shared. Somewhere a kid can be outside without leaving the property.
Sound separation between homes. Designed into the assembly, not added later. A family that can hear the neighbours through the floor doesn't renew, and you can't retrofit it.
The Bet
The bet is that a city which spent twenty years building smaller and smaller homes has left the most durable product in the market underbuilt — and that with the tax structure no longer penalizing it, building it earns a strong return.
That's the part worth sitting with. This isn't philanthropy with a rent roll attached. Lower cost per square foot to build, higher rent per home, longer tenancies, and an asset that gets scarcer as Toronto grows — while families who would otherwise have left the city get somewhere to live. The returns and the impact come from the same decision, which is why we expect more people to make it.
Join the waitlist if you're looking for a home, or get in touch if you own a property and want to build something like this on it.